Overall Performance of M B Knit Fashion

Chapter 1 Introduction1.1 Background of the ReportIn general sense “MB Knit Fashion Limited” means a Multinational Manufacturer of all Kind

of Knitted Garments Company that its use transfer pricing to maximize corporate

profitability, by ensuring most profits are made where taxation is lowest. Transfer prices will

differ from market prices to give the desired profit split between different parts of the

multinational. Multinational Corporation, business enterprise with manufacturing, sales, or

service subsidiaries in one or more foreign countries, also known as a transnational or

international corporation. A multinational Buyer’s develops new products in its native

country and manufactures them abroad, often in Third World nations, thus gaining trade

advantages and economies of labor and materials. Almost all the largest Buyer’s are

American, Spain, Japanese, or West European. Such corporations have had worldwide

influence—over other business entities and even over governments, many of which have

imposed controls on them. Many smaller corporations also became multinational, some of

them in developing nations. Proponents of such enterprises maintain that they create

employment, create wealth in countries that are in dire need of such development. Critics,

however, point to their inordinate political influence, their exploitation of developing nations,

and the loss of jobs that result in the corporations' home countries.

1.2 Objectives of the Report

The following are the general & specific objectives of the report.

General Objectives

The general Objectives of the report are as follows:

To acquire practical experience and analyze the overall performance of MB Knit

fashion Limited in providing different corporate services.

Specific Objectives

The specific objectives of the study are as follows:

To present an overview of MB Knit fashion Limited.

To find out the “Impact of Providing Satisfactory Customer Service on Business

Growth of MB Knit fashion Limited.”

To gather comprehensive knowledge of the overall corporate functions and the

expectations of the customers regarding the service level of the company.

To enrich idea about the products of the company.

To identify the factors contributing to the attractive and operative performance of the

corporate office.

To make a study of the facts in order to arrive at certain conclusion about overall

function of MB Knit fashion Limited.

To find out strength and weaknesses of the organization.

To learn how to use different ratios in practical fields.

1.3 Scope of the Study

While I have prepared this report, I have a great opportunity to have an in depth knowledge

of all the divisional work practiced by MB Knit Fashion. It also helps me to acquire a

firsthand perspective of a leading private organization in Bangladesh. The scope of this report

is to analyze the operation of Import Department and to evaluate the performance of the

different departments of MB Knit Fashion.

1.4 MethodologyWhile conducting smooth and accurate study everyone has to follow some rules and

regulations. In this report have both primary and secondary data. Both the primary and

secondary form of information is used to make the report more meaningful and presentable.

The details of these sources are given below

Primary Sources

Face to face conversation with the respective officers & staffs of the Company.

Informal conversation with the clients.

Personal observation.

Desks work in different sections/departments.

Secondary Sources

Annual report of the Company.

Consultation of related books and publications.

Different statements of Company.

1.5 Limitations of the Study

It was difficult to communicate with the customer, as many of them were hesitant to respond.

Therefore, the sample size was not big.

Another limitation of this report is Company’s policy of not disclosing some data and

information for obvious reason, which could be very much useful.

Field practice varies with the standard practice that also created problem.

Large-scale research was not possible due to constraints and restrictions posed by the

organization.

To protect the organizational loss in regard of maintaining confidentiality, some parts

of the report are not in depth.

Chapter 2 An overview of MB Knit Fashion

2.1 Introduction

2.2 Historical background of MB Knit Fashion Ltd.

2.3 Business Philosophy of MB Knit Fashion Ltd:

2.3.1 Vision

2.3.2 Mission2.3.3 Goals

2.3.4 Objectives2.3.5 Management Strategies

2.4 Hierarchy of MB Knit Fashion Ltd.

2.5 Achievements of MB Knit Fashion

2.6 Product and Services information 2.7 Quality Control

2.8 Products of MB Knit Fashion

2.8.1 Production Guide Line

2.8.2 Products Gallery:

2.9 MB Knit Fashion Ltd at a Glance

2.10 Company Analysis

2.10.1 SWOT Analysis

2.10.2 Ratio Analysis

2.11 MB Knit Fashion Current Operations and Future Directions

2.11.1 A MB Knit Fashion for Tomorrow

2.1. Introduction

M B Knit Fashion, a name for quality in the knit world, established in January, 1992, is still

working for the buyers through out the world. Quality and in time shipment is our first

concern and with our policy in every steps in production and exporting has satisfied the

customers. To meet the commitment of quality and prompt delivery, M B Knit Fashion

decided to integrate the manufacturing processes in a planned manner. Over the years the

entire process has been integrated by importing sophisticated machinery from world-

renowned manufacturers. Working on new concepts in styling and content of the knitwear is

a continuous activity in M B Knit Fashion with an objective to up the quality and the value of

the merchandise.

2.2. Historical Background of MB Knit FashionMB knit fashion has started its operation in the RMG sector in the year of 1992 with only 20

sewing machines. Under the immense talent of its managing director and Proprietor

“Mohammad Hatem” along with some dedicated and skilled technocrats today, MB Knit

fashion emerged as one of the recognized knit garments manufacturers in Bangladesh. Today

MB Knit fashion own fully vertical set up which includes knitting, dyeing, a fabric finishing

division with all of the latest machinery, a several stitching units highly experienced in

production of Garments for all age ranges of both genders.

Since inception, the company has been exporting various types of world class T-shirts, Polo

shirts, along with all kinds of knit items to the couple of countries like USA, UK, Denmark,

Italy, Spain, German etc. and have built a good reputation as a reliable vendor for all of our

customers and associates to whom we offer our assurance of confidentiality and discretion. In

the era of globalization and the out coming of enormous challenge coming days will be more

competitive. And MB knit fashion will surely win the race with its uncompromising

motto........Price, quality, reputation & service.

2.3. Company’s Mission, Vision, Objectives and Strategies

Future Plans:* To be a world-class knit garments company -- one that becomes a benchmark for other knit

garments company, its source for new ideas, information, professional development and

quality standards.

* One that impresses its customers the first time.

* To attain highest level of business efficiency with integrity and honesty.

2.3.1 VisionTo be the most admired and respected family company in the country. MB Knit fashion has

been successful in realizing this vision by creating a lasting brand name in every household

all over the world. It has continued to expand in the field of Hire Purchase durables by

acquiring new companies producing related products. It also describes aspiration for the

future, without specifying the means necessary to achieve those desire ends. MB has

continued to expand in the field of Hire Purchase durable and also increasing social

responsibility. It has created a lasting brand name in every household all over the world.

2.3.2 Mission Statement: The Company mission is to give their customers a competitive advantage through

superior products and services at best prices.

The Company will meet and exceed their customers' expectations of service through timely communications and quality information.

To achieve tangible benefits by promoting efficiencies, productivity and professionalism.

Provide competitive prices and genuine products to our clients.

Creating a climate for voluntary compliance by providing guidance and building mutual trust.

To promote international textile trade.

2.3.3 Goals

To develop and consolidate a strong client base and ensure all kinds of modern Garments facilities by expanding business and service periphery to full fill the expectations of the customer .

2.3.4 Objective

Highly trained and skilled managerial group, creating a friendly atmosphere through

continuous training is expecting to achieve the company objective. Apart from support the

nation with fore earning & solving unemployment problem, the main objective of MB Knit

Fashion Group is human resource development for efficient management of garment sector

giving priority to primary requirement of quality & on time shipments. Political instability,

power crisis & illiterate work force having low quality concept are major barrier for

Bangladesh garment export; break through of which is a challenge for us.

2.3.5 Management StrategyMB Knit Fashion consistently focuses on growth and risk minimization through best Quality

of products and increasing the market Demand of existing products by responding to

changing customer or Buyer needs.

2.4. MB Knit Fashion Limited Organ-gram

AST.MGR.(Q.C)AST.MGRQ .C-CABLE

AST,MGR (EDN)

2.5 Achievements of MB Knit Fashion MB Knit Fashion ISO 9001: 2000 Company: MB Knit Fashion has been awarded ISO

9001: 2000 in recognition of the organization’s Quality Management System. The area of

this certification will cover manufacturing of all kinds of knitted products.

Mb Knit Fashion is committed to offer quality products and service by maintaining quality at

each and every level of its operational process. Achieving ISO 9001: 2000 is a reflection of

its continuous effort to improve quality and maintain high ethical standard in every sphere of

activities.

2.6 SERVICE AND ACTIVITIES…………………….

The services which we provide the best sourcing, Buying arrangement, meeting with

manufacturers, and co-coordinating from sampling, production to dispatch, quality assurance

in production, consolidating shipments etc.

Our service can help you find the best manufacturer for almost any type of readymade

garments product. We will quote you on a one-cost basis, including all duties, freight, and

delivery. If you would like to expand your line, find a lower-cost manufacturer with best

quality, or get a quote on an existing item. The main objective of our Company is to reduce

your risk by keeping the following issues on our agenda of work:-

To introduce manufacturer who is capable of manufacturing as per buyer requirements.

To check production capacities and quality capabilities of Companies To ensure that the quality is built into the product sample and manufacturing

processes. To check the correct material and component are used for production. To check quality at start of production. To check conformity as per samples and order during production. To inspect quality, quantity, packing prior to shipment. To witness loading of inspected consignment. To carry out other special instruction of buyers.

Company also undertakes developments, products sourcing, as per buyer’s specification. In a

nutshell we can assist you in outsourcing wide range of products from Bangladesh.

Company Activities

Sourcing

Supplier evaluation

Monitor compliance

Facilitate pricing and negotiation

Sampling

Quality control - inline and final inspections

Testing

Facilitate approvals

Monitor and facilitate export documentation

Updates on production status

   

   

2.7 Quality Control

The Company offer quality products that are built to compete with the best in the world. All

the company products are tested and verified for the best quality. The company has their own

QC department & start checking quality from making yearn to shipment, in every stage

company has their specialist quality controller to ensure the merchandise quality. The

Company ensure the right yearn, right fabric weight, right pantone color, right pattern, right

sewing, the right finishing and as well as right time shipment. This Company believe quality

is the main key for clothing items.

