Shreya Textiles

8/8/2019 Shreya Textiles

1/27


2/27

Via Cappellini 18, 20124Milan, Italy.

Pin: 67930-gih fax: 11135329011347 P.O.BOX NO.: 87529-981

Courier no.: 9361bb C.S.T/P.S.T# 876543 Tin no: 836h-fs E-mail:[email protected]

Website:http://www.primejeansbd.com/prface.php

Retailers of garments of all categories and all age groups

To,

The Head merchandiser,

Shreya textiles,

327 Industrial Area B,

Ludhiana.

9/11/2010

Sir/Mam,

We came to know about your products in the trade fair that was held at Ritz hotel in Paris,

this September and found interest in dealing with you. We request you to prepare the samples

of the summer collection of men polo t-shirt, 100% Cotton, full sleeves, with zipper, for us so

that we can see the type of fit and proceed further with the disposition of order.

The samples of the following art numbers are required:

141001

141002

141031

We would require the samples by 20th November at my buying office in Gurgaon, India

Yours sincerely,

Mr. James Blunt

Production Head

Preface International, Milan.

22/09/2010
mailto:[email protected]:[email protected]://www.primejeansbd.com/prface.phphttp://www.primejeansbd.com/prface.phpmailto:[email protected]://www.primejeansbd.com/prface.php


3/27

SHREYA TEXILES

327 Industrial Area A

Ludhiana, Punjab, India

pin: 265899262 Tel: 01615437882 Fax: 0161-86546778 e-mail:

[email protected]

C.S.T/P.S.T# 8764489 website: shreyatextiles.in/ludhiana

Manufacturers of all types of garments

To,

Preface international,

Via Cappellini 18, 20124 Milan, Italy.

Refer: samples for art#141001, 141002, 141031

Dear James Blunt,

It was a great pleasure to receive a request for samples from your side as it is a matter of

being gratified to be associated with such a reputed company of yours. All the three art

numbers for which you want the samples are our best sellers and have been liked a lot by

many vendors and buyer. We are sending you 3 samples of each of them of the medium size.

We will be looking forward to your comments and wish that you like our sent samples.

Thanking you,

Your Sincerely,

Shreya Bahl

Head merchandiser

Shreya textiles

27/09/2010
mailto:[email protected]:[email protected]


4/27

Via Cappellini 18, 20124Milan, Italy.

Pin: 67930-gih fax: 11135329011347 P.O.BOX NO.: 87529-981

Courier no.: 9361bb C.S.T/P.S.T# 876543 Tin no: 836h-fs E-mail:[email protected]

Website:http://www.primejeansbd.com/prface.php

Retailers of garments of all categories and all age groups

To,

The Head merchandiser,

Shreya textiles,

327 Industrial Area B,

Ludhiana.

Mam,

You would be highly pleased to know that our management and designers really liked your

samples. The finishing was also very good. We would like you to make the shipment for us

and the make the order in 100 sets and breakdown of each set should be like follow.

Kindly send us the sales quotation as per our order. Our agent Mr. Samantha Desuza wouldkeep in touch with you for the further negotiation.

Yours sincerely,

Mr. James Blunt

Production Head

Preface International , Milan.

ART NUM. Colour S M L XL

141001 Blue 5 2 6 2

141003 Orange 4 4 4 4

141031 White 5 2 6 2

11/10/2010
mailto:[email protected]:[email protected]://www.primejeansbd.com/prface.phphttp://www.primejeansbd.com/prface.phpmailto:[email protected]://www.primejeansbd.com/prface.php


5/27

SHREYA TEXILES



pin: 265899262 Tel: 01615437882 Fax: 0161-86546778 e-mail:

[email protected]

C.S.T/P.S.T# 8764489 website: shreyatextiles.in/Ludhiana

Manufacturers of all types of garments

To,

Preface international,

Via Cappellini 18, 20124 Milan, Italy.

Refer: samples and sales quotation

Dear James Blunt,

We are sending you the samples as per you needed and are also sending the Performa invoice

along with. Please mail us the signed copy of the Performa invoice duly signed.

Thanking you,

Your Sincerely,

Shreya Bahl

Head merchandiser

Shreya textiles Enclosures: Performa Invoice

14/10/2010
mailto:[email protected]:[email protected]


6/27

PRO-FORMA INVOICE

SHIPBILL No.___________________________ TOTAL NET WEIGHT: ______kg

FROM

NAME / COMPANY_________________________ADDRESS __________________________________

CITY______________________

POSTCODE __________ COUNTRY:__________

PHONE/Fax No.______________________________

CONTACT PERSON __________________________

BANK NAME___________ A/C# ______________

TO

NAME / COMPANY_________________________ADDRESS _________________________________

CITY______________________

POSTCODE __________ COUNTRY:__________

PHONE/Fax No.___________________________

CONTACT PERSON_______________________

V A L U E F O R C U S T O M S P U R P O S E S O N L Y

I declare that the above information is true and correct to the best of my knowledge

Date: _____________ Name: _________________

FULL DESCRIPTION OFGOODS SAMPLE

COUNTRYOF ORIGIN

QUANTITY UNITVALUE

SUB TOTALVALUE

Tick as

appropriate

Men polo t-shirt, 100%Cotton, full sleeves, withzipper

141001141003141031

INDIA 150016001500

50 50 50

75000 80000 75000

TOTAL VALUE

AND CURRENCY: 230000

12388-764 800

Shreya Textiles Preface International

327 Industrial Area- A

Ludhiana

141001 INDIA

0161-2357899

Shreya Bahl

SBI BANK 87254-99

Via Cappellini 18, 20124

Milan

I-10123 ITALY

09876-29876544

Mr. James Blunt


7/27

Signature........................................... (company stamp)


8/27

Purchase order no.:......... Date: 21/10/2010

Style no.:......................

