Internship Report on Export Promotion Bureau

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					Internship Report on Export Promotion Bureau (EPB)


In the past, business was on short scale and was easily managed by a common man. With the
passage of time, this activity has become vast and complicated.
Nowadays, it is impossible for a common man to run the business especially in this period of
competition. This situation demands energetic, duly qualified experienced business
administrators who could meet the challenges of this age of modernization. Department of
Business Administration undertakes to produce management specialists fully aware of the ins
and outs of the business management, and capable of meeting the competitions.
Internship is an indispensable part of MBA degree program. The philosophy behind this is to
orient the entrance towards business atmosphere and to broaden the vision. In this regard, I was
assigned to take my internship training at Export Promotion Bureau. I also worked in many
departments and observed the overall performance and procedure of the organization.
Moreover a complete and comprehensive report is the requirement for the MBA programme. In
completing this report, I have tried my best to arrange the various facts and observation in such a
way that will help the reader to maximum understanding towards the functioning of Export
Promotion Bureau.
Muhammad Farooq

Absolute praise for Almighty Allah, provider of hope, guidance and knowledge without whose
constant remembrance I would not have over come my moments of despair.
I am grateful to Allah almighty, for enabling me to fulfill this tiring, but interesting job for the
completion of my internship report.

I would not be going justice in presenting this internship report without mentioning the people
around me who have been inextricably related with the completion of this report.

I would like to express my heart felt thanks to my supervisor Mrs. Sajida Nisar for her support
and guidance, which she rendered through out the study, and provided me with such a wealth led
ideas, to peruse and power of writing this report. It could not have been possible to accomplish
this report without her thoughtful guidance and expertise.

I wish to record my honorable regards to all those who helped a lot in completion of this report,
especially to Deputy Director, IKRAM ULLAH.
I also appreciate the valuable services and moral support from my friends. Finally I wish to place
on record, my heart felt thanks, regards, and gratitude to my parents. Their guidance support and
trust enable me to through this report.

Finally, for any all to fallible errors, omissions and shortcomings in the writing of the report only
I am responsible for which I hope that all concerning regards of this report will forgive me.
Muhammad Farooq

“ One of the Greatest Discoveries a man makes,
One of his great surprises,
Is to find he can do what he was afraid he could not do it “


Organizational chart of Lahore Office 11
Marketing 26
Communication 26
e) Regulatory 27
Strategy 28
Pricing of a product 34
Promotion 36
Facilities and incentives to the exporters 72
Import and export Registration 74
Director (Mr. Waheed Raza Bhatti) 79
Director (Mr. Sarfraz Ahmad) 80
Director (Asaf Ghfoor) 81
Deputy Director (Dr. Nazim Latif) 81
Assistant Director (Saira Imdad) 81
Deputy Director (Dr. Javed Akhtar) 83
Assistant Director (Madam Fozia Perveen Ch.) 84
Deputy Director (Mr. Faiz Rasool) 87
Assistant Director (Mr. Nauman Aslam Sheikh) 88
Assistant Director (Mr. Shahzad Ahmad Rana) 89
Assistant director (Miss Nudrat Hussain Khan) 90
Strengths 91
Weaknesses 93
Opportunities 94
Threats 95


FINANCIAL ANALYSIS----------------------------------------------------------------------100


Business has become an activity. Nations used for survival. As a country rich in natural
resources and a rowing economy, Pakistani products compete globally to a favorable degree.
Now even a single nation cannot fulfill its even residential needs with only domestic business. So
the nations now thing how to promote their export. As it is happening in all over the world so, in
Pakistan, at the time of its inception, Chief Controller of Imports and Exports CCI&E was
established for this purpose but it was not so efficient to meet the growing needs of receiving and
disseminating latest market information and taking regulatory measures wherever necessary. In
order to cater the need of the time, Export Promotion Bureau of Pakistan took the place of this
institute in 1963.
In very beginning EPB was a small department with a few functions to perform. But with the
passage of days and night it expanded its scope, functions and facilities and now it has a wide
setup with country-wise branches. Now besides having Head Office at Karachi, EPB has offices
in Lahore, Faisalabad, Gujranwala, Gujrat, Multan, Hyderabad, Sukkur, Peshawar and Quetta
and so on. Presently EPB has a network of 15 regional and sub-regional offices in the country.
EPB also has its office network outside the country; these are 40 foreign offices for the purpose
of promotion of exports. These foreign offices are continuously work in foreign market for
demand study and exportable product opportunities for Pakistani products.
Where EPB foremost function is to promote exports, it provides facilities existing exporters and
prospective businessmen who want to venture into the international markets by establishing
stronger bonds with foreign countries.
Export Promotion Bureau has always tried its utmost to maintain and sustain relationships in the
existing markets and to capture the new potential markets. It performs various functions to assist
in trade, one of that is marketing pertaining to market research, execution of fairs and exhibitions
both local and international, and trade delegations for exploring international markets.
The IAC of EPB maintains a comprehensive record of Pakistani exporters/manufacturers and
their product profiles. The information is useful when attending to foreign enquiries by
Pakistan’s trade offices abroad. The EPB produces a number of documentary films each year
which are distributed to Pakistan embassies abroad for screening before potential buyers and at
trade fairs abroad. At present, there are over 40 trade offices in Pakistani Missions abroad.
The main purpose of these trade offices is to boost Pakistani exports. EPB maintains a close
working relationship with all of these trade offices which also act as export houses. In order to
introduce Pakistan’s exportable commodities to the world, EPB has been arranging permanent
display of products within Pakistan and in selected centres abroad to attract prospective foreign
buyers. EPB maintains permanent display centres where samples of exportable goods are
prominently displayed. The display centres are regularly visited by foreign importers or to say
so, attract considerable attention of the foreign buyers. One of the important roles of EPB is its
participation in international and national trade fairs. Pakistan, as a member of community of
developing nations, has developed policies aimed at exploiting the international market. Opting
for a policy of export promotion (rather than import substitution) does entail strong orientation
towards overseas markets and a liberalization of the domestic market for goods, services and
capital, as also the external trade of a country. This in view, EPB acts as a conduit to striking a
manageable balance of trade.
EPB has set up a number of research and training institutes as well. In these institutes main
emphasis is given on quality consciousness and efficient production techniques enabling
exporters to enrich themselves for better results.
In order to maximize the export potential of Pakistan and take on the challenge of adapting our
approach to one which takes into account the rapidly changing world economic climate, he EPB
is expanding its promotional activities and attempting to position the “Made in Pakistan” label as
a hallmark of quality.