2.8 Products of MB Knit Fashion

2.8.1 Production Guide LineMonitoring progress and Quality of orders in production is a crucial and essential part of the

Production function. Our Production & QC department takes charge of the process after all

sampling and pre-production activity is completed. With a dedicated team of QC personnel,

production is diligently checked daily at the manufacture's premises to ensure complete

conformance to standards and requirements. The company works with a number of qualified

manufacturers whose processes meet the quality standards of Apparel Source.

Daily production figures are verified by our own staffs who visit the manufacturers daily. Our

production department works with buyers in their needs to move in or move out deliveries

based on their requirements for the retail industry.

Full time quality Control team.

Everyday Quality Inspection.

Collecting report From QC team.

2.8.2 Products Gallery:

Product Gallery :: Polo Shirt

Product Gallery:: T-Shirt

Product Gallary :: Ladies Tank Tops

Product Gallery: Ladies T-shirt

Product Gallary: Hooded Jacket

Product Gallery: Sweatshirt

2.9 Company AnalysisThere are two types of Company Analysis.

1. Qualitative (SWOT) Analysis

2. Quantitative (Ratio) Analysis

2.9.1 SWOT AnalysisThe SWOT analysis of Singer reveals that it can be considered as a feasible and profitable

marketing plan. According to the analysis, the strengths, weaknesses, opportunities and

threats are as follows:

Strengths

The products of MB Knit Fashion have unique features compared to the other similar

products.

The company has already acquired customer or Foreign Buyer trust in their better

Quality and Service.

The company is providing better Quality and Service in their products.

The company has sufficient ability to research, develop and improve the product.

Mass marketing.

Convenient shape and usage features.

Existing production facility.

Weaknesses

Existing competitors.

Product costs are higher than similar products in the market.

Absence of traceable market potential.

Opportunities

Fewer competitors.

Existing strong distribution channel.

Wide range of not yet reached target market.

Existing brand loyal customers.

Threats Well organized competitors. Absence of patent for the unique features. Price competition. Wide range of similar product with extra features is served by competitors. Leakage of technology. Piracy.

2.9.2 Quantitative analysis:Ratio analysis:

2007 2008

Profitability Ratio: I. Return on equity capital = Net income after tax / Total equity

21.24% 22.45%

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II. Return on assets (ROA) = Net income after tax / Total Assets

1.35% 1.47%

III. Net operating Margin = (Total operating revenues – Total operating expanses) / Total Assets

3.90% 3.89%

IV. The company net profit margin (NPM) = Net income after tax / Total operating revenues

23.98% 25.68%

V. Degree of asset utilization (AU) = Total operating revenues / Total Assets

5.62% 5.72%

VI. Equity multiplier (EM) = Total Assets/ Total equity capital

15.76 times

15.28 times

VII. Operating efficiency = Total operating expenses / Total operating revenues

30.64% 32.07%

Liquidity Ratio: I. Current Ratio = Current Assets / Current Liabilities

0.12 0.13

II. Quick Ratio = Cash + Short term marketable Security / Current Liability

0.023 0.056

2.9.3 Degree of Operating Leverage (DOL):

The degree of operating leverage (DOL) is defined as the percentage change in operating income- that is, earnings before interest and taxes, or EBIT-associated with a given percentage change in sales. Thus, the degree of operating leverage is computed as % change in NOI DOL = Degree of operating leverage =

Q (P-V) DOL =

S - VC DOL =

Gross Profit DOL =

1841m DOL 2004 =

DOL2004 = 1.28 times

1105m DOL 2005 =

DOL2005 = 1.59 times

Thus, for every 1 percent change (increase or decrease) in sales there will be a 1.28 percents 2004 & 1.59 percents change (increase or decrease) in EBIT.In this situation, we see that the company was more risky in 2005 than 2004.

2.9.4 The degree of Financial Leverage (DFL):The degree of financial leverage (DFL) is defined as the percentage change in earnings per share (EPS) that results from a given percentage change in earnings before interest and taxes (EBIT), and it is calculated as follows: % change in EPS DFL = Degree of Financial leverage =

EBIT DFL =

1431m DFL2004 =

% change in sales

Q( P-V)-F

S – VC - F

EBIT

1431m

695m

% change in EBIT

EBIT - I

1431m-150m

DFL2004 = 1.12 times 695m DFL2005 = DFL2005 = 1.28 times

In this situation, we see that the company was more risky in 2005 than 2004.

2.9.5 The Degree of total Leverage (DTL):The degree of total leverage (DTL),Which shows how a given change in sales will affect earnings per share. Here are equivalent equations for computing DTL.

% change in Sales DTL = Degree of Total leverage =

DTL = DOL X DFL

Gross Profit DTL =

1841m DTL2004 = DTL2004 = 1.44 times

1105m DTL2005 = DTL2005 = 2.03 times

In this situation, we see that the company was high risky in 2005 than 2004.

2.10. MB Knit Fashion Current Operations and Future DirectionsMB Knit Fashion has emerged from a series of business and organizational restructurings as a

stronger company. And the company is determined to build on this by achieving sustained

growth with profit in all their business segments.

2.10.1 MB Knit Fashion for TomorrowMB Knit Fashion’s activities span the high growth domains of all kind of Manufacturing

Knitted Products, the stable growth domain of Infrastructure Systems, and Home Appliances.

They are promoting the strategies and capital investments required to achieve growth in all of

695m-150m

% change in EPS

EBIT - I

1431m - 150

695m - 150m

these areas. This strategy can be seen in Singer’s capital investments in new semiconductor

facilities, our commitment to building a global presence in the nuclear power business, and

our drive for leadership in the Manufacturing Garments market through high Quality of

products.

2.10.2 Multiplier Effect of InnovationsThe growth the company is aiming for demands wide-ranging innovation in the way the

company do business. They are promoting innovation in development, innovation in

manufacturing and innovation in sales, along with the multiplier effect of applying these

advances throughout their operations.

2.10.3 Execute Management with CSRAnother essential aspect of the way MB Knit Fashion do business is respect for their

corporate social responsibilities (CSR). As a matter of course the company complies with

laws and regulations. It cultivates robust corporate ethics and ensures honesty and

transparency in their management practice. Looking to the future, MB Knit Fashion promotes

strict environmental management and auditing, seek to reduce the environmental loads of its

products, and promote measures to help protect the global environment. MB Knit Fashion

also works closely with the communities in which the company operates through numerous

outreach programs and voluntary activities.

Chapter 3Foreign Exchange & L/C PracticesOf Commercial Section in MB Knit Fashion

3.1 Introduction3.2 Sources of foreign exchange and uses of foreign exchange

3.3 Role of Bank in Foreign Exchange

3.4 Exchange Rate

3.5 Exchange Rate System

3.6 Types of Foreign exchange Departments

3.7 Function of AD in Foreign Exchange

3.8 Import

3.8.1 Introduction

3.8.2 Types of Importer

3.8.3 Requirements of Import

3.8.4 Letter of L/C

3.8.5 Types of L/C

3.8.6 Features of Letter of Credit

3.8.7 Documentation of L/C opening

3.8.8 Payment System

3.8.9 Charges of L/C

3.8.10 Parties involved in a Letter of Credit

3.8.11 Import Financing

3.9 Export

3.9.1 Introduction

3.9.2 Exporter letter of Credit

3.9.3 Export Documentation

3.9.4 Back to Back letter of Credit

3.9.5 Export Financing

Foreign Exchange 3.1 Introduction:Foreign Exchange is the mechanism by which the currency of one country gets converted in

to currency of another country to effect ‘International Trade’ payment. This mechanism by

which commercial investments and others transactions between countries are being settled. It

involves with the purchase and sell of the money of foreign countries and transferring of

exchange balance from bank to bank.

Bank largely depends in its Foreign Exchange Business to ensure profitability. To look after

the Business and also to ensure prompt service to the Import & Export officers having

exposure and expertise in Foreign Exchange Business have been posted both at Head Office

& Authorized Dealer Branches. During 2006, the Bank handled Export & Import Business to

the tune of Tk.8, 557.03 million & Tk.17, 646.84 million respectively.

Bank’s wide network of correspondence plays vital role in facilitating its International

Trading. At present, total number of correspondents is 335.

With a view to facilitating housebound remittance, the Bank made arrangements with a

number of exchange companies during the year. These arrangements brought significant

development in remittance business. We are going to expand this network in near future. 

3.2 Sources of foreign exchange and uses of foreign exchange:

Sources of foreign currency of a nation- Proceeds from Export of commodities.

Proceeds from Export of service at abroad.

Foreign remittance. (inward by non-resident wage earner/ gifts grants form other country)

Foreign AID/Loan/Credit/Barters.

Foreign Direct Investment (FDI).

Income on investment receipt from abroad, foreign tourist/travelers.

Uses of foreign exchange-

Payment against imports of commodities from other nations.

Payment for services from abroad.

Providing gifts grants/donation to other nations.

Investment made to abroad.

Transfer of profit arising from foreign investment.

Residence travel to other nations (tourist/travelers)

Maintenance of am basis/consulate office at abroad.

3.3 Exchange Rate:

The rate at which one currency is converted in to another currency is the rate of exchange

between the currencies concerned. The conversion of currency is done by bank who deals in

foreign exchange. The rate of exchange is the price of one currency expressed in terms of

another currency. (For Bangladesh, Exchange rate means the price of foreign exchange in

terms of Bangladesh Taka)

3.4 Exchange Rate System:

Exchange Rate System can be classified as-

Fixed: Exchange rates are either held constant on are allowed to fluctuate only within narrow boundaries.

Freely Floating: Exchange rates would determine market forces without any intervention from government.

Managed Float: Exchange Rate System that lies some where between and freely floating system.

Pegged: Involves a policy of pegging a currency’s value to another currency on to same currency on to same other units of accounts.