Consignee:...................

Payment mode:.......

Delivery mode:.........

14001

Blue

S M L XL

500 200 600 200

Total:1500 pcs

141003

Blue

S M L XL

400 400 400 400

Total:1600 pcs

141031

Blue

S M L XL

500 200 600 200

Total:

1500 pcs

No. ofpieces

Priceperpiece

Totalprice

1500 50 75000

No. ofpieces

Priceperpiece

Totalprice

1600 50 80000

No. ofpieces

Priceperpiece

Totalprice

1500 50 75000

PURCHASE ORDER

PF 88776

141001, 141002,

141031

Preface International

Letter of credit

By Ship


9/27

TERMS AND CONDITIONS:

a.) the order delivery should be on time or otherwise the shipment would be charged back

highly.

b.) On non delivery of the shipment on time, the shipment would have to be sent by air,all payment by the seller.

c.) Until and unless the buying office agents apporve the samples, they would not be

considered pass.

IEC NUMBER

Place from where we can receive IEC number from:

An application for grant of IEC number shall be made by the Registered/Head Office of the

applicant to the licensing authority under whose jurisdiction, the registered office in case of

company and Head office in case of others, falls. Option of filing an online application

followed by submission of physical copy of application can also be exercised to avoid delay

caused by deficient applications. PAN is mandatory. Photocopy of PAN card has to be

submitted along the application. If PAN card not issued to the applicant then a copy of PAN

allotment letter from I.T. Department will also be accepted.

Introduction to IEC code:

The IEC code is unique 10 digit code issued by DGFT- Director General of Foreign Trade,

Ministry of Commerce, Government of India to Indian Companies. An application for grant

of IEC number shall be made by the Registered/Head Office of the applicant and apply to the

nearest Regional Authority of Directorate General Foreign Trade, the Registered office in

case of company and Head office in case of others, falls in the Aayaat Niryaat Form

ANF2A and shall be accompanied by documents prescribed therein. In case of STPI/ EHTP/

BTP units, the Regional Offices of the DGFT having jurisdiction over the district in which

the Registered/ Head Office of the STPI unit is located shall issue or amend the IECs. There

are to ways to apply Importer-Exporter Code number as following.

An applicant may now choose one of the two options for application submission:

File an online application and submit a physical copy of the application by taking a

printout of the online application.

Submit a physical copy of the application directly at the regional DGFT office.
http://www.etaxindia.org/wp-content/uploads/2010/02/ANF2A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/ANF2A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/ANF2A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/ANF2A.doc


10/27

Procedure of online application

1. Applicants can file an on-line application at the DGFT web-site http://dgft.gov.in. On-

line form has been designed to ensure feeding of all the required information by

prompting user wherever a field is left blank. Applicant has to submit scanned copies of

PAN and bank certificate along with their application.

2. There are 2 options for payment of fee.

If fee is paid by Demand Draft, IEC will be generated only after receipt of the

physical copy of the application.

If IEC application fee is paid through Electronic Fund Transfer facility, IEC number

will be generated by the licensing office automatically and the number can be viewed

online by the applicant.

On the receipt of physical copy of the application, the same IEC will be printed in 24

hours time and dispatched to the firm.

Procedure for Physical Application

One copy of the application must be submitted. Aayaat Niryaat Form ANF2A

Demand Draft of Rs.250 evidencing payment of application fee in favor of the

concerned regional office of DGFT. Money can also be paid through Electronic Fund

Transfer (EFT).

Certificate from the Banker of the applicant firm in the specified format. Appendix

18A

Self certified copy of Permanent Account Number (PAN) issued by Income Tax

Authorities.

Two copies of passport size photographs of the applicant

Photograph on the bankers certificate should be attested by the banker of the

applicant.

Self addressed envelope and stamp of Rs.30.

These documents may be kept secured in a file cover.

The above documents may be sent by post or hand delivered at the concerned regional

DGFT office.

The IEC number should normally be given within two working days provided the application

is complete in all respects and is accompanied by the prescribed documents.

Hints for filling IEC Applications Each page of the application form should be signed by applicant
http://www.etaxindia.org/wp-content/uploads/2010/02/ANF2A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/appnd-18A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/appnd-18A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/ANF2A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/appnd-18A.dochttp://www.etaxindia.org/wp-content/uploads/2010/02/appnd-18A.doc


11/27

Enclosed documents should be self attested.

