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H.T Traders has grown from a small paper firm to the premier business of Pakistan by importing paper, in order to fulfill the increased demand of paper. Today, H.T Trader is well known and leading supplier of the paper products across the country. The objective of this Internship was to explore the issues relating to Imports and to find out problems regarding the theoretical concepts with practical experience working in a company during the internship. There are many possible improvements, which can make positive changes in the company. y learning experience with H.T Traders begins with my joining from !"#$"#%& which was for ' weeks. y internship report contains all the information about my work experience with H.T Traders, which was established in %()( I got training from each of its department. The internship basically revolved around the administration, importing and finance. The system, the style of working * the commitment of the employees in H.T Traders is really exemplary. The difference between the success * failure is doing things right and doing things nearly right, * H.T Traders has always tried for success * that is making progress day by day. Irrespective of all these positive points of H.T Traders, I have noticed a few areas where the improvement can really increase the efficiency of H.T Traders. In this report I have given a brief review of what I have seen during our internship I have mentioned all these as I have made an internship as according to the schedule. I also mentioned about the paper industry in Pakistan and vision of this industry. Then I have done a detailed +,-T analysis. Then I have discussed about my learning in the whole internship that is all about the various terminologies. .onfidence, on time decision making, consistency, hard work, team work,innovation, creativity, organi/ational survival customer handling techni0ues are the key learnings out of my job. I have made it possible to write each and every thing that I have learned there. I have all my practical efforts in the form of this manuscript that1s the asset for my future career. %


The objectives or purposes of internship are to learn the existing business practices being followed in the company. The main objectives are given as under2 % ! & 5 " ' 7 ) To understand importing system of the company. To understand the application of theoretical knowledge in practical life. To attain knowledge about the 3dministration and 4inance department. I want to get practical knowledge about international trade so, I select the Import based company for studying. H.T Traders is leading paper Importing company in 6ahore. To study the role of imports in economy of Pakistan. To be a part of a competitive environment and enhances my skills. To identify problems, opportunities and providing recommendation there on.

,ith the passage of time there have been lots of changes in 8Paper Industry9. :o doubt, in every country of the world it is a very important sector because today paper is used almost in each and every field of life as educational and non#educational, formal and casual, personal and social. Paper is used at every inch of our daily life i.e. for books, notebooks, diaries, newspapers, maga/ines, letter pads, different types of cards, raping papers, binding sheets, envelopes, bags for carrying grocery etc. ;ifferent industries are very important but mostly they are field bound or it can be said that their scope revolves around some specific area. <ut paper industry has a vast scope having the reason that it is involved in every walk of life. Paper industry is a very active sector that also plays a vital role in the economy of a country.


The history of 8Paper9 is divided in five parts. The Origin o P!"er The origin of paper comes from =gypt and the >iver :ile. The term 8paper9 is derived from 8Papyrus9. It is the marsh grass called .yperous Papyrus that thrived in the valley of the river :ile. The =gyptian cut the stem of the plant into thin strips and soaked in the water of the :ile. This softened the stem. Then these strips were arranged to form a mat and pounded to form a thin sheet. This sheet was dried in sun light. The resulting sheet was used for writing. It was easy to carry around because it was light. The =gyptians, ?reeks and >omans used these sheets to record events, write spiritual texts and create works of art. It has been discovered that the De#e$o"e% in Chin! Invention of paper as we know it today is attributed to T1sai 6un. He was respected as a patron saint of paper making. It is said that T1sai 6un experimented with different materials and developed the art crushing the fiber of plants until each strand was separated. These separated fibers were mixed with water and dipped into a huge vat. Then this layer of fiber was dried and the product that was formed was paper. The paper was thin, flexible and strong and had a fine smooth surface. The process of & ayans made something similar to keep records in the second century 3;. That was like a mat and nothing like the paper that we use today.

making paper was kept a secret within .hina till the &rd century. S"re!% &o o&her !re!' ;uring &rd century it spread to @ietnam and then to Tibet. Paper was introduced in Aorea in the 5th century and to Bapan in the 'th century. Then it spread slowly to 3sia and :epal. S"re!% &o M('$i) *or$% In 7"%3; when the Tang dynasty was at war with the The +amar0and and they taught the ;amascus and .airo. Re+en& or) ,hen the oors of :orth 3frica attacked +pain and Portugal they took the paper making techni0ue with them and paper making finally found its way to =urope in the %!th century. .harles 4enerty of Halifax made the first paper from wood pulp CnewsprintD in %)&). .harles 4enerty was helping a local paper mill maintain an ade0uate supply of rags to make paper, when he succeeded in making paper from wood pulp. He neglected to patent his invention and others did patent papermaking processes based on wood fiber. In %)"', =nglishmen, Healey and 3llen, received a patent for the first uneven paper. The paper was used to line men1s tall hats. 3merican, >obert ?air promptly invented the corrugated cardboard box in %)7$. -n ;ecember !$, %)7%, 3lbert Bones of :ew Eork :E, patented a stronger corrugated paper CcardboardD used as a shipping material for bottles and glass lanterns. In %)75, ?. +myth built the first single sided uneven board#making machine. 3lso in %)75, -liver 6ong improved upon the Bones patent and invented a lined corrugated cardboard. uslim rulers on the banks of the Tarus >iver. uslims captured a .hinese caravan that had many papermakers as well. They were taken to uslims how to make paper. Then eventually +amar0and became an

important center for the production of paper. 4rom here the paper makers moved west to <aghdad,


<eing a new and separate state, at the time of independence Pakistan was under developed. <ecause of this reason Pakistan had no paper and paper board manufacturing unit. The needs regarding paper were met through imports. In %("!, first paper unit was established. Its production capacity was "$$ tons per annum. Then more units were set up in Punjab, :,4P and +indh, producing various grades of paper, using local and

imported raw materials. <ut due to poorly planned growth in the )$9s and ($9s, many of the units are lying closed from that time. 3t present, in Pakistan there are about %$$ units in the organi/ed and unorgani/ed sectors. .ollectively, these units have a set up capacity of '"$ thousand tons per annum. The units in organi/ed sector have a capacity of !$ to &$$ tons per day. The organi/ed sectors have "7" thousand tons production capacity from !' paper manufacturing units. These units produce ,riting and Printing Paper, ,rapping and Packing Paper, ,hite duplex coated, Fn#coated board, .hip <oard and other board. In Punjab, about 7$ percent of the paper mills are located, in +indh !$ percent and %$ percent in :,4P. Punjab has a vast concentration due to availability of abundant underground water and wheat straw used as primary raw material. -nly a few mills have a capacity of more than %$$ tons per day. ,here as, majority of the mills have low production capacities. Production capacity of these units ranges between %"$$#))$$$ tons on annual basis.

3n import is any good Ce.g. a commodityD or service brought into one country from another country in a legitimate fashion, typically for use in trade. It is a good that is brought in from another country for sale. Import goods or services are provided to domestic consumers by foreign producers. 3n import in the receiving country is an export to the sending country. Imports, along with exports, form the basis of international trade. Import of goods normally re0uires involvement of the .ustoms authorities in both the country of import and the country of export and are often subject to import 0uotas, tariffs and trade agreements. ,hen the GimportsG are the set of goods and services imported, GImportsG also means the economic value of all goods and services that are imported. The macroeconomic variable I usually stand for the value of these imports over a given period of time, usually one year. T/"e o i)"or&' There are two basic types of imports2 Industrial and consumer goods Intermediate goods and services "

.ompanies import goods and services to supply to the domestic market at a cheaper price and better 0uality than competing goods manufactured in the domestic market. .ompanies import products that are not available in the local market. There are three broad types of importers2 6ooking for any product around the world to import and sell. 6ooking for foreign sourcing to get their products at the cheapest price. Fsing foreign sourcing as part of their global supply chain.


-ne of the issues that our industrial sector has been struggling with is the lack of continuity in fiscal, monetary and economic policies. In retrospect, a sound industrial sector relies as much on a stable government policy as it does on the skills of the private businessman. The paper and paperboard industry has been dealt reeling blows by the successive wave of governments and know#all bureaucrats that seem to be completely unaware of ground realities. Paper and paperboard was the industry of choice in imposition of .entral =xcise duty for decades. 4inally ?ovt is failed to develop the sector due to corruption, mismanagement and bad ?overnance.


Pakistan1s infrastructure is poor and suffers from decades of neglect. >oads and railways are insufficient and in poor condition. <oth the telephone system and the provision of electricity are hampered by corrupt and inefficient governmental service providers, which increasingly face competition from private entrepreneurs. 3nd now days due to worst flood Pakistan is facing problems in redeveloping the infrastructure. The development of Pakistani infrastructure is very slow .urrent flood again takes Pakistan in the %('$,s and it will take again %$ to %" years to establish roads and infrastructure. 4inally for paper and board industry only 6ahore is suitable now days due to flood.


+ince paper industry of Pakistan is vital industry and to be competitive in the world market this sector must be innovative. In paper and board industry of Pakistan there come process innovation as a result '

of process innovation many companies improved their technologies in manufacturing process and if we talk about product innovation some of big names like packages and century paper and board mills are continuously improving there products by spending there lots of budget in >*;. 3nd if we talk about immaterial, organi/ational or soft innovation in paper industry of Pakistan some of the big companies introduce new production concepts and supply chain management as well as they are working on value added services to support products. <ut still lots of continuous work and consistent policies are re0uired by the government to compete in the world market.


