KALINA PROCEDURES

WHAT ARE KALINA’S PROCEDURES?

1. Letter of Intent (LOI) to be received from Client after inquiry has been made with Kalina representative.

2. Soft Corporate Offer (SCO) or Full Corporate Offer (FCO) to be provided to the client for review and acceptance.

3. Upon acceptance, the client will provide a completed Client Information Sheet (CIS) to Kalina. This is then sent to our bank with a copy of the Contract to confirm the transaction. The Client then makes arrangements for payment with their institution and provides evidence of their ability to pay to Kalina’s bank, by bank to bank correspondence. (Either by SWIFT or Bank Confirmation Letter)

4. Upon acceptance, the client has the option of providing a Purchase Order to Kalina prior to the receipt of the Contract or request a Contract immediately which will indicate

       a. The commodity and its quantity

       b. The price of the commodity

       c. The destination Port

       d. The product specifications

       e. Kalina payment terms:

           1. A deposit must be received that is a minimum of 30% unless arranged with Kalina and              requested upfront by the client

           2. 70% payable on the provision of the Bill of Lading and SGS Certificate

All payments have to be discussed on a client basis with regards to their disclosures which will be treated confidentially. If the payment terms involve the use of a Letter of Credit, then Kalina will request that the client execute the FCO that was supplied to them so that they may be referred to Kalina’s Trade Finance partner for financing. Buyer’s will not be referred unless a commitment is provided to Kalina on their Intent to further complete the transaction by placing their deposit.

WHY WOULD KALINA HAVE A PROCEDURE?

In the case of any client, a Contract is required to obtain a commitment from Producers to supply a commodity to a Client. A Commodities Contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date. In order to have a valid contract the law requires that there be an offer made, an acceptance and consideration for the contract. Acceptance occurs when the Buyer accepts the Seller’s offer by agreeing to buy the commodity at the set price. The consideration of the contract then comes from both parties. The consideration from the Buyer is the deposit. The consideration from the Seller is to commit to the buyer to provide the commodity at the price offered.

Without a deposit being made, the Buyer has not completed their portion of the contract, and thereby creates a defective or faulty contract.  As the contract is considered faulty or defective then provisions in the contract are no longer binding on the Seller.  If there is no Contract there can be no price offered for the commodity until a Contract with a deposit is executed.

Consequently, if there is no agreement on the price, commodity and quantity via acceptance of the FCO offered by Kalina there is no need for an agent to discuss with a client the use of Kalina’s financing channels. Without acceptance of the FCO the transaction is deemed to be terminated including all related actions that would have continued after acceptance of the FCO.

HOW DOES KALINA’S PROCEDURE CHANGE IF THE CLIENT USES DIFFERENT APPROVED PAYMENT METHODS?

Kalina’s procedure with the client does not change as outlined previously. 

For example if the transaction is to be financed via a Letter of Credit from the bank for any advances made by the Client to complete the trade with Kalina. The following will still occur:

1. Client remits 30% cash deposit by TT to Kalina. 

2. Client’s bank remits 70% payment by TT to Kalina when requested by Kalina’s bank with the documents as disclosed under Kalina’s procedures.