One photograph of applicant shall be attested by the applicants banker.

http://www.etaxindia.org/2010/02/how-to-get-importer-exporter-code-iec-

number-in-india.html
http://www.etaxindia.org/2010/02/how-to-get-importer-exporter-code-iec-number-in-india.htmlhttp://www.etaxindia.org/2010/02/how-to-get-importer-exporter-code-iec-number-in-india.htmlhttp://www.etaxindia.org/2010/02/how-to-get-importer-exporter-code-iec-number-in-india.htmlhttp://www.etaxindia.org/2010/02/how-to-get-importer-exporter-code-iec-number-in-india.html


12/27

RCMC CERTIFICATE

GUIDELINES FOR ISSUANCE ONLINE REGISTRATION-CUM-MEMBERSHIP

CERTIFICATE (RCMC) OF CAPEXIL

1. The applicant has to enter his IE Code and at least first three characters of name of his

organisation to

access his company details at CAPEXIL website. The Name must match with the Name as

registered in DGFT while procuring the Import Export Code (IEC).

2. The applicant is required to enter the requisite details in the prescribed form after entering

the IEC and the first three characters of the companys name.

3. The applicant has to scan and upload the requisite document as per the criteria of

CAPEXIL.

For Manufacturer exporter the following document need to scan and upload:

a. Self Certified copy of Import Export Code (IEC) issued by the licensing authority.

b. Self Certified copy of Personal Account number (PAN).

c. Self Certified copy of Industrial License / Manufacturing License issued by the licensing

authority.

d. Self Certified copy of Self Declaring that the firm is not black listed by any Government

Department or Government Organisation

For merchant exporter:

a. Self Certified copy of Import Export Code (IEC) issued by the licensing authority

b. Self Certified copy of Personal Account number (PAN)

c. Copy of Chartered Accountants Certificate mentioning Export Turnover / Domestic

Turnover in respect of CAPEXILs item for the last two years.

d. Self Certified copy of Self Declaring that the firm is not black listed by any Government

Department or Government Organisation

4. All the documents along with the requisite payment must to be sent the respective regional

office of CAPEXIL for the purpose of verification.

5. The requisite fees for the registration is

a. Rs. 3000.00 for admission fees for registration as Small Scale category and Rs. 5000.00 for

Large

Scale category + Service Tax @ 10.3%

b. Subscription fees Rs. 5500.00 per year for Small Scale category + Service Tax @ 10.3%c. Subscription fees Rs. 11000.00 per year for Large Scale category + Service Tax @ 10.3%


13/27

d. Additional panel 1000.00 per panel + Service Tax @ 10.3%

e. Rs. 1000.00 for Dual RCMC for once in every five years + Service Tax @ 10.3%

6. The criteria for Small Scale category is as follows:

a. Turnover of a Merchant firm should be less than 25 Lacs

b. Manufacturing firm has to be a SSI holder

7. The criteria for Large Scale category is as follows:

a. Turnover of a Merchant firm should be more than 25 Lacs



b. Manufacturing firm has to be IEM or SIA (Secretariat for Industrial Assistance) certificate

holder

issued by Ministry Of Commerce. Govt. of India

8. The payment should be made in Demand Draft, Cheque in favour of CAPEXIL, payable at

Kolkata, or

through RTGS.

9. Once the applicant furnished all the above information an application number will be

generated and

will be informed for future correspondence. RCMC will be issued from the respective

Regional Office

of CAPEXIL situated at Kolkata, New Delhi, Chennai and Mumbai.

10. Once the RCMC will be issued an exclusive username and password will be generated

and informed

to the applicant through the email address provided by them at the time of filling up the

application.

11. While apply for the RCMC online if the applicant faces any problem and the process gets

stuck in between pages the system will not allow the applicant to reapply for that and it will

show an error message You have Already applied. In such case the applicant is requested to

contact the respective region of CAPEXIL for the deletion of their incomplete application.

The detailed contact details of all the regional offices are available in the website of

CAPEXIL under Reach Us section.

N.B. The Registration is liable to be cancelled in the event of default in payment of yearly

subscription to CAPEXIL, the registration authority.

CAPEXIL holds all the rights to cancel the registration if the requisite amount is not paid and

also if all the necessary documents mentioned above are not furnished by the applicant.


14/27



To operate the application of Issuance of Online RCMC through our website

www.capexil.com users

from the respective regional offices have to go to the Admin section of the website. The

address of the Admin link is www.capexil.com/admin Once the user opens the link

he/she will be asked to enter the requisite username and password to log in into the Admin

account. Remember all the regional offices will have separate username and password. In this

regard they may get in touch with the System Administrator of CAPEXIL to avail the

username and password. After entering the username and password the regional users will be

able to process the applications submitted online by the new applicants.

http://www.capexil.com/onlinehelp.pdf
http://www.capexil.com/onlinehelp.pdfhttp://www.capexil.com/onlinehelp.pdf


15/27

Packing List

Manufactures name & address :

SHREYA TEXILES



Invoice no. & date :

FCM/E/01/2-10 DT. 12/6/2010

Exporters Ref.I.E.C NO. 1233847923

Buyers Order no. Perform Invoice &Date

PF 88766. PI-1234 DT 26/12/2010

Other Reference(s). :

Country of Origin of Goods

INDIA

Country of Final Destination

ITALY

Pre- Carriage by

RAIL

Place of receipt by Pre-carriage

LUDHIANA

Terms of Delivery & Payment :

AS PER L.C.NO. 1ZB/LC/01/2010 DT. 02/04/2010Vessel/Flight No.

