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Rahman Rahman Huq Chartered Accountants
Synopsis
The Institute of Chartered Accountants of Bangladesh (ICAB) is the National Professional Accounting Body of Bangladesh established under the Bangladesh Chartered Accountants Order 1973 (Presidential Order No. 2 of 1973). The Council of ICAB is the Supreme Authority responsible for the administration and management of the Institute. The Council is composed of 20 (twenty) members elected by the members of the Institute from its two regional constituencies in Bangladesh every three years. The Council is headed by an elected President who is the Chief Executive of the Institute. The President and the Vice-Presidents of the Institute are elected by the Council every year to manage the affairs of the Institute. The Council is assisted by various Standing and Other (non-standing) Committees. For the purpose of assisting the Council in matters concerning its functions, the Council is empowered to constitute Regional Committees. At the moment there are two Regional Committees in Dhaka and Chittagong and two Chapters - UK Chapter and North American Chapter.
As on 01 July 2009, the Institute had 969 members (including 26 females) of whom 824 were resident in Bangladesh and 145 were resident abroad. Associate and Fellow memberships are offered by the Institute. Persons passing the qualifying Final Examination of the Institute are offered Associateship (ACA) while fellowship (FCA) is offered to members having at least five years post-associateship experience and fulfilling relevant other requirements. Out of 969 members, 305 are practicing as public accountants and the rest 664 are serving in various key positions in public and private organizations-both at home and abroad. As on the same date, there were 2719 articled students (including 115 females).
RRH is one of the most prominent firms in this sector. RRH, besides establishing an extensive accounting, auditing and tax practice, has extensive experience in multidisciplinary consulting assignments carried out solely, or in a consortium with international firms like KPMG, Arthur D. Little, Price Waterhouse, Deloittes etc. many of which were in the areas of banking, chemicals, food and agriculture, hydrocarbon, transportation and “Cutting through complexity” 1 | P a g e
Rahman Rahman Huq Chartered Accountants
communication. A distinguishing feature of RRH has been its catalytic role in bringing under one umbrella the qualifications and experiences of top grade professionals available in the country.
Table of content
SI.
No.
Topic Page
No.
Chapter-One: Introduction 06
1 1.1 Origin of the Report 07
2 Scope of the report 07
4 1.4 Limitations 08
5 1.5 Definition 09
Chapter Two: Overview of Rahman Rahman Huq KPMG
6 2.1 Introduction about RRH KPMG 10
7 2.2 Recent information 11
8 2.3 Corporate Profile of the firm 11
9 2.4. Corporate Vision & Mission: 12
10 2.5 Objective 12
11 2.6 Organization structure: 13
12 2.7 Core value of the organization 14
13 2.8 Clients of the RRH KPMG 15
14 2.8.1 Manufacturing Company 15
15 2.8.2 Bank and Financial institution 17
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16 2.8.3 Energy and Power 18
17 2.9 Service provided to their clients 19
18 2.9.1 Audit 19
19 2.9.2 Tax and Advisory 19
20 2.9.3 Financial Advisory 19
21 2.9.4 Risk and advisory Service 19
Chapter 3 auditing of cash incentive
22 3.1 Introduction 20
233.2 Sectors of Auditing of Cash Incentives
20
24 3.3 Clients of RRH for cash incentives 20
25 3.4 Procedure of auditing of cash incentive (viyellatex ltd) 21
26 3.4.1 Collection of application 21
27 3.4.2 Collection of PRC 22
28 3.4.3 Checking application with the source documents. 23
29 3.4.4 Calculating the total claim amount 24
30 3.4.5 Preparation of Certificates 26
31 3.4.6 Preparation of Detail of Audit Case 27
Chapter 4 Conclusion and Reference
34Conclusion
28
Introduction
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Chapter l 1 l
Rahman Rahman Huq Chartered Accountants
Rahman Rahman Huq, with six active partners, is one of the leading
accounting firms in Bangladesh and the only such firm in the country where all
partners are members of The Institute of Chartered Accountants in England
and Wales. The partners are supported by nearly 200 trained and experienced
professionals including chartered accountants, MBAs, economists and MIS
specialists, including software engineers. The firm operates from two offices in
Bangladesh: Dhaka and Chittagong.