There are number of supporting reasons why import business and services is growing at such a fast rate2# 3vailability2 3n individual or business man or an importer needs to import because there are certain things that he can9t grow or manufacture in his home country. 4or example <ananas in 3laska, ahogany 6umber in aine and <all Park franks in 4rance. .achet2 3 lot of things, like caviar, pack more cachet, more of an Gimage,G if they1re imported rather than home#grown. Think +candinavian furniture, 4rench perfume, =gyptian cotton. It all seems classier when it comes from distant place. Price2 Price factor is also an important reason for import of products. +ome products are cheaper when imported from foreign country. 4or example Aorean toys, Taiwanese electronics and exican clothing, to rattle off a few, can often be manufactured or assembled in foreign factories for far less money than if they were made on the domestic country.


The exports and imports are one of the oldest trades carried out by the mankind. =ven in the ancient times, western people approached India for spices and many other things. 6ater the exports and imports became the primmest trade serving the whole economy. =ven in the modern times, exports and imports act are looked upon with a great value. Today there are loads of things that are exchanged, exported like tea, rubberH crafts and reciprocally several things are imported like fuel and many more. There are several traders and marketers in the business of the 7

exports and imports. Hence forth it is the duty of the govt. to regulate the whole export and import procedure, without any hitch to the business world. It is checked by the G=IP->T+ 3:; I P->T+ 3.TG that was constituted long ago in %(57. However after the era of globali/ation, the need of modifying the old act was reali/ed G=IP->T+ 3:; I P->T+ 3.TG was taken over by the G4->=I?: T>3;= CT>3;= * ;=@=6-P =:TD %((!G. The bottom#line of the G=IP->T+ 3:; I P->T+ 3.TG is to maintain and attain cent percent e0uilibrium between exports and imports. 3lso, to encourage local traders to expand their business ranges in all the sectors2 3ll the traders in the business must be registered by the official and recogni/ed department of the government. The registration is the basis on which govt. facilitates you with any kind of aid or any thing else. ?ovt, if finds the organi/ation not liable to all the criteria then can cancel the license provided to that organi/ation. There are special specification of some exports and imports goods or services that are under special G=IP->T+ 3:; I P->T+ 3.TG like tea, rubber and many others. ,ith the in coming of the newest technologies and moderni/ation, G=IP->T+ 3:; I P->T+ 3.TG encourages modern trade practices that help the economy for long time. In the recent development, govt. is enabling more and more local traders for exports and imports. In the recent developments, govt. has shown flexibilities in the act so that growth rate is maintained at the same rapid speed.


To fill the demand and supply gap paper and paper board products are imported from 4inland, .anada, F+3 and .hina. :ewsprint comprises the major imported finished product followed by white dupJcoated board. <reak#up of various types of paper and paper boards imported during the last five years up till !$$& and in !$$7 it will decreased to %"%,&'$ tons which is 0uit healthy and further in !$$) it come on &'"!$ ton only. Pakistan imported paper and paperboard valuing K%$$ million in !$$$ which increased to K%7' million

in !$$5. The import of pulp and waste paper was K!) million, !$$$, that increased to K5' million in !$$5. . The imports were K%) million in !$$$ which increase to K5& million in !$$5. The most direct way of achieving sustained economic growth is to become self sufficient in items that promise growth potential and to increase exports. The enormous export potentials of the paper and board industry remain an untapped treasure in Pakistan. -ver the years, the industry has attained a height where it is serving and ade0uately meeting the entire paper and printing needs of the industry including the multinational companies. The pharmaceutical and other multi#national companies working in Pakistan are fully satisfied with the 0uality of services, the paper industry is providing to them. The industry has proved its worth not only within the country but also carved a respectable place all around the world and supplying 0uality paper products to 4ar =astern .ountries, iddle =ast, =uropean as well as the Fnited +tates. The credibility of this industry is reflected in the fact that when foreign visitors were avoiding visiting this part of the world following terrorist attacks at 4rench =ngineers in Aarachi, participants from over !" countries visited the International exhibition GP>I:TP3A !$$!G recently held at =xpo .entre in Aarachi.


=xchange opportunity of goods .onsumer get privilege through international trade :atural assets of a country are to be utili/e properly International trade helps to produce domestic production as well as global production.

H.T Traders is well reckoned as one of the leading importers and +uppliers of paper#based Products like ;uplex <oard, Printing Paper, <leach <oard, +emi Araft Paper, ?ift ,rapping Paper etc. They excel in providing all these products at extremely affordable price range to suit their wide client base. .ustomi/ed packaging facilities are provided to cater to the ever#changing re0uirements of all our customers. 3 decade old marketing company, They are engaged in sourcing and supplying 0uality products to esteemed customers through a well established and well#knit marketing network supported by highly dedicated marketing officials. H.T Traders have close associations with major Paper Products anufacturers and Importers who use high 0uality materials for the fabrications of products and speciali/e in delivering them on time. 3s a result, they have managed to establish a strong foothold in the markets of various cities like Islamabad and Aarachi.


6ocated in 6ahore H.T T>3;=>1+ is engaged in providing high 0uality products to the customers spread across the city. =ver since its inception in %()(, the company has been successfully filling up the gap between manufacturers and customers. -wned by M!$i: M(h!))!% H!ni 7 who has an experience of &$ years, the company has made its mark as a paper Products +upplier in a very small span of time. The owner of H.T traders P3AI+T3: P3P=> alik ohammad Hanif is an active member of L366 =>.H=:T 3++-.I3TI-:MC3PP 3D and was elected, @ice F:ITE.

chairmanC:orthern NoneD by the =xecutive .ommittee thus won the award of 3PP>=.I3TI-: -4 +=>@I.=+ T- <F+I:=++ .-


,.. ;UA1ITY
Ouality is given prime importance by the company. They are associated with only those manufacturers who use the best materials and latest technologies in production. ,.0 CUSTOMER SATISFACTION .onsistent efforts are made by the team to ensure maximum customer satisfaction. Their stringent online 0uality control norms ensure that only best of the best finished products are supplied to our customers to surpass their expectations. ,.2 NET*ORThey have developed a strong network for procuring and supplying in the minimum possible time. .ompany has a wide customer base that stretches across the country.

N!)e o Pro"rie&or



3; H3:I4

Ye!r o E'&!<$i'h)en&


N!&(re o B('ine''

I P->T=>+ 3:; +FPP6I=>+ -4 P3P=> P>-;F.T+

N()<er o E)"$o/ee'


Ann(!$ T(rno#er

>s. %$$ 6acs


M!r:e& Co#ere%

63H->=, I+63 3<3;




VISION The vision of H.T T>3;=>+ is to be a company that creates value and growth in a sustainable manner for their shareholders, employees, customers, suppliers and the areas in which they operate. They aim to be market oriented, innovative, profitable, easy to work with and caring. MISSION To provide 0uality products to customers and explore new markets to promoteJexpand sales of the company through good governance and foster a sound and dynamic team, so to achieve optimum prices of products of the company for sustainable and e0uitable growth and prosperity of the .ompany.

Their vision will be achieved by maintaining high 0uality product, relentless pursuit of customer satisfaction, empowering employees to lead paper industry and achieve importing excellence, producing superior returns to our shareholders.

,.5 VA1UES
C('&o)er' They listen to their customers and improve our product to meet their present and future needs. Their success depends upon high performing people working together in a safe and Peo"$e healthy work place where diversity, development and team work are valued and recogni/ed.



They expect superior performance and results. Their leaders set clear goals and expectations, are supportive and provide and seek fre0uent feed back. They support the communities where they do business, hold themselves to the highest standards of ethical conduct and environment responsibility, and communicate openly with public and employees.

So+i!$ Re'"on'i<i$i&/

,.6 GOA1S
H.T Trader1s goal is to be a company that creates value and growth in a sustainable manner. In Pakistan,we will reach this by providing well thought out and well delivered services, products and solutions throughout the paper#based communications industry chain, down to the end user. =ntrepreneurial spirit will give us the flexibility to achieve our ambition to grow. The focused positioning of our products, assets and services empowers us to create and deliver appealing value to our customers and a strong financial performance for H.T Traders =ach day they live with their values of business intelligence integrity, courage and speed to guide and direct our behavior and actions. ,e embrace H.T Trader1s principles of sustainable development and ensure they are integrated into our business.