On the demand side, EPB helps exporters to participate in exhibitions abroad and sends
delegations to export markets with a view to explore new markets and develop the traditional
markets. On supply side, EPB has established over 32 training institutes and projects in various
export sectors to train necessary manpower that can manage the export trade and industry,
professionally, meeting the requirements of the export markets. Export promotional activities are
carried out in co-ordination with trade bodies at home and Pakistan's trade missions abroad. EPB
has its head office in Karachi, which is also the main industrial and commercial center and the
major export outlet of the country.


At present the Export Promotion Bureau is the largest organization in the Public sector to
facilitate and boost exports. It is working closely with other departments and with the respective
industries chambers and their associations.
It has build up relationships with the foreign importers. It has made easy access to the
international markets for the exporter. It is providing the timely and informative date to enter into
the new market and statistical analysis to make him suitable to enter the market at the right time.
It has many branches in the countries with a central head office at Karachi. And regional offices
at Islamabad, Lahore and Faisalabad. Moreover it has branches in almost in all the major cities of
the country. It has established large number of institution for the training to the exporters. Now it
is trying to establish more institutions and working with the associations to make their best.
Our major export are being made to the European Union, America and U.K. after the September
11, 2001, our exports has been decreased to a minimum level. There was a slowdown because
these countries have refused to accept our products. So EPB has realized this fact and it trying to
move to the new markets of the Africa and the Middle East.

Moreover it is giving emphasis on the developmental categories products. It is helping the
exporter in these categories in joining the trade delegations and the trade exhibitions and a very
nominal fee is charged for this. Moreover it has a large network of its foreign offices and
promotion is made through these offices. Our trade offices are working in more than 40
countries. In short the EPB is making their best to increase product. There are some problem
facing the organization. Because here is no export culture. First we have to try to create export
culture and then to make our business internationalize in the foreign markets and the make the
country prosperous and rich in the foreign exchange.

Providing Leadership, Direction, Pro and Re-active Facilitation, to an aggressive national drive
for sustainable growth of Pakistan's Foreign Trade, achieving a level of US$ 14 billion by year
2002-2003 as a minimum
Export Promotion Bureau is under the department of the Ministry of Commerce and was
established in 1963 with the main objective of promoting and supporting sustained growth in
exports of goods and services both in terms of volume and value.

· Assist the govt. in formulating and administering export policy
· Formulate export targets and monitor exports
· Recommend production for export and establishment of export oriented industries.
· Receive and disseminate market intelligence
· Sponsor incoming and outgoing trade delegations
· Participating international trade fairs
· Settlement of trade disputes
· Markets studies, seminars and workshops
· Registration of export houses abroad
· Training of officers and businessmen
· Export of services

Structure of. E.P.B. Regional office Lahore


Organizational chart of Lahore Office

Director General
Directorate 1
§ Fiscal and facilities
§ Institute
§ Export facility.
Directorate II
§ Exhibitions, delegations
§ Seminars
§ Product office.
Directorate III
§ Administration
Directorate IV
§ Textiles

Directorate I
Asst. Director
Asst. Director
Fiscal & Facilities
Directorate II
D.D. Exhibition
D.D.Delegations, Seminars, Special Projects
D.D. Carpets
D.D. Pharmaceutical
D.D. Sports/Surgical
D.D. Engineering
D.D. Rice
D.D. Gems. Jewellery
D.D. Leather
D.D. Furniture
D.D. Textile
Directorate III
Deputy Director

Assistant Director

Directorate IV
Deputy Director
Assistant Director
Assistant Director


Gujranwala, Gujrat, Sialkot Triangle
Sports wear
Sports goods
Ceramics & Pottery


Sanitary ware & Fittings
Leather garments
Product Cluster A

Product cluster B
Lahore, Sheikhupura, Kasur

Fruits & vegetable

Organizational behavior is simply the understanding, prediction, and management of human
behavior in organizations. In other words, organizational behavior is involved with the study and
application of the human side of management and organization. EPB, being an organization in
the competitive business community, also needs to carefully concentrate on behavioral side of
human management. The important issues in this regard follow:
In recent years EPB has adopted job rotation form of job design, by providing to its employees a
greater variety of work by transferring them to different departments. Particularly the marketing
analysts enjoy the benefit of job enrichment, too, through visits to assigned projects. The staff
members are also sent to attend various courses offered by other institutions in the country as
well as abroad. This practice enhances their experience and skills.
Almost all the officers of the high level management come through CSS. Their qualification does
not match with their professional work. So they face some kind of problems in performing the
daily routine work. In some departments there is a very little job satisfaction among the
employees. But the overall the people are satisfied with their job up to some extent.
Stress is an adaptive response to an external situation that results in physical, psychological or
behavioral deviations for organizational participants.
The following types of stress may result in job stress.
1. Extra-organizational stress
2. Organizational stress
3. Group stress
4. Individual stress
5. Job stress
The top management of EPB has taken measures and made efforts to minimize the negative
stress amongst the employees. In organization special efforts are being made to reduce group
stress by making the employees realize that they are an essential part of the organization and a
sense of involvement is provoked amongst them.
Another reason for this low negative stress is the fact that there are no inter-personal or inter-
group conflicts in organization. There is an environment of mutual understanding amongst the
unions of the officers as well as employees. This is also due to the fact that the top management
takes keen interest in these matters.
Personality means how people affect others and how they understand and view themselves as
well as their pattern of inner and outer measurable traits. The development of personality is a
continuous process by which children gradually acquire pattern of overt behavior, thinking
problem solving, emotions, conflicts and ways of coping with conflicts that will go to make up
their adult personalities.
Organization should give a great deal of attention in this regard. Suitable environment along with
other opportunities should be provided to the employees to understand themselves and to
evaluate themselves. It should also offer more refresher courses to both its officers and its
employees, inside and outside the country that will groom their personalities. They should be
taught how to use their knowledge and skill effectively in practice and how to plan their daily
work in a better way.
Organization should also introduce the following concepts, which will surely develop the
personality of its employees.
- Job responsibility is given to the employees and a close check to see how people respond to
their employees.
- Relationship of the employees with their clients and other persons.
- Proper turnout of the employees, as it makes a significant impression on the customers.
- Regular checks to confirm that people abide by the rules of IDBP.
- Punctuality and regularity of the employees
The success and prosperity of an organization depends upon its inter personal relationships.
There are pleasant relationships because people are getting high monetary rewards. High-level
officers work in close coordination with the middle level officers and the clerical staff in the
form of a team. In all the departments, different teams are formed comprising a high official.
There is a lot of interaction between the different levels of management.
Training Programme
All the training and recruitment policy for the employee is set by the Government of Pakistan.
All the officers appointed here come through the CSS. So the training is done on the selection of
the officers and later on some training programs are managed by the organization. Sometimes it
sends its employees to the foreign for the training. But the percentage of the officers is very low
who go abroad for training.
So organization has no recruiting policy. Some of the people are kept by the organization on the
contract basis but their limits are also mentioned by the Government.

