This document provides an overview of Lucas Fashion Limited, a buying house in Bangladesh. It discusses the company's history, vision, mission, control processes, market information, and yarn options. Key points include: - Lucas Fashion was established in 2007 and works with five garment factories in Bangladesh. It exports to countries like the US, Canada, and Europe. - The company's vision is business excellence through working with world-class buyers, with quality as the cornerstone. - Factory evaluations, sample approval, and production problem identification are part of Lucas Fashion's control processes. - Merchandising staff source prime vendors, negotiate costs and prices, and ensure daily communication between

1. Accounting and Financial Activities of Buying House: A Study
on
Lucas Fashion Limited.
Supervised By
Ms: Farhana Rob Shampa
Assistant Professor of Finance
Department of Business Administration
Northern University Bangladesh
Prepared By
Rafe Ibne Siraj
ID No.: BBA110103982
Department of Business Administration
Northern University Bangladesh
Date of Submission: 15 September 2014
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2. DECLARATION
I do hereby declare this report entitled “Accounting and Financial Activities of
Buying House: A Study on Lucas Fashion Ltd.” Submitted by me to Northern
University Bangladesh, for the degree of Bachelor of Business Administration is an
original work. I also declare that the report has not been submitted earlier either partly
or wholly to any other university or Institution for any Degree, Diploma, Associate-
ship, Studentship, Fellowship and other similar title or prizes.
…………………..
Rafe Ibne Siraj
ID: BBA110103981
Email: rafe.islam91@gmail.com
Department of Business Administration
Northern University of Bangladesh
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3. BONAFIDE CERTIFICATE
This is to certify that this report entitled “Accounting and Financial Activities of
Lucas Fashion Ltd” submitted to Northern University Bangladesh, in connection
with the institution’s internship program is a bona-fide record of work done by “Rafe
Ibne Siraj” under my supervision at the “Lucas Fashion Ltd” from 15 September
2014 to 15 December 2014.
…………………….. ………………………
Supervisor Committee Chairperson
Ms. Farhana Rob Shampa Md. Lutfor Rahman
Senior Lecturer of Finance Associate Professor and Head
Department of Business Administration Department of Business Administration
Northern University Bangladesh Northern University Bangladesh
INTERNSHIP CERTIFICATE
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4. ACKNOWLEDGEMENT
At the very beginning, I would like to express my deepest gratitude to the Almighty
Allah for giving me the ability and the strength to finish the task successfully within
the scheduled time.
This report “Accounting and Financial Activities of Buying House: A Study on
Lucas Fashion Ltd.” has been prepared to fulfil the requirement of BBA degree. I am
very much fortunate that I have received sincere guidance, supervision and co-
operation from various persons.
I would like to express my heartiest gratitude to my supervisor, Ms.Farhana Rob
Shampa, Assistant Professor of Finance, Department of Business Administration,
Northern University Bangladesh (NUB), for her continuous guidance, encouragement,
and patience, and for giving me the opportunity to do this work. Her valuable
suggestions and strict guidance made it possible to prepare a well-organized report.
I am also indebted to Baharul Rashid Milon, Md.Mashiur Rahman Saheen,and all
officers and staff of Lucas Fashion Limited who kindly spared for me much of their
precious time in giving me support and information. During the internship I was
treated so cordially by the Lucas Fashion Limited officials and staffs that I feel the
office like my second home.
Finally, my deepest gratitude and love to my parents for their support, encouragement,
and endless love.
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5. EXECUTIVE SUMMARY
As soon I completed BBA (Course work), my department assign me as internee
in Lucas Fashion Ltd. This program designed to nourish my confidence and to
develop my consistency.
RMG sector is the major Foreign Currency earning sector of Bangladesh. Its
foreign earning share is about 75%. Garment industry can be classified in
different perspective but mainly there are three types of garment industry in
RMG sector based on technology and raw materials used in the industry are as
follows. The RMG sector rapidly attained high importance in terms of
employment, investment; foreign exchange earnings and its contribution to
GDP In the initial stage Importer organization/country directly invest in our
country by itself or with our local investors. The first garment factory in
Bangladesh was set up in the late 70s, named Reaz garment Industry, played a
pioneer role by exporting ten thousand pieces of shirt to France. Now we’re
having 4500 garment industry in Bangladesh. At present RMG units in
Bangladesh is employing 2.4 million of people and more than 2 million are
working indirectly surrounding the industry any about 80% workers are female.
Bangladesh has so far exports apparels to almost 85 countries but USA is the
largest market. At that time they directly place orders and execute all the
procedure. By the time our local investors rapidly establish new industries with
our local technologist and skilled manpower. But as they have few
importer/Buyer, they were in need of much more Buyer /importer. Then the
sense of third party buyer/ Buying House/trading house is established. Now in
our country maximum RMG industries get their order by buying house/trading
house. All the process executes by factory but supervises and controlled by
buying house. My topic is “Accounting and financial Activities of Lucas
Fashion Ltd”
I have tried to in my best to study the materials related with my topic and
observed Buying house mechanism performed By Lucas Fashion ltd.,
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6. examine, relevant officials and other published and unpublished data of Lucas
Fashion ltd, Annual reports of Lucas Fashion ltd And perform a field survey in
order to prepare this report.
This report consists of four chapters. Chapter one includes Introduction to the
report which is based on my study. Chapter two includes Overview of the
Organization, Chapter three includes Data Analysis and findings and Chapter
four includes Conclusion and Recommendation.
This study also designed to review the financial performance of Lucas Fashions
Ltd. Our rapidly growing RMG industries are producing garments with proper
quality but comparatively in low price. As a result new importers are willingly
come into our country. And most of them are come through buying house, as
they haven’t idea of placing order and execution. So, now a days buying houses
playing a vital role in RMG sector. They have skilled manpower, testing
machineries and sometime their own factories to execute an order. Buying
houses directly contact with the buyer and confirm an order, and then place this
order in a suitable factory that is done this type of order and have some
reputation on that type of garments production. As a result distance between
buyer and manufacturer is reduced by buying house. It consumes time and
money for both factory and buyer. It is fulfilling the gap between factory and
buyer. To execute these works buying house needs some technologist and
skilled person. By this it also help us from unemployment problem.
The actual data can’t be found anywhere as they haven’t any organization, how
much order is placed by buying house on factories. But it is known to all that
the amount is huge. Now-a-days number of buying house is increasing rapidly.
And they are helping us by collecting order from importing countries and place
them in our RMG industries. So it can be say that, buying houses helping our
economy by sourcing orders and placement.
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7. List of Abbreviation
ATM Automated Teller Machine
AVP Assistant Vice-president
BBA Bachelor of Business Administration
B/L Bill of Landing
DZN Dozen
C&F Cost & Freight
CIF Cost, Insurance & Freight
C.M Cost of Manufacturing
EXP Export Permission form
FOB Free On Board
FIT Federal Income Tax
GSM Global System for Mobile (communications)
GSP Gross State Product
LC Latter of Credit
NUB Northern University Bangladesh
PO Pay Order
PP Pre-production
QC Quality Control
QA Quality Assurance