The 3PP 3 is made up of businesses, small and large, includes importers, distributor, stockiest, supplier, wholesaler, retailer, broker and indenter of Paper and Paper <oard. The members work collectively to accomplish that which none could undertake alone. The present 3PP 3 was formed in %((& through the amalgamation of TH>== trade bodies in Pakistan at that time, namely, the A3>3.HI P3P=> =>.H3:T+ 3++-.I3TI-: CAP 3D, 63H->= P3P=> =>.H3:T+ 3++-.I3TI-: C6P 3D 3:; >3,36PI:;I P3P=> =>.H3:T+ 3++-.I3I-: C>P 3D. It

was 6I.=:.=; under the Trade -rgani/ations -rdinance %('% on !$th -ctober %((& and incorporated under section &! of the .ompanies -rdinance, %()5 which regulates the working of the %&

Trade <odies in the country. It incorporated under section &! of the .ompanies -rdinance, %()5 by joint >egistrar of the .ompanies, ?overnment of Pakistan on !$th :ovember %((&. The promulgation of Trade -rgani/ation -rdinance !$$7, 3PP 3 is the only 3ssociation of the Paper <usiness sector who has been granted license under new -rdinance and has the privilege to be the only recogni/ed Trade <ody in Pakistan on Paper Trade, Printing, publishing and packaging industries. The new license is granted by ;irector ?eneral Trade -rgani/ation on %st :ovember !$$), vide license no. %$(. The ;?T-, renewed this license up to &%.%$.!$%5 Co)"o'i&ion The 3PP 3 is affiliated with the 4ederation of Pakistan .hamber of .ommerce * Industry. It has two classes of membership, namely, 3ssociates and .orporate. This 3ssociation has currently around %)$$ direct members both importers and traders all over Pakistan. The 3ssociation has two Nonal -ffices, one at Aarachi for +outhern None Ci.e. Provinces of +indh and <aluchistanD and another at 6ahore for :orthern None Ci.e. Provinces of Punjab, Ahyber Pakhtunkhwa. and 4ederally administered 3reas. The 3ssociation can open >egional offices in any for last two consecutive years an available. M!n!ge)en& The organi/ation1s policies and programs are deter#mined by the %! members of .entral =xecutive .ommittee which are elected by the members, out of which %J! retire every year and in their place, new members are inducted through election. The =xecutive .ommittee every year elects .hairman, @ice .hairman C+outhern NoneD and @ice#.hairman C:orthern NoneD. The Nonal offices dealt with the Provincials and unicipal matters and have their own %! embers unicipal 6imit where &$ or more valid members

=xecutive .ommittees. The =xecutive .ommittees are elected by the members of concerned Nones, out of which %J! retire every year and in their place, new members are inducted through election. The =xecutive .ommittee every year elects President, @ice President, ?eneral +ecretary, Boint +ecretary and Treasures. President control the working of Nonal -ffices with 3ssistant +ecretary and staff and directs all matters of the 3ssociation, with the assistance of others officer bearers. . S&!n%ing Co))i&&ee' %5

Programming is carried out by +tanding committees. The =xecutive .ommittee every year appoints members and nominates the .hairman and @ice .hairman of +tanding .ommittees on various subjects, relating to trade and other allied matters. The +tanding .ommittees formulates their recommendations for the consideration and approval of the =xecutive .ommittee. The major +tanding .ommittees are2 +ales Tax, <udget and Taxation, .ustoms and @aluation, 6ocal Trade and <anking and ;ry Ports. Re"re'en&!&ion in Di eren& Go#ern)en& De"!r&)en&' This premier trade body has been given due representation in every important 3dvisory meetings held, time to time, in .ustoms, Income Tax, +ales Tax departments, Interior and others trade related and deep insight in specific field. ,hile the 3PP 3 participation in various ;epartments meeting keeps it posted with up#to#date information on various government policies and measures, the 3PP 3 also utili/es these forums to influence the policies and perception of the ?overnment through personal discussion as well as through submission of representationsJmemorandum and studies. 4or example, comprehensive memorandum, giving considered recommendations and policy#proposals are submitted to the federal government well in advance of the announcement of the 4ederal <udget. The Provincial ?overnment and local authorities concerned are also time to time approached and provided with necessary memorandumJrepresentations. They are followed#up with personal meetings and discussions, it is against such an exercise and experience that problems both of individual or collective nature, whether they are concerned to trade, imports, retail or taxation or shipping or telephones, electricity are dealt with and pursued till such problems are resolved. In fact the 3PP 3 acts as a catalyst and work as a bridge between the government and the members of the business community. inistries of .ommerce, 4inance, inistries and ?overnment ;epartments etc. Those who are nominated

by the 3PP 3 on these meetings are senior and prominent businessmen of trade with long experience


H.T Traders import various types of paper after forecasting the market conditions. A<r!'i#e -r! & U'e% For2 3brasive Araft is used for making sand paper used in roughening applications. A<'or<en& -r! & U'e% For? Fsed for 6aminates, tube making and defence applications. 3lkaline Paper Paper having pH values greater than 7 made by an alkaline manufacturing process. An&i %"

R('& P!"er P!"er which has the property of protecting the surfaces of ferrous metals against rust An&i@(e P!"er Printing paper having good bulk and opacity with rough or matt surface Ar& P!"er U'e% For2 <rochures, calendars, maga/ine covers, maga/ine text, where high 0uality printing is re0uired AA(re$!i% P!"er 3 laid paper usually bluish green in color having a good writing surface <arograph Paper >ed thin paper coated on one side with a white wax, so that the needle of the barograph leaves a red line on a white ground, sold in rolls and coils and to suit the type of barograph. <ase Paper This paper is generally used by a converter to either coat or laminate. ;ifferent grades are available for different applications. Fsed 4or2 ostly used for converting into a value added grade Bee%i *r!" P!"er Fsed 4or2 Fsed for decorative purposes in different colours. <ible Paper Thin white opa0ue heavily loaded, used for printing bibles. :ot suitable for pen and ink, because of its absorbency. Bon% P!"er This paper has good strength properties, good stiffness and good aesthetical look. The name GbondG was originally given to a paper which was used for printing bonds, stock certificates, etc. Important characteristics are finish, strength, and freeness fro Fsed 4or2 ostly used for letterheads and for image building stationery <ook Paper 3 general term used to define a class of papers used by the book publishing industryH most commonly used for the book text paper but also for book cover paper. B('ine'' For)' P!"er Paper made for the manufacture of business forms. Fsed 4or2 Fsed for business forms and data processing such as computer printouts. C!r<on B!'e .arbon is normally manufactured in lower grammages like !$ gsm or less. The most important property in this paper is porosity which should be controlled at about %"#!$ mlJmin, so that absorption leads to cost increase while less absorption makes poor 0uality of carbon paper which is used many a time. C!r<on $e'' P!"er Paper stock specially treated or coated to provide copies without the use of interleaved carbon. The copy process re0uires mechanical pressure such as from writing or typing and sometimes a chemical reaction. Fsed 4or2 3pplication forms, computer stationery, time saving stationery. 3lso used in copying applications without carbon paper .ardboard 3 range of various boards such as pulp board, paste board. C!'& Co!&e% P!"er 3 coated paper with high gloss and absorptivity in which the coating has been allowed to harden or set while in contact with a mirror like polished chrome surface.


P($" <o!r% are multi layer boards can be used .inema Poster Fsed 4or2 4or printing .inema posters, ,all papers .lay .oating <ase Paper Fsed 4or2 Fsed for coating with .lay for making chromo and art paper. Co!&e% P!"er Paper could be coated on either or both sides. .oating applied on the paper could be as per the re0uirement. 4or example, china clay coating for glossy paper used for high 0uality printing or gum coated paper for use of printing stamps Fsed 4or2 .ould have different applications for different coated papers Co"ier P!"er ainly used for copying. Fsed extensively in photocopiers, plain paper faxes, etc. and onwards. Fsed 4or2 .opying, typing, plain other office stationery. Thickness could range from 7$ ?+ paper faxes, general stationery F!B B!'e P!"er It is first coated with photo conductive /inc oxide on which images exposed. Hence electrical conductivity J resistivity is to be controlled to ensure that the image is not conducted through the paper to the other side Fsed for2 4or making 4ax images 4lexible .arton <oard Fsed 4or2 Fsed for making 4lexible .artons. F$(ore'+en& P!"er Fsed 4or2 Fsed for 6abels, Posters and decorative applications. F$(&ing Me%i() U'e% For2 Fsed for .orrugated <oard manufacturing. 4oil <ase Poster, <oard Paper is laminated with metal foil using a suitable adhesive. Hence paper must have porosity to accept glue. Fsed 4or2 Fsed for lamination of paper with metal foil. Gener!$ *ri&ing P!"er C:ote bookD Paper used for :ote <ooks should have excellent bulks because note book should appear bulky, as otherwise it will be perceived as having less number of pages. G$!''ine P!"er These papers are characteri/ed by very low porosity Cair permeability less than %$ cubic cm min. Preservation of aroma and perfection against attack of external environment to the packed contents are also important 0ualities of the subject papers. Fsed 4or2 Fsed for food packaging9s and other special wrapping applications. Gre!'e"roo P!"er These papers are characteri/ed by very low porosity Cair permeability less than %$ cubic cm min. This gives resistance to grease and moisture. Preservation of aroma and perfection against attack of external environment to the packed contents are also important 0ualities of the subject papers. Fsed 4or2 Fsed for food packaging9s and other special wrapping applications. ?ypsum <oard Fsed 4or2 This is used for making panel boards for interior partitions, false ceiling etc.