5TH Floor, Block A , Finance and Trade Centre,
Shahrah-e-Faisal, Karachi.
TEL PABX (92-21) 920 6487-90
UAN NO (92-21) 111-444-111
Chairman (92-21) 920 6462
Vice Chairman (92-21) 920 5777
URL Address

Director general

1) Administration
Director (Waheed Raza Bhatti)
Deputy Director (Ikram Ullah)
Assistant Director (Noreen Bashir)
2) Finance & Accounts
Director (Waheed Raza Bhatti)
Assistant Account Officer (Nafees Ahmad)
Accountant (Irfan Ullah)
1). Registration
Director (Sarfraz Ahmad)
Deputy Director (Syed Javed Akhtar)
Executive Officer (Muhammad Aslam)
4) Delegation & Exhibition
Director (Asaf Ghafoor)
Deputy Director I (Irfan Tarar)
Deputy Director II (Nawaz Shi)
Assistant Director (Waqas Azeem)
5) Textile Quota Management
Deputy Director (Dr. Nazim Latif)
Assistant Director I (Riaz Ahmad)
Assistant Director II (Saira Imdad)
6) Institutes
Assistant Director (Zarshi Masood Malik)

7) Women Entrepreneurs
Assistant Director (Nudrat Hussain Khan)

Export Promotion Bureau is headed by the Chairman who is usually from the private sector with
the status of the Minister of State. The Vice Chairman who is a senior civil servant of the country
assists him. Total number of employees in EPB is 1311, out of which 316 are in executive and
995 in non-executive cadres. With a view to make Export Promotion Bureau an effective trade
promotion and development body of the country, it has recently been expanded, restructured, and
reinforced with employment of experts from the private sector.

Now EPB has 9 Divisions that are :

1. Geographic and Regional Trade Alliances
2. Export Supply Management (Textiles and Agriculture)
3. Export Supply Management -II (Other than Textile)
4. Quota & Regulatory Management
5. Planning, Policies and International
6. Communications
7. Human Resource, Finance & Administration
8. Information Technology
9. Skill Development
This division works as a navigator. Based on the feedback from Commercial Officers in foreign
countries regarding unconstrained demand and performance of our products, it would provide
strategic guidance to export and supply management divisions for both textile and non-textile
products mix. The division would also identify and plan exploitation of opportunities flowing
from regional trade alliances. Exhibitions and delegations abroad would also be planned and
managed by the Division.
Primarily responsible for implementing programmes such as Export Vision, etc. This Division
would chase the unrestrained demand through keeping the existing products afloat by constantly
adapting and upgrading them and launching new products. Campaigns for marketing and product
up-gradation will be developed and Export Promotion Committees (EPCs) would be their forums
of intervention. The proactive interaction with trade and supply chain will be managed through
deliverables such as market updates and product reports developed in close collaboration with
Geographic Division, Technical Skills Development division, SMEDA, BOI and Trade
This Division is responsible for managing all regulatory functions, such as registration of
exporters/importers, textile quotas management, registration of products contracts and issuance
of GSPs. Quality Review Committee for Rice will also work under this Division.
Primarily responsible for trade policy formulation, its review and evaluation with specific
emphasis on simplification and harmonization of procedures with the objective of achieving
competitive edge in the context of emerging business realities such as W.T.O and Trade Blocks.
The division ensures the provision of the facilitation services to manufacturers and exporters
through liaison with agencies like CBR, SBP, KPT, Civil Aviation, etc. Resolution of trade
disputes is also the responsibility of this division. In addition to that, the division will forge and
actively pursue linkages with international agencies such as CBI, GTZ, JICA, etc. for training
and export development.
The prime responsibility of this division is to manage the image of E.P.B. as well as export
regime through periodical reports about activities of E.P.B. Moreover, advertising, publication of
bulletins and promotional literature will be handled by this Division. Export display Centres will
also be managed by this Division.
Human Resource, Finance & Administration
This Division manage human resource, administration and finances of E.P.B. including Export
Marketing Development Fund. In addition to financial management, the Division will carry out
management audit. Assets management including the management of Karachi Expo Centre
(KEC) will be the responsibility of this Division.
To gear-up export promotional activities and adopt such measures which could help in obtaining
our due share in international market the old organization of EPB has been re-structured on
functional basis with distribution of functions and responsibilities into mainstream by products
and by territories. The objective is to achieve specialization by products and by geography.
EPB has been divided into the eight divisions. The functions of these divisions as well as names
of the head of the divisions are as follows:-
Geographic & Regional Management Division
· Based on feedback from Pakistani Commercial Officers in foreign countries regarding demand
and performance of various products it provides strategic guidance to export and supply
management divisions for both textile and non-textile products mix.
· The division also identifies and plans availing of opportunities from regional trade alliances.
· Exhibitions and delegations abroad are also planned and managed by the Division. Mr. Rahat-
ul-Ain, Director General
Export & Supply Management
· Implementing programs such as Export Vision, etc.
· Work towards meeting international demand by constantly adapting and upgrading existing
· Launching new products.
· Implement campaigns for marketing and product up-gradation.
· Proactive interaction with trade and supply chains by providing market updates and product
reports developed in close collaboration with Geographic Division, Technical Skills
Development division, SMEDA, BIO and Trade Association.
Mr. Javed Anwar Khan, Director Agricultural Products (Phone No. 9206478 Fax: 9206497)
Mr. Mohammad Yahya, Director Non-Agricultural Products (Phone No. 9206471 Fax No.
Quota and Regulatory Management
· Manage all regulatory functions, such as registration of exporters/ importers, textile quotas
management, registration of products contracts and issuance of GSPs.
· Quality Review Committee of Rice
Mr. Mohammad Siddique Alvi, Director General (Phone No.9205472 Fax:9206474)
Policies, procedure and International Liaison
a) Resolution of trade disputes.
Mr. Ali Nawaz Kalhoro, Director (Phone No. 9201528)
b) Work towards trade policy formulation, its review and evaluation with specific emphasis on
simplification and harmonization of procedures with the objective of achieving competitive edge
in the context of emerging business realities such as WTO and Trade Blocks.
Pursue linkages with international agencies such as CBI, GTZ, JICA, etc. for training and export
Dr. Yousuf Junaid, Director (Phone No. 9206475)
c) Ensuring the provision of the facilitation services to manufacturers and exporters through
liaison with agencies like CBR, SBP, KPT, Civil Aviation, etc.
Federal Export Promotion Board
Mr. Ali Raza Bhutta, Dy. Director (Phone No. 9206802)
Research and Policy Division collects and consolidates information and relevant research
material including market intelligence on products as well as countries. This information is used
in identifying potential for the exportable products and their destinations. Product Development
Division, Personnel and Services Division and Textile & Clothing Division also utilize this data
in their day to day activities especially while interacting with exporters and selecting them for
their inclusion in exhibitions and delegations.