RMG Ready Made Garment
ROE Return on Equity
Chapter One
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8. Introduction
1.1 Introduction:
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9. Buying houses started their journey in Bangladesh approximately after 1980. This
house acts as a medium of garments industry. Without the garments support buying
house cannot do anything. Therefore every buying house needs to build up a good
relationship between them. Basically Buying houses try to communicate with buyers
of other countries who want to buy products. Then they contact with garment factories
in Bangladesh who can make those kinds of products and fulfill buyer’s demand. Like
this they create a contract between these two parties. Sometime buying houses make
their own sample section, so that they do not have to go to factories for colleting
sample and they can attract customers faster and easily. On the other hand, they create
a show room of their product to attract the buyer. Moreover, this house maintain the
merchandiser to follow up the product processing line perfectly and also build a
quality assurance team for checking the actual quality of the product.
1.2 Origin of report:
This report is based on an internship program, Northern University Bangladesh,
arranges internship program in attachment with its students after the completion of
theoretical courses (i.e., after final semester) of program of Bachelor of Business
Administration (BBA). Each intern must carry out a specific project, which is
assigned by the concerned organization and approved by the Internship and placement
committee of Department of business, NUB, consequently a report based on the
project is to be submitted to the committee.
In this particular report, the author is an intern of the previously mentioned program
and the concerned organization is Lucas Fashion Ltd. which is a reputed and well
known Buying House in Bangladesh.
In way of delegation, responsibility of carrying out the study has conferred upon the
concerned internship program.
1.3 Background of the study:
Garment is very important part of the country. More that 76% foreign incomes gets
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10. from this sector. Day by day this sector is expending their business more frequently.
So this sector is providing lots of employment. If anyone wants to work in any
organization in Bangladesh garment sector will always be open for him or her. In
order to acquire more practical knowledge about garment related business the
internship program is very necessary.
1.4 Objectives of the study:
Objective of the study acts as a bridge between the starting point and the goals of the
study. To illustrate the objectives properly, presented into two parts:
1.4.1 Main Objective:
The core objective of education is to acquire knowledge. To acquired knowledge
ultimately I must do some practical application in addition to theoretical knowledge.
1.4.2 Supportive Objective:
The other objectives of this Report are:
 To know detail about RMG sector
 To achieve new idea about knit garments manufacturing process
 Getting idea about shipping procedure
 To fulfill the academic requirement.
 To make a bridge between the theoretical and practical procedure of banking
day to day operations.
 To know the merchandising practice in Buying house
 Knowledge gather about RMG sector related other organization.
 To know about the management and technical process of buying house.
 . Identify the major opportunity and threat of Lucas fashion Ltd.
 To know buyers satisfaction level of Lucas fashion Ltd.
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11. 1.5 Scope of the study:
As I am doing my job in this organization I can move many areas of its working place.
I can take valuable information directly from the spot, worker and buyer. So better
opportunity need to take required information and also to implement steps to the
concern area.
1.6 Methodology of the study:
On the basis of knowledge that will be gathered from the practical work during the
internship period following methodological issues will be followed.
.6.1Research design:
In order to carry out the study, I will use descriptive research. Descriptive research
design is a scientific method which involves observing and describing the behavior of
a subject without influencing it in any way.
1.6.2Data collection method:
I will use different methods to collect relevant information for my study those are
follows:
 Observing and recording well-defined events( Observation and Document
review)
 Obtaining relevant data from management information systems.
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12. 1.6.3Data sources:
Both the primary as well as the secondary form of information will be used to the
study. The details of these sources are highlighted below:
Primary Source (Lucas Fashion Ltd):
 Personal observation.
 Practical work exposures on different desk.
 Face-to-face conversation with the respective officer.
Secondary Source:
 Annual report of Lucas fashion Ltd.
 Official website information of Lucas fashion Ltd.
 Different books articles etc. regarding Buying House operations.
 Relevant file study as provided by the officers concerned.
 Some of our course elements as related to this report.
 Other manual information.
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13. 1.6.4 Analyzing tools and techniques:
To analyze the data I will use following tools and techniques:
01.Microsoft Excel will be used in calculating and constructing of graphs.
02.Tables, Pie Charts, Bar Charts and Line Graphs will be used in
presenting data.
1.7Limitations of the study:
There are some limitations in our study. We faced some problems during the study
which we are mentioning them as below-:
i) Insufficient data: Some desired information could not be collected due to
confidentially of business.
ii) Lack of monitory support: Few officers sometime felt disturbed, as they were busy
in their job. Sometime they didn’t want to supervise us out of their official work.
Sometimes the officials were busy and were not able to give us much time.
iii) Other limitation: As we are newcomer, there is a lack of previous experience in
this concern. And many practical matters have been written from my own observation
that may vary from person to person.
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14. Chapter Two
Overview of the Organization
Lucas Fashion Limited.
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15. 2.1Historical Background:
2.1Overview of Lucas Fashion Ltd:
LUCAS FASHION is a BUYING HOUSE which does its business with garments related
product. This buying house does its business with many other factories. There are five
factories are also working under this buying house. Those are Anzir Apparels Limited,
Angel Sweater (BD) LTD. Barnali Fabrics LTD. Ayasha & Galeya Fasions LTD.
Appearels LTD.
This buying house does its business partner with Giant Tiger and partner with KOEI
Enterprize.
This buying house production mainly depends on this garment factory as well. This House
established on 2007 by owner two people. Now this Buying House owned by Bahair Rahman
Milon he is MD of this buying house. It does its business mostly with Japan, China, Portugal,
USA, Norway, Canada, Spain, Italy, France, Poland etc. Its basic products are divided by
three category followed by the year basis like summer, autumn and winter. Under this
category three part which is knit, woven and sweater. For these instance each part divided by
three another part which is men, women and kids.
LUCAS FASHION does its banking activities with Prime Bank Ltd. All kind of Master L/C
(letter of credit) and back to back L/C are opened with Primer Bank Ltd. LUCAS FASHION
gives importance to product quality to achieve more market report. Also it gives importance
to achieve more quantity to maximize its profit. Now this company has become very renown
in the field of garment factory because of its positive approach from the very beginning along
with the garment activities.
The company has a dynamic management team to control the overall operation and under
their leadership its strong workforce (designers, merchandisers, quality controllers,
technicians, compliance and supports service team members) focus on each customer to
professionally manage the entire supply chain to product design and development, through
raw material and factory sourcing, production planning and management, quality assurance
15