3.5 Foreign exchange Departments:

Foreign exchange & foreign trade are being routed in NCC bank Ltd. through the following:

1) Import2) Export3) Remittance

1. Import:Import of merchandise essentially involves two things, bring of goods physically into the country &

remittance of foreign exchange toward the cost of the merchandise and services connected with

dispatch of the merchandise. The physical import is regulated by the ministry of commerce through

the chef controller of imports & export while Bangladesh Bank regulates the payments of these

imports through its exchange control department.

2. Export: Export is vise-a-visa of import. The import and export normally made against latter of credit through

dependent upon the buyer & seller relationship. Detail procedure of import & export to be discussed

in ahead.

3. Remittance:

Dealing Room-Management-FC Fund Mgt.Dealing-Cross Fcry-US$/BDTForward-Dealing

NOSTROReconciliationExchange position

Exchange Rate

Remittance means transfer of fund. Latin the word “Remittance” we understand transfer of fund from

one place to another place with may be within the country or between two countries. Remittance and

which in effected between two countries is called foreign remittance.

3.6 Function of AD in Foreign Exchange:The Authorized Dealer Bank has vital role in the foreign trade of a country. They provide the

finance needed to execute the transaction. They from the conduit pipe through which the

documents and money are exchange between the exporter and importer. They act as the

extended arm of the reserve bank of Bangladesh in a provision of the foreign exchange

regulation act 1947. For the banks foreign exchange dealing is a specialized activity with

good potential for profits.

FOREGN EXCHANGE TRANSACTION PERFORMED BY AUTHORIZED DEALER

3.7 Import Section3.7.1 Introduction:Import is the process of purchasing goods from overseas. Import of goods into Bangladesh is

regulated by the ministry of commerce in terms of the import and export (control) act 1950,

with import policy orders issued periodically and public notices issued from time to time by

the chief controller of import and Export (CC in terms of importers, exporters and indentures

(Registration) order 1981. No person can import goods into Bangladesh unless he/she is

Foreign Trade Finance

Others Transactions

Foreign Exchange

Export L/CAdvisingConfirmECC (H)ECC (P)PCBBL/CFDBPFDBCIFDBC

Foreign Remittance-Inward-Outward (DD, TT, MT)TC Sale & EncashmentIssuanceDollarBond

Import L/CAmend meAdvisingConfirmingPADIFDBCLIMCC (P)LTR

FC Treasury Operation

CorrespondingBankingAgencyArrangement

F.c.Depo Private AccountsF/C AcctsNFCDRFCDFC (WES)

Exchange House

Foreign Guarantee/Bond

F/C CashSales/ PurchaseNotes & Coins

registered with the CCI&E. On the next step, the importer applies to Bangladesh Bank

through authorized dealer for import goods.

3.7.2 Types of Importer:

Import is the flow of goods and services purchased by economic agent located in one country

from economic agents located in another. Hence, import of merchandise essentially involves

two things: bringing of goods physically into the country and remittance of foreign exchange

towards the cost of the merchandise and service connected with its dispatch to the importer.

In case of import, the importers are asked by their exporters to open letter of credit so that

payment against goods is ensured.

Fig: Types of ImportersPARTIES INVOLVED IN FOREIGN EXCHANGE BUSINESS:The Mechanics of Import and Export:

Importer

Private SectorPublic Sector(Govt. Org. &

Corp.)

Commercial(Finished product)

Industrial(Raw materials, machineries etc.)

Actual Users

Importer Exporter

1st: Exporter ships the goods

Importer Preference

2nd: Importer pays after goods received

DOCUMENTATION: A bill of loading, or, B/L, is issued to the exporter by a common carrier

transporting the merchandise. It will be described more fully later in this chapter.

A signed commercial invoice is issued by the exporter and contains a precise

description of the merchandise. Unit prices, financial terms of sale, and amount due

from the importer are indicated, as are shipping conditions related to charges, such as

“FOB” (free on board), “FAS” (free alongside), “CFR” (cost and freight), or “CIF”

(cost, insurance, freight).

Insurance documents must be as specified in the contract of sale and must be

issued by insurance companies or their agents. The insurance may be issued to the

exporter, who must then endorse the policy to the importer, or it may be issued in the

name of the importer. Insurance must be of types and for risks specified in the letter

of credit.

Packing lists may be required so that the contents of containers can be identified,

either for customs purposes or for importer identification of the contents of separate

containers. In addition, an export declaration prepared by the exporter to assist the

government in the preparation of export statistics may be required.

Shipping deadline: Most importers insist on a specified deadline or time interval by which the shipment will be

made. If the goods in question are particularly time-sensitive (such as products for seasonal

sale), Remedies will be included in the sales contract for failure to meet time commitments.

Importer Exporter

1st: Importer pays for the goods

Exporter Preference

2nd: Exporter ships the goods after being paid

Payment instructions:Which of the parties—the exporter or the importer—is to pay such charges as freight,

insurance, import duties, handling fees, taxes, etc., must be specified carefully in the sales

contract. The currency in which all payments are to be made benzene importer and exporter

must also b specified dearly. The payment terms state whether cash is to be paid in advance,

whether letters of credit are required, and what documents need to be presented against

payment, consignments, or payment on open account. These terms must be detailed, in the

sales-contract. The following section on key documents will elaborate on these payments

term concepts.

Packaging and marking:Depending on the nature of the goods, proper packaging may be critical to preserving and

protecting items being shipped. Proper markings on the inner and outer boxes and containers

are needed to conform to customs regulations in countries. These markings typically include

clear and conforming invoices of the value of all items for import duty calculation and

payment purposes.

Warranties, guarantees, and inspections: Assurances regarding the performance or qualities demonstrated by the goods from the

exporter ma also are included in the sales contract. This may include not only protection

against product defects and proper performance, but protection against any consequential

damages from defective parts or performance. In some cases, the Importer may wish to have

the right to inspect the goods before paying (and even the right to inspect the goods while

being manufactured before shipping). These stipulations should of course be delineated in the

sales contract.

3.7.3 Requirements of ImportIn order to import a product from aboard, the importer is obliged to open L/C with a bank. To

process the import business, photocopies of following paper need to be attached with the

application form:

An up-to-date Trade License

Import Registration Certificate

Membership Certificate of the Chamber of Commerce or the Related Business

Community

Tax identification Number (TIN)

Pro-forma Invoice or Indent

CHART OF EXPORT-IMPORT FINANCING:

The Bank as the Import/Export Intermediary:

3.7.4 Letter of Credit (L/C) Letter of Credit (L/C) is an agreement between an importer and a bank (Issuing bank). The

bank to the importer provides letter of credit in order to purchase goods from the exporter.

The bank acts on behalf of the clients to deal with the exporter and the clients make the

payment after receiving the goods accordingly. It is one of modern credit facility that

provides assurance, that exporter of goods will receive his payment from importer. Subject to

the condition that the beneficiary exporter submits documents conforming to the term of L/C.

It contains a brief description shipping date and the expiration date after which the payment

will no longer be made. This type of letter is issued by commercial bank.

3.7.5 Types of Documentary Letter of CreditDocumentary Credits are basically two types. It may be either

Revocable

Irrevocable

Revocable Credit

1st: Importer obtains bank’s promise to pay on importer’s behalf

Importer

Bank

2nd: Bank promises exporter to pay on behalf of importer.

6th: Importer pays the bank

4th: Bank pays the exporter

Exporter

5th: Bank “gives” merchandise to the importer

3rd: Exporter ships “to the bank” trusting banks’ promise.

This type of credit can be revoked or cancel at any time without consent of, or notice of the

beneficiary. As per Article 8 (a) of UCPDC 5000 “A revocable Credit may be amended or

cancelled by the issuing Bank at any moment and without prior notice to the Beneficiary”. In

case of seller (Beneficiary), Revocable Credit involves risk, as the Credit may be amended or

cancelled while the goods are in transit and before the documents are presented, or although

presented, before payment has been made. The seller would then face the problem of

obtaining payment. On the other hand, Revocable Credit gives the buyer maximum

flexibility, as it can be amended or cancelled without prior notice to the seller up to the

moment of payment by the issuing bank at which the issuing bank has made the Credit

available. In modem banking, the use of revocable credit is not widely spread.

Irrevocable Credit:The Irrevocable Credit is a commonly used type of documentary credit. The Credit which

cannot be revoked varied or changed/amended without the consent of a parties-buyer

(Applicant), seller (Beneficiary), Issuing Bank and Confirming l3ank (in case of confirmed

LC). As per Article 9 (a) of UPCDC 500, an irrevocable Credit constitutes a definite

undertaking of the issuing Bank, provided that the stipulated documents are presented to the

Nominated Bank or to the issuing Bank and that the terms and conditions of the Credit are

complied with. Irrevocable Credit gives the/seller greater assurance of payments, but he

remains dependent on an undertaking of a foreign bank, Irrevocable Credit may be

unconfirmed.

Special types of Letter of Credit (L/C) Sight Payment Letter of credit.

Deferred Payment letter of Credit.

Acceptance letter of Credit.

Negotiating Letter of Credit.

Red Close letter of Credit.

Revolving credit.

Stand by Credit.

Confirmed Letter of Credit.

Confirmed and Irrevocable letter of credit.

Transferable letter of credit (L/C).

Back-to-Back letter of credit (L/C).

Green clause letter of credit (L/C).

Sight Payment Letter of Credit: The most commonly used credits are sight payment credits. These provide for payment to be

made to the beneficiary immodestly after presentation of the stipulated documents on the

condition that the terms of the credit have been complied with. The banks are allowed

reasonable time to examine the documents.

Deferred payment Letter of credit: Under a deferred payment credit the beneficiary does not receive payment when his presents

the documents but at a later date specified in the credit. On presenting the requited

documents, he received the authorized banks written undertaking to make payment of

maturity. In this way the importer gains possession of the documents before being debited for

the amount involved.