Following Directorate and Sections work under the Research & Policy Division:
I) Policy and Research Directorate
II) Support Services Directorate
I) Policy and Research Directorate
Following sections work under this directorate:
a) Domestic Policy Section
b) External Policy Section
c) Statistics Section
d) Export Terminal Generalized System of preferences (G.S.P). Certificate Section.
e) Export Development fund (E.D.F). Projects Section.

II) Supporting Services Directorate
Following sections work under this directorate:
a) Information and Advisory Centre (IAC) & Library Section.
b) Publication & Publicity Section.
c) Exporter/Importer Data Base Section.
Ø Manage the image of EPB as well as export regime through periodical reports about activities
of EPB.
Ø Manage domestic and international advertising (print & electronic), publication of bulletins
and promotional literature.
Ø Manage Export Display Centers.Mr. Nusrat Iqbal Jamshed, Director (Phone No. 9202718 Fax
No. 9202713)
Information Technology
Ø Automation of EPB.
Ø Development of EPB website
Ø Providing the policy input to Ministry of Commerce on IT Policy and the E-Commerce and
coordinating with Ministry of Science and Technology on E-Commerce related matters and
Action Plan. (Mr. Asif Ali Sheikh, Director (Phone No. 9201513)

Human Resource, Finance & Administration
Ø Manage human resource, administration and finance and EPB including Export Market
Development Fund.
Ø Management audit.
Ø Manage Karachi Expo Centre.
Mr. Mohammad Zahid Khan, Director General (Phone No. 9206476 Fax No.9206473)
Export Skills Development and EDF Division
Ø Identification, formulation and Management of Technical Training Institute / infra-structural
development project.
Ø To Manage Export Development Fund
Mr. Kamal Shaheryar, Executive Director


EPB not only provides assistance to exporters but also assists the Government of Pakistan in the
following matters.
· EPB assists the Government of Pakistan in setting the export targets
· EPB helps the Government in devising action plan to achieve these targets
· EPB advises in framing the rules and regulation of export trade so that the exports targets may
be achieved
· EPB assists the Government to simplify the procedures so that these are easily understandable
and applied by all the persons who are not well qualified but interested in exports.
· EPB in collaboration with the Government of Pakistan carries out different studies and surveys
Ø Market Research
Ø Fairs and Exhibitions - local and international
Ø Trade Delegations
Ø Overseas and local publicity
Ø Participation in Trade Related Events
Ø Expo Center - Holding of exhibitions
�� Facilitation through trade officers abroad
Ø Seminars/Conferences/Workshops

Ø Publication of Trade inquiries/opportunities
Ø Library
Ø Export Intelligence Bulletin
Ø Counseling
Ø Year Book - Statistics

c) Human Resource Development
Ø Training Institutes
Ø Seminars on ISO 9000 and 14000
Ø Social Sector Concerns
Ø Environmental Concerns

d) Service to exporters
Ø Export Facilitation committee
Ø Resolving problems in exports
Ø Simplification of procedures
Ø Export procedures handbook
Ø Establishing buyer-seller contacts
Ø Fax on demand and the Web site
Ø Interface with chambers/trade associations
Ø Settlements of trade disputes
e) Regulatory
Ø Formulation of proposals for the Trade Policy
Ø Implementation of Trade Policy
Ø Textile Quota Management
Ø Registration of Importers/Exporters
Ø Registration of Export Contracts
Ø Determination of Minimum Export Prices
Ø Issuance of GSP Certificates

Based on an evaluation of the world demand of goods and services, the Strategy aims to
prioritize those where Pakistan has or can achieve a competitive edge, sourced from within or
outside Pakistan and facilitate the achievement of the desired levels of profitable exports via
‘demand led ‘Strategy, as opposed to the previous’ supply led efforts. The 7-point strategy is as

World Market Share:
Enhance world market shares of the Core Product Categories via
Increased penetration of our best performing Core Product Categories in the top 10 respective
Selectively increase the penetration of the Core Product Categories in the next top 10 countries.