16. and export documentation and distribution to customers' warehouses worldwide.
Address:
HOUSE 11/3, 10TH FLOOR, TYENBEE CIRCULAR ROAD,
MOTIJHEEL C/A, DHAKA-1000, BANGLADESH.
2.3 Vision:
Vision of Lucas fashion is to achieve business excellence by working with world class buyers
for Garments where quality will be the cornerstone of success.
2.4 Mission:
We will satisfy our buyers as well as other regulatory requirements ensuring to provide
quality service and products. To meet the goal we are committed to put the best endeavors
and work as a team efficiently for continual improvement of the quality management system.
The management will also ensure the employees benefits and provide training to improve
their skills to the desired level.
2.5 Control:
Factory evaluations Sample approval Identify and pre-empt production problems during
placement meetings. Monitor laboratory tests results and match against local testing data.
Maintain accurate product details and records.
Lucas Fashions Ltd. understands that communication between the buyer and vendor is of
prime importance. Hence their organization is well equipped with Internal LAN system and
email facilities. Their shipping staff caters the need to ensure timely delivery of consignments
and the right documents.
2.6 Working:
Proper sourcing is the key to success in imports from Bangladesh. In order to execute a
purchase order for you, it is vital to select the prime vendor who would fulfill your needs.
The ability of a factory to produce your product at a given price is of great importance.
Their merchandising staff is of the finest corporate level in Bangladesh. Our prime priority is
customer satisfaction. The following functions are just a brief outline of the role of our
merchandisers:
2.7 Market information:
16