1!'er P!"er Fsed 4or2 Fsed for printing purposes where 6aser beams are used. 6iner <oard Fsed 4or2 Fsed for .orrugated <oard manufacturing. Me&!$iA!&ion B!'e P!"er Fsed 4or2 Fsed for vacuum metali/ation for packaging applications. M($&i P!r& S&!&ioner/ U'e% For2 ulti part stationery paper is used for computer applications where number of copies are printed in one attempt. :ewsprint It has to be made with ade0uate strength properties and surface characteristicsH especially wax pick. One Ti)e C!r<on =OTC> P!"er 3 carbon paper intended to be used once as opposed to many times or multiple use carbon papers. Fsed 4or2 ostly used in multi#part continuous stationery. So!" *r!""er Po'&er =ARSR> Fsed 4or2 Fsed for ,rapping of +oaps and detergents. Te! B!g P!"er Fsed 4or2 Fsed for retail packing of tea. TeB&i$e T(<e' !n% Cone' Fsed 4or2 Fsed for 6aminates, tube making and defense applications. TCi'& *r!" &i''(e It possesses properties of with standing breaking stress when twisted during packing of toffees. High bursting strength combined with excellent machine runnability makes it suitable for special packing operations which re0uire papers with high twisting properties. Fsed 4or2 It is used in packing of pharmaceutical products after poly lamination or coating. *!$$ P!"er Co!&e% Ci&h )($&i"$e +oo$er' or $or!$ %e'ign'. Fsed 4or2 Fsed as an alternative to paint. To give better aesthetic appeal to the walls Eellow Pages Paper used for this needs to have high bulk C%.% to %.!D, high tensile strength of about ! kgJ%" mm in print made on thin paper like 5$ ?+ ; and good opacity C($PD so that the fine would be readable on both side. =xcellent reel build up is

re0uired for smooth feeding during printing. This re0uires every uniform profile of bulk, gsm, caliper, moisture etc. Fsed 4or2 Fsed for printing classified addresses and information in telephone directory.


Problems and issues appear in supply side . 3s we all know that Pakistan is facing all time worst conditions, currently flood is continuously disturbing the country above all these things due to unfair and pathetic decisions of the government we are facing electricity shortage, gas shortage, fuel shortage and all kinds of those shortages which are necessarily re0uired to run the business. <efore these problems continuously bomb blasts and suicides attacks swirly disturbed the paper industry as well as whole business in the country. ,ith all above problems Pakistan paper industry was catering the '"P


demand of the paper in the country and they were bearing the high cost of doing business, energy crisis and production loss, Lbut still, they were selling our products with a minimi/ed increase around )#%$ percentM. <ut after imposition of regulatory duty, the total 0uantum of duties increased to >s &",$$$ per tonne from !",$$$ per tonne for commercial importers, chairman 3ll Pakistan Paper 3ssociation C3PP 3D. In Pakistan due to mismanagement and bad governance 3round (" percent import of finish paper products are made in name of waste paper under mis0uoting and false declaration by the commercial importers this effect of ?overnment as well as the local manufactures. erchant


<anks plays an important role in almost every businesses. In H.T Traders banks plays an important role when shipping documents have arrived. held through bank. ost of the the transaction and the financial matters are

A$$ie% B!n: o P!:i'&!n 1i)i&e% A':!ri Co))er+i!$ B!n: 1i)i&e% MeeA!n B!n: 1i)i&e% B!n: A$ H!<i< 1i)i&e% Union B!n: 1i)i&e%


=very organi/ation is made up of different departments. =ach department contributes to the run the business. H.T Traders has following departments which work and perform their function efficiently and effectivelyH


4igure &.%





The finance department consists of many different roles, most of which are critical to any smooth running company. Its main job is to provide the financing and accounting information which is needed to make various decisions. 4inance department deals with the day to day matters of the company. The main areas in a finance department include2# Aeeping records of the purchases and sales made by business as well as capital spending. .reating balance sheets and profit and loss accounts # 3t the end of each financial year, statements are re0uired to be produced. Trial balances are taken from the ledger entries and are used to create a balance +heet which shows the assets and liabilities of the business at the year end. >ecords of purchase and sales are also summed up to create a Profit and 6oss account. The preparation of financial statements and report on import operation is being done by the department. Providing management information # -n#going financial information is provided to the managers to enable them to make better decisions in regards to their business. They are then able to decide if it is worthwhile to switch to import an alternative product. The finance manager oversee the billing of a company to ensure that the company mark#up percentage rates on goods or services is profitable. 3 similar duty is to supervise the accounting department for correct and ethical reporting, as the bookings and entries of the accounting department are what compose the financial reports the manager interprets. >aising of finance # The finance department are also responsible for the technical details of how a company raises finance, for example through loans and what the repayment of interest is on that finance. The finance department will also supervise the payment of dividends to shareholders.



The role of administration department within an organi/ation is to process all of the administration and documents for the rest of the company. There are many different departments that need to have different things done with their administration. The main functions performed by the administration department areH ;iscussing orders and arranging for the importation of goods with suppliers and distributors. 3rranging for the movement of cargo via air, sea, or land. >eceive, prepare and process import documents for customs brokering. 3rranging the shipment of goods, ensuring that all customs barrier control procedures and other documentation re0uirements are satisfied. .oordinating the movement of goods in and out of the country, ensuring compliance with customs barrier control matters, and analy/ing freight rates and delivery schedules. .oordinating the receipt, recording and progress of import orders through the company in an efficient manner. This involves liaison with company departments, customers and outside organi/ations. To process paperwork for external suppliers. To process paperwork and information for internal people. This could be anything from looking after the basic bills to the internal post. 6ooking after the internal communications so that all members of the organi/ation are aware of what is going on within the organi/ation. -rgani/ing any deliveries or suppliers coming into the offices for the day for any reason. +ending out any mail on behalf of the company. This could be for different stakeholders, customers or even for staff. The administration department is responsible for ensuring that all records that pass through the department are filed correctly and can be found and referred to if and when they ever become necessary. These are records of purchases and expenses from different parts of the company and their approval from the finance department. There will also be different confidential information about employees.


These too will be stored and used by the administration department. This is an important department of the company and they work across all departments and with all kinds of work.


The function of an accounting department is to look after the finances of a company. This can be anything from paying bills to making sure that the employees that work for the company get paid. The functions performed by accounting department areH aking payments. aking sure that all bills are paid by the company, on time and also at the least cost possible. If there is a discount for paying 0uickly, the accounts department will usually pay the bills as soon as possible so that the company spends as little money as they possibly can. They are responsible for all outgoing payments and making sure that what they are paying is correct. Payroll The accounts department have to ensure that the employees are all paid correctly and on time. >eceiving payments. The accounting department must also receive payments and make sure that these are all processed correctly. These will all be payments for the services or products the company has provided and they must ensure that they have paid all relevant tax. There will also be an element of chasing up payments and making sure that all of the payments are received when they should be. <udgets. <udgeting department give budget to every department as estimated by each department. ;epartmental budget shows the re0uirements of overall financial year. <udgeting department1s work is to estimate the next overall budget of H.T Traders by observing the past budget. 3ctual expenditure of current year is compared with actual budget of the current year and also actual expenditure of current year is compared with the actual expenditure of preceding year. !5

3ll matters relating to recording of transaction like payables, receivables, inventory, fixed assets, expenses and sales tax issues etc are dealt. This further have treasury department Treasury department deals with all the cash related matters. 3ll the .he0ues are made and signed in this department. The accounting manager is responsible for preparing all the financial statements for the company. These include monthly, 0uarterly and year#end reports and monthly financial statements. The development, implementation and maintenance of all accounting systems used in a company falls within the scope of the accounting manager1s duties. These include general ledger, journal entries, accounts receivable, accounts payable, bank reconciliation, revenue reconciliation and cash flows.


These are the main sections of the marketing departments2 +ales department is responsible for the sales and distribution of the products to the different areas of the country. >esearch * ;epartment is responsible for market research and testing new products to make sure that they are suitable to be sold. ;istribution department transports the products to the market. The marketing and sales department of H.T Traders serves as an intermediary between customers and production. .ustomers discuss their needs, concerns or re0uests with the sales personnel of the company. In turn, sales relays this information to the various departments in the company, including Import department. +ales communication re0uirements vary based on the type of product and the sales channel. <oth departments look to enhance sales and profits by supplying products that customers need or want. arketing and sales support within the import department can help tie customer preferences to the importing process. +ales department the most important part of supply and demand of a product. The sales department must create value for the products they are selling to customers in order to grow the sales of the product. !"

The distribution manager supervises daily work activity. This includes receiving, storing, testing and shipping materials within the distribution center. To determine what type and si/e of storage container is needed for any given good, the distribution manger examines the weight and 0uantity for each product or material. He administers shipping instructions and orders the appropriate shipping documents for all materials. The manager prepares the budget for the department and relays to the sales and billing departments the customer1s shipping charges for each transaction. The distribution manager plans the pickup and delivery schedule of goods and products. He communicates with the department officials to coordinate activities of the distribution center. This includes production, sales, records control and purchasing.


Import department is the most important department in the company. 3s the company import and supply paper products so this department is the base of the whole company. <efore importing a commodity it is necessary to obtain all the re0uired information in matters associated with foreign trade agreement. +tarting an import is not a get#rich#0uick#scheme. It re0uires a lot of preparations. Import anager plans the transport routes and means. They are, therefore, re0uired to research the best transportation means, routes and any special re0uirements in the handling and care of goods under transport. The anager ensures that goods are packaged appropriately, and he negotiates contracts for transportation and handling. It is the manager9s responsibility to obtain, prepare and check all necessary documents re0uired to ensure that the documents meet the re0uirements of national customs authorities or any other regulatory body. The manager oversees the delivery of goods in accordance with customer specifications and ensures that deadlines are met. The import manager deals with all third parties involved in the operation as well as makes and collects payments on behalf of the customer. Import anager is responsible for the following functions2

Q <ank :egotiations Q 6etter of .redit Q 6iaison with ?overnment ;epartments and 3uthorities involved in Import Q .learing and 4orwarding !'