Core Categories Other Core Categories
Textile Garments Rice
Raw Cotton Yarn (all types) Leather /Products
Fabrics Sports Goods
Garments Carpets and Wool
Made Ups (excluding towels) Surgical Instruments
Towels Petroleum Products
Art Silk and Synthetic Textiles
Value Addition:
Pursue enhancement of manufacturing and marketing capabilities and efficiencies with a view to
achieve value addition and increased competitive strength for our Core Product Categories.
Core Categories: As above.
Export Diversification:
Pursue with national alignment and focused resource application, selected Developmental export
opportunities where Pakistan Currently enjoys, or can achieve, a strong competitive edge. The
identified Categories are:

Core Categories Other Core Categories
Fisheries Marble & Granite
Poultry Gems & Jewelry
Fruits Vegetable & Wheat ¢ Engineering Goods
I.T. Software & Services Chemicals
General Services
Geographic Expansion:
Pursue in the less explored Geography, exports of our Core Products Categories and Services
and any other, but significant opportunities. The geographic areas identified are:
Core Categories Other Core Categories
Africa Central Asian Republics
South America Oceania (Australia /New Zealand)
Eastern Europe
Women Entrepreneurship:
To energize the Women Entrepreneurship in support of developing and realizing Pakistan's
export capabilities and potential, and enhance overall economic value addition.
Traditional Partner Countries
Bilateral Trade Enhancement would be achieved with countries where Pakistan traditionally
/potentially enjoys close relationships. These will initially be:

China, Malaysia, Japan, Saudi Arabia, Kuwait, Syria, Iraq, Iran, Libya, Egypt, Turkey, UAE,
Oman, Qatar,
Central African Republic.
Leverage International Trade Blocks /Agreements:
Enhance market access based on proactive and innovative management of current or emerging
world economic /trading blocks and bilateral trading arrangements. These would initially be
pursued with:
ASEAN Bilateral Trade
For the successful implementation, the following enablers need to be ensured and or
Export Culture:
It is essential that national alignment of all stakeholders be ensured to the need for an aggressive
national drive, a quantum leap in exports and also the Export Strategy and the availability of an
enabling environment. An 'Export Hype' needs to be created to ensure the desired mindset and
action by all stakeholders. The acronym HYPE stands for
H Hyper Sensitivity to Exports
Y Yes, 'can do' approach
P Profitable
E E-Commerce & Government
It is vital in the context of the above that any regulatory, environmental and social impediments
to exports be ruthlessly demolished.
Marketing Support
An extremely vital enabler. Majority of our exporters are presently weak in the marketing
management abilities and the financial /human resources required for aggressive market share
enhancement and product and geographical diversification. Due need of upfront investment of
funds, SME exporters are shy to invest. It is essential that the government in partnership provide
professional and financial help with the exporters, for aggressive international promotions,
distributors and gaining access to new customers and markets.
Pakistan's Business Image:
It is recognized that all countries have their strengths and weaknesses. Success depends upon
efficient capitalization of Strengths and management of Weaknesses to provide an honest and
positive business image. It is also recognized that image management has to be professionally
achieved for best results.
Human Resources and Skill/Technology Support:
In alignment with the strategic product, geographic needs and international trading regulations,
the skills, training /technical facilities be enhanced amongst all stakeholders especially the
exporters, Pakistan's Missions and the Export Promotion Bureau, financial institutions and
Supply Chain Management:
To develop the on-shore capacity to produce the right quality at internationally competitive
prices, based on customer needs, the supply chain needs to be closely examined by our
entrepreneurs, in close collaboration with the government; bottlenecks need to be removed and
infrastructure strengthened. This would include the use of state-of-art technology and
manufacturing process development.
Qualities, Social and Environment Management:
Culture of 'TQM' (Total Quality Management) and 'CI' (Continuous Improvement) needs to be
inculcated and embedded in support of Quality, Social progressively and meet international
standards and specifications as a minimum. Appropriate regulatory framework, quality and
social management processes such as ISO/SA certifications and a transparent efficient judicial
process needs to be in support.
Foreign Direct Investments and Finance:
Foreign Direct Investment needs to be strongly encouraged to strengthen our exporters
management expertise, technological and infrastructure support, competitive edge and market
Transparent access to finance will be vital for the desired significant increase in exports.
Sufficient access at internationally competitive mark ups would need to be ensured, especially
for the value adding and Developmental Product Categories.
Exchange Rate:
Careful management of the exchange rate would be required to provide the exporters a level
playing field with international competition.
Small & Medium Enterprise Development:
On a medium term basis, the success of Pakistan's exports must heavily rely on the strength of
our Small and Medium size exporters. EPB in alignment with the supply chain management
efforts of SMEDA must help enhance the exporting and marketing capacity of the SME's
inclusive of adequate finance through the relevant financial institution i.e. State Bank, SBFC,
RDFC and other DFI's.


Export Promotion Organization is a promotional organizational to promote export so it is a
service mix rather than product mix. The exporters are provided information relating to their
product and their export and market.