17. Develop new resources and products Appraise vendors of buyers ‘requirements, Effective
costing and price negotiations, Communications with
buyer on a daily basis counter checking on product quality, Weekly reports for customers,
highlighting production status, shipping information, sample status and other customized
reports for customers.
2.8 Using Yarn For Sweater:
100% ACRYLIC / MELANGE / CHENILLE / COTTON / ROYON / SMILING / TT / 100%
COTTON /MIXED COTTON / WOOL / BOOGLY / COTTON LIKE
/CASHMERE/ANGORA/ POPCORN /LOOP/ SPANDEX ETC.
2.9 Using Fabric For Knit & Woven:
1.Home Textile ltems as Bed Set, Comforter, Duvet Covers, Curtains with Cotton and PC
fabrics. Wehave also sources for Silk & Jute items for pillowcase, Cushion Covers,
Curtains, and tablecloths. We have connections in Pakistan Home Textiles manufactures also.
2.Knit Garment Items as Men’s, Ladies & Children Wear both in Woven and Knit fabrics.
3.China based all types of fabrics we are doing in connection with China well renounced
supplier.
4.Hong Kong/China based all types of garment accessories have done with Recent
International Ltd. So, we could provide price for fabric and accessories sharply and in-
timedelivery.
5.Local fabricswe are doing in connection with FineTex fabrics Brothers Fabrics,Sirajgonj
Check Industries Ltd.,Beximco Textiles Mills Ltd., Munno Fabrics Ltd., Mars Weaving
Mills Ltd. Bismillah Textile Mills Ltd., H.H. Textile Mills Ltd.Prime knit dyeing, So, we
could provide European Buyers GSP facility so that they could enjoy duty frees at customs
during goods arrival.
2.10 Products:
We provide sourcing / buying services for Apparel of Knit, Woven, Sweates items and
Home Textile, Brand Manufacturers and wholesalers through out the world who are looking
for Offshore Production of sourcing of Home Furnishings, Apparels both sweaters, Knit and
Woven, Accessories and etc. as per their design and specifications. We would welcome you
or your staff members to visit us in Dhaka and see first-hand the strengths and scope of our
organization.
2.11 Style & Design:
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18. JERSY KNIT, RIB, DROP NEEDLE, DIAMOND, CABLE, HALF CARDIGAN, FULL
CARGIGAN, MELANO, TOP,PINE APPLE, DROP, AUTO MINE, POINTAL, BISCUIT
DIAMOND, COMBO, FANCY CABLE,ALLOVER CABLE & WOOLEN CAP.ROUND
NECK,V NECK, BOAT NECK,TURTLE NECK, MOCK
NECK, LONG SLEEVE, SHORT SLEEVE, MAGI SLEEVE,SLEEVELESS,
2.12 Product development (KNIT & WPOVEN)
Product development is another important responsibility for RMG merchandisers. Before go
to bulk production various stage of sampling has to pass in order to develop a product for end
user. Those are below:
1. Initial Sample
2. Style Approval
3. Pre-production (PP) Approval
4. Photo Sample
5. Shipping Sample
2.12.1 Initial Sample
At first buyer sends us a sample detail, then we make a sample, just to make sure that the
style is perfect, that is called initial sampling. In initial sampling color or fabric is not a
matter.
2.12.2 Style Approval
Every style has a number which we call reference number. From the reference number according
to the information from the initial sample we try to make the style which is given by the buyer
with the actual fabrics. Then send this style to the buyer for approval.
2.12.3 Pre-production (PP) Approval
In pre-production sampling we make a sample with actual fabric and other materials
according to the order description. Then we send it to the buyer to get approval that exactly
this kind of products are going to be send to them.
2.12.4 Photo Sample
Photo sampling is showing a photo of a sample to the buyer. It can be a photo in website or in
projector etc.
2.12.5 Shipping Sample
When products are send for shipment, s sample from every style is sent to buyer to show
them this products are sent for shipment. In shipping sample one piece of every kind of
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19. product is taken, like style, color etc.
2.13 Pre-production (PP) Meeting
After preparing pre-production sample and before production, a meeting is held after getting
pre-production sample approval; this meeting is called Pre-production (PP) Meeting. After
getting pre-production approval we take the comments of buyer and do this meeting with
factory manager, cutting master, production manager, finishing in charge, merchandiser and
other people who are involved in production. On the basis of the comment of buyers there we
discuss what they have to do, not to do and how they have to do the production etc.
2.14 Merchandising activities on production follow up
2.15 Cutting
2.16 Making
2.17 Wash
2.18 Finishing
2.14.1 Cutting
Before sending the fabric to cutting section we unfold the fabric and keep it in open air for
one or two days. We do that because when the fabric is kept folded it remains squished. But
when air passes through it comes into original texture. If we cut the fabric without doing this
it can shrink or lose after cutting.
2.14.2 Making/Swing
Sewing section is the section where cutting part are joined to make a garments. In sewing
section sewing machines are set up according to the kind of final product.
2.14. 3 wash
After making the product we send it to wash section. There are different types of wash like
fade wash, strong wash, silicon anjime wash etc.
2.14.4 Finishing
Finishing section is the last part of production. When sewing completed then finishing and packing started.
Thread cutter workers are cutting loose thread. Iron man workers are ironing goods. Then Packing man
workers are putting goods in to poly bag and export carton. But there should have balance process
from thread cutting to carton process. Iron people must be increases as per the demand of
packing people. Boiler should be always in fit position.
2.15 Merchandising activities on Quality control
19