V-1213 A

Port of loading :

MUMBAI

Port of Discharge :

Mumbai

Final Destination :

MILAN, ITALY

No.& Kind of Pkgs Description of goods Quantity

Gross Wt. (Kgs)

Amnt

(in euro)

Cartons

1-250

DISCRIPTION OF GOODS & OR SERVICE

FOR 100% OF FOB MUMBAI VALUE OF 800 KGS, 100% COTTON MEN POLO T-SHIRT,

AS PER PERFORMA INVOICE NO. PI-1234 DT 26/12/2010

1500, 250kgs

1600, 300kgs

1500,

250kgs

1500*50

75000

1600*50

80000

1500*50

75000

Art # Colour S M L Xl

141001

141003

141031

Blue 5 2 6 2

Orange 4 4 4 4

White 5 2 6 2

TOTAL 4600,

800kgs

230000


16/27

Declaration :-

1.GOOD EXPORTED OF INDIAN ORIGIN

Commercial Invoice


17/27

Manufactures name & address :

SHREYA TEXILES

327 Industrial Area


Invoice no. & date :

FCM/E/01/2-10 DT. 12/02/2011

Exporters Ref.I.E.C NO. 1233847923

Buyers Order no. Perform Invoice &Date

PF 88766. PI-1234 DT 26/12/2010

Exported to:

Preface International,

Via caplini 18, 2024

Milan Italy

Other Reference(s). :

Country of Origin of Goods

INDIA

Country of Final

Destination

Milan, Italy

Pre- Carriage by

RAIL

Place of receipt by Pre-carriage

LUDHIANA

Terms of Delivery & Payment :

AS PER L.C.NO. 1ZB/LC/01/2010 DT. 02/04/2010

Vessel/Flight No.V-1213 A Port of loading :MUMBAI

Port of Discharge :

Mumbai

Final Destination :

Italy

Quantit

y

Rate

EURO

Amount

EURO

Cartons

1-250

DISCRIPTION OF GOODS & OR SERVICE

FOR 100% OF FOB MUMBAI VALUE OF 800 KGS, 100% COTTON MEN POLO

T-SHIRT, AS PER PERFORMA INVOICE NO. PI-1234 DT 26/12/2010

1500

1600

1500

46*100

50

50

50

7500

0

8000

0

7500

0

Art # Colour S M L XL

141001 Blue 5 2 6 2

141003 Orange 4 4 4 4

141031 White 5 2 6 2

Amount chargeable (IN WORDS) :

Two lakhs thirty thousand only

Declaration :

GOODS EXPORTED OF INDIAN ORIGIN

TOTAL EURO : 230000

FOB

SIGNATURE & DATE


18/27


19/27

BILL OF LADING

or combine Transport or Transport Shipment REG office

hipper ForwardingHREYA TEXILES

Preface International,

Via caplini 18, 2024

Milan Italy 7 Industrial Area

udhiana, Punjab, India

otify Party

NamePreface Internatinal Unless marked "non negotiable" expressdd.......Via Caplini 18, 2024ilan Italy bill, One original bill of lading must be

e-Carriage by: Place of receipt by pre-carrier slandered duty in exchange for the good

AIL LUDHIANA of delivery order for apply.

essel/Flight No. V-1213 A Port of loading :

MUMBAITELNO.

ort of Discharge Final destination

umbai France On carriage to

arks& No No.& kind of packages Description Of Goods Quantity Measurement

.)

2 Two hundred carton

ontainer No.

Seal.. Men polo t shirt 100*20*60

Seal.

100% cottonART # 141001141003141031

hipped On Board Invoice No FCM/E/01/2-10 DT. 12/02/2011 (carton)SB NO: 12388-764

IEC No1233847923 PO NoPF 88776Date21/10/2010

L/C NoSBI-917511.Date28/12/2010..

Ocean freight payable of destination

Freight collected

FOB Excess Value: Refers to Cause 14.3

Declared and Reversed

ITALY.

1500

16001500


20/27

Marine Insurance:-The Marine Insurance Act , 1963, defines marine insurance as follows ; A contract of marine

insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and

to the extend thereby agreed, against marine losses, that is to say, losses incidental to marineadventure.

Marine insurance falls under commercial insurance. The policy is taken to reduce business risks. It

caters to small scale business organisations to large corporate. Policy does not cover loss or damage

due to wilful misconduct, ordinary leakage, improper packing, delay, war, strike, riot and civil

commotion.

Different types of Marine Insurance are available :

Marine import transit insurance Marine export transit insurance Marine inland transit insurance Marine insurance claim procedure Marine Hull

Calculation of Marine Insurance Amount/Premium :

Amount of premium depends on factors like nature of cargo, scope of cover, packing, mode of

conveyance, distance and past claims experience. Premium can be paid on a monthly/quarterly/half-

yearly/yearly basis.