RRH has a large number of clients. It has served a large number of local and
multinational clients in Bangladesh. Beside this it has also full fill foreign
assignment in different countries throughout the world considering kpmg
permission
its main objective is to Uphold professional integrity and honesty of its
members Advise government on taxation, business law and related matters
,Maintain superiority in respect of professional competence, Meet the growing
demand for qualified Chartered Accountants in Bangladesh, Create the
environment of mutual cooperation ,Carry out continuous research and make
in-depth study of related subjects and apply ,findings of research and study in
the fields of accountancy profession.
Origin of the Report
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Rahman Rahman Huq Chartered Accountants
University of Dhaka is the most popular and well known university in
Bangladesh. It acquires and holds the first position of the university brand in
Bangladesh according to brand zeal consultancy firm. It provides many
courses both in graduate and post graduate program. Bachelor of Business
Administration (BBA) is one of them. In the BBA program internship activities is
compulsory for the students of Faculty of Business Administration. This
internship program for BBA student is for 45 official days. However I was
assigned at HSBC cash incentive audit segment. During this period I worked at
HSBC head office (Anchor Tower), Pantho Path, Dhaka to complete the
program. After completing the practical work I prepare the report.
Rahman Rahman Huq is one of the leading auditing firms in Bangladesh which
is also the member firm of KPMG, recruits me and assigned to the cash
incentive sector. Under the supervision of two senior audit supervisor the
report is made. The cash incentive sector is the most crucial audit
engagement of RRH, because on behalf of Bangladesh Bank RRH is auditing
total acquired by the bank as well as exporting organization(here Viyellatex in
RMG sector and Pran foods ltd in food and agro sector). I have prepared this
report on this topic by counseling with my honorable course supervisor and
the staff of the RRH.
Scope of the Report:
This report covers the details of cash incentive audit workflows in
multinational bank. This report consists of my observations and on the job
experiences during the internship period in the cash incentive section of the
HSBC bank operated by the RRH. This report emphasizes on the sequential
activities involved and used by RRH for auditing of cash incentive.
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Limitation of the Study:
• All the audit activities are not observed.
• All the concerned personnel of the firm are not been communicate.
• The report covers the audit activities of HSBC bank (head office) Dhaka
only.
• The report covers only the cash incentive audit of the bank, not the
group audit, interim audit.
• The duration of the internee at the audit firm was in dull season.
• Some information was withheld to retain the confidentiality of the bank
as well as RRH.
• PRC, Application, Bangladesh Bank circulars, file of Viyellatex and Pran
foods ltd- these documents are failed to enclose with this report due to
the terms and condition of the RRH.
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Duration of internship program
I have been employed as a junior auditor in Rahman Rahman Huq CA firm in
order to complete my internship program held by “University of Dhaka” (BBA,
Management Studies) from 29.09.2010 to 07.11.2010.
Definitions
PRC : Proceed Realization Certificate.
BB : Bangladesh Bank.
BBC : Back to Back L/C.
L/C : Letter of Credit.
BTMA : Bangladesh Textile Mills Association
BGMEA : Bangladesh Garments Manufacturing and Exporters
Association
NOC : No Objection Certificate.
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2.1. Introduction
In 1962, when Price Waterhouse Peat & Co. left Pakistan, one of its former
partners joined forces with two other chartered accountants to form Rahman
Rahman Huq. Over the years, this firm has built a formidable reputation for
providing audit, tax, advisory, and other business solutions to national and
multinational businesses, public sector corporations and development
organizations in Bangladesh (and both wings of Pakistan until the emergence
of Bangladesh in 1971).
Rahman Rahman Huq, with six active partners, is one of the leading
accounting firms in Bangladesh and the only such firm in the country where all
partners are members of The Institute of Chartered Accountants in England
and Wales. The partners are supported by nearly 200 trained and experienced
professionals including chartered accountants, MBAs, economists and MIS
specialists, including software engineers. The firm operates from two offices in
Bangladesh: Dhaka and Chittagong.
RRH, besides establishing an extensive accounting, auditing and tax practice,
has extensive experience in multidisciplinary consulting assignments carried
out solely, or in a consortium with international firms like KPMG, Arthur D.