It is important that the exporter knows the export market before starting any export business. The
exporter should know in advance, the distribution channel, the market segment, the governing
regulations and the price at which his goods can be sold in the new market. This information will
be useful for him when drawing up his own marketing plan and negotiating with the importer.
He has to develop his own strategy to match his products with the local needs and preferences of
consumers. There is a slim chance that his product will fit the target market without some
modification. He may have to change the size, colour, specification, etc. in order to meet the
consumer`s preferences and the rules and regulations concerning the distribution of the product.
Therefore, it is helpful for the exporter to know the following points regarding his target market
before he commences his export business:
1. Profile of local major manufacturers.
2. Distribution channel and mark-up at each of the distribution channel.
3. Competition among local products and imported brands.
4. Evaluation of products by consumers, retailers, wholesalers and importers in terms of price,
quality and design.
Local rules and regulation related to the marketing of the intended product for sale. It would
benefit the exporter if he knew earlier if the time consuming and elaborate modification, testing
and labelling of his product to meet local rules and regulations are necessary.
5. Local production figures.
6. Export by destination & Import by Country of origin.
7. Market size in terms of value and quantity.
Pricing of a product
Pricing is very important factor to enter in the foreign market along with quality. To price the
product is an important and sensitive task. EPB provides the exporters information the related
and same product price in the international markets and help them in making decision to price
their product so that they may able to enter the market with differentiation. Here is some kind of
guidelines that are used in order to price a products.
To price your product for export, you would normally start with the cost of production. Allow for
special designs, special runs, modification, tooling and costs necessary to produce a marketable
product. Rather than using your normal administrative cost, it`s much better to add a direct
export administrative cost, which may include representative`s commissions, direct costs for
attorneys, freight forwarders, accounting, telephoning, mail, labour, etc. Some costs for
exporting will be less than for domestic sales and some will be more. When you quote a price to
your customer, you want to be sure there is reasonable profit margin left for you. Prices can be
quoted in several ways. Here are some examples:
· Price of goods at seller`s factory: Ex Factory
· PLUS export packing if any: Free On Board (at named point of departure) e.g. F.O.B.
· Plus export packing, if any, and inland freight, per delivery and other port charges: Free Along-
side Ship (F.A.S.)
· PLUS loading costs, if any: Free On Board Vessel
· PLUS ocean freight: Cost and Freight (CFR)
· PLUS insurance charges: Cost, Insurance and Freight (C.I.F)
· PLUS wharfage, landing charges, taxes, customs entry, duty: Ex Dock Port
Some exporters have made the mistake of quoting their domestic price without figuring the
actual cost and have later discovered they had not made the profit they estimated. Consider the
Fair Trade Practice Laws also when pricing your product, to avoid possible "dumping" practices.
Normally, a firm should make on export sales at least the profit that it makes on domestic sales,
and possibly more, if costs have been accurately calculated. The challenge is to make your price
high enough to return a profit, but low enough to be competitive in foreign markets. If domestic
sales are not utilising full production capacity, export sales could bring production close to
capacity, thereby reducing unit costs and raising overall profits.
The export packaging requirements vary from product to product but the primary function of
packaging is to protect the product from any damage due to contamination, crushing, breakage,
climatic conditions and theft before, during or after its transportation from the place of its
manufacturing to its destination. In order to avoid damage to the product the exporter must take
into account all possible factors that can prove to be hazardous to the product safety during its
handling and storage at different points of its shipment to the final destination.
The product factors that should be considered when deciding on the best type of packaging
include fragility, durability, mode of transportation, resistance to abrasion, value, susceptibility
to moisture, chemical reactions like oxidation and corrosion, chemical stability and shelf life.
Normally, it is the market where the product is being sent that determines the requirements of the
packing to be done, because these differ from country to country and importer to importer. The
consumer also influences the type of packaging demanded by the importers in different
countries. It is essential to get an idea of packing required by the importers in order to customize
the packaging with the behavior and the needs of consumers in their countries because it is an
essential tool of marketing and remains with the product till the product is used or consumed. It
also helps the exporter find out any restrictions imposed by the importing country on the
packaging of certain products or commodities. For example, most countries, particularly the
developed nations, will not allow import of fruit, vegetables and meat in packs that do not
completely eliminate the chances of contamination.
The packaging requirements are also influenced by international guidelines such as ISO
standards as well as by national health, safety, environmental and consumer protection measures
and regulations effecting the product and packaging concerned. Most developed and some
developing nations have their own standard-setting bodies to serve their domestic needs,
focusing primarily on the requirements of their industries and the needs of their consumers.
The Export Promotion Bureau provides the exporter the information relating to the packaging of
the products and the international standards that are required for packaging. The more emphasis
is given on the packing of the perishable commodities and timely arrangements are being made
in order to send those to the destinations.


As the Export Promotion Bureau is an organization with an objective to promote export, so the
main emphasis is given on the promotional activities. Various methods are being used in order to
boost exports. Here are some kinds of the tools that are generally used by the organization in
order to boost and promote products exports.

Trade Fairs and Exhibitions
Trade Delegations
Video Films/Documentaries
Print Media
Electronic Media
The EPB Web Site.

Through these seminars EPB provides necessary know-how to inform the exporters and the
delegation of the foreign countries regarding promotion of export products. Different seminars
on ISO 9000, ISO 14000, fashion forecasts, New market Development, Agri Exports, Non
Traditional forecasts and other specialized topics have been arranged by the EPB.
EPB frequently organizes seminars on issues such as “Basics of Exporters”, “How to Increase
Exports” and other Export marketing related activities.


Export Promotion Bureau of Pakistan also work for Pakistan’s representation in international
trade events especially in exhibitions, shows and fairs. All the procedures and other rules are the
same as mentioned in the above lines. If there is some participation fee, Export Promotion
Bureau bears 50% of it while the rest half is borne by the participant himself.
The method to join the trade fairs is as under that are general guidelines for the exporters.
· Application on the prescribed form is made to the Export Promotion Bureau chairman with the
· Participation is fee is charged by the exporter that is refundable in some cases.
· If the application for the fair is accepted then the participation fee is not refunded.
· EPB provides some kind of facilities to the exporter as forwarding goods, delivery, decorating,
space, booths and other material.
· The participants who have participated thrice in the fairs before will not be given any subsidy in
the cost by the Export Promotion Bureau.

Sometimes the exporter participate in the trade fairs as private capacity. Then the different
procedure is adopted by the EPB. Almost the same procedure is adopted for the local trade fairs
as is mentioned above.
Following facilities are available to the Pakistani registered exporter if they participate in the
international trade fairs on their private capacity and following subsidies are available.
Trade Fairs where sample goods are taken
Remittance of space rent direct to Fairs/Exhibition authorities against their debt note and
undertaking from the exporter`s firm/company on the form as marked `A` attached here to.
Remittance will be reported on Form.
Release of exchange for the estimated account expense.
Issue of an authority letter to the airline/travel agents for issue of ticket to and from the country
where the Trade Fair/Exhibition is being held.
Payment for the cost of ticket and foreign exchange to be released for payment of rent for stalls,
booking of space, construction of pavilion, advance deposits etc. and for the expenses of the
representative(s) of the firm/company participating in international trade fairs/exhibitions will be
received by the Airlines/Travel Agents/Shipping Companies and Authorised Dealers through
cheques drawn on the bank account of the firm/company concerned. There are some kind of
others fairs that are arranged by the Chamber of Commerce and Industry Where goods are taken
for sale.


Local Exhibitions:
In side the country exhibition to create awareness in Pakistani business community about export
of different commodities, Export Promotion Bureau arranges specific commodity shows and
exhibitions. Along with these shows, seminars are also arranged. In these seminars, participants
are provided export-related information. Brochures, pamphlets, and other written material are
also distributed among the participants. These shows are conducted where there is concentration
of production of the commodity. For example, a few days ago, Shoe Show was held in Lahore
while Dates Show was arranged in Khairpur (Sind). The sole aim of this activity is to encourage
the local community and the local producers of a particular product to export that commodity.
These shows are arranged with the cooperation of trade associations and mostly, the participation
is free.