Marine Insurance Claim Procedure:

In case of loss/damage in transit, a monetary claim should be lodged with the carrier withinthe time limit to protect recovery rights

Appointment of surveyor or claim representative in agreement with the insurer to determinethe nature, cause and extent of loss/damage

The surveyor informs the insurer of the approximate value of loss incurred The claim procedure takes from one to three weeks

Documents Required for Marine Insurance Claim:

Original Invoice & packing List - if forming part of Invoice Document of declaration of consignment Damage Certificate from the carrier

List of Some of Insurance Companies Offering Marine Insurance:

1.ICICI Lombard - Marine Import Transit Insurance Policy2. United India Insurance Co. - Marine Cargo3. The New India Assurance Co. - Marine Cargo Policy


21/27

Process of letter of credit

A Letter of Credit is a payment term generally used for international sales transactions. It is

basically a mechanism, which allows importers/buyers to offer secure terms of payment to

exporters/sellers in which a bank (or more than one bank) gets involved. The technical term

for Letter of credit is 'Documentary Credit' LC (as it is commonly referred to) is a payment

undertaking given by a bank to the seller and is issued on behalf of the applicant i.e. the

buyer. The Buyer is the Applicantand the Seller is the Beneficiary. The Bank that issues the

LC is referred to as the Issuing Bank which is generally in the country of the Buyer. The

Bank that Advises the LC to the Seller is called the Advising Bank which is generally in the

country of the Seller.

The specified bank makes the payment upon the successful presentation of the required

documents by the seller within the specified time frame. The process works both in favor of

both the buyer and the seller. The Seller gets assured that if documents are presented on time

and in the way that they have been requested on the LC the payment will be made and Buyer

on the other hand is assured that the bank will thoroughly examine these presented documents

and ensure that they meet the terms and conditions stipulated in the LC.

The essential characteristic of the Letter of Credit is that it relies on the doctrine of strict

compliance for release of payment to the exporter against the draft(s) drawn by him. The

banks do not deal in goods; they deal in documents. As such, the importer has to specify to

the bank the documents which it should examine as evidence to the effect that the exporter

has sent the shipment in strict compliance with the terms and conditions of the export

contract.


22/27

Participants in LC Process

Buyer Issuing Bank Advising Bank Seller (Beneficiary)

Process of Letter Of Credit

%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs

%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0
http://www.google.co.in/imgres?imgurl=http://www.frbatlanta.org/econ_rd/macroblog/120908a.jpg&imgrefurl=http://macroblog.typepad.com/macroblog/trade/&usg=__agx0Tue-tHFaA3Tfx4rXHudKly4=&h=343&w=584&sz=53&hl=en&start=0&sig2=m9H91dbU_jGwtHIemMnjUg&zoom=1&tbnid=c5wcpsGFWL73AM:&tbnh=137&tbnw=233&ei=D7vqTL_PBYT8cJ-N0ZIK&prev=/images%3Fq%3Dprocess%2Bof%2Bletter%2Bof%2Bcredit%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0http://www.google.co.in/imgres?imgurl=http://www.frbatlanta.org/econ_rd/macroblog/120908a.jpg&imgrefurl=http://macroblog.typepad.com/macroblog/trade/&usg=__agx0Tue-tHFaA3Tfx4rXHudKly4=&h=343&w=584&sz=53&hl=en&start=0&sig2=m9H91dbU_jGwtHIemMnjUg&zoom=1&tbnid=c5wcpsGFWL73AM:&tbnh=137&tbnw=233&ei=D7vqTL_PBYT8cJ-N0ZIK&prev=/images%3Fq%3Dprocess%2Bof%2Bletter%2Bof%2Bcredit%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0http://www.google.co.in/imgres?imgurl=http://www.frbatlanta.org/econ_rd/macroblog/120908a.jpg&imgrefurl=http://macroblog.typepad.com/macroblog/trade/&usg=__agx0Tue-tHFaA3Tfx4rXHudKly4=&h=343&w=584&sz=53&hl=en&start=0&sig2=m9H91dbU_jGwtHIemMnjUg&zoom=1&tbnid=c5wcpsGFWL73AM:&tbnh=137&tbnw=233&ei=D7vqTL_PBYT8cJ-N0ZIK&prev=/images%3Fq%3Dprocess%2Bof%2Bletter%2Bof%2Bcredit%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0http://www.google.co.in/imgres?imgurl=http://www.frbatlanta.org/econ_rd/macroblog/120908a.jpg&imgrefurl=http://macroblog.typepad.com/macroblog/trade/&usg=__agx0Tue-tHFaA3Tfx4rXHudKly4=&h=343&w=584&sz=53&hl=en&start=0&sig2=m9H91dbU_jGwtHIemMnjUg&zoom=1&tbnid=c5wcpsGFWL73AM:&tbnh=137&tbnw=233&ei=D7vqTL_PBYT8cJ-N0ZIK&prev=/images%3Fq%3Dprocess%2Bof%2Bletter%2Bof%2Bcredit%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0http://www.google.co.in/imgres?imgurl=http://www.frbatlanta.org/econ_rd/macroblog/120908a.jpg&imgrefurl=http://macroblog.typepad.com/macroblog/trade/&usg=__agx0Tue-tHFaA3Tfx4rXHudKly4=&h=343&w=584&sz=53&hl=en&start=0&sig2=m9H91dbU_jGwtHIemMnjUg&zoom=1&tbnid=c5wcpsGFWL73AM:&tbnh=137&tbnw=233&ei=D7vqTL_PBYT8cJ-N0ZIK&prev=/images%3Fq%3Dprocess%2Bof%2Bletter%2Bof%2Bcredit%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0http://www.google.co.in/imgres?imgurl=http://www.frbatlanta.org/econ_rd/macroblog/120908a.jpg&imgrefurl=http://macroblog.typepad.com/macroblog/trade/&usg=__agx0Tue-tHFaA3Tfx4rXHudKly4=&h=343&w=584&sz=53&hl=en&start=0&sig2=m9H91dbU_jGwtHIemMnjUg&zoom=1&tbnid=c5wcpsGFWL73AM:&tbnh=137&tbnw=233&ei=D7vqTL_PBYT8cJ-N0ZIK&prev=/images%3Fq%3Dprocess%2Bof%2Bletter%2Bof%2Bcredit%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1366%26bih%3D643%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=606&vpy=286&dur=237&hovh=149&hovw=253&tx=53&ty=125&oei=D7vqTL_PBYT8cJ-N0ZIK&esq=1&page=1&ndsp=15&ved=1t:429,r:7,s:0