In terms of its economic effect a deterred payment credit is equivalent to an acceptance

credit, except that there is no bill of exchange and therefore no possibility of obtaining money

immediately through a descant transaction. In certain circumstances, how ever, the banks

payment undertaking can be used as collateral for an advance, though such as advance will

normally only be available form the issuing or confirming bank. A discountable bill offers

wider scope.

Acceptance Letter of Credit: With an acceptance credit payment is made in the form of a tern bill of exchange drawn on

the buyer, the issuing bank.

The word bank comes from Latin words Banco, Bancus, Banke, Bangk and Banca. Bank is a

financial institution act as an intermediary that receives deposits for savers at a lower

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javaScript: void (O) ’’ Bank or the pendent bank. Once he has fulfilled the credit

requirements, the beneficiary can demand that the bill of exchange be accepted and returned

to him. Thus the accepted bill takes the place of a cash payment.

The beneficiary can present the accented bill to his own bank for payment at maturity or for

discounting, depending on whether or not he wants cash immediately. For simplicities sake

the beneficiary usually gives on instruction that the accepted bill should be let in the safe

keeping of one of the banks involved until it matures. Bill of exchange drawn under

acceptances credit usually has a term of 60-180 days.

The purpose of an acceptance is to give the importer time to make payment. It he sells the

goods before payments fall due, he can use the proceeds to meet the bill of exchange in this

way, he does not have to borrow money to finance the transaction.

Negotiation Letter of Credit: Negotiation means the purchase and sale of bill of exchange or other marketable instruments.

A negotiation credit is a commercial letter of credit opened by the issuing bank in the

currency of its own country and addressed directly to the beneficiary. The letter is usually

delivered to the addressee by a correspondent bank. This credit is sometimes also as Hand on

credit.

The letter of credit empowers the beneficiary to draw a bill of exchange on the using bank, on

any other named drawer or on the applicant for the credit. The beneficiary can present this

bill to a bank for negotiation, together with the original letter of credit and the documents

stipulated therein.

Payment of the bill of exchange is guaranteed by the issuing bank on the condition that the

documents presented by the beneficiary are in order. The most common form of negotiation

credit permits negotiation by any bank. In rare case the choice is limited to specified banks.

Red clause Letter of Credit: In the case of a red clauses credit, the seller can obtain an advance for an agreed amount from

the correspondent bank, goods that are going to be delivered under the documentary credit.

On receiving the advances, the beneficiary must give a receipt and provide a written

undertaking to present the required documents before the credit expires.

The advance is paid by the correspondent bank, but it is the using bank that assumes liability.

If the seller’s dies not present the required documents in time and fails to refund the advance,

the correspondent bank debits the issuing bank with the amount of the advance plus interest.

The issuing bank, in turn, has reveres to the applicant, who therefore beats the risk for the

advance and the interest accursed.

The clause permitting the correspondent bank to make an advance used to be written in red in

home the name red clause credit.

Revolving Letter of Credit: Revolving credit can be used when goods are to be delivered in installment at specified

intervals. The amount available at any one time is equivalent to the value of one partial

delivery.

A revolving credit can be cumulative or non-cumulative means that amount from unused or

incompletely used portions can be carried forward to subsequent period. If a credit is non-

cumulative, portions not used in the prescribing period case to be available.

Stand by Letter of Credit: Stand by credit is encountered principally in the US. Under the laws of most US states, banks

are prohibited from issuing regular quarantines, so credits are used instead. In Europe, too the

use of this type of credit is increasing by virtue of their documentary credit, stand-by credit

are governed by the UCP. However, their function is that of a grantee.

The types of payment and performance that can be guaranteed by stand-by credits include the

following:

-Payment of thorium bill of exchange

-Repayment of bank advance

-Payment of goods delivered.

-Delivery of goods in accordance wets contract and

-Execution of construction contracts, supply and install contracts.

In order to enforce payment by the bank, the beneficiary merely presents a declaration stating

that the applicant for the credit has tailed to meet his contractual obligation. This declaration

may have to be accompanied by other documents.

Transferable Letter of Credit: Transferable credits are particularly well adapted to the requirements of international trade. A

trader who receives payment from a buyer in the form of a transferable documentary credit

can use that credit to pay his own supplier. This enables him to carry out the transaction with

only a limited and lay of his own funds.

The buyer supplies for an irrecoverable credit issued in the traders favor. The issuing bank

must expressly designate the credit as transferable.

As soon as the trader receives the confirmation of credit he can request the bank to transfer

the credit to his supplier. The bank is under no obligation to affect the transfer except in so

far as it has expressly consented to do so.

The costs of the transfer are usually charged to the trader and the transferring bank is entitled

to delete them in advance.

3.7.6 Features of Letter of Credit It is a documentary credit.

It contains a directive for honoring a bill, a check of specific amount.

Banks work as representative of the importer.

It contains as representative of the importer.

It contains a definite time period.

It works as a contract among different parties to it. It bears a specific date

A bank issues it.

Advantages of Letter of Credit

To the exporter

A letter of credit is generally a very safe method of obtaining payment provided the

exporter complies with the terms of credit.

An irrevocable credit cannot be amended without his knowledge agreement.

A confirmed irrevocable undertaking of a bank generally in the exporter’s country.

A credit open in his favor can often lead to a credit being opened on his behalf in

favor of his supplier (to-back credit); alternatively the credit may be transferable.

Finance may be available by means of:- negotiating of his bills. The exporter has

indirect control of the document of title.

Better than collection as a means of securing payment.

To the Importer

Protect own position by stating the precise documentation required.

o He should consider making a status report on the supplier and in the case of a

large order call for a performance bond.

o Credit can be obtained from the exporter by insisting on the use of a term bill

or exchange.

o He could also consider the use of a revocable credit, which would be

particularly appropriate where the goods are, dispatched in part shipments as

soon as the first lot of goods arrives. The importer can inspect them and if they

are not up to quality, can cancel the credit, hopefully before other shipments

are mode.

o The advising bank will only make payment when the exact document

Specified has been received.

o Once the specified documents which will usually be the documents of title are

in the hands of the advising bank then it will only be a matter of time before

they are sent to the issuing bank allowing him to collect the goods subject to

their safe arrival.

Finance may be available by means of

Ordinary bank loan / overdraft

Loan against imported merchandise.

Acceptable credit.

3.7.7 Documentation required for opening L/CIn order to open a L/C, a client has to submit the following papers:

A photocopy of Membership Certificate from “The Chamber of Commerce” or the

Related Business Community

Import Registration Certificate (IRC)

Trade License VAT

Certificate of incorporation

Memorandum of article

Insurance cover note

IMP form LCA form

Import Policy Order

Current deposit A/C Income Tax Document

Contingency Liability Voucher

3.7.8 Procedure of L/C Opening and Payment

BANK identify whether the goods (will be imported) are in the import list, which is

selected by the government of Bangladesh.

Justify the clients credit worthiness by collecting social status• information form after

business or from after bank credit report.

Judge whether the importers goods bear good quality and more is a market of goods.

Secures the documents efficiently.

If every thing is OK, then the client proposes to fill up the prescribed form,

The sum percent of total amount of L/C should be deposited and get admonition form.

Then it is registered in L/C register book.

Three copies of L/C are prepared.

Two out of three is sent to advising bank and rest are sent to reimbursing bank with

order to pay claim to the negotiating bank.

Advising bank sent one copy with advice to ship to the importer.

Exporter submits necessary documents to the negotiating bank and receipts his/her

claim.

Negotiating bank sent two same letter of payment to the issuing bank and importer.

Simultaneously the negotiating banks demand his/her claim from reimbursing bank.

Payment System Through Letter s of Credit.

At sight Payment.

Deferred Payment.

Through advance T.T Remittances.

C.A.D. Basis etc.

Of all the methods referred to above, letter of credit method is most popular and it is in

fashion.

3.7.9 Charges of L/C L/C commission

VAT 15% OF L/C amount

Postage Tk 200

Miscellaneous tk 150

Stamp tk 150

SWIFT Charge TK.3000

3.7.10 Parties involved in a Letter of Credit: A letter of credit is issued by a bank at the request of an importer from whom he has

contracted to purchases some commodity or commodities. The importer, the exporter and the

issuing bank are parties to the letter of credit there are however, one or more than one banks

that are involved in various capacities and at various stages to play an important role in the

total operation of the credit.

i). The opening Bank.

ii). The Advising bank.

iii). The Buyer and Beneficiary.

iv). The paying Bank.

v). The Negotiation Bank.

vi). The confirming Bank.

i). The Opening Bank: The opening bank is one that issuing the letter of credit at the request of the buyer. By issuing

a letter of credit it takes upon it self the liability to pay the bills drawn under the credit. if the

drafts are negotiated by the another bank, the opening bank reimburses that bank. as soon as

the opening bank, issuing a letter of credit (L/C), it express its undertaking to pay the bill or

bills as and when they are drawn by the beneficiary under the credit. When the bills are

presented to or when antic is received that bills have been presented to a paying or

negotiating banks its liability matures.

ii). The Advising Banks: The letter of credit is often transmitted to the beneficiary through a bank in the letters

country. The bank may be a branch or a correspondent of the opening bank. The credit is

some times advised to this bank by cable and is then transmitted by it to the beneficiary on its

own special form. On the other occasions, the letter is sent to the bank by mail or telex and

forwarded by it to the exporter. The bank providing this service is known as the advising

bank. The advising bank undertakes the responsibility of prompt advice of credit to the

beneficiary and has to be careful in communicating all its details.

iii).The Buyer and the Beneficiary: The importer at whose request a letter of credit is issued is known as the buyer. On the

strength of the contract that he makes with the exporter for the purchase of some goods that

the letter of credit is opened by the opening bank.