Little, Price Waterhouse, Deloittes etc. many of which were in the areas of
banking, chemicals, food and agriculture, hydrocarbon, transportation and
“Cutting through complexity” 8 | P a g e
Chapter l 2 l overview of Rahman Rahman Huq
Rahman Rahman Huq Chartered Accountants
communication. A distinguishing feature of RRH has been its catalytic role in
bringing under one umbrella the qualifications and experiences of top grade
professionals available in the country.
2.2. Recent Information:
At present RRH is the member firm in Bangladesh of KPMG International
Cooperative, one of the four largest international accounting firms in the
world. They are the only member firm in Bangladesh of any of the four major
global audit firms.
2.3. Corporate profile of RRH:
Partners 1. Sheikh Abdul Hafiz FCA. (England & Wales, ICAB )
2. A.N. Altaf H. Siddiqui. (England & Wales, ICAB )
3. M. Mosleh Uddin. (England & Wales, ICAB )
4. Adeeb H. Khan. (England & Wales, ICAB )
5. Ali Ashfaq. (England & Wales , ICAA, ICAB)
6. Muhammad Mehedi Hasan. (England & Wales, ICAB).
Senior Manager 1. Keshab Gupta FCA (ICAB).
2. Utpal Datta FCA (ICAI).
3. Mohammed Saif Uddin ACA (ICAB).
4. Snehasish Barua ACA (ICAB).
5. Abu H.M. Kibria ACCA (Uk).
Post 9 Mohakhali C/A (11th floor). Dhaka – 1212. Bangladesh.
Fax +880-2-9886449.
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Telephone +880-2-9886450-2.
Website www.Rahman-rahman-huq.com
2.4. Corporate mission and vision of RRH:
The vision:
- Uphold professional integrity and honesty of its members
- Advise government on taxation, business law and related matters
- Maintain superiority in respect of professional competence
- Meet the growing demand for qualified Chartered Accountants in
Bangladesh
- Create the environment of mutual cooperation
- Carry out continuous research and make in-depth study of related subjects
and apply
findings of research and study in the fields of accountancy profession
The mission:
The mission of is to provide leadership in the development, enhancement and coordination
of the Accountancy Profession in Bangladesh in order to enable the profession to provide
services of consistently high quality in the public interest.
2.5. Objective of the RRH:
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• Ensure sound professional ethics and code of conduct by its members
• Provide specialized training and professional expertise in Accounting,
Auditing, Taxation, Corporate Laws, Management Consultancy,
Information Technology and related subjects
• Foster acceptance and observance of International Accounting
Standards (IAS) and International Standards on Auditing (ISA) and adopt
the same as Bangladesh Accounting Standards (BAS) and Bangladesh
Standards on Auditing (BSA) respectively.
• Keep abreast of latest developments in Accounting techniques, Audit
methodology, Information technology, Management consultancy and
related fields
2.6. Organizational Structure of the RRH kpmg :
Audit firm generally follows the line organization system. RRH kpmg is one of
them and it strictly follows the straight line system. At the top most partners
hold the ultimate powers. As it is the partnership organization, important and
crucial decisions are held with the consent of all partners. But senior partner
has the power to influence in the decision making process. Senior manager
hold the second position followed by manager, assistant manager, Qualified
(serving article), Tax specialist, IRM (Information & risk management)
specialist, Senior Auditor, Semi Senior Auditor, junior auditor.
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Partner
Senior Manager
Manager
Rahman Rahman Huq Chartered Accountants
2.7. Core values of the RRH kpmg Bangladesh:
Our values create a sense of shared identity within the KPMG organization,
which is a network of member firms in 148 countries. They define what we
stand for and how we do things. They help us to work together in the most
effective and fulfilling way. And they bring us closer as a global organization.
We lead by example—at all levels acting in a way that exemplifies what we
expect of each other and our member firms’ clients.
We work together—bringing out the best in each other and creating strong
and successful working relationships.
We respect the individual—respecting people for who they are and for their
knowledge, skills, and experience as individuals and team members.
We seek the facts and provide insight—challenging assumptions,
pursuing facts, and strengthening our reputation as trusted and objective
business advisers.
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Assistant Manager
Qualified (Serving Article)Tax Specialist
IRM specialist
Senior auditor
Junior auditor
Rahman Rahman Huq Chartered Accountants
We are open and honest in our communication—sharing information,
insight, and advice frequently and constructively and managing tough
situations with courage and candor.
We are committed to our communities—acting as responsible corporate
citizens and broadening our skills, experience, and perspectives through work
in our communities.