Q Transportation of shipments from the port to .ompany warehouses Q 3dvise on Import Policy of the .ompany The Import ;epartment with its excellent relation with the concerned ?overnment authorities is capable of clearing the shipments within no time. The Import ;epartment of H.T Traders also makes sure the safe handling and placement of the shipments right from its arrival until the time it reaches the .ompany warehouses. anager normally communicate by phone, computer and fax with a wide range of people involved in the importation process. If a customs issue arises or there is a problem with a shipment at the point of entry, an import manager fre0uently resolve the issue in person. His work environment is typically high energy and results driven. 3n import manager knows the re0uired licenses, customs forms, inspection procedures and transportation methods needed to expedite the goods into the receiving country. 4rom the time the import order is received until the merchandise reaches its final destination, all related forms and documents must be completed according to stringent guidelines and processed in a timely manner. The import manager is fastidious about every detail of each shipment and be accessible to resolve any issues that arise to avoid delays in shipments. He is also responsible for generating client invoices in a timely manner. Aeeping up to date on the latest customs and international trade laws is essential to be proficient in this position. In import department many employees work under the import anager. 3n import manager supervises import employees concurrent with managing the importation of goods from other countries. In addition, He work with other departments in his own company, particularly sales, marketing and finance.

. <ank :egotiations Q 6etter of .redit Q 6iaison with ?overnment ;epartments and 3uthorities involved in Import Q .learing and 4orwarding Q Transportation of shipments from the port to .ompany warehouses Q 3dvise on Import Policy of the .ompany !7

The Import ;epartment with its excellent relation with the concerned ?overnment authorities is capable of clearing the shipments within no time. The Import ;epartment of H.T Traders also makes sure the safe handling and placement of the shipments right from its arrival until the time it reaches the .ompany warehouses. anager normally communicate by phone, computer and fax with a wide range of people involved in the importation process. If a customs issue arises or there is a problem with a shipment at the point of entry, an import manager fre0uently resolve the issue in person. His work environment is typically high energy and results driven. 3n import manager knows the re0uired licenses, customs forms, inspection procedures and transportation methods needed to expedite the goods into the receiving country. 4rom the time the import order is received until the merchandise reaches its final destination, all related forms and documents must be completed according to stringent guidelines and processed in a timely manner. The import manager is fastidious about every detail of each shipment and be accessible to resolve any issues that arise to avoid delays in shipments. He is also responsible for generating client invoices in a timely manner. Aeeping up to date on the latest customs and international trade laws is essential to be proficient in this position. In import department many employees work under the import anager. 3n import manager supervises import employees concurrent with managing the importation of goods from other countries. In addition, He work with other departments in his own company, particularly sales, marketing and finance.


Import of goods is also associated with various types of risks. >isks faced by H.T Traders are as followH Transport >isk R This risk is associated with the loss of goods during transportation.


Ouality >isk R This risk is associated with the final 0uality of the products. ;elivery >isk R This risk arises when the goods are not delivered on time. =xchange >isk R This risk arises due to the change in the value of currency. These risks and the steps taken by H.T Traders to overcome these risks are explained belowH Tr!n'"or& Ri': 4or a better transport risk management, the import manager ensures that the goods supplied by the exporter are insured. ,hether the goods are transported by +ea or by 3ir, the risk can be covered by Insurance. 3n agreement between the parties as to the type of cover to be obtained in the .ontract of +ale. The company obtain Insurance cover from their own Insurance .ompany under a 1blanket cover1 called an 1-pen Policy1 thus taking advantage of bulk billing and other relationships. ;(!$i&/ Ri': The proper 0uality risk analysis is important for the importer to ensure that the final products are as good as the sample. -ccasionally, it has been found that the goods are not in accordance with samples, 0uality is not as specified, or they are otherwise unsatisfactory. To handle such situations in future, import manager take necessary protective measures in advance. To avoid such situation manager investigate the reputation and standing of the supplier. =ven before receiving the final product, inspection is being done from the importer side or exporter side or by a third party agency. consider what measures can be taken to ensure that the need for legal action does not arise. De$i#er/ Ri': ;elivery of goods on time is important factor for the company to reach the target market. Import manager make the import contract very specific, so that company always has an option of refusing payment if it is apparent that goods have not been shipped by the specific shipment date. ,here the is paying for goods by means of a ;ocumentary .redit, the Issuing <ank can be instructed to include a 1latest date for shipment1 in the terms of the .redit. EB+h!nge Ri': <efore entering into a commercial contract, manager determine the value of the product in domestic currency. 3s there is always a gap between the time of entering into the contract and the actual payment for the goods is received, so determining the value of the good in domestic currency help an exporter to anager


0uote the right price for the product. The steps taken by the company in order to avoid the exchange risk are as followH .ontracting to import in 4oreign currency. =ntering into a 4oreign =xchange .ontract through <ank. -ffsetting =xport receivables against Import payables in the same currency by using a 4oreign .urrency 3ccount. ,here Pre J Post#+hipment 4inance is provided with a 4oreign .urrency 6oan in the currency of the transaction and =xport receipts repay the loan.


0.1 CUSTOM INSEPECTION 3ny violation in the import license is usually scanned by the custom officials of the custom department. .ustomer inspector and other custom officials have authority to inspect and evaluate the &$

goods to be imported. It9s a part of their job to determine whether imports conform to the description in the import 6icense or not. .ustom official even have right to charge fines and penalties if any violation in the import license is found to be done by the importer. 0., FINA1I9ING TERMS OF IMPORT -nce an importer is satisfied with the product sample and creditworthiness of the supplier or exporter, the he can proceed to finalise the terms of the import contract. 3t this stage importer need to draft the contract terms and conditions very carefully and comprehensively. There should not be any ambiguity regarding the exact specifications of the goods and terms of the purchase including import price, mode of payment, type of packaging, port of shipment, delivery schedule, replacement of defective goods supplied, after sale servicesJwarranty coverage etc. The different aspect of an import contract is enumerated as under some of which may be relevant and other may not be2 Pro%(+& S"e+i i+!&ion'? 3n importer should clearly mention every minute detail about the product. This factor sometimes became 0uite important while importing a special order product or item. Pro%(+& S&!n%!r%'? Importer should check whether the imported product meets the product standards like I+- certification and 3gmark .ertifications. ;(!n&i&/? <efore making an import order, an importer should evaluate the domestic market. This will help the importer to judge the actual 0uantity of product to be imported. In'"e+&ion? Importer should make clear whether the inspection of imported product will be done by the importer side or exporter side or by a third party agency. In case of inspection done by a third party, importer should also make clear that who will bear the inspection charges. Ter)' o De$i#er/? ;elivery terms define the obligations and the responsibilities of the buyer and seller during the delivery of goods. Importer should check all the terms of delivery as mentioned in the Incoterms to avoid any feature doubts. Ter)' o P!/)en&'? The method of payment is an essential part of an import contract. The credit standing of the importer, previous history of payments, regulations on foreign exchange and licenses in different countries, as well as vested business practices all have an influence on selecting the method of payment. I)"or& 1i+en'e !n% I)"or& Per)i&'? Importer should check weather the goods to be imported need


any license or not. Importer must also check weather the imported goods are prohibited or restricted. D(&ie' !n% Ch!rge'? It is better for an importer to have knowledge of all duties and charges imposed on the imported goods. Perio%' o De$i#er/ EShi")en&? Importer must fix a particular date for the delivery of product, which is also acceptable to the exporter exporting the goods. Importer should also mention the charges that importer will imposed on the exporter in case of late delivery. P!+:ing7 1!<e$ing !n% M!r:e&ing? Proper packaging and labelling not only makes the final product look attractive but also save a huge amount of money by saving the product from wrong handling the export process. +o, importer should mention his entire re0uirement in detail and with preference on labeling of products. In'(r!n+e? Importer can ask the exporter to insure the goods and bear the cost of import insurance. Insurance can also be done from the importer side but it must be made clear on the document.


The duty has been calculated on the basis of assessable value. 3ssessable value in rupees S .I4 C.ost Insurance 4reightD value T landing charges C%P of .I4 value and H.+.+. CHigh +eas +aleD .I4T!PT%D If the case is of 4-< C4ree on <oardD then freight and insurance is to be added. If insurance is not there then %.%!"P of the . * 4 C.ost and 4reightD value is taken as insurance charges. ;uty calculation is done by .H3 as per the given rate of duty for a particular product.