The exporter in whose favor the credit is opened and to whom the letter of credit is

addressed is known as the beneficiary. as the seller of goods he is entitled to receive payment

which he does by drawing bills under the letter of credit (L/C. as soon as he has shipped the

goods and has collected the required documents, he draws a set of papers and presents it with

the documents to the opening bank or some other bank mentioned in the L/C.

iv). The Paying Bank:

The paying bank only pays the drafts drawn under the credit but under takes no opening

bank, by debating the letters accounts with it if there is such an account or by any other

measured up, between the two bankers. As soon as the beneficiary has received payment for

the draft, he is out of the picture and the rest of the operation concerns only the paying bank

and the opening bank.

v). The Negotiating Bank: The negotiating bank as to be careful in scrutinize that the drafts and the documents attached

there to are in conformity with the condition laid down in the L/C. any discrepancy may

result in refused on the part of the opening bank to honor the instruments is such an

eventuality the negotiating bank has to look bake to the beneficiary for refund of the amounts

paid to him.

vi). The Confirming Bank: Sometimes an exporter stipulates that a L/C issued in his favor be confirm by a bank in his

own country. the opening this country to add its confirming to the credit the bank confirming

the credit is known as confirmed credit.

Circulation Cycle of L/C:

Content of the Letter of Credit

Indenters

Buyer (Importer) Seller (Exporter)

Reimbursing Bank

Advising BankConfirming BankNegotiating Bank

Issuing Bank

Banks normally issued letter of credit (L/C) on forms which clearly indicate the banks name and extent of the banks obligation under the credit. The contents of the L/C of different banks may be different. In general L/C contains the following information:-

i). Name of the Buyer: Who is also known as the accounted since it is for his account that the credit has been opened?

ii). Name of the Seller: Who is also known as the beneficiary of the credit?a. Moment of the Credit: which should be the value of the

merchandise plus any shipping charges intent to be paid under the credit?iii). Trade Terms: Such as FOB and CIF.

a. Tenor of the draft which is normally dependent upon the requirements of the buyer.

b. Expiration date: which is specified the latest date documents may be presented. In this manner or by including additionally a latest shipping date, the buyer may exercise control over the time of shipment.

Iv). Documents Required: Which will normally include commercial invoice consular or customers invoice, insurance policies as certificates if the source is to be effected by the beneficiary and original bills of lading.

v) General Description of the Merchandise: Which briefly and in a general manner duly describes the merchandise covered by a letter of credit?

3.7.11 Import financing:

SOD (Importer)Advance allowed in foreign currency for opening L/C to import good, fall under this type of

lending. This is also an advance of temporary period, which is also known as pre finance.

PAD (Payment against Document)Payment against lodgment of shipping documents of goods, imported through L/C fans under

this head. It is an in term advance connected with import and is generally liquidate shortly

against payment, usually made by the party for retirement of documents to release goods

from customer authority as payment has to be made within 7 days after the documents have

been received and negotiating bank may claim interest for making delay.

Loan against Imported Merchandise (LIM) Advance allowed for retirement of shipping documents and release of goods, imported

through LIC taking effective control over the goods by pledge in to downs under bank’s lock

and key fall under this type of advance. This is also a temporary advance connected with

import, which is known as post-import financing would falls under the category “Commercial

Lending”.

Loan against Trust Receipt (LTR):Advance allowed for retirement of shipping documents would release goods imported

through L/C falls under trust with the arrangement that sale proceeds should be deposited to

liquidate the advance within a given period This is also a temporary advance connected with

import, and known as post import financing would and under the category “Commercial

Banking”.

Major problems in the operation of L/C Bank deals with documents not with goods, but sometimes goods are not as per

document.

Over invoicing by mist up conspiracy of buyer and supplier.

In advance of pre-shipment inspection supplier may inferior goods and for that the

bank faces some problem.

If the market price of the goods falls and the party maintains less the liquid money of

margin then the party would not release the goods.

In absence of insurance cover note with access risk.

In case of frequent change in tax, tariff duty and the exchange rate of Taka with

foreign currency.

3.8 Export Section3.8.1 Introduction:Export is the process of selling goods ad services to the other country The bank is making

vast revenue by hailing export trade Export formality introducing Back-to-Back letter of

credit facility and boded warehouse system, which acts as catalytic force for the success of

the industry As the low initial capital requirement, short gestation period, high turnover ratio

to investment and due to availability of Back-to-Back UC facility, one could go into

production within a period of four to six months time Because of the prospect of quick

turnover, the commercial banks also come forward to finance these enterprises, of which

NCCBL is the pioneer By 2000, the number of garments industry had grown to more than

3500 registered units, which accounted for 73% of the total export earnings of the country

This impressive performance has been possible as the buyers, who find East Asia too

expensive as supply source, have been attracted by Bangladesh’s relatively low cost of

production and high quality proud According to Foreign regulation act, 1947, none can

export by post and otherwise than by post any goods either directly or indirect to any place

outside of Bangladesh, unless a declaration is furnished by the exporter to the collector of

customers or to such other person as the Bangladesh Bank may specify in this behalf that

foreign exchange representing the full exporter value of the goods has been or will be

disposed of in a manner and within a period specified by Bangladesh Bank. Payment for

goods exported from Bangladesh should be received through an authorized dealer in freely

convertible foreign currency or in Bangladeshi Taka from a Non-resident Account. The

Export section deals with two types of credit that are as follows

Exporter letter of credit

Back-to-Back letter of credit

3.8.2 Exporter letter of creditThe other type of L/C facility offered by NCCBL is export. L/C. Bangladesh exporters a

large quantity of goods and services to foreign households. Readymade textile garments (both

knitting and wove) jute, jute-made products, frozen shrimps, tea are the main goods that the

Bangladeshi exporter to foreign countries. Garments sector is the largest sector that exports

the lion share of countries export. Bangladesh exports about 40% of its readymade garments

products to USA, most of the exporter who export through NCCBL are readymade garments

exporters. They open against the import L/C opened by their foreign importers.

3.8.3 Export DocumentationIn any business especially in export business documentation is one of the most important

part. Implementation of a business contract much depends on preparing and submitting the

documentation properly. In order to export any goods or services to overseas, the exporter

should have affixed the photocopies of the following documents for export:

Export Registration Certificate (ERG)

Bill of exchange

Bill of Lading /Airway Bill /Truck Receipt.

Commercial invoice Certificate Of Origin

Mate Certificate

Packing List

Insurance Coverage

Beneficiary Certificate where the exporter tells about the goods he/she wants to

export

Besides, more documents are required for some specific goods. Following are the documents

under this category:

Quality control Certificate (for food products)

GSP Certificate (for handicrafts products)

Consular Invoice (for Middle countries)

Inspection Certificate

The types and number of the documents are to be submitted to implement the export contract

are mentioned in the LIC. Banker’s negotiation of bill depends upon these documents.

3.8.4 Back-to-Back Letter Of CreditBack to Back LIC is a type of pre—shipment finance by way of opening L/C in favor of a

local or foreign supplier for purchase of raw materials or the finished merchandise, as the

case may be, to execute export order. This type of L/C is only opened on the strength of an

export order received by way of an L/C or firm contract with or without realization of cash

margin or collateral security depending upon banker—customer relationship. In awarding this

type of facility particular care shall be taken to see that there remains adequate time to

process the raw materials /intermediary or finished products imported under 88 LIC to

execute the work order.

Features of Back-to-Back Letter Of CreditBack to Back is an import L/C to procure goods I raw materials for further.

BTB is operand based on Export L/C / BTB is a kind of Export Finance. Export L/C is at

sight, but Back to Back L/C is at unasked scrutiny. No margin is required to open Back to

Back L/C.

Necessary documents required by bank for opening BACK TO BACK L/C

Prescribed application and agreement of LIC duly stamped and signed

A set of LCAF(Letter Of Credit Authorization Form) duly filled in and signed

Pro-forma Invoice! Indent duly accepted

IMP From duly signed

Insurance Cover Note along with Money Receipt

Letter of authority to recover Bank’s charges from account

Necessary charge documents duly stamped and signed

3.8.5 Financing for ExporterPre-Shipment Export Financing

During the process of manufacturing the exportable garments, the exporter may face working

capital crisis, which causes late shipment of goods. To avoid this situation, banks may also

finance (besides BTB L/C facility) pre shipment export financing to the exporter in the from

of packing Credit! Export cash credit maximum 10% of the master! Export L/C to meet up

overhead and factory expanses i. e. salary, office rent, telephone bill, electricity bill.

The PC I ECC Allowed Earlier may be Adjust with Interest at the Time of Negotiation: After

negotiation of export bills, the documents are sent abroad usually to the Export L/C opening

bank as per instruction of Master L/C. The negotiation bank claim reimbursement of the

proceeds from the bank as mentioned in the Master LIC. The negotiation bank also advice the

L/C issuing bank to remit the proceeds to Head Office A/C maintained with correspondence

abroad advice to negotiation bank.

Foreign Documentary Bills for Purchased (FDBP)

Finally, after manufacturing the garments the export of the same is made. The Exporter then

submits the related shipping documents to the bank for I collection. After receipt of the

documents, the same is duly scrutinized with the respective Export L/C and if found drawn

strictly in conformity with L/C terms and conditions a portion of balance documents value

(after deduction of BIB, Term loan, FDR, PC/ECC with interest, Local Commission, Foreign

Commission, Bank Commission, Reimbursement charges etc.) is negotiated if requested by

the party.

Discrepant export documents must not be negotiated without prior approval of the Foreign

Master L/C issuing bank. The discrepancies may be classified as major or minor. There may

be some discrepancies, which are removable, and then exporters to be advised to remove the

discrepancies. Then documents are sent on collection (FDBP) basis for major discrepancies.

Local documentary Bills for Purchased (LDBP) When export is done in local then importers opens a L/C in his/her bank (associating bank).

Importers import supplying accessories from his/her supplier (exporter) and it is done in

deferred payment. Importer pays the payment by giving L/C to exporter. But exporter needs

cash payment from his/her advising bank against the L/C. The advising bank finances the

exporter 90% of the L/C value and takes 10% of value of L/C as interest @15%.