Above all, we act with integrity—constantly striving to uphold the highest
professional standards, provide sound advice, and rigorously maintain our
independence.
2.8. Clients of the RRH kpmg Bangladesh:
RRH has a large number of clients. It has served a large number of local and
multinational clients in Bangladesh. Beside this it has also full fill foreign
assignment in different countries throughout the world considering kpmg
permission. List of Clients of the RRH are given below:
2.8.1. Manufacturing company;
• Advanced Chemical Industries Ltd.
• Amo Tea Co. Ltd.
• The Allynugger Tea Co. Ltd.
• The Chandpore Tea Co. Ltd.
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• Bayer CropScience Bangladesh Ltd. (formerly Aventis CropScience
Bangladesh Ltd.) Aventis Ltd. (formerly Rhône Poulenc Rorer Bangladesh
Ltd.)
• TATA (A Member of TATA Group of India)
• Bangladesh Edible Oil Ltd.(Subsidiary of Leverian Holdings of Singapore,
manufacturers and markets edible oil.)
• Bangladesh Lamps Ltd.(Maker of Philips bulbs.)
• BASF Bangladesh Ltd.
• Bata Shoe Co. (Bangladesh) Ltd.
• BOC Bangladesh Ltd. (A member company of British Oxygen Group of
U.K.)
• British American Tobacco Bangladesh Company Ltd.
• Cemex Cement Bangladesh Ltd.
• Coats Bangladesh Ltd.
• Dhaka Match Industries Co. Ltd. (A subsidiary company of Swedish
Match AB, Sweden.)
• Holcim Bangladesh Ltd.
• Integrated Beverage Services Bangladesh Ltd. (Member of Pepsico
group of USA.)
• Karnavphuli Fertilizer Company Ltd.
• Lenny Fashions Ltd. (Part of a major Hong Kong based garments
producer.)
• Nestle Bangladesh Ltd. (Manufacturing and import of food and allied
products. Subsidiary of Nestle SA of Switzerland. Group auditors: KPMG.)
• New Zealand Milk Products Bangladesh Ltd. (Multinational Company
engaged in retail marketing of milk producer and allied products.)
• Organon (Bangladesh) Ltd. (Part of Akzo-Noble group)
• Premier LP Gas Ltd. (Subsidiary of Total Fina)
• Proctor & Gamble Bangladesh Ltd.“Cutting through complexity” 14 | P a g e
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• Renata Ltd. (A listed public limited company engaged in manufacturing
and marketing pharmaceutical products.)
• Roche Bangladesh Ltd. (Subsidiary of Hoffmann La Roche of Switzerland
manufacturing medicine.)
• Saiham Cement Ltd.
• Saudi Bangla Fish Feed Ltd. (A company owned by SABINCO producing
poultry and fish feed.)
• Scancem Bangladesh Ltd.
• Scancement International Ltd. (Member of the Norwegian cement
group, this is a producer of high quality cement)
• Teesta High Fashion Ltd. (Member of Kukdong Group of Companies of
South Korea engaged in production of garments for export.)
• The Baraoora Sylhet Tea Co. Ltd.
• The Consolidate Tea & Lands (Bangladesh) Ltd.
• The Deundi Tea Co. Ltd.
• The New Sylhet Tea Co. Ltd.
• The Noyapara Tea Co. Ltd.
• The Surma Vally Tea Co. Ltd.(These are Sterling Tea Companies,
producing and selling tea in Bangladesh being fully owned subsidiaries
of UK companies.)
• Triumph International Bangladesh Ltd. (Garment manufacturing
company based in Germany.)
• Transcom Beverage Bangladesh Ltd. (Bottler of Pepsi products in
Bangladesh)
2.8.2 Bank and financial institution
• Arab Bangladesh Bank Ltd.
• Bangladesh Shilpa Bank (industrial bank).
• Bangladesh Shilpa Rin Sangstha (industrial credit finance institution).
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• Citibank NA.
• Delta Brac Housing Finance Corporation Ltd.
• Dutch Bangla Bank Ltd.
• Federal Insurance Co. Ltd.
• United Insurance Co. Ltd.
• First Security Bank Ltd.
• Industrial Development Leasing Company of Bangladesh Ltd.
• Industrial Promotion and Development Company of Bangladesh Ltd.