There are many foreign exhibitions that are arranged by the export promotion bureau for the
various categories as for leather, agricultural products, engineering, textiles products and
information technology. Some of them are specific to the products and some are general.

One of the most important functions of Export Promotion Bureau is to promote Pakistani
products abroad for the purpose of exports. Export Promotion Bureau adopts a number of
strategies for this purpose.
Export Promotion Bureau, Government of Pakistan from time to time organizes Trade
Delegations abroad, the programme of which is published through the press and advertisements.
A normal package of incentives is given to the members of delegation.
The overall objectives of the trade delegations are as under:
To promote new & medium to small size exporters having a successful track record of
aggressive growth, irrespective of the size of current level of export.
To increase geographical spread in developed countries, of our exports in the core and
developmental categories, with the help of experienced & medium to large size exporters with an
aggressive track record of growth.
To maximize exports and market shares with the help of experienced exporters with critical
mass/product range & a proven track record.
To increase geographical spread in non-developed countries for the core products with the help
of medium to large size and small, but aggressive, entrepreneurial exporters.
To increase exports of our developmental categories in selected geography with
exporters/businessmen of medium to large size with proven track record of success in similar
geographical areas abroad or in Pakistan as far as possible

· Keeping budgetary provisions in view, delegations shall be sponsored on the following basis.

· Preferably product specific rather than general (except for reasons of bilateral relations).

· Preference will be given to products and markets in close alignment with current export strategy
(Annex I).

· Selection of destinations will essentially be of those that diversify exports and not on the basis
of historical visits (except for reasons of bilateral relations).

Criteria for selection of delegates.

For all applicants the following will apply:

· No exporter will be eligible for EPB’s support in excess of two (2) events in a year.

· Adequate production capacity, quality of products (ISO & SA certified companies will be
preferred), availability of brochures & literature (especially in language of host country).

· Any instance of misconduct, unjustified absence OR poor presentation in a previous event will
render applicant ineligible.

· Adverse decision in a trade dispute by a commercial court will render applicant ineligible.

Core Product Categories (including Textiles & Garments)

Out of the applicants 70% will be selected on the basis of level of certified exports as an average
of the last 3 years in descending order. These will be from amongst applicants responding to the
advertisement released by EPB. Where the response from such press advertisements s
insufficient, EPB will select on its own, and as far possible, in consultation with the trade.

Registered/Branded product exporters (registered in a region/country of destination) will be
preferred {irrespective of level of exports}. This excludes brand for others under franchise.

15% of participants will be from amongst small & medium exporters (SMEX). They will be
selected on the basis of the rate of compound growth per annum based on a maximum for last 3
years exports – irrespective of level of exports. Two definitions of Small & Medium Exporters
are available on record. One, defined vide serial No.280 (g) of Customs Rules as “an export unit
having export upto US$ 2.5 million per annum”, while the second by SMEDA, Small as having
employees between 10-35 & productive assets ranging between Rs. 2-20 million; and Medium
between 36-99 employees & productive assets from Rs.20-40 million. A suitable insertion, in
this regard, will be made in all the advertisements asking the exporters to indicate the category
against which they intend to apply.

15% of participants will be new exporters or women entrepreneurs where preference will be
given to manufacturing exporters. At least one-women entrepreneur will be encouraged to join
every event as a delegate. Method of selection as for © above. (New Exporter means a firm,
which intends to enter the field of exports).
Developmental Categories
For export Enhancement
Based on applications received exporters/businessmen will be selected in descending order of
their last year’s exports OR local sales in the case of new exporters.
Product range should be appropriate to the market.
Must have acceptable level of quality control, grading, packaging facilities & production
capacity to support emerging export opportunities. This will be verified by an EPB officer
through personal visits giving reasons in writing for selection or otherwise.

All other Product Categories

Criteria are same as for Developmental Categories. The exporters that EPB will subsidize,
however, will be of product sectors that have registered a growth rate of minimum of 10% p.a. in
the last 5 years on total Pakistan basis.

Geographic Diversification

Product range to support will consist of Core or Developmental products and any other that the
local Mission may suggest as capable of “significant” import into the country as per country
product portfolio or focus.


For each trade delegation EPB shall designate a Project Officer as soon as it is included in the
calendar of events.
The role of Project Officer is detailed at Annex IV and that of Trade Officer/Pakistan Embassy at
Annex V. (It is not however necessary for EPB to nominate project officers to visit every
destination assigned to them).


Participation methodology will follow the planning calendar as per Annex VIII.

.1. Covering letter on the Company’s letterhead should accompany this form.
2. Rs.5,000 refundable fee in shape of Pay Order / Demand Draft in favor of Accounts Officer,
EPB Karachi
3. Brochure / Product Catalog / company Profile
4. Export performance certificate duly verified by bank.
5. Copy of Membership Certificate.

All applicants shall provide their particulars in prescribed form (Annex II).
Selected applicants will attend a pre-participation briefing, at their own cost, on a date and place
determined by EPB. Anyone absent without an acceptable reason may be debarred from future


In consultation with relevant Trade Bodies (a term that includes FPCCI, chambers and Trade
Associations) EPB shall determine which delegations will be organized by the nominated Trade
body and partially subsidized by EPB. After conclusion of the visit, the Trade Body will submit a
detailed report on the visit. Any Trade Body, which fails to provide the report within one month
of the conclusion of the visit, will not be allowed any further support from the EPB for any
future event, until the matter is resolved to the satisfaction of the EPB.
Subsidy for Trade Delegations – ALL TYPES (EXCEPT THE FREE CHOICE
50% of the return economy airfare on the shortest route to and from the destination/destinations
of the delegation
US$ 100 per day per delegate for the approved duration.

Note: A Rs.5,000/= deposit is required to be submitted with applications in the form of Pay
Order / Bank Draft in favor of Accounts Officer EPB, Karachi. This amount is refundable in case
the delegate is not selected and also refundable to all selected delegates after submission of Visit


Before the visit

§ To plan, organize & progress all arrangements.

§ To help in selecting suitable parties.

§ To familiarize himself with rules, regulations and procedures of the host country.

§ To brief the selected participants and ensure that all pre-delegation arrangements are complete.