Chapter 4Documentation4.1 Import Documentation

4.2 Export Documentation

4.3 Documentation for opening L/C

4.4 Documentation for Shipment

4.5 Export Documents Examination & Negotiation System

4.6 Checking List for the Examination of Export documents

4.7 Export & Export Marketing Formalities

4.1 Import DocumentationIn order to release of imported good from the port / station the following documents to be

submitted by a C & F Agents to the customs authority:

1. Bill of Entry.

2. Copy of bill of lading (BL).

3. Copy of invoice.

4. Packing List.

5. Certificate of origin (CO).

6. UD / UP. (Utilization Declaration / Utilization Permission).

7. VBF-6A. (value Bond Form) Form to be supplied by the C & F agent.

8. Bond / Stamp (In case of garments industry no stamp is required) the rate of

stamp / bond is TK. 500/- for imported goods worth TK. 10 lacks.

9. Copy of master L / C.

10. Letter of Credit Authorization (LCA).

11. Pro forma Invoice.

12. Copy of insurance cover note etc.

13. PSI (Pre-Shipment inspection) certificate if the industry is not export oriented.

4.2 Export DocumentationThe documents which to be submitted n a C & f agent for export. An exporter should have to

submit the following documents to the customs authority of a station:

1. Shipping Bill Of Entry.

2. Export L/C.

3. Packing List.

4. Invoice.

5. UD / UP.

6. VBF-9A. Form to be supplied by the C & F agent.

7. Export permission form (EXP).

4.3 DOCUMENTATION FOR OPPENING L/CBefore preparing necessary documents you must collect Indent / pro-forma invoice.

Otherwise, you will not be able to fill up the L/C application form. So, obtain an

indenr/proforma invoice as per the category of your L/C prior to filling up the forms.

4.3.1 FOR OPENING L/C THE BANK WILL PROVIDE YO THE

FOLLOWING DOCUMENTS1. L/C Application Form.2. L/C A Form (Letter of Credit Authorization Application Form).3. IMP form (Import permission Form).4. TM Form.5. Agreement Form.6. Charges of Documents.7. Guarantee Form.

4.3.2 You have to fill up the forms mentioned above, and after verifying

and signing, the following documents should be submitted to the bank.1. Trade license (Valid).

2. Import Registration Certificate (IRC).

3. Income Tax Declaration or a TIN.

4. Membership Certificate.

5. Memorandum of Association.

6. Registered deed (in case of partnership firm).

7. Resolution (in case of partnership firm).

8. Photographs.

9. Insurance cover Note and receipt of premium payment.

10. A copy of indent/pro forma invoice etc.

4.3.3 FOLLOWING DOCUMENTS ARE REQUIRED TO OPEN A

CASH/WESS L/C

1. A Prayer for opening L/C.

2. L/C Application from.

3. Indent/Pro forma invoice.

4. L/C A Form.

5. IMP.

6. Charge of Documents.

7. Insurance cover note.

4.3.4 FOR OPENIG BACK TO BACK L/C, THE FOLLOWING

DOCUMENTS ARE REQUIRED:

8. A Prayer for L/C opening.

9. L/C Application form.

10. Indent/Pro-forma invoice.

11. LCA Form.

12. IMP.

13. Insurance cover note.

14. Original Export master L/C.

4.4 DOCUMENTATION FOR SHIPMENT

When we refer to documentation in the process of export, we usually refer to the preparation

of documents which the shipper uses to collect money for the goods shipped. Therefore, this

is the final of the transaction and an important step.

Depending on how the payment term is set up between you and your buyer, we should

prepare the documents accordingly. However, no matter it is L/C payment or DP, DA or

Open Account, you must prepare your documents to satisfy the following parties.

(i). The buyer’s bank that has open the L/C to you if it is L/C payment, otherwise

you will have delay in receiving the proceeds of the goods you have shipped.

(ii). That Customs, otherwise you will have delay in clearing the goods through

Customs.

(iii). Your buyer, giving him the correct information in all respect, particularly all the

packing details in order to enable him to distribute the merchandise correctly to the

retail stores.

Now, let us go through each piece of paper needed in the set of documents we are preparing

and note the essential information it should contain.

4.4.1 COMMERCIAL INVOICE

This is the document that you use to collect money from your buyer. Therefore, it must

contain the correct unit price with the indication of FOB the shipping port, or CIF or CNF at

the shipping destination. If the terms used are FOB the shipping port, then it is simple and

easy.

4.4.2 PACKING LISTThere is no hard and fast rule as to how exactly it should b e prepared. You can use your own

format. As long as you can show the following, it will be acceptable.

The contents of each of the cartons shipped, including the color and size

assortment.

The measurements and gross weight of each carton. Your packing list you

must indicate the gross weight, net weight and net net weight clearly.

4.4.3 WEIGHT LISTSometimes the buyer may ask for this on the L/C. If he does, then you should prepare it and

submit it to the bank as one of the documents required for L/C negotiation. If your buyer does

not ask for it, then you should include this information in the packing list.

The weight information’s are:

GROSS WEIGHT.

NET WEIGHT.

NET NET WEIGHT.

4.4.4 BILL OF LADING:If the shipment is to be made on board, B/L (Bill of Lading) is usually used. In preparation of

the B/L the most important thing is the use of the correct consignee and notifies party. You

should use the exact wording as stated in the L/C opened by your buyer so that you will not

have any discrepancy against the L/C. In regard to the other aspect of the B/L, you can just

follow the format as provided by the4 shipping line.

However sometimes the buyers L/C may require you to do the following for their

convenience:

They want you to send one original B/L to their customs broker directly by

courier service, and submit the balance 2 original B/L to your bank for

negotiation of their L/C.

They also want you to consign the shipment to them (use their company name

as the consignee) instead of consigning the shipment to their bank.

4.4.5 AIR WAY BILL:

Air waybill is used for air shipment, with similar function of B/L on board shipment.

How4ever, there is some important difference between air waybill and Bill of Lading. Please

note the following to guard you accordingly.

On board shipments, the buyer needs at least one original B/L to take possession of the

goods. However, on air shipments, the buyer does not need original Air waybill, or even a

copy of the Air waybill to take possession of the goods. If the shipment is consigned to the

buyer, the buyer can legally claim the goods from the airline. In fact, the airline will notify

the buyer to claim the goods. As long as the buyer can identify himself as the consignee, he is

allowed to take the goods from the airline.

Therefore, when we make shipments by air, unless we have received payment up front, we

should mot consign the goods to the buyer. We should always consign the goods to the bank

making the bank the legal owner of the goods. The bank will only pass the title to your buyer

when your buyer pays the bank for the goods. When the bank passes the title to your buyer, it

is responsible to pay you.

If by mistake, you have consigned the goods to your buyer, it is at his mercy to pay you.

4.5 OTHER DOCUMENTS:

Other than the above mention documents, of course there are others you have to prepare for

negotiation of the L/C such as:

Draft

Beneficiary Statement

Quota statement

Some Kind of CertificateOther than the draft which is an i8nstrument for the bank to collect the money from the buyer,

the other documents are designed by the buyer or his bank to provide some extra protection

for the buyer. You just prepare them as instructed by the L/C to avoid discrepancies.

If the payment term agreed is not L/C, but D/P or D/A, then you just prepare documents

needed by your by your buyer to enable him to take possession of the goods and pass the

goods through customs. These documents are to be sent from your bank to your buyer’s bank

for your buyer to pick up and pay his bank to you.

4.5.1 EXPORT DOCUMENTS EXAMINATION & NEGOTIATION SYSTEM

As per UCP- 500, 1993 revision there are four types of credit. These are as

follows:

Sight Payment

Deferred Payment

By acceptance

Negotiation

Today our discussion will be concentrated on Negotiation. Negotiation stands

for payment of value to the exporter against the docs stipulated in the L/C.

The bank giving the value is known as negotiation bank. Negotiating bank

firstly examines the docs presented by the exporter. Upon satisfaction bank

pays the value to the exporter. The export documents are mainly categorized

into four groups:

Transport Documents

Insurance Documents

Commercial Invoice

Other Documents

Other Documents include the following documents as required by the L/C:

Inspection Certificate.

Certificate of origin / GSP Certificate.

Packing list/Weight list.

Shipping Certificate.

Photo Sanitary Certificate / Food Inspection Certificate.

Health Certificate.

Certificate of Analysis.

Fumigate Certificate.

Radio Activity Certificate.

As the negotiating bank is giving the value before repatriation of the export

proceeds it is advisable to examine the docs with reasonable care whether any

discrepancy is observed in the docs are in order bank negotiates the same.

4.6 CHECKING LIST FOR THE EXAMINATION OF EXPRT DOCUMENTS’

PERTICULARS YES NO

1. Docs. relate to the L/C Number

2.Documents received as per forwarding schedule

3.Documents received as per forwarding schedule

4.Shipment made within the validity of the L/c

5. Documents value does not exceed the L/C amount.

6. Documents are properly signed & authenticated

BILL OF EXCHANGE

1. Correctly dated

2. Amount agrees with that of Commercial Invoice

3. Tenor is as required by L/C

4. Amount agrees in words and figures

5. Drawn on correct drawee.

6. Marked with L/C No.

7. Name of the payee is identified

COMMERCIAL INVOICE

1. Issued by the beneficiary

2. Made out in the name of applicant

3. Description of goods must correspond with that in the L/C

4.Price, Quantity and amount shown as per L/C

5. Signed, notarized, legalized, certified as required

6. Shipping marks, weight & no. of packages correspond with L/C

& other documents.