• International Leasing and Financial Services Ltd.
• United Leasing Company Ltd.
• Agrani Bank, Janata Bank, Sonali Bank.
• Prime Finance Ltd.
• Saudi Bangladesh Industrial and Agricultural Investment Co. Ltd.
• Southeast Bank Ltd.
• Standard Chartered Bank
• The Hongkong and Shanghai Banking Corporation Ltd.(HSBC)
2.8.3. Energy and power:
• ABB SAE SADELMI SpA (Branch operation, engaged in Civil Engineering connected with Karnafuli Hydro Power Plant Rehabilitation Project.)
• AES Haripur Private Ltd.
• AES Meghnaghat Ltd.(Bangladesh’s largest private sector land based power producers.)
• BP Middle East Ltd. (Liaison office of BP of UK, involved in marketing of petroleum products.)
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• BJ Services Company Middle East Ltd. (Branch operation of BJ Services of UK. Engaged as sub-contractor to oil companies.)
• Brown and Root Bangladesh Ltd. (Subcontractor for exploration and development of oil and natural gas.)
• Cairn Energy PLC (Contractor for exploration and development of natural gas in joint venture with Shell group of companies.)
• Meghna Energy Ltd. (Subsidiary of Heidelberg group of Germany. Private sector captive power producer in Bangladesh.)
• Khulna Power Company Ltd. (First private sector barge mounted power plant in Bangladesh. Subsidiary of El Paso Power of USA.)
• Unocal Bangladesh Ltd. (Gas exploration and development in Bangladesh.)
• Wartsila Bangladesh Ltd. (Subsidiary of the Wartsila group of Finland, this company markets power generating units in Bangladesh.)
RRH has full fill all kinds of auditing, advising, consulting type of activities for
all of its clients. Most of the clients are multinational organizations. It is
because all multinationals need to conduct their global audit report, so that in
Bangladesh RRH is the only member firm of KPMG international global audit
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firm. For this reason most of the multinationals prepare their audit activities
and report with the help of RRH.
2.9. Service provided to the clients:
2.9.1. Audit
Audit/attestation , Reviews and compilation of financial statements,
Regulatory compliance attestation, Interim reports, Special reports/agreed-
upon, procedures stock exchange offerings –attestation services ,Review and
reporting on internal control
Information risk management, Computer security reviews ,Internal audit
outsourcing, Accounting services ,Forensic and investigative
accounting/litigation support ,Due diligence reviews, Valuations, Corporate
governance.
2.9.2. Tax, legal and advisory services
Corporate taxation, Mergers and acquisition, Payroll management, VAT,
Taxation of individuals, International taxation, International contract
structuring, Expatriate tax services, complete tax compliance review,
company law.
2.9.3. Financial Advisory Service
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Country Specific Statutory Reporting, IAS Attest Reporting, US GAAP Reporting,
Prospective Reporting, Other Forms of Attestation Reporting, Alliances and
Joint Ventures, valuation.
2.9.4. Risk advisory service
Internal Audit Co/Outsourcing, IT Audit Co/Outsourcing, Regulatory Assistance
Services (incl.S-O)New Business / New Products, Capital Adequacy &
Regulatory Reporting, Corporate Regulatory Compliance, Accounting Support,
Process Improvement Service.
3.1. Introduction:
Auditing of cash incentives involved the activities of checking relevant
documents and calculating the amount whether it is satisfying the circulated
amount of Central Bank (Bangladesh Bank) or not. If the documents are
relevant and the amount are fulfilling the central banks circulated markup
then the audit firm will provide the certificate to their clients (relevant
financial, non financial, export oriented organization). At that time, only,
Bangladesh bank will provide the cash incentive facilities.
On behalf of Bangladesh bank, Rahman Rahman Huq recently audited the
cash incentives activities of HSBC (bd) bank.
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Chapter l 3 l Auditing of cash incentive at HSBC bank
Rahman Rahman Huq Chartered Accountants
3.2. Sectors of auditing of cash incentives:
According to Bangladesh banks circular cash incentives is provided in to two
sectors for export oriented activities. They are:
In Agriculture and food sector: 14 percent cash incentives will provide.
In Ready Made garments (RMG) sector: in RMG sector 5 percent cash
incentives will provide on exported amount but considering that 20 percent
domestic value addition is compulsory in preparing goods.