4igure 5.5


0.2 MECHANISM THROUGH BANTo import, a person should be competent to be an importer. C3ccording to the Import * =xport .ontrol 3ct, %("$ the office of chief controller of =xport * Import provides the registration to the importer. 3fter obtaining this registration the person has to secure a letter of .redit 3uthori/ation from the <angladesh <ank. 3fter going through theses procedure, a person becomes an importer. I)"or&er' !""$i+!&ion or 1.C $i)i&E)!rgin To have an import 6.. limit, an importer submits an application to <ank. In that application he gives full detail of the following2 4ull particulars of bank accounts :ature of business >e0uired amount of limit Payments terms * conditions ?oods to be imported -ffered security >epayments schedule Tr!n')i''ion o 1e&&er o Cre%i& The transmission of 6.. is done through tested telex, fax, +,I4T, ;H6 or 4=;=I, or through =mergency ail +ervice C= +D to the advising bank to advices the 6.. to the beneficiary. A)en%)en& o 1e&&er o Cre%i& Parties involved in a 6.., particularly the exporter cannot always satisfy the terms and conditions in full as expected due to some unexpected reason. In such situation, the credit should be amended. +o <ank transmits the amendment by tested telex to the advising bank. In case of revocable credit, it can be canceled or amended by the issuing bank at any moment and without prior notice to the beneficiary. <ut in#case of irrevocable 6.. it can neither be amended nor canceled without the agreement of the issuing bank, the advising bank and the beneficiary, if the 6.. is amended, then the service and telex charged is debited from the party account. A%#i'ing ! 1e&&er o Cre%i& &'

The advising or notifying bank is the bank through which the 6.. is advised to the exporter without taking any responsibility. It is a bank situated in the exporting country and it may be a branch of the openingJissuing bank. It becomes customary to advise a credit to the beneficiary through an advising bank.

4igure2 5." Pre'en&!&ion o &he %o+()en&' 3fter the exporterJseller is being satisfied with the terms and condition of the credit, he then proceeds to dispatch the re0uired goods to the importerJbuyer. Then he has to present the documents evidencing dispatching of goods to the negotiating bank within the stipulated expiry date of the credit. 3fter receiving the documents the negotiating bank checks them against the credit. It the document are found in order, the bank will negotiate to the issuing bank. Then the bank checks all the documents likeUbill of exchange, commercial invoice, packing list, bill of lading, certificate of origin, pre#shipment inspection report, insurance cover note, shipment certificate etc.



H.T Traders have personal import. In general a personal import is a direct purchase of foreign goods from overseas mail order companies, retailers, manufacturers or by an individual. The company import the paper#based products through various ways depending on the situation and need. The terms of purchase used in H.T Traders are as follows2 .onsignment Purchase .ash#in#3dvance CPre#PaymentD 6etters of .redit Con'ign)en& P(r+h!'e .onsignment purchase terms is the most beneficial method of payment. In this method of purchase, company makes the payment only once the goods or imported items are sold to the end user. In case of no selling, the same item is returned to the foreign supplier. .onsignment purchase is considered the most risky and time taking method of payment for the exporter. C!'hFInFA%#!n+e =PreFP!/)en&> .ash in 3dvance is a pre#payment method in which, the company makes the payment for the items to be imported in advance prior to the shipment of goods. The company trust that the supplier will ship the product on time. .ash#in#3dvance method of payment creates a lot of risk factors for the company. However, this method of payment is inexpensive as it involves direct importer#exporter contact without commercial bank involvement. 1e&&er O Cre%i& 3 letter of credit is the most well known method of payment in international trade. Fnder an import letter of credit, importer9s bank guarantees to the supplier that the bank will pay mentioned amount in the agreement, once supplier or exporter meet the terms and conditions of the letter of credit. In this method of payment, plays an intermediary role to help complete the trade transaction. 6etter of .redit 6J. also known as ;ocumentary .redit is a widely used term to make payment secure &)

in domestic and international trade. The document is issued by a financial organi/ation at the buyer re0uest. <uyer also provides the necessary instructions in preparing the document. The International .hamber of .ommerce CI..D in the Fniform .ustom and Practice for ;ocumentary .redit defines 6J. as2 3n arrangement, however named or described, whereby bank Cthe Issuing bankD acting at the re0uest and on the instructions of a customer Cthe 3pplicantD or on its own behalf2 Is to make a payment to or to the order third party Cthe beneficiaryD or is to accept bills of exchange CdraftsD drawn by the beneficiary. 3uthori/ed another bank to effect such payments or to accept and pay such bills of exchange CdraftD. 3uthori/ed another bank to negotiate against stipulated documents provided that the terms are complied with. 3 key principle underlying letter of credit C6J.D is that banks deal only in documents and not in goods. The decision to pay under a letter of credit will be based entirely on whether the documents presented to the bank appear on their face to be in accordance with the terms and conditions of the letter of credit. 0.4 PARTIES TO 1ETTER OF CREDIT A""$i+!n& =O"ener>? 3pplicant which is also referred to as account party is normally a buyer or customer of the goods, who has to make payment to beneficiary. 6. is initiated and issued at his re0uest and on the basis of his instructions. I''(ing B!n: =O"ening B!n:>? The issuing bank is the one which create a letter of credit and takes the responsibility to make the payments on receipt of the documents from the beneficiary or through their banker. The payment has to be made to the beneficiary within seven working days from the date of receipt of documents at their end, provided the documents are in accordance with the terms and conditions of the letter of credit. If the documents are discrepant one, the rejection thereof to be communicated within seven working days from the date of receipt of documents at their end. Bene i+i!r/? <eneficiary is normally stands for a seller of the goods, who has to receive payment from


the applicant. 3 credit is issued in his favour to enable him or his agent to obtain payment on surrender of stipulated document and comply with the term and conditions of the 6J.. If 6Jc is a transferable one and he transfers the credit to another party, then he is referred to as the first or original beneficiary. A%#i'ing B!n:? 3n 3dvising <ank provides advice to the beneficiary and takes the responsibility for sending the documents to the issuing bank and is normally located in the country of the beneficiary. Con ir)ing B!n:? .onfirming bank adds its guarantee to the credit opened by another bank, thereby undertaking the responsibility of paymentJnegotiation acceptance under the credit, in additional to that of the issuing bank. .onfirming bank play an important role where the exporter is not satisfied with the undertaking of only the issuing bank. Nego&i!&ing B!n:? The :egotiating <ank is the bank who negotiates the documents submitted to them by the beneficiary under the credit either advised through them or restricted to them for negotiation. -n negotiation of the documents they will claim the reimbursement under the credit and makes the payment to the beneficiary provided the documents submitted are in accordance with the terms and conditions of the letters of credit. Rei)<(r'ing B!n:? >eimbursing <ank is the bank authori/ed to honor the reimbursement claim in settlement of negotiationJacceptanceJpayment lodged with it by the negotiating bank. It is normally the bank with which issuing bank has an account from which payment has to be made. Se+on% Bene i+i!r/? +econd <eneficiary is the person who represents the first or original <eneficiary of credit in his absence. In this case, the credits belonging to the original beneficiary is transferable. The rights of the transferee are subject to terms of transfer.


0.5 TYPES OF 1ETTER OF CREDIT Re#o+!<$e 1e&&er o Cre%i& 1EC? 3 revocable letter of credit may be revoked or modified for any reason, at any time by the issuing bank without notification. It is rarely used in international trade and not considered satisfactory for the exporters but has an advantage over that of the importers and the issuing bank. There is no provision for confirming revocable credits as per terms of F.P;., Hence they cannot be confirmed. It should be indicated in 6. that the credit is revocable. if there is no such indication the credit will be deemed as irrevocable. Irre#o+!<$e 1e&&er o Cre%i& 1EC? In this case it is not possible to revoked or amended a credit without the agreement of the issuing bank, the confirming bank, and the beneficiary. 4orm an exporter9s point of view it is believed to be more beneficial. 3n irrevocable letter of credit from the issuing bank insures the beneficiary that if the re0uired documents are presented and the terms and conditions are complied with, payment will be made. Con ir)e% 1e&&er o Cre%i& 1EC? .onfirmed 6etter of .redit is a special type of 6Jc in which another bank apart from the issuing bank has added its guarantee. 3lthough, the cost of confirming by two banks makes it costlier, this type of 6Jc is more beneficial for the beneficiary as it doubles the guarantee. Sigh& Cre%i& !n% U'!n+e Cre%i& 1EC? +ight credit states that the payments would be made by the issuing bank at sight, on demand or on presentation. In case of usance credit, drafts are drawn on the issuing bank or the correspondent bank at specified usance period. The credit will indicate whether the usance drafts are to be drawn on the issuing bank or in the case of confirmed credit on the confirming bank.


B!+: &o B!+: 1e&&er o Cre%i& 1EC? <ack to <ack 6etter of .redit is also termed as .ountervailing .redit. 3 credit is known as back to back credit when a 6Jc is opened with security of another 6Jc. 3 back to back credit which can also be referred as credit and counter credit is actually a method of financing both sides of a transaction in which a middleman buys goods from one customer and sells them to another.