20. The main objective of quality control is to ensure that goods are produced to the first
customer (Direct Order) and hopefully to the second customer (Recorder/Alter order/ new
order) as well. If both customers can be satisfied then the manufacturer products are more
likely to continue to be in demand,
Satisfactory quality can only be ensured through (from the manufacturer point of view)
 Knowing the customers’ needs.
 Designing to meet them
 Faultless construction- manufacture.
 Certified performance and safety.
 Clear instruction manuals.
 Suitable packing.
 Prompt delivery.
 Feedback of field experience.
Satisfaction quality can be ensured from the customer from the customer's
point of view by providing:
 Right Product.
 Right Quality.
 Right Time.
 Undamaged Condition
How can quality be achieved?
 Goods must be designed to meet customer's needs and make
manufacturing process and maintenance easily.
 They must be made exactly and consistently to the specified design.
 Marketing must ensure accurate advertising, trade description with
constant feedback for improved design.
 Total commitment to organized design.
Maximum buyer of the world follows this above chart for inspecting their garments. When
garments will be ready for shipment, an inspector should follow the above acceptance level
of quality products. It is applicable for all types of garments. So this chart is very important
for Quality Control and Quality Inspection of a Garment. Factory will have to follow and
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21. work on the basis of this chart. Factory should have to submit their AQL report to the
respective buyers before shipment.
2.16 Principles of Quality Management
 The main objectives is to prevent errors by early detection and action
 The need to make the requirement complete and clear at all levels, from this
specification of a large system to the individual work construction and terms of
reference.
 The detection error by monitoring both product and the method by which is produced.
 The prevention of errors at all earliest
 The total involvement all concerned of the contribution to the final products quality.
 Establish a total forward and backward control system, allowing flexibility for
change.
2.17 Purpose of Quality Control
It is a long standing trading of any organization to offer the customers first quality merchandise.
The purpose of this quality control program is to assist manufacturers in meeting the high
standards. In addition, company's quality control program can also help the supplier with their
operation. Quality control program not only help spot and reject defective items, but more
importantly they pinpoint production operations that need special attention, thereby reducing the
number of defects in future production. This type quality control provides basis for management
decision in the manufacturer's plant. For the purpose of this manual; the defect refers to* a
condition that renders merchandise of second quality and or unacceptable because the defect is
one or more of the following:
1. It is conspicuous.
2. It will affect the salability of the product.
3. It will affect the serviceability of the product.
4. It is significantly different from the specification.
5. It is understood that all performance and legal requirements be following to
6. the letter (that is L/C or any other contact between the buyer & seller) with no
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22. division allowed, including requirements of the following:
I. Flammability.
II. Refurbishing (Cleaning).
III. Labeling.
2.18 Quality Process
LUCAS FASHION is weak in research on production but their quality is 100 percent ok.
Quality procedure starts from cutting to packing. Their quality and inspection procedures go
ahead with following steps.
 At first factory has to handover the order to merchandiser and QA people. This team
is responsible for this order. Every morning they have to discuss the whole status in
the daily meeting with General Manager.
 Factory will make the sample for final changes and comments from the buyer on the
products. QA and merchandiser will study together with approved FIT samples and
the comments from buyer.
 After receive the fabrics and accessories in the company they send it to the factory,
one of the QA and merchandiser concerning that particular order will stay in the
factory from morning to evening.
 LUCAS FASHION tells their factory to makes pre-production meeting before going
into production. Merchandiser and QA inspector of the company go to the factory at
the time of pre-production meeting, check the samples, patterns and final comments
from buyer and if they are satisfied then they give instruction to the factory people for
trial production.
 QA inspector evaluates trial production and then approve for bulk production. As seen
as bulk production is started QA inspector goes for inline inspection. Initially every
day, then every alternative day, depends on the situation.
 In the middle stage of production if standard for quality result is acceptable then it is
given permission for pre-final inspection. Here it is checked for case pack, carton
quality, shipping mark, assortment, presentation etc.
 After pre-shipment result is acceptable it is permitted for doing final inspection and if
is pass this is approved for shipment.
 Quality procedure will be included in the cutting section. Quality department must
22

23. advise how to control perfect measurement for concern garments. How to minimize
consumption And etc.
2.19 Merchandising activities on goods delivery to buyers
After making final inspection merchandiser received packing list from packing section which
contain the list of carton, how many pieces garments in the carton, weight of the carton,
number of pieces of garment to be shipped etc. Refer to this information merchandiser make
booking to sea or air forwarder.
23

24. Chapter Three
Accounting and Financial Activities of
Lucas Fashion ltd.
24

25. 3.1 Exchange and Transaction
Buying House people and buyer's people exchange then- views regularly to solve each
problem. They regularly communicate mainly with e-mail and internet messengers
like Skype, yahoo, Google talk etc. Besides more clarification they send samples or
documents through courier service holder.
3.2 Price negotiation & Order confirmation
Price negotiation is the most important part of merchandising and marketing. Order
confirmation depends on how cleverly and logically one can negotiate price with
buyer. Competitive price is the key element of price negotiation. To make competitive
price first of we have to know about the product that buyer want to buy from us. Then
we will calculate the raw material price, manufacturing cost & shipping terms of the
product.
3.2.1 How to prepare garment price
There are processes for fixation of export prices which are as under:
1. FOB (Free On Board).
2. C&F (Cost & Freight).
3. CIF (Cost, Insurance & Freight).
FOB means 'free on board' i.e. exporter doesn't bear the cost of freight of ship or air. It
is buyer (Importer) who himself bears the freight of ship or air.
25

26. C & F means Cost of Freight i.e.
FOB (Cost) + Freight of Ship = C
& F.
In the case ship or air freight is carried by the exporter while quoting price, the
exporter quotes price a bit higher than FOB. The whole responsibility including the
sending of goods to the selected port of the importer is shouldered by the exporter
ship or air. Freight may vary from place to place and shippers to shippers.
CIF means cost insurance & Freight In this case in addition to the bearing of freight
the cost of insurance is also borne by the exporter. The exporter, while quoting CIF
price, quotes much higher than C&F value i. e; C & F + Insurance=CIF. Normally we
can add 1-2% insurance charge with CIF price.
During the fixation of FOB price of a T-Shirt following notes are to be followed
carefully:
1. Cost of fabrics/Dzn. garments.
2. Cost of Accessories/Dzn. garments.
3. C.M (Cost of Manufacturing) /Dzn. Garments.
4. Cost of embellishment (if any) likes print, embroidery, etc
5. Commercial cost.
6. Commission (if any)
Order of 10000 pieces of Knit
Fabrics: 100% cotton, single jersey 160 GSM (white color)
Measurement
Half chest 56cm
Back length 74cm
Sleeve Length 25cm
Arm Hold 25cm
Shoulder 49cm
Neck (inside) 16cm
Front neck droop 9cm
Back neck droop 10cm
Neck rib width 2cm
Bottom 56cm
26