7. Currency of Invoice is same as that of L/C

TRANSPORT DOCUMENTS

1. Full set of originals is presented

2. TD is Clean.

3. TD indicates that goods have been loaded or shipped on board.

4. Port of loading & port of discharge comply with L/C

5. Shipping marks as per L/C

6. All originals are signed

7. Marked freight prepaid / freight collect

8. Issued to the order as stipulated in L/C

9. Bears name & address of shipper & notify party

INSURANCE DOCUMENTS:

1. Cover risks as per L/C

2. Dated on or before shipment date

3. Issued in the currency of L/C

4. Name place where claims are payable

5. Cover is for at least 10% above the CIF value

OTHER DOCUMENTS: CERTIFICATE OF ORIGIN:

1. Signed notarized visited as required

2. Data on it is consistent with that of other documents

3. Country of origin is specified

OTHER DOCUMENTS: PACKING LIST:

1. Corresponds with the requirement of L/C

2. Data Ok

OTHER DOCUMENTS : INSPECTION CERTIFICATE

1. Inspection conducted by nominated firm in the L/C

2. Certificate complies with the Inspection requirements of the L/C

3. Signed

4.7 Expo Form: Exporter must submit copies of EXP. Form (Duplicate, Triplicate & Quadruplicate) along

with export documents. Negotiating bank reports the Duplicate to Bangladesh Bank on or

after negotiation date but not later than 14 days from the date of shipment. On realization of

export proceeds, Triplicate is reported by the same bank to same Authority. Finally

Quadruplicate is retained by the negotiating bank as their office copy. It is necessary to

mention that first copy of EXP. is reported by customs authority to Bangladesh Bank.

Chapter-5

Analysis wings

5.1 YARN NUMBERING SYSTEM

Definition:

Count is a numerical value, which express the coarseness or fineness (diameter) of the yarn

and also indicate the relationship between length and weight (the mass per unit length or the

length per unit mass) of that yarn. Therefore, the concept of yarn count has been introduced

which specifies a certain ratio of length to weight.

Types of Yarn Count:

One distinguishes between two systems.

a)Direct Count System:

The common features of all direct count systems are the length of yarn is fixed and the

weight of yarn varies according to its fineness.

The following formula is used to calculate the yarn count:

N = (W X l) / L

Where, N = Yarn count or numbering System

5.1 Yarn Numbering System

5.2 Some Important Conversion Factors:

5.3 Formula For Count Conversion:

5.4 Knitted Fabric Faults:

5.4.1 Sources Of Fabric Faults:

5.5 Fabric Faults:

5.6 Calculation Related To Weft Knitting

5.7 Relation Between Yarn Count And GSM:

5.8 Calculation For Consumption And Garments Pricing

W = Weight of the sample at the official regain in the unit of the

System

L = Length of the sample

I = Unit of length of the sample

Numbering System Unit of Length (I) Unit of Weight (w)Tex system, Tt 1000 metres No. of Grams

Denier, D or Td 9000 metres No. of Grams

DeciTex, dtex 10,000 metres No. of Grams

Millitex, mtex 1000 metres No. of Milligrams

Kilotex, ktex 1000 metres No. of Milligrams

Jute count 14,400 yards No. of Pounds (lb)

b) Indirect Count System: The common features of all indirect count systems are the weight of yarn is fixed and the

length of yarn varies according to its fineness.

The following formula is used to calculate the yarn count:

N = (L X w) / (W X l)

Where, N = Yarn count or numbering System

W = Weight of the sample at the official regain in the unit of the

System

L = Length of the sample

I = Unit of length of the sample

w = Unit of weight of the sample

Numbering System Unit of Length (I) Unit of Weight (w)

English cotton count, Ne (NeB) 840 yards 1 pound

Metric count, Nm 1000 metres / 1km 1 Kg

Woolen count (YSW) 256 yards 1 pound

Woolen count (dewsbury) 1 yards 1 ounce

Worsted count, Ne K 560 yards 1 pound

Linen count, Ne L 300 yards 1 pound

5.2 Some important conversion factors:1yards = 0.9144 metre 1Inch = 2.54

cm

1 metre = 1.0936 yards 1 m2 = 1.196 yd2

1 metre = 39.37 inch 1 yd2 = 0.8361 m2

1 cm = 0.3937 inch 1 gm/m2 = 0.0295 oz/yd2

1 gm = 0.0353 oz 1 oz/yd2 = 33.91 gm/m2

1 oz = 28.350 gm 1 pound = 0.4536 kg

1 pound = 45.6 gram 1 yd/ Ib = 2.0159 m/k

1 kg = 2.2046 pound

1 m/kg = 0.4961 yd/Ib

Example

On a cone, there are 980m yarn which weight 490gm. What is the Ne, Nm, Tex and denier of

the Yarn?

For Ne:

We know that, Ne = (L X w) / (W X l) Here,

Ne = (9800 X 453.6) / (840 X 0.91 X 490) L = 9800m

Ne =11.87 W = 490 gm

Ne = 12 w = 1 lb

l = 840yds = 840*0.91m

For Nm:

We know that, Nm = (L X w) / (W X l) Here,

Nm = (9800 X 1000) / (1000 X 490) L = 9800m

Nm = 20 W = 490 gm

w = 1 Kg = 1000gm

l = 1000m

5.3 FORMULA FOR COUNT CONVERSION:

Ne =5315/D D= 5315/Ne

Ne = 590.5 / T Tex = 590.5 / Ne

Ne = 0.59 X Nm Nm = 1.693 X Ne

Nm = 9000 / D D = 9000 / NM

Nm = 1000 / T Tex = 1000 / Nm

D = 9 X Tex Tex = 0.111 X D

5.4 KNITTED FABRIC FAULTS: Faults in circular knitting production can be caused in various ways and quite a few of them

cannot be related to just one cause. The following explanations are expected to be helpful in

trying to locate the causes of these faults easier.

Reasons of fabric faults: Yarn manufacturing faults

Fabric manufacturing faults

Fabric processing faults – dyeing, printing or finishing faults

5.4.1 Sources of fabric faults: The sources of faults could be (in circular knitting machine, 80% faults comes from yarn).

Faults in yarn and the yarn package

Yarn feeding and yarn feed regulator

Machine setting and pattern defects

Machine maintenance

Climatic conditions in the knitting plan

5.5 Fabric faults: Knitted fabric faults are very different in nature and appearance and are often superimposed.

The most common faults are:

Broken ends, hoes or cracks.

Drop stitch

Cloth fall-out or pressed off stitches

Snagging or snags

Truck or double loop or stitches

Bunching-up

Vertical stripes

Horizontal tripe’s

Soil stripes

Color fly or colored tinges

Distorted stitches or deformed or tilted loops.

Holes:Holes are the result of cracks or yarn breakages. During stitch formation the yarn had already

broken in the region of the needle hook. Depending on the knitted structure, yarn count,

machine gauge and course density, the holes has different sizes. The size can therefore only be

estimated if the comparable final appearance of a comparable fabric is known.

Possible causes:

a) Yarn parameters

High yarn irregularity

Incorrect yarn input tension setting, yarn running in tension is too high

Poorly lubricated yarns

Weak places in yarn, which break during stitch formation

Knots, slubs etc.

Yarn is too dry.

b) If the yarn is trappe4d between the cheek taper and the closing latch

o Yarn Damage

c) Too small stitches

o Difficulty in casting-off of the stitches

d) Relation between cylinder and dial loop not correct; yarn feeder badly set;

Defection knitting elements.

Drop stitches:These are the result of a defective needle. They also occur when a yarn is not properly fed

during stitch formation, i.e., not properly laid-in the needle hooks. These are the unlinked

knitted loops.

Possible causes:

a) Inaccurate insertion of the yarn into the needle hook;

b) Broken needle hook;

c) Due to high yarn twist and low fabric take-down-tension the knitted loop could fall out

of the hook;

d) Yarn feeder wrongly threaded-in;

e) Dial loop length not properly related to cylinder loop length; the loop jumps out of the

needle hook;

f) Bad take-up;

g) Very dry material;

h) Insufficient yarn tension.

Needle marks or Vertical stripes:Vertical stripes can be observed as longitudinal gaps in the fabric. The space between adjacent

Wales is irregular and the closed appearance of the fabric is broken up in an unsightly manner.

Vertical stripes and gaps in the fabric are often the result of a meager setting, i.e., the yarn

count selected is too fine for the machine gauge or the stitch size (course density) is not correct.

Needles are bent, damaged, do not move uniformly smooth, come from different suppliers or

are differently or the differently constructed.

Possible causes:

Twisted or bent needle hooks;

Stiff latches and needles;

Incorrect closing of the hook by the latch;

Heavily running needles;

Damaged dial and cylinder;

Damaged needle latch and needle hooks;

Damages on other knitting elements.

Horizontal Stripes:These are cause by unevenness in the courses; the traverse horizontally and repeat themselves

regularly or irregularly.

Possible causes:

a) Deflector in dial cam brought into tucks position.

b) Deflector not completely switched off. Needle can still grip the

yarn and forms a tuck loop.

c) Yarn feeder badly set.

d) Differences in the yarn running-in tension.

e) Couriering not constant at all feeders.

f) Jerky impulse from fabric take-up.

5.6 CALCULATION RELATED TO WEFT KNITTING

The equations for calculating the various machine parameters, such as system count and density

i. r. feeding system, knitting speed and machine rpm, performance factor and efficiency level,

will first of all be discussed below.

System Count

By a knitting system (functional unit), we understand on circular knitting machines a cam

system or a number of cam system with yarn feed, arranged in such a way that a course is

formed on all needles in one cylinder revolution. In the case of individual needle selection or

selected choice, they are the part courses equivalent to a full course.

The variables influencing the number of functional units are

Cylinder diameter

The circular knitting machine operating principle

Possibilities (plain and structured knits, jacquard fabrics), and also

Machine gauge.

Relation between Yarn count and Machine gauge:Selection of machine gauge depends upon yarn diameter. Yarn diameter also depends on

several factors such as yarn count, fiber type, yarn finishing etc.

Machine gauge is given by a equation,

For single-jersey, G = √ (1650/Tex) and

For Double-jersey, G = √ (1400/Tex).

Where G is a measured in needles per cm.