3.3. Clients of RRH for cash incentive:
Rahman Rahman Huq generally audited cash incentive activates of HSBC
bank. Right now HSBC is dealing with Viyellatex limited and Pran foods ltd for
their exporting activities. So it becomes
the major responsibility of the RRH to audit all the exporting documents of
both the viyellatex ltd and Pran foods ltd at the head office of HSBC bank.
3.4. Procedure of auditing of cash incentives: Viyellatex ltd
During the period of internship I have involved only in the sector of RMG sector
for cash incentive activities. So here the overall audit program of the cash
incentive of the RMG sector is highlighted. In this procedure two kinds of
documents is essential, one is base documents and other is source
documents.
• Base documents: Base documents are the Application and Proceed
Realization Certificates (PRC). Here the application format will provided
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by the audit firm (RRH) according to the guide line of Bangladesh bank
to the exported organization.
• Source documents: Source documents are the Master L/C (letter of
credit), local back to back L/C, BTMA (Bangladesh Textile Mills
Association) certificates of yarn, foreign back to back L/C, invoice, bill of
leading, Export number/claim no. the PRC will prepared and provided by
the inclined bank (HSBC) and it is also the source document. All of these
source documents are compiled in one master file.
So using these documents cash incentive activities will be started. Procedures
are given below:
3.4.1. Step-1 Collection of application:
Application is the base documents with which the procedure will start. The
application will contain the information of:
a) In table 1: The following information will be provided.
• Master L/C no.
• Master L/C date.
• Master L/C value.
b) In table 2(column2): local back to back L/C of yarns’ following
information will be given below;
• Weight.
• Date.
• Value.
c) In table 2(column 3): Foreign back to back L/C
• L/C number
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• Date
• Value
d) In table 3 (column 2): Total quantity exported.
• (Column 3): Total invoice value.
• (Column 4): Bill of lading date.
• (Column 5): Export number.
• (Column 6): Repatriated value.
• (Column 7): Repatriated date.
e) In table 4: The claim amount of the exported organization will appear.
3.4.2. Step-2 Collection of Proceed Realization Certificate
(PRC):
Proceed realization certificate is the document provided by the bank. In PRC all
important documents information will be gathered systematically. PRC
generally contains the total information about the master L/C , foreign back to
back L/C , local back to back L/C. it contain the information about total
exported value and total repatriated amount of the exported goods. It is also
known as bank certificate, because bank provides a certificate with the PRC.
3.4.3. Step-3 checking application with the source documents:
• At first compare the Master L/C number, date and value which is given in
the application, with the Master files’ documents where main copy of
master L/C is stored. After that, compare the Master L/C number, date
and value with the PRC document prepared by the inclined bank (HSBC).
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• Then the local Back to Back L/C of the yarns’ weight, date, and value will
be compare with the BTMA certificate. In this certificate total weight,
date and value will be properly appearing.
• Foreign Back to Back L/C includes L/C number, date, value and it will be
compare with the PRC – bank certificate. Then again compare it with the
master files documents – foreign Back to Back L/C document (which is in
draft form).
• The export number given in the application will be compare with the PRC
documents where the bank will provide an unique number of the export.
• Again compare the repatriated value, repatriated date from the PRC
documents.
• Then compare the information of piece/quantity exported and invoice
value from the Master files’ invoice documents.
• Date of the bill of lading which is given in the application will compare
with the Master files’ draft copy of the bill of lading.
• At last compare the fabric value which is given in the application with
the documents of cost statement. This cost statement will be prepared
by the exporting organization and will be approved by the responsible
authorities. Here in the case of Viyellatex cost statement is approved by
the BGMEA.
3.4.4. Step-4: Calculating the total claim amount (cash
incentive).
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In this stage, RRH follow its own format for calculating the total claim amount
along with the guide line of the central bank format. So the process of
calculation is given below:
• In excel sheet 1(ud-13): (Appendix: 1)
At first allocate foreign back to back L/C value to all claim amounts. So
make a summation of foreign back to back l/c value. Then make a
summation of invoice value of all claims. After that, calculate the
proportion of all claims. At last applicable value of foreign back to back
l/c amount will be execute.
