M/S Taneja Exports, Mumbai
Mr. Gurmeet Taneja and Mr. Rahul Khatri are partners of M/S Taneja exports, Mumbai. Both of them qualified from IIFT, New Delhi in the year 2002. They declined lucrative corporate job offers, since they have decided to plunge into the world of international business. M/S Taneja Exports is registered as a partnership firm, with Mr. Gurmeet Taneja and Mr.Rahul Khatri sharing the profits in the ratio of 60: 40. The partners had conducted in depth market survey in the domestic as well as international markets regarding the demand of women’s apparels in cotton and hosiery. They have taken the assistance of Apparel export promotion council and the marketing agencies in various countries of European Union. On account of their knowledge in foreign trade, they were able to quickly assess that Indian exporters have not succeeded in penetrating into the huge apparel market of Europe. They found out that the main reasons were ineffective marketing, improper quality control and non adherence to the shipping schedules. Mr. Gurmeet concentrated on marketing of the cotton and hosiery apparels abroad and Mr. Rahul ensured on the procurement of the raw materials and timely execution of shipments. The firm had taken an industrial gala, measuring 700 sq ft, at 501, Mangal Das market, Lower Parel, Mumbai. They were paying a monthly rent of Rs. 35,000/- for the office premises and the stock of garments was kept in a godown in the same gala area, for which the rent payable was Rs. 15,000/- pm. The firm was sourcing their raw materials from the south Indian towns of Tirupur and Coimbatore. As per the export orders, they were providing the raw materials for job works in Mumbai and subject the samples to rigorous quality and specification checks. The firm had employed 2 accounts staff and 3 contract workers to attend to daily office and godown activities. The firm was able to achieve steady improvement in export sales due to the stringent quality control measures and timely execution of shipment schedules. The following were the credit facilities enjoyed from M/S International Bank of India, Fort branch, Mumbai.
Facility (Amount in Lakhs)| 2003| 2004| 2005|
Fund based| | | |
a) Export packing credit| 5.00| 7.00| 10.00|
b) Foreign bill purchased/Foreignbill negotiated| 5.00| 7.00| 10.00| Non Fund based| | | |
a) Performance guarantee| 2.00| 5.00| 7.00| | | | |
Export sales| 20.00| 30.00| 40.00 |
Towards the security of the credit facilities, the firm had mortgaged the residential house, valued at Rs 85 lakhs, belonging to Mr. Vikram Taneja, father of Mr. Gurmeet Taneja, and stocks valued at Rs 15 lakhs was also hypothecated to the Bank. Mr. Vikram Taneja stood guarantee for the facilities sanctioned to the firm. M/S Taneja exports used to avail the export packing credit facility from International Bank of India and adjust the same by purchase or negotiation of the export bills drawn on their European buyers. Generally the bills carried a tenor period of 60 days. Most of the export bills were drawn and send for collection through international Bank of India, Mumbai Fort Branch, to the foreign buyer’s bankers, based on the confirmed purchase order of the buyer. The bills were paid on the due dates and the conduct of the account on the bank’s books was quite satisfactory. Based on the past history and the increase in sales turnover achieved by the firm, the bankers were happy to increase the credit limits from Rs 7 lakhs in 2003 to Rs 17 lakhs in 2005. On June 17, 2005, the firm submitted an export document to International Bank of India, Fort Branch, for Euro 53000.00, drawn on M/S St Laurn Fashions, Paris. The documents were drawn on 60 days DA terms as per the contract. The merchandise under the export were ladies garments in...