5.7 Relation between Yarn count and GSM: From the research work it is try to find the following equations for the selection of yarn count

to get required GSM equations vary for fabric types, fabric construction. List of equations are

tabulated below:

Name of Fabrics EquationsSingle-jersey GSM = 350.4-6.879XNe

Lycra Single-jersey GSM = 354.56-4.9716XNePique GSM = 386.44-6.6737XNe1x1 Rib GSM = 437.66-7.9731XNeLycra 1x1 Rib GSM = 494.08-8.2839XNeLycra 2x2 Rib GSM = 519.05-9.1216XNeInter lock GSM = 388.41-4.778XNe

Fabrication GsmLyecra

Yarn

Req. Yarn (Count) Fabrication Gsm Lyecra

YarnReq.Yarn

(Count)

S/J

90-100   40 /1

P.k / Lucost Lyecra (5%)

140-160 20 D 40/1110 -120   34/1 170-180 20 D 34/1130-140   30/1 190-200 20 D 34/1150-160   30/1-26/1 210-220 40 D 30/1170-180   26/1 230-240 40 D 30/1190-200   24/1 250-260 40 D 26/1210-220   20/1 270-280 40 D 26/1240-250   20/1 290-300 40 D 24/1

260-270   30/1 Duble  280-300   30/1/ Duble

1X1 Rib

150-160   34/1  170-180   30/1

S/J Lyecra (5%)

140-160 20 D 40/1 200   30/1170-180 20 D 34/1 220-230   26/1190-200 40 D 34/1 250-260   24/1210-220 40 D 30/1 270-280   20/1230-240 40 D 30/1 290-300   20/1250-260 40 D 26/1  270-280 40/D 26/1

2X2 Rib

160-180   36/1290-300 40 D 24/1 185-200   30/1

  210-220   30/1

S/J Lyecra (10%)

170-180 20 D 40/1 225-240   26/1190-200 20 D 34/1 250-260   26/1210-220 20 D 34/1 270-280   24/1230-240 40 D 30/1 290-300   24/1250-260 40 D 30/1  270-280 40 D 26/1

100% Cotton Tarry Fleece

200-220    290-300 40 D 26/1 230-240    

  250-260    

P.k / Lucost

120-140   40/1 270-280    

150-170   34/1 290-300    30/1&24/1

180-200   30/1 310-320    30/1&24/1

210-220   26/1 330-350    

230-250   24/1        260-300   22/1

Relation among GSM, Stitch length and yarn count can be derived from the

following equation:

GSM = K / (Yarn count, Ne X GSM)

Where K is a constant.

Constant ‘K’ which can be derived as follows:

Fabrics Constant K values

Single-jersey or plain

Double lacoste

1X1 Rib

2X1 Rib

Interlock

12068.509

14855.2

16431.497

19005.333

2413.8

5.8 CALCULATION FOR CONSUMPTION AND GARMENTS PRICE

Formula for Knit Garments

CONSUMPTION = {(Body length+slv length+10)*(Chest+4)*2*GSM / 10000000}

+wastage %

POLO SHIRT M L XL XXLR/N 240 240 240 240Chest 56 58 60 62Length 72 74 76 78S.Length 23 24 25 26 Chest 60 62 64 66Length 72 74 76 78S.Leghth 23 24 25 26Wastes 18% 18% 18% 18%Collar 15% 15% 15% 15% Consumption 3.6 3.9 4.1 4.3Consumption 4.28 4.55 4.83 5.11Consumption 4.92 5.23 5.55 5.88 Collar 0.64 0.68 0.72 0.77 Yarn 15.76 16.75 17.77 18.82Knitting 1.01 1.08 1.14 1.21Dyeing 6.52 6.93 7.35 7.78Accessories 3.50 3.50 3.50 3.50Print 0.00 0.00 0.00 3.50Emb 0 0 0 1.5Zipper 0 0 0 0Documents 0 0 0 0Collar 1.74 1.85 1.96 2.08C&F 0.00 0.00 0.00 0.00

Lycra 0.00 0.00 0.00 0.00Commercial Charge 0.10 0.10 0.10 0.10Factory 2.00 2.00 2.00 2.00C.M 3.50 3.50 3.50 3.50Profit 2.00 2.00 2.00 2.00         TTL Cost/Doz (USD) 36.1 37.7 39.3 46.0         Actual Cost/Pcs 3.01 3.14 3.28 3.83         

Chapter 6

My Observation

6.1 Findings 1) MB Knit Fashion limited is one of the most growing multi Quality Manufacturing

Company. It’s doing its operations to Hire Purchase value first. So its operations also take

at major part of Bangladeshis business near future also.

2) It uses modern techniques to maintain credit so there arise very few problems.

3) MB Knit Fashion Limited has already achieved a high growth rate accomplished by

an impressive profit growth rate from 2004. The number of investment is also rapidly

increasing.

4) MB Knit Fashion Limited has an interactive corporate culture. The working

environment is very friendly, interactive and informal. And there are no hidden barriers or

boundaries while communication between the superior and the subordinate.

5) This corporate culture provides as a great motivation factor to the Buyers.

6) MB Knit Fashion Limited has available training opportunity for its employees, so

they don’t require to train them in other training Institutions.

7) Some employee’s performance is below of the standards.

8) Information Infrastructure is not developed.

9) Lack of proper setting arrangement of employees.

10) MB Knit Fashion’s numbers of customers / Buyers are also very small in compared to

other company’s in the market.

11) Most of the time it has been seen that Buyers/peoples who come to the Company for

hire purchase, they are not well informed about this type of sale. So, they need to properly

information to motivate them. But most of the Company mangers are too busy to

maintain the customer properly. So they need to more training on emphasis customers

first.

12) MB Knit Fashion Have no customer/Buyer care division but most of the customers

are not informed about this.

13) Most the businesses of MB Knit Fashion are export and import oriented. So they

should increase more expertise at this sector by providing more training.

14) The recovery of hire sale is threatened because it is increasing day by day due to

tendency of human behavior.

15) Lengthy process of Merchandising sanction or delay is a common problem of MB

Knit Fashion which affects Company Profit.

16) The client is not willingly provides sufficient information as the Merchandising

sanction is delayed.

17) Legal system is not prompt and it is the curse to the credit management system and

alarming factor recovering credit from the defaulter. In reality it is very difficult, lengthy

and expensive to have a verdict in favor of the company.

18) The influence of the board members, management of the company sometimes

approved some bad proposals and at last the customer becomes defaulter.

19) Information that is acquired by the company officials to appraise a hire sell proposal

is not enough to judge a customer’s / Buyer’s quality and sometime it creates conflict.

20) Gradually increased of the company activities.

6.2 Recommendations 1) Attractive bonus and intensive package for Merchandiser so that they are more motivated

to their merchandising Process. Though there is existing commission system for

Merchandiser, it should be more attractive.

2) The merchandiser managers need to more freedom to select a customer / Buyer. So, higher

authority must have to give more flexibility for merchandiser mangers.

3) To permit an order it is required to maintain a lot of chain command and this process

should be minimized.

4) Commercial Merchandising officer must be skilled enough to understand the manipulated

and distorted financial statements.

5) In case of big hire sell, care must be taken to accept accurate information and control the

International Standard Quality.

6) Reporting of all production and productivity ratio should be periodically made to the

company.

7) Company should always in touch with market because everything is rapidly changing and

new era of business is created. At now situations are changing so quickly. There has the good

potentiality and company should review the performance profiles and made it favor to them.

8) The company is overloaded with un-skilled aged employees and for that company should

arrange golden handshake for its betterment of the service.

9) Human resources should be always developed with up to date knowledge, training,

changes, technology etc.

10) The interior decoration should be given more emphasizes.

11) The marketing and advertisement of the company, its products should be given more

priority.

12) The hire sell approval should be free from any types of influence; the management of the

company should be stricter regarding this.

13) As Buyer selection is the key to successful hire sell, Merchandiser Manager should focus

on the selection of true Buyer.

14) Care should also be taken so that good buyers are not redundant due to strict adherence to

the hire sell policy.

15) Coverage of all production report should be periodically made to chief Executive officer.

The Chief executive officer should have more obsessive for the production history.

ConclusionMB Knit Fashion was established in 1994 with an intention to fulfill the demands of all

kinds of knitted readymade garments buyer's. MB Knit Fashion is readymade garments

Manufacturer Company & it has the authority to export & trading with other companies in

own country & abroad. MB Knit Fashion has business contract with 12 Numbers of Foreign

Buyers. Even MB Knit Fashion can supply stock lot products round the year to any country.

Our goal is to serve the buyers of excellence with quality, knowledge and integrity, which

allows us to contribute to business success. Decades of experience in drive technology and

our wide range of services have become the basis of long-term business relations.

MB Knit Fashion is one of the leading Garments company in Bangladesh has made a

remarkable position as manufacturer and exporter of 100% knitted garments from 1994.Our

Chairman has 30 years extensive experience in textile sector is the core visionary of this

project. A highly qualified and competent team under the dynamic leadership of our

Managing Director has made remarkable growth possible.

MB Knit Fashion equipped with world class machineries, state of the art production facility

and a qualified technical team. With this combination we are marching towards our avowed

goal of attaining undisputed leadership, in our chosen field.

MB Knit Fashion is specially takes care of workers welfare. Because we believe that

workers are our first strength. Free medical facility for every worker. Our well-equipped

Doctors room is ideal example for every garment factory, free transport facility for workers

& staff, Life insurance for each & every worker of MB Knit Fashion.

MB Knit Fashion main objective is to make sure that the right QUALITY at the right

VALUE is being delivered to the customers in the right TIME…

MB Knit Fashion believes today's business world stands on two principles, one is quality

management and other is quality implement system with strict confidentiality, which

ultimately indicates the net value addition to the business and shows the growth of the

organization.

They have strength with their solid brand image and experience and skills as well, with which

they are being able to satisfy the customers with their wide range of products and services.

As one of the most taxes paying company, it maintains its operations at authentic processes; it

needs to take it up at near future also.