27. 3.3 Fabric booking
After receive order confirmation from buyer we chase buyer to provide us PO sheet
(purchase order) which includes color & size wise break down of the total quantity.
Then we will go for knit fabrics booking. Yarn is the first element of knit fabric. So to
make fabric we have to book suitable yarn from home or abroad. To import yarn from
abroad it need approx. 44/45 days and to buyer yarn from Bangladesh it need approx
20/30 days. After receive yarn we go for fabrics knitting and then coloring of the
fabrics. After dyed fabrics is ready to make garments.
3.4 Trim booking
Various kinds of trims are used in Basic T-Shirt. To buy or make booking for trim
firstly we have to know from buyer what kind of trims they required for their T-Shirt.
After collection trimming information from buyer we have to develop the same and
need to get approval. Then we will book trim from respective trim manufacturing
house. It is very important to buy all the necessary trims before start garment
production.
3.4.1 Export Documentation
The documents which to be submitted by 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. Commercial Invoice
5. UD/UP
6. VBF-9A. From to be supplied by the C&F agent
7. Export Permission form (EXP).
3.4.2 Bill of Landing (B/L)
It is document issued by an eerie (railroad, steamship, or trucking Company) which
serves as receipt for the goods to be delivered to a designed person or to his order. B/L
describes the conditions under which the goods are accepted by the career and details
 The quantity of the goods
 Name of vessel
 Identified marks and numbers
 Destination
Invoice: Below point are including in the invoice:
27

28.  Name and address of the buyers and the seller
 The Date and term of the sale
 A description of the goods
 The price of the goods and
 The mode of transportation
3.4.3 Payment release
After prepared invoice, bill of landing and other required documentation we send it to
buyer's nominated bank for payment release.
Research and Development
Research and development is very important part for any company as well as factory
also. Lucas Fashion Ltd is not well equipped with this idea. Moreover this company is
moving forward to achieve this practice. Every month its honorable CEO makes
arrangement meeting about how this company can make more production, how they
take more order from buyer, what are the main obstacles for production in the factory?
For this purpose executives of the company thinks to give more intention in their
factory to evaluate the actual performance of each section by face to face interview
with operator, worker, supervisor to take exact information regarding production
related problem. It is mentionable that production process starts from garment Cutting
section up to Finishing packing section. All the problems are taken from production
related people and accordingly management takes the solution. Weak operators are
replaced by strong operators. Sufficient cutting parts are needed to supply to direct
production department for achieving balance production. Sometimes there are some
types of fabrics which cannot cut more at a time as the direct production department
requires. In this situation cutting department need to do overtime, even it requires a
whole night. This way finishing and packing section goes forward to achieve delivery
date.
3.5Proforma Invoice:
28

29. PI has opened against PO. Here describe color details also have to open LC base on
PI. Meanwhile merchandiser has to complete lab dip and also get accessories
approval.
Lab Dip is process. Through this process identify the chemicals are used to produce
the fabric. If it is not exam than fabric color may be differ and there has also
possibility to reject the order. That’s why it is essential to do.
INVOICE
Date-20/06/2013
ATTN: MS. SOPHIE / LEIZL
GIANT TIGER
SUTIE NO # 1551,555 CHABANEL WEST,
MONTREAL, QUEBEC
H2N 2J2
CANADA
TEL: (514)-384-3886
FAX
SUB: SAMPLE OF SWEATER & KNIT
STYLE NO-KE-412 CT------------PDS SAMPLE-------------------------- 4 PCS (SWEATER)
STYLE NO-KE-415 JR------------PDS SAMPLE-------------------------- 4 PCS (SWEATER)
STYLE NO-TG-308 EYELETS SWATCH CARD------------------------ 1 PCS (KNIT)
STYLE NO-TG-326 FABRIC LAB-DIP SWATCH CARD------------ 1 PCS (KNIT)
STYLE NO-TG-326-Print Combo 2 & 3 Print Strike Off ----------- 2 PCS (KNIT)
TOTAL= 12 PCS TOTAL VALUE= $ 5
NO COMMERCIAL VALUE ONLY FOR CUSTOM
PURPOSE
PLEASE ACKNOWLEDGE UPON RECEIPT AND ADVICE.
LUCAS FASHION
29

30. FOB system is most common system in our country. In this system the seller delivers
the goods cleared for export, when the pass the ship’s rail at the named port of
shipment.
3.6Letter of Credit (L/C):
A standard, commercial letter of credit (LC) is a document issued mostly by a
financial institution, used primarily in trade finance, which usually provides an
irrevocable payment undertaking. The parties to a letter of credit are usually a
beneficiary who is to receive the money, the issuing bank of whom the applicant is a
client, and the advising bank of whom the beneficiary is a client. Almost all letters of
credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of
the beneficiary, the issuing bank and the confirming bank, if any. [6]
Export Procedure
1. Seller and buyer conclude a sales contract, with method of payment usually by
letter of credit (documentary credit).
2. Buyer applies to his bank, usually in Buyer’s country, for letter of credit in favor of
seller (beneficiary).
3. Issuing bank requests another bank, usually a correspondent bank in seller’s
country, to advise and usually to confirm the credit.
4. Advising bank, usually in seller’s country forwards letter of credit to seller
informing about the terms and conditions of credit.
5. If credits terms and conditions confirmed to sales contract, seller prepares goods
and documentation, and arranges delivery of goods to carrier.
6. Seller presents documents evidencing the shipment and draft (Bill of Exchange) to
paying, accepting or negotiating bank named in the credit (the advising bank usually),
or any bank willing to negotiate under the terms of credit.
7. Bank examines the documents and draft for compliance with credit terms. If
complied with, Bank will pay, accept or negotiate.
8. Bank, if other than the issuing bank, sends the documents and drafts to the issuing
bank.
9. Bank examines the documents and draft for compliance with credit terms. If
complied with, Seller’s draft is honored
30