§ To ascertain before leaving the country the arrival dates of the participants at the destination
and inform Pakistan Embassy of these dates.

§ To obtain addresses of importers of the country of Destination and circulate them to the
selected delegates for advance contact.

§ To arrange contact, meetings with prospective buyers for each participant and inform the
participants of this about one month in advance of departure.

Upon reaching the destination
§ To contact the Embassy and check the overall arrangements.

§ To brief the delegates about their duties and responsibilities and code of conduct.

During the Visit

§ To assist, along with the Trade Officer / Ambassador's representative, the participants in all
reasonable manner.

§ To ensure timely attendance of all meetings by all delegates.

At reaching Pakistan

§ To submit TA / DA adjustment bill within a fortnight.

§ To submit within 10 days detailed report on the Visit highlighting the following points:

(i) Economic Profile of the host country
(ii) Overall impression on the Visit and its management.
(iii) Performance of Trade Officer-orders booked, new contacts made, long term
arrangements by each delegate.
(iv) Performance of competitor countries.
(v) Overall conduct of the delegates.
(vi) Achievements.
(vii) Shortfalls.
(viii) Recommendations.

§ To make a presentation to the "Review Group" headed by the Vice Chairman on the quality of
participation and recommendations for future delegations.

Annex V

Before the Visit

§ To fix dates of the visit of the delegation in consultation with EPB.
§ To identify the product groups which have potential for exports of our goods.
§ To prepare / send budget for the visit.
§ To send profiles of the delegates to potential buyers seeking their convenience for meetings.
§ To arrange to send the address of the potential Importers to our selected delegates for advance
§ To send the information about custom Rates and Regulation of host country.
§ To provide the information about the hotels for delegates.

During the Visit
1. To arrange meetings of the delegates with the potential buyers.

2. To ensure timely attendance of all meetings by all delegates.

After the Visit

1. To send report about the Visit and detailed accounts along with vouchers / receipts within 10
days after the Visit.

Any other matter relating to the Visit of the delegation.

It is not denying the fact that continuous learning is possible only when access to quality libraries
is available to the company employees. In this age of liberalized trade where change in
technology, product composition etc. are very rapid and flow of information also very fast, our
ignorance from these developments can prove fatal. To keep pace with the developed nations of
the world, it is necessary that we must keep ourselves abreast of developments happening in the
field of science, technology and management skills in the world. Libraries in this connection are
the most important and very reliable source of such information to cater for the needs of the
nations. Keeping this in mind, Export Promotion Bureau has set up a library at Information and
Advisory Center. Information and Advisory Center Library at Karachi is one of the best business
related libraries of Pakistan and it is most frequently visited by very large number of
entrepreneurs, researchers and students. It satisfies almost all the requirement of the exporters.
This library contains around 3000 business related valuable books, journals, trade manuals and
product reports and possess a good collection of CDs on the businesses. For more details of
books available in our Library, please click on relevant link.

Export Promotion Bureau's Publications
S. #. Titles Placement

1 12 Shutteless Looms Two Colors With Bobby Info Desk. Shelf
2 50 Years of Visual Arts in Pakistan Info Desk. Shelf
3 A Brief on Export Promotion Bureau Info Desk. Shelf
4 Activities & Achievements Info Desk. Shelf
5 Agricultural Machinery Info Desk. Shelf
6 Arts & Crafts Pakistan Info Desk. Shelf
7 Biscuits & Confectionery Info Desk. Shelf
8 Brief Reports on Pakistan Dates Show' 1999. Info Desk. Shelf
9 Commodity Guide Series Info Desk. Shelf
10 Cultures of the World Pakistan Info Desk. Shelf
11 Cutlery & Utensils Info Desk. Shelf
12 Electrical Goods Info Desk. Shelf
13 Export Potential of leather & leather products from Pakistan Info Desk. Shelf
14 Export Potential of Soft Toys Info Desk. Shelf
15 Export Related Policies & Procedures Info Desk. Shelf
16 Fan Industry Info Desk. Shelf
17 Fish & Fish Preparations Info Desk. Shelf
18 Floriculture Products Info Desk. Shelf
19 Foreign Trade of Pakistan (Statistical Book-1999-2000) Info Desk. Shelf
20 Fresh Fruits (1995) Info Desk. Shelf
21 Fresh Fruits Business plan target for next two years Info Desk. Shelf
22 Fruit & Vegetable Juices & Preserves Info Desk. Shelf
23 Gemstones Minerals & Marbles Info Desk. Shelf
24 Horns & Crushed Bones Info Desk. Shelf
25 How to Import from Pakistan Info Desk. Shelf
26 Jewellery from Pakistan Info Desk. Shelf
27 Leather Goods Info Desk. Shelf
28 Machine Made Carpets Info Desk. Shelf
29 Made in Pakistan (Brief Description of a select portfolio of Pak) Info Desk. Shelf
30 Molasses Info Desk. Shelf
31 Pakistan Export & Investment Guide Info Desk. Shelf
32 Pakistan Food & Foodstuff (Dir. Of Prod. Manu. & Exporters) Info Desk. Shelf
33 Pakistan Fruit & Vegetables Info Desk. Shelf
34 Pakistan Furniture A Rich Heritage Info Desk. Shelf
35 Pakistan Products Info Desk. Shelf
36 Pakistan School of Fashion Design Info Desk. Shelf
37 Pakistan Seafood Info Desk. Shelf
38 Pakistan Trade Secrets (The Export Answer Book) (SMEDA) Info Desk. Shelf
39 Plastic Goods Info Desk. Shelf
40 Products Pakistan Info Desk. Shelf
41 Report of official trade delegation of Balochistan (Quetta) Info Desk. Shelf
42 Resource Directory for Human Settlements Info Desk. Shelf
43 Rice Info Desk. Shelf
44 Soft/Stuffed Toys Info Desk. Shelf
45 Sub Committee on ISO 9000 Info Desk. Shelf
46 Symposium: Export Promotion of Minerals & Mineral Products Info Desk. Shelf
47 The Carpet Communication Pakistan Info Desk. Shelf
48 The Full Story Hand Loom Info Desk. Shelf
49 Threaolines Pakistan Info Desk. Shelf
50 Time Excellence Pakistan Info Desk. Shelf
51 Vegetable Info Desk. Shelf