• In excel sheet 2 (ud-13(n)(m)): (Appendix: 2)
“n” is denoted here as the number of claim or file and “m” is the sub file
of “n” . In excel sheet 2 the client (here viyellatex) will provide the net
weight of output of total exported goods, its export number. On the
other hand the exchange rate of those individual file or claim will also be
given. In each claim or file, six export numbers is included, that means
six individual exported lots make one claim. Now in order to calculate
the exchange rate:
a) Take the exchange rates of the first exports, bill of leading
date from the six exp no. of each claim.
b) Then take the exchange rates of the last exports bill of
leading date.
c) Now calculate the average of the two exchange rates.
d) If any exchange rates is not found then a requisition will send
to the inclined bank (here the bank is HSBC).
• In excel sheet 3 (ud-13 workings(n)(m)): (Appendix 3)
This format of calculation is given by the BB.
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In calculation process:
a) Sheet 3 is comprised of two parts. These two parts have also
linked with the sheet 1 and 2. So the average exchange rate
of sheet 2 and proportional amount of sheet 1 brings the
change in total calculation process.
b) In calculation process type input weight from cost statement
given by the viyellatex in cell G29.
c) Now make a link with the output weight from “sheet 2 cell
D9” to “sheet 3 cell G30.
d) Calculate the required shipped net weight by multiplying .16
with the input weight. Here 16% is the given markup by BB
regarding the minimum wastage level.
Now in the table format:
e) Calculate the applicable rate of the repatriated value by
dividing required shipment net weight (input) cell no. G 33
(comes from= G29*0.84) by the actual shipped weight cell
G 30.
f) Then write down the total repatriated export value of the
particular claim at the column numbering 3 in cell “E7”. But
it is not the actual value; actual value will be executed after
deducting 16 % wastage from the total repatriated exports.
So in column 3 cell 10, 11 show the amount after deducting
the wastage value.
g) Calculate the net FOB value after deducting freight charge
and commission.
h) In Column 7 (c&f value) link with the “applicable foreign back
to back L/C” amount from sheet 1.
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i) In column 8; put the amount of 125% of column 7.
j) In column 9; from the net FOB exported value the Required
export earnings for proper utilization of imported materials
125% of col 7 will be deducted.
k) In column 10; for export earnings mentioned in col 9,
maximum cost of local yarn used 80% of col 9.
l) In column 11; Cost of fabrics collected from other local
producers.
m) In column 12; Maximum acceptable cost (mentioned in para
Uma of application) of own produced fabrics used.
n) In column 13; Applicant submitted cost (mentioned in para
Uma of application) own produced fabrics used.
o) In column 14; Repayable taka amount of cash incentive 5%,
of 12 and 13 whichever is lower, multiply OD sight rate
applicable on export proceed realization date.
In the result check process
p) Applicable rate is 5% and the amount which one is lower in
column 12 and 13 will be multiply by the applicable rate.
q) After that the amount will be exchange from taka to USD by
using the average exchange rate from sheet 2, related claim
file.
3.4.5. Step-5: Preparation of the certificate of cash incentive.
(Appendix 4)
After the preparation of the calculation, certificate of cash incentive will be
prepared by the audit firm. This certificate will be prepared by the statutory
format of the RRH. Certificate will be provided for each number. Certificate will
contain the following information:
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• Master L/C no. date, value taken from application.
• Total realize value.
• Applicant claim amount in taka which will collect from sheet 3.
• Export number, date, realized value.
• Actual payable cash incentive in taka from sheet 3 according to
Bangladesh bank calculation process.
• At last type financial year from bill of lading date.
3.4.6. Step-6: Preparation of detail of audit case: (Appendix 5).
Detail of audit case is the tools by which an audit firm claims their audit fee
from their client. In the cash incentive audit, detail of audit case is contained
the following things;
• Address of the clients
• Master L/C no. date, value from application
• Invoice value form application.
• Realized value from application.
• Clients Claimed amount in taka.
• Repayable (actual calculated amount) cash incentive in taka.
• At last the calculations of audit fee. The audit fee generally claimed on
the basis of clients claimed amount of cash incentives rather than the
repayable cash incentive amount. So the calculation is;
i) if claimed amount is taka less than 500,000(<500,000) than audit fee
is 4000.
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ii) if the claim amount is equal or more than 500,000 but less than
10,00,000 than audit fee is 5000.
iii) And if the claim amount is more than 10, 00,000 than the audit fee
will be 7000.
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