23/27

9 Steps in the Letter of Credit Process

Buyer and seller agree to terms including means of transport, period of credit offered (if

any), and latest date of shipment acceptable.

Buyer applies to bank for issue of letter of credit. Bank will evaluate buyer's creditstanding, and may require cash cover and/or reduction of other lending limits.

Issuing bank issues LC, sending it to the Advising bank by airmail or electronic meanssuch as telex or SWIFT.

Advising bank establishes authenticity of the letter of credit using signature books or testcodes, then informs seller (beneficiary).

Seller should now check that LC matches commercial agreement and that all its terms andconditions can be satisfied.

Seller ships the goods, then assembles the documents called for in the LC (invoice,transport document, etc.).

The Advising bank checks the documents against the LC. If the documents are compliant,the bank pays the seller and forwards the documents to the Issuing bank.

The Issuing bank now checks the documents itself. If they are in order, it reimburses theseller's bank immediately.

The Issuing bank debits the buyer and releases the documents (including transportdocument), so the buyer can claim the goods from the carrier.


24/27

3 Most Common Reasons why Letters of Credit Fail

1) Time Lines: The letter of credit should have an expiration date that gives sufficient time to

the seller to get all the tasks specified and the documents required in the LC. If the

letter of credit expires, the seller is left with no protection. Most LC s fail because

Sellers/Exporters/Beneficiaries were unable to perform within the specified time

frame in the LC.

Three dates are of importance in an LC:

a) The date by when shipment should have occurred. The date on the Bill of Lading.

b) The date by when documents have to be presented to the Bank

c) The expiry date of the LC itself.A good source to give you an idea of the timelines would be your freight forwarding agent.

As a seller check with your freight forwarding agent to see if you would be in a

position to comply.

2) Discrepancy within the Letter of Credit:

Letters of credit could also have discrepancies. Even a discrepancy as small as a missing

period or comma can render the document invalid. Thus, the earlier in the process the

letter of credit is examined, the more time is available to identify and fix the problem.

This is another common reason why LCs fail.

3) Compliance with the Documents and Conditions within the Letter of Credit.

Letters of credit are about documents and not facts; the inability to produce a given document

at the right time will nullify the letter of credit. As a Seller/Exporter/Beneficiary you should

try and run the compliance issues with the various department or individuals involved within

your organization to see if compliance would be a problem. And if so, have the LC amended

before shipping the goods.


25/27

Documentation for letter of credit

When making payment for product on behalf of its customer, the issuing bank must verifythat all documents and drafts conform precisely to the terms and conditions of the letter of

credit. Although the credit can require an array of documents, the most common documentsthat must accompany the draft include:

Commercial Invoice

The billing for the goods and services. It includes a description of merchandise, price, FOBorigin, and name and address of buyer and seller. The buyer and seller information mustcorrespond exactly to the description in the letter of credit. Unless the letter of creditspecifically states otherwise, a generic description of the merchandise is usually acceptable inthe other accompanying documents.

Bill of Lading

A document evidencing the receipt of goods for shipment and issued by a freight carrierengaged in the business of forwarding or transporting goods. The documents evidence controlof goods. They also serve as a receipt for the merchandise shipped and as evidence of thecarrier's obligation to transport the goods to their proper destination.

Warranty of Title

A warranty given by a seller to a buyer of goods that states that the title being conveyed isgood and that the transfer is rightful. This is a method of certifying clear title to producttransfer. It is generally issued to the purchaser and issuing bank expressing an agreement toindemnify and hold both parties harmless.