The parties to a <ack to <ack 6etter of .redit are2 The buyer and his bank as the issuer of the original 6etter of .redit. The sellerJmanufacturer and his bank, The manufacturer1s subcontractor and his bank. The practical use of this .redit is seen when 6Jc is opened by the ultimate buyer in favour of a particular beneficiary, who may not be the actual supplierJ manufacturer offering the main credit with near identical terms in favour as security and will be able to obtain reimbursement by presenting the documents received under back to back credit under the main 6Jc. The need for such credits arises mainly when2 The ultimate buyer not ready for a transferable credit The <eneficiary does not want to disclose the source of supply to the openers. The manufacturer demands on payment against documents for goods but the beneficiary of credit is short of the funds Tr!n' er!<$e 1e&&er o Cre%i& 1EC? 3 transferable documentary credit is a type of credit under which the first beneficiary which is usually a middleman may re0uest the nominated bank to transfer credit in whole or in part to the second beneficiary. The 6J. does state clearly mentions the margins of the first beneficiary and unless it is specified the 6J. cannot be treated as transferable. It can only be used when the company is selling the product of a third party and the proper care has to be taken about the exit policy for the money transactions that take place. 5!

This type of 6J. is used in the companies that act as a middle man during the transaction but don9t have large limit. In the transferable 6J. there is a right to substitute the invoice and the whole value can be transferred to a second beneficiary. The first beneficiary or middleman has rights to change the following terms and conditions of the letter of credit2 >educe the amount of the credit. >educe unit price if it is stated ake shorter the expiry date of the letter of credit. ake shorter the last date for presentation of documents. ake shorter the period for shipment of goods.

Increase the amount of the cover or percentage for which insurance cover must be effected. +ubstitute the name of the applicant Cthe middlemanD for that of the first beneficiary Cthe buyerD.

S&!n%</ 1e&&er o Cre%i& 1EC Initially used by the banks in the Fnited +tates, the standby letter of credit is very much similar in nature to a bank guarantee. The main objective of issuing such a credit is to secure bank loans. +tandby credits are usually issued by the applicant9s bank in the applicant9s country and advised to the beneficiary by a bank in the beneficiary9s country. Fnlike a traditional letter of credit where the beneficiary obtains payment against documents evidencing performance, the standby letter of credit allow a beneficiary to obtains payment from a bank even when the applicant for the credit has failed to perform as per bond. 0.6 IMPORT OPERATION UNDER 1GC The Import 6etter of .redit guarantees an exporter payment for goods or services, provided the terms of the letter of credit have been met. 3 bank issue an import letter of credit on the behalf of an importer or buyer under the following .ircumstances 5&

,hen an importer is importing goods within its own country. ,hen a trader is buying good from his own country and sell it to the country for the purpose of merchandi/ing trade. ,hen an Indian exporter who is executing a contract outside his own country re0uires importing goods from a third country to the country where he is executing the contract. Fee' !n% Rei)<(r'e)en&' The different chargesJfees payable under import 6J. is briefly as follows2 The issuing bank charges the applicant fees for opening the letter of credit. The fee charged depends on the credit of the applicant, and primarily comprises of2 O"ening Ch!rge' This would comprise commitment charges and usance charged to be charged upfront for the period of the 6J.. The fee charged by the 6J. opening bank during the commitment period is referred to as commitment fees. .ommitment period is the period from the opening of the letter of credit until the last date of negotiation of documents under the 6J. or the expiry of the 6J., whichever is later. Fsance is the credit period agreed between the buyer and the seller under the letter of credit. This may vary from 7 days usance CsightD to ($J%)$ days. The fee charged by bank for the usance period is referred to as usance charges. Re&ire)en& Ch!rge' This would be payable at the time of retirement of 6.s. 6. opening bank scrutini/es the bills under the 6.s according to F.P;. guidelines , and levies charges based on value of goods. The advising bank charges an advising fee to the beneficiary unless stated otherwise the fees could vary depending on the country of the beneficiary. The advising bank charges may be eventually borne by the issuing bank or reimbursed from the applicant. The applicant is bounded and liable to indemnify banks against all obligations and responsibilities imposed by foreign laws and usage. 55

The confirming bank1s fee depends on the credit of the issuing bank and would be borne by the beneficiary or the issuing bank Capplicant eventuallyD depending on the terms of contract. The reimbursing bank charges are to the account of the issuing bank. 0.18 RIS- ASSOCIATED *ITH OPENING IMPORT 1GCH' The basic risk associated with an issuing bank while opening an import 6J. are2 The in!n+i!$ '&!n%ing o &he i)"or&er? 3s the bank is responsible to pay the money on the behalf of the importer, thereby the bank should make sure that it has the proper funds to pay. The goo%'? <ankers need to do a detail analysis against the risks associated with perishability of the goods, possible obsolescence, import regulations packing and storage, etc. Price risk is the crucial factor associated with all modes of international trade. EB"or&er Ri':? There is always the risk of exporting inferior 0uality goods. <anks need to be protective by finding out as much possible about the exporter using status report and other confidential information. Co(n&r/ Ri':? These types of risks are mainly associated with the political and economic scenario of a country. To solve this issue, most banks have speciali/ed unit which control the level of exposure that that the bank will assumes for each country. Foreign eB+h!nge ri':? 4oreign exchange risk is another most sensitive risk associated with the banks. 3s the transaction is done in foreign currency, the traders depend a lot on exchange rate fluctuations.


Bi$$ o En&r/ 3 <ill of =ntry also known as +hipment <ill is a statement of the nature and value of goods to be imported or exported, prepared by the shipper and presented to a customhouse. The importer clearing the goods for domestic consumption has to file bill of entry in four copiesH original and duplicate are meant for customs, third copy for the importer and the fourth copy is meant for the bank for making remittances. 5"

If the goods are cleared through the =;I system, no formal <ill of =ntry is filed as it is generated in the computer system, but the importer is re0uired to file a cargo declaration having prescribed particulars re0uired for processing of the entry for customs clearance. In the non#=;I system along with the bill of entry filed by the importer or his representative the following documents are also generally re0uired2# +igned invoice Packing list <ill of 6ading or ;elivery -rderJ3irway <ill ?3TT declaration form duly filled in ImportersJ .H39s declaration 6icense wherever necessary 6etter of .reditJ<ank ;raftJwherever necessary Insurance document Import license Industrial 6icense, if re0uired Test report in case of chemicals 3dhoc exemption order ;==. <ookJ;=P< in original .atalogue, Technical write up, 6iterature in case of machineries, spares or chemicals as may be applicable +eparately split up value of spares, components machineries .ertificate of -rigin, if preferential rate of duty is claimed :o .ommission declaration 3mendment of <ill of =ntry ,henever mistakes are noticed after submission of documents, amendments to the bill of entry is carried out with the approval of ;eputyJ3ssistant .ommissioner.


Green Ch!nne$ !+i$i&/ +ome major importers have been given the green channel clearance facility. It means clearance of goods is done without routine examination of the goods. They have to make a declaration in the declaration form at the time of filing of bill of entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods. P!/)en& o D(&/ Import duty may be paid in the designated banks or through T>#' challans. ;ifferent .ustom Houses have authorised different banks for payment of duty and is necessary to check the name of the bank and the branch before depositing the duty. Prior En&r/ or Shi""ing Bi$$ or Bi$$ o En&r/ 4or faster clearance of the goods, provision has been made in section 5' of the 3ct, to allow filing of bill of entry prior to arrival of goods. This bill of entry is valid if vesselJaircraft carrying the goods arrive within &$ days from the date of presentation of bill of entry. S"e+i!$iAe% S+he)e' Import of goods under speciali/ed scheme such as ;==. and =-F etc is re0uired to execute bonds with the custom authorities. In case failure of bond, importer is re0uired to pay the duty livable on those goods. The amount of bond would be e0ual to the amount of duty livable on the imported goods. The bank guarantee is also re0uired along with the bond. However, the amount of bank guarantee depends upon the status of the importer like +uper +tar Trading HouseJTrading House etc. Bi$$ o En&r/ or Bon%E*!reho('ing 3 separate form of bill of entry is used for clearance of goods for warehousing. 3ssessment of this bill of entry is done in the same manner as the normal bill of entry and then the duty payable is determined.



2.1 BASIC PURPOSE AND DETAI1 The reason behind my internship was recommended by our university for the partial fulfillment of the re0uirement for the degree of honors in =conomics. The aim was the practical exposure. I was told to work at any government, semi government or private organi/ation for the sake of experiencing the practical life. In this context, I got an opportunity to do my internship in an importing company. The reason behind this was to understand the concept, importance * role of International Trade with respect to our economy, society * overall growth in the world as a nation. The name of the company was H.T Traders deals in importing and supplying of paper#based products, I was appointed as an internee in the company. y internship duration at H.T Traders was of ' weeks. H.T Traders comprises with different departments. There are "" employees in this company. These all employees are highly skilled, professionally e0uipped * co operative having experience of customer dealing. ;ue to limited period of internship it was difficult to do complete work with respect to all departments. However , I tried to deal in some of the major departments for the sake of practical knowledge. Through the time period was limited yet the employees of the H.T Traders gave me the proper access and knowledge about their working style. 4ollowing is the summary of the work that I have done in H.T TradersH I was fully aware of the complicated terminologies used in any businesses to perceive, conduct and perform on the re0uired parameters etc. -ut of " departments, I had worked in & major departments and get experience with a diverse team environment with staff, suppliers and managers


3; I:I+T>3TI-: ;=P3>T =:T I P->T ;=P3>T =:T 4I:3:.= ;=P3>T =:T ADMININISTRATION DEPARTMENT? In the administration department I learned that every problem is solved with a systematic process, I learned how to manage the office affairs of company, I have learned how to prepare and process import documents for customs brokering.I assist the anager in ensuring that all customs barrier control procedures and other documentation re0uirements are satisfied. I assist in organi/ing any deliveries or suppliers coming to the office. 3ll others departments works under administration department except import department. I assist the orders through the company. I learned here that how to make the salaries. There are several bonuses and allowances given to employees such as House 3llowance which is %"P of basic salary, edical 3llowance and .onveyance 3llowance. These allowances are added into the basic salary of each individual. The income tax is also deducted from the salary of the employees. 3nd the net amount is paid to the employees by banks. FINANCE DEPARTMENT? In finance department of H.T Traders I learned about technical details of how company raises finance, through loans and what the repayment of interest is on that finance. In finance department I also assist in making payment of dividends to shareholders. I enter the sales, purchases and capital spendings of the company on the daily basis, >ecords of purchase and sales are than summed up to create a Profit and 6oss account. I assist the finance manager in making profit and loss account. I provide the -n#going financial information to the managers to enable them to make better decisions in regards to their business. I prepared the list of all the investers with the amount they have invested in the company, the profit of the investers depends on the overall profit earned by the company. They are anager in coordinating the receipt, recording and progress of import


then able to decide if it is worthwhile to switch to import an alternative product. If the excess amount of particular paper is available than I inform the import manager not to import that product.