31. 10. Documents release to buyer after payment or on other terms agreed between the
bank and Buyer.
11. Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for
the goods or the delivery order.
3.7 Bill of Lading:
A bill of lading (sometimes referred to as a BOL or B/L) is a document issued by a
carrier to a shipper, acknowledging that specified goods have been received on board
as cargo for conveyance to a named place for delivery to the consignee who is usually
identified. A thorough bill of lading involves the use of at least two different modes of
transport from road, rail, air, and sea. The term derives from the verb "to lade" which
means to load a cargo onto a ship or other form of transportation.
A bill of lading can be used as a traded object. The standard short form bill of lading
is evidence of the contract of carriage of goods and it serves a number of purposes:
 It is evidence that a valid contract of carriage, or a chartering contract, exists,
and it may incorporate the full terms of the contract between the consignor and
the carrier by reference
 It is a receipt signed by the carrier confirming whether goods matching the
contract description have been received in good condition (a bill will be
described as clean if the goods have been received on board in apparent good
condition and stowed ready for transport); and
31

32.  It is also a document of transfer, being freely transferable but not a negotiable
instrument in the legal sense, i.e. it governs all the legal aspects of physical
carriage, and, like a cheque or other negotiable instrument, it may be endorsed
affecting ownership of the goods actually being carried.
32

33. 33

34. 3.7Packing List:
A packing list is a shipping document that accompanies delivery packages, usually
inside an attached shipping pouch or inside the package itself. It commonly includes
an itemized detail of the package contents and does not include customer pricing. It
serves to inform all parties, including transport agencies, government authorities, and
customers, about the contents of the package. It helps them deal with the package
34

35. accordingly.
35

36. 3.8Accounting Activities:
3.8.1Cost Calculation:
Cost is divided in to:-
1) Pre- cost------- Merchandiser
2) Final costing -------- Merchandiser + import section
Garment for example: - $ 5.00 = cost
Garment costing: - $ 5.00 + profit = costing
Pre- cost:-
1) It is an estimate made before the garment is adopted in to the line
2) Fabric, trim and labour costs for each garment is calculated
3) The merchandiser / designer usually keep a record of all materials costs on a
work sheet.
4) Then the costing department can roughly estimate the cost and price structure.
(Normallyover head cost is 30-40%)
Final costing:-
1) It is an exact calculation by the costing or import department
2) Using actual figures for fabric,, accessories and labor cost
3) Costing department uses-
a. Merchandiser work sheet
b. A proto type garment
c. Production pattern
4) A detailed cost analysis is made for each garment the final cost is plotted on a “cost
sheet”.
3.8.2 Analysis a cost sheet:
1. Materials:- Total amount of material × ($ 1) / yd = Total price
2. Trimming: - Button (BTN), thread(THD), interlining(INT), level & packing
3. Production pattern making, grading, marking, spreading and cutting
4. Assembly and finishing:- Calculated the average time of operations
5. Overhead cost: - Salary, rent, utilities > (30- 40%)
6. Freight: - Air freight / sea freight
7. Quota change
36

37. 3.8.3 Costing of garments in (FOB) cost:
Costing of a garment for example in a shirt:
1. Fabric costing
2. Garment accessories:
1. Button 2. Interlining
3. Label
4. Thread
5. Collar bone
6. Hang tag/ price tag
3. Finishing accessories:
1. Poly bag
2. Plastic clip
3. Gum Tape
4. Neck board
5. Tag pin
6. Sticker
7. Butterfly
8. Collar insert
9. Back board 10. Neck insert
11. Scotch Tape
12. PP belt
13. Carton
14. Labor charge
15. Washing charge (If it is garment wash)
16. Commercial and transportation cost.
37

38. 3.9 Yearly Financial Highlight on Lucas Fashion-2013:
Lucas Fashion Ltd Maintain a spread sheet to record their financial activities such as..
LUCAS FASHION
FOR THE MONTH OF . JAN..to DEC.2013.
PERIOD .01/01/2013..TO.31/12/2013...
38

39. 3.10Yearly Financial Highlight:(Received)
Sources of Financing:
Properties Amount in BDT % of Financing
Received From Bank 24,24,268 51.53
39
HEAD OF ACCOUNTS 01-01-2013
TO
31-12-2013
HEAD OF ACCOUNS 1/1/2013
TO 31/12/2013
OPENING
BALANCE
CASH BDT 27000 TEMPORARY LOAN
RETURN
BDT 340500
BANK BDT 184 TEMPORARY LOAN
STAFF
BDT 3500
ADVANCE BDT 260131
FUND OFFICE EQUIPMENT BDT 36391
TEMPORARY LOAN BDT 251380 SALARY &
ALLOWANCES
BDT 1608935
COMMISSION FROM BUYER BDT 2424868 FESTIVAL BONUS BDT 193000
LONE FROM ACCESSORIES BDT 261000 OFFICE RENT BDT 380835
BANK INTEREST BDT 300 OFFICE
MAINTENANCE
BDT 5243
OTHERS INCOME BDT 1595442 CONVEYANCES 178407
LOAN A/C BDT 2500 PRINTING &
STATIONARY
BDT 6270
SAMPLE MATERIALS BDT 790846
TELEPHONE &
MOBILE
BDT 13621
INTERNER BILL BDT 44020
CURRIER / POSTAGE BDT 377384
COMPUTER
MAINTENANCE
BDT 36760
VEHICLE
MAINTENANCE
BDT 59355
ENTERTAINMENT BDT 44187
NEWSPAPER &
PUBLICATIONS
BDT 2324
DAILY ALLOWANCES BDT 1500
L/C COLLECT FEES BDT 2400
L/C TRANSFER FEES BDT 17250
L/C ADVISING FEES BDT 13500
LEGAL FEES BDT 83520
BANK CHARGE BDT 5567
BANK DIPOSIT BDT 47600
BDT 45,62,674
BDT 45,53,046