Letter of Indemnity

Specifically indemnifies the purchaser against a certain stated circumstance. Indemnificationis generally used to guaranty that shipping documents will be provided in good order whenavailable.

Common Defects in Documentation

About half of all drawings presented contain discrepancies. A discrepancy is an irregularity inthe documents that causes them to be in non-compliance to the letter of credit. Requirementsset forth in the letter of credit cannot be waived or altered by the issuing bank without theexpress consent of the customer. The beneficiary should prepare and examine all documents

carefully before presentation to the paying bank to avoid any delay in receipt of payment.Commonly found discrepancies between the letter of credit and supporting documentsinclude:

Letter of Credit has expired prior to presentation of draft. Bill of Lading evidences delivery prior to or after the date range stated in the credit. Stale dated documents. Changes included in the invoice not authorized in the credit. Inconsistent description of goods. Insurance document errors. Invoice amount not equal to draft amount. Ports of loading and destination not as specified in the credit. Description of merchandise is not as stated in credit.


26/27

A document required by the credit is not presented. Documents are inconsistent as to general information such as volume, quality, etc. Names of documents not exact as described in the credit. Beneficiary information

must be exact. Invoice or statement is not signed as stipulated in the letter of credit.

When a discrepancy is detected by the negotiating bank, a correction to the document may beallowed if it can be done quickly while remaining in the control of the bank. If time is not afactor, the exporter should request that the negotiating bank return the documents forcorrections.

If there is not enough time to make corrections, the exporter should request that thenegotiating bank send the documents to the issuing bank on an approval basis or notify theissuing bank by wire, outline the discrepancies, and request authority to pay. Payment cannot

be made until all parties have agreed to jointly waive the discrepancy.


27/27

European union

The European Union (EU) is an economic and political union

of 27member states[8] which are located primarily in Europe.

Committed to regional integration, the EU was established by

the Treaty of Maastricht in 1993 upon the foundations of

the European Communities.[9] With over 500 million citizens,[10] the EU generated an

estimated 28% share (US$ 16.5 trillion) of the nominal and about 21% (US$14.8 trillion) of

the PPP gross world product in 2009.[11]

The EU traces its origins from the European Coal and Steel Community formed among six

countries in 1951 and the Treaty of Romeformed in 1957 by the same states. Since then, it

has grown in size through enlargement, and in power through the addition of policy areas to

its remit. The last amendment to the constitutional basis of the EU came into force in 2009

and was the Lisbon Treaty, by virtue of which the Charter of Fundamental Rights of the

European Union was elevated to legally binding status.[nb 3]

The EU has developed a single marketthrough a standardised system of laws which apply in

all member states, and ensures the free movement of people, goods, services, and capital,[12] including the abolition of passport controls by theSchengen Agreement between22 EU

states and 3 other European states.[13] It enacts legislation in justice and home affairs, and

maintains common policies on trade,[14]agriculture,[15]fisheries and regional development.[16] Sixteen member states have adopted a common currency, the euro, constituting

the eurozone.

The EURO , the common currency of the European Union, was launched by 11of the 15

members of the union, on Jan1, 1999.

The exchange rates per euro determined at the time of Euro launch were about US $ 1.17.

One Euro is equivalent to about Rs. 65.

The European Council gives direction to the EU, and convenes at least four times a year. It

comprises the President of the European Council, the President of the European

Commission and one representative permember state; either its head of state orhead of

government. The European Council has been described by some as the Union's "supreme

political authority.