IMPORT DEPARTMENT? In H.T Traders they use emos, letters, Internet and telephone for communication between dealers ,

customer1s and with different stakeholders like .lients and different governing bodies such as .ustom -ffice. I learned a lot at the organi/ation how to communicate with customers and suppliers, verbally and in writing. Internet was the main source of communication I check and send =# ails on the behalf of the company to various dealers. ain communication language was =nglish. <y working in H.T Traders my abilities of communication increased. The foreign supplier inform the company via e.mail about what they want to supply if that product is re0uired, on the behalf of the company I give them positive response via e.mail. The foreign supplier send pictures of the product and inform about the 0uality of the product, I download all those pictures and inform manager. I enter the data of imports on the in the =xcel. The record of the company,s imports is present in the computer. I compare the imports of the various months. -nce the manager get satisfied with the product sample and creditworthiness of the supplier then he can proceed to finalise the terms of the import contract. 3t this stage I read the draft the contract terms and conditions very carefully and comprehensively, so that there should not be any ambiguity regarding the exact specifications of the goods and terms of the purchase including import price, mode of payment, type of packaging, port of shipment, delivery schedule, replacement of defective goods supplied, after sale servicesJwarranty coverage etc. If the excess amount of particular paper is available than I inform the import manager not to import that product. In H.T Traders I observe the re0uired demand of imports in market and on the daily basis analy/e the exchange rate. I used to be aware of the policies of foreign governments so that company can change their marketing tactics accordingly and take the necessary steps to prevent loss of business and investment.



3.1 PO1ITICA1 CONDITIONS The political conditions are not very stable in the country, this does directly influence the trends and spending patterns of the customers. There are restrictions or barriers on the imports. +o the political conditions are not favorable for this market because imposition of regulatory duty, the total 0uantum of duties are increased to a large extent. 3., ECONOMICA1 CONDITIONS The economic conditions are not very favorable and the economy is facing problems, it is directly influencing buying power of consumers. If the country is out of its current problems, it will further boost up the growth of this industry, as people will feel more secure economically and it will further increase the attractiveness of the market. 3.. SOCIA1 CONDITIONS The social patterns are changing in the country, as the world is becoming a global village, and mutually share and accept patterns. +ocial unrest and changing norms are also effecting the industry. In order to meet the social conditions the company is importing new products. 3.0 TECHNO1OGICA1 CONDITIONS High tech technology is the basic re0uirement of industry. The companies that are using latest technology have some cost benefits over the companies, which are not using high tech technology. The key to survival for companies in this industry is using high technology for 0uality and cost purposes. The new technological developments such as e#commerce, e#banking and information technology are improving the efficiency and productivity.



4.1 MEANING 3 tool that identifies the strengths, weaknesses, opportunities and &hreats of an organi/ation. +pecifically, +,-T is a basic, straightforward model that assesses what an organi/ation can and cannot do as well as its potential opportunities and threats. The method of +,-T analysis is to take the information from an environmental analysis and separate it into internal Cstrengths and weaknessesD and external issues Copportunities and threatsD. -nce this is completed, +,-T analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimi/ed to achieve desired results.


4igure 7.%

3 firm1s strength are its resources and capabilities that can be used as a basis for developing a competitive advantageH H.T Traders is under 3PP 3 and is 6I.=:.=; under the Trade -rgani/ations -rdinance so it meets the re0uirement of international standard and has a value in the mind of concern people. H.T Traders import the high 0uality paper products. The management of H.T Traders is skilled they have hired the skilled people in their management and also have experienced people from all over the country. H.T Traders is among the best importers in the Pakistan so it got the position in the "&

mind of its customer. 3nd being an old paper importing company people are loyal with it. H.T Traders have a better position in the mind of its customers. +trong local presence in the city. <ecause it is an old paper importing company and it has still keep its position in the paper market on all others competitors in the nation wide which is its competitive advantage. 3wareness of the product which is imported. H.T Traders has good relation with foreign suppliers

The weaknesses are the things internally it is bad or it has weaknesses. 3ctivities the organi/ation does not do well or resources it need but does not possess The decisions are made by the upper management which is weakness of the H.T Traders because they have no proper idea about the situation and their decision can be not fruitful for the company. The advertising and promotional cost of the H.T traders is very low it can take advantage for more turnouts. +ome facilities that other providing to their employees like Transport and medical fee etc H.T Traders is not providing to their employees because of which the productivity of the employees decrease. H.T Traders does not have separate marketing department while sale time also perform the re0uirement for marketing sort activities by passage of sales assignment. The company is facing a large amount of competition by the rival companiesH therefore company needs to provide best prices as far as services to come up with wining situation. 6ack of Human resources department.



3 threat is a forecast environmental condition that is out of control and has the potential to harm the businesses profitability. 3n increase in the competition in the industry or a reduction in market si/e. ?enerally threaten the company to reduce businesses profitability. ;evaluation of the currency and shifts in foreign exchange rate makes the imports more expensive and reduces the profit margin of the company. 3 negative shift in exchange rates will force up costs, if company is unable to pass these costs on to customers, profit margins will reduce. +o, exchange rate volatility could be a threat. Political instability is the major threat to the company as it effects the imports, increase the security threats ?overnment policies are strict and are not stable which leads to the changing circumstances in importing the paper. Fnforeseen risk such as terrorist attack or a natural disaster like an earth0uake may cause damage to imported products.

3n opportunity is an environmental condition in your macro or industry environments that can improve your organi/ations competitive position relative to that of your competitors. H.T Traders has opportunity to explore new international and growth oriented markets for the import of the paper. The company should make efforts to improve the technical skills of the labor and the employees which will improve the overall efficiency and productivity of the organi/ation. The company should import the latest technology to decrease the per unit cost of the production. H.T Traders have opportunity to have high potential in the market because of rising demand of paper products. ""

The company should enhance its marketing skills through advertisement H.T Traders can expand their customer base ?eographically or through new products. H.T Traders have opportunities to increase the technology that business can utili/e such as = commerce or Internet sales


,orking with H.T Traders was a lifetime experience for me because not only it has made me able to step into my practical life but it also provided me with the exposure of a business operations in the company. I have learnt a lot from my internship withH.T Traders. The overall working experience, the workplace environment, the help from the seniors and many more was excellent. ,hile doing my internship training of ' weeks in 3llied <ank of Pakistan, I have analy/ed some problem in the company. Aeeping in views those problems followings are my recommendations2 "'

H.T Traders should create business opportunities for themselves. :owadays there is a intense competition between the companies. 3ll the companies are expanding with aggressive H.T Traders needs to open more branches to capture the market. H.T Traders should import more variety of paper products. H.T Traders must ensure that the goods supplied by the exporter are insured. ,hether the goods are transported by +ea or by 3ir, the risk can be covered by Insurance. H.T Traders should investigate the reputation and standing of the suppliers before importing paper. H.T Traders should send an agent in the +upplier1s country closer supervision to be maintained over shipments. banks deal only in documents and not in goods so, H.T Traders should work to ensure that the final products are as good as the sample. H.T Traders should sell online to provide the 0uality and speedy services to the customers and also remain competitive in the market. The environment of the company should be comfortable so that the customer and staff must feel comfortable during business in bank. The company should bring forward the new talent as fresh knowledge and education is considered very important to increase the efficiency. The company should keep the proper check on stock which is being imported.

3t present there is no such organi/ation in the world that is free from problems and challenges. =very one1s concern is to strive and struggle a lot to be more profitable and to get more competitive edge. The management of H.T Traders is taking strategic steps to enable the company to emerge as a strong and progressive institution. It is continuing to make efforts to refine its products and operations to make them more compatible. ;uring my internship I have learned many new things in spite of the knowledge gained at "7

university and also came to conclusion that education alone is not enough, practical training in every field is crucial to become a successful manager. H.T Traders has capacity to increase market share. 3s the business and economic conditions remain uncertain, H.T Traders continues to import the new products like it has been doing in past.