40. Received From Account 15,25,442 32.43
Other Income 5,87,380 12.47
Temporary loan 1,67,200 3.55
Total 47,04,290 100
Figure: Yearly Financial Highlight :(Received)
Interpretation: The above figure shows that Received From Bank tk.2424268
Received From Account tk 1525442 Other Income tk 587380 Temporary loan
tk.167200.
3.11Yearly Financial Highlight:(Paid)
Yearly Expenses:
40

41. Properties Amount in BDT % of Expenditure
Long term loan repaid 30,10,500 50.23
Temporary loan repaid 3,500 0.06
Office Equipment 36,391 0.60
Salary 16,08,935 26.84
Festival Bonus 1,93,000 3.22
Office Rent 3,80,835 6.35
Office Maintenance’s 5,243 0.08
Others 7,54,642 12.59
Total 59,93,046 100
41

42. Interpretation: The above figure shows that Loan Return tk. 3010500
Temporary loan tk 3500 Office Equipment tk 36391 Salary tk. 1608935
Festival Bonus tk 193000 Office Rent tk 380835 Office Maintenance’s tk 5243
Others tk. 754642
General Costs
Properties Amount
Printing & Stationary 6270
Sample Material 790846
Telephone/Mobile 13621
Currier/Postage 377384
Computer Maintenance 36760
Vehicle Maintenance 59355
Entertainment 44187
News Paper 2324
Total 1330747
42

43. Employees Cost:
43
Properties Amount
Employee Salary 1608935
Festival Bonus 193000
Conveyance 178407
Daily Allowances 1500
Total 1981842

44. Office Cost:
Properties Amount
Office rent 380835
Office equipment 36391
Office maintenance 5243
Internet bill 44020
Computer maintenance 36760
Legal fees 83520
Others 67500
Total 654269
Chapter Four
44

45. Overall Findings
45

46. Overall Findings:
From the above Discussion and my personal observation dewing the internship program. I
have found some problem if they can improve those things they can also improve their
performance in the future years.
 Lucas Fashion is not producing the goods, so reputation goes to manufacturer.
 For some non-reputed buying house reputation hampers of all buying house.
 Suppliers are going through direct contact with buyer after one or two
shipment.
 Sometime buying house decrease its reputation by placing order in
inexperienced FTY.
 Day by day more fashionable products order is coming need some training
session.
 Most common/basic type of orders is conducting in our country.
 Buyer are directly contacting with manufacturer.
 Manufacturers are impressing buyer for direct contact after one shipment by
third party.
 Go through third party is comparatively costly than direct contact.
 Not directly producing any product.
From above we can say that, the position of buying house strong now. But if more
new buyers cannot be captured then it will be problematic for them, as reputed buyers
are willing to open their own country office. In future buying houses will be totally
depends on small buyers, they have all season orders but small in quantity.
46

47. Chapter Five
Conclusion
47

48. 48

49. Conclusion:
Buying house type companies are very important for Bangladesh. Because more than
76% of the country’s foreign incomes are earned from this line. More than 2 million
people are engaged with this sector. So country’s economic situation becomes more
and stronger for this buying house sector. So buying house must be well equipped by
hook or by crook. Lucas Fashion Ltd is also renowned BUYING HOUSE Company in
the present sector as well as garment market in Bangladesh. There are lots of problems
are existing in the company and its factory. These kinds of problems cannot be
removed in short. It will take time. This is very positive indication that now a day's
high educated peoples are coming in this sector. Lucas Fashion Ltd is now bearing
more than 15 MBA holders in the current operation both company and factory.
Moreover some peoples are pessimistic about future of Lucas Fashion Ltd. But I think
this is not correct. This factory is now going up word day by day. As I have gone
through the inside and outside of this company I have given some advices for the
betterment for future. If Lucas Fashion Ltd tries to follow my recommendations I am
sure that in future this factory will be within the TOP TEN in Bangladesh Buying
House sector.
Though some of problems of buying houses are continuing there business but it is the
time for them to take necessary action to ensure their better future. Buying houses
have to give priority to build strong relationship with buyers for survived because
buyers know the suppliers way of making products and doing business. Buying needs
some training program to strengthen their manpower, which is the key strength of
buying house. Buying house act as a buyer to the factory and place order & control the
process behalf of the end buyer/importer. Placing order, execute the order in time with
49

50. proper quality is the main key work of a buying house. So, Building strong
relationship with the buyer as well as manufacturer is also needed for a buying house.
Chapter Five
References and Appendix
50

51. Book References:
1. Andronov, A. A., Vih, A. A., and Khaikin, S. E. (1966). Theory of Oscillations.
London: Pergamon Press.
2. Scott Besley, Eugene Brigham.(14th
edition) Essentials of Managerial Finance
London: Pergamon Press.
Web Site:
 http://en.wikipedia.org/wiki/List_of_Buying House_in_Bangladesh
 http://lucasfashion.com/
 http://www.bgmea.com.bd/
 http://www.bgmea.com.bd/member/memberlist#.VJpNTc4EM
 http://www.bangladeshyellowpages.com/Buying house/Lucasfashion.php
51