http://ec.europa.eu/dgs/health_consumer/about_us/our_vision_en.htm
http://en.wikipedia.org/wiki/Economic_and_monetary_unionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/European_Union#cite_note-Oxford_Dictionary_of_English-9http://en.wikipedia.org/wiki/European_Union#cite_note-Oxford_Dictionary_of_English-9http://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/European_integrationhttp://en.wikipedia.org/wiki/European_integrationhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/European_Communitieshttp://en.wikipedia.org/wiki/European_Communitieshttp://en.wikipedia.org/wiki/European_Union#cite_note-EU1993-10http://en.wikipedia.org/wiki/European_Union#cite_note-population-11http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/European_Union#cite_note-GDP_IMF-12http://en.wikipedia.org/wiki/European_Coal_and_Steel_Communityhttp://en.wikipedia.org/wiki/Inner_Sixhttp://en.wikipedia.org/wiki/Inner_Sixhttp://en.wikipedia.org/wiki/Treaties_of_Romehttp://en.wikipedia.org/wiki/Treaties_of_Romehttp://en.wikipedia.org/wiki/Enlargement_of_the_European_Unionhttp://en.wikipedia.org/wiki/Enlargement_of_the_European_Unionhttp://en.wikipedia.org/wiki/Treaty_of_Lisbonhttp://en.wikipedia.org/wiki/Treaty_of_Lisbonhttp://en.wikipedia.org/wiki/Charter_of_Fundamental_Rights_of_the_European_Unionhttp://en.wikipedia.org/wiki/Charter_of_Fundamental_Rights_of_the_European_Unionhttp://en.wikipedia.org/wiki/European_Union#cite_note-22http://en.wikipedia.org/wiki/European_Union#cite_note-22http://en.wikipedia.org/wiki/Single_markethttp://en.wikipedia.org/wiki/Single_markethttp://en.wikipedia.org/wiki/Four_Freedoms_(European_Union)http://en.wikipedia.org/wiki/European_Union#cite_note-Europa_Internal_Market-13http://en.wikipedia.org/wiki/Schengen_Agreementhttp://en.wikipedia.org/wiki/Schengen_Agreementhttp://en.wikipedia.org/wiki/Schengen_areahttp://en.wikipedia.org/wiki/Schengen_areahttp://en.wikipedia.org/wiki/Schengen_areahttp://en.wikipedia.org/wiki/Schengen_areahttp://en.wikipedia.org/wiki/European_Union#cite_note-Internal_borders-14http://en.wikipedia.org/wiki/Interior_ministryhttp://en.wikipedia.org/wiki/European_Union#cite_note-15http://en.wikipedia.org/wiki/Common_Agricultural_Policyhttp://en.wikipedia.org/wiki/Common_Agricultural_Policyhttp://en.wikipedia.org/wiki/European_Union#cite_note-16http://en.wikipedia.org/wiki/European_Union#cite_note-16http://en.wikipedia.org/wiki/European_Union#cite_note-16http://en.wikipedia.org/wiki/Common_Fisheries_Policyhttp://en.wikipedia.org/wiki/Regional_policy_of_the_European_Unionhttp://en.wikipedia.org/wiki/European_Union#cite_note-17http://en.wikipedia.org/wiki/Eurohttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/European_Councilhttp://en.wikipedia.org/wiki/President_of_the_European_Councilhttp://en.wikipedia.org/wiki/President_of_the_European_Commissionhttp://en.wikipedia.org/wiki/President_of_the_European_Commissionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/Head_of_statehttp://en.wikipedia.org/wiki/Head_of_governmenthttp://en.wikipedia.org/wiki/Head_of_governmenthttp://en.wikipedia.org/wiki/Head_of_governmenthttp://en.wikipedia.org/wiki/European_Union#cite_ref-199http://en.wikipedia.org/wiki/European_Union#cite_ref-199http://ec.europa.eu/dgs/health_consumer/about_us/our_vision_en.htmhttp://ec.europa.eu/dgs/health_consumer/about_us/our_vision_en.htmhttp://en.wikipedia.org/wiki/Economic_and_monetary_unionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/European_Union#cite_note-Oxford_Dictionary_of_English-9http://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/European_integrationhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/European_Communitieshttp://en.wikipedia.org/wiki/European_Union#cite_note-EU1993-10http://en.wikipedia.org/wiki/European_Union#cite_note-population-11http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/European_Union#cite_note-GDP_IMF-12http://en.wikipedia.org/wiki/European_Coal_and_Steel_Communityhttp://en.wikipedia.org/wiki/Inner_Sixhttp://en.wikipedia.org/wiki/Inner_Sixhttp://en.wikipedia.org/wiki/Treaties_of_Romehttp://en.wikipedia.org/wiki/Enlargement_of_the_European_Unionhttp://en.wikipedia.org/wiki/Treaty_of_Lisbonhttp://en.wikipedia.org/wiki/Charter_of_Fundamental_Rights_of_the_European_Unionhttp://en.wikipedia.org/wiki/Charter_of_Fundamental_Rights_of_the_European_Unionhttp://en.wikipedia.org/wiki/European_Union#cite_note-22http://en.wikipedia.org/wiki/Single_markethttp://en.wikipedia.org/wiki/Four_Freedoms_(European_Union)http://en.wikipedia.org/wiki/European_Union#cite_note-Europa_Internal_Market-13http://en.wikipedia.org/wiki/Schengen_Agreementhttp://en.wikipedia.org/wiki/Schengen_areahttp://en.wikipedia.org/wiki/Schengen_areahttp://en.wikipedia.org/wiki/European_Union#cite_note-Internal_borders-14http://en.wikipedia.org/wiki/Interior_ministryhttp://en.wikipedia.org/wiki/European_Union#cite_note-15http://en.wikipedia.org/wiki/Common_Agricultural_Policyhttp://en.wikipedia.org/wiki/European_Union#cite_note-16http://en.wikipedia.org/wiki/Common_Fisheries_Policyhttp://en.wikipedia.org/wiki/Regional_policy_of_the_European_Unionhttp://en.wikipedia.org/wiki/European_Union#cite_note-17http://en.wikipedia.org/wiki/Eurohttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/European_Councilhttp://en.wikipedia.org/wiki/President_of_the_European_Councilhttp://en.wikipedia.org/wiki/President_of_the_European_Commissionhttp://en.wikipedia.org/wiki/President_of_the_European_Commissionhttp://en.wikipedia.org/wiki/Member_State_of_the_European_Unionhttp://en.wikipedia.org/wiki/Head_of_statehttp://en.wikipedia.org/wiki/Head_of_governmenthttp://en.wikipedia.org/wiki/Head_of_governmenthttp://en.wikipedia.org/wiki/European_Union#cite_ref-199http://ec.europa.eu/dgs/health_consumer/about_us/our_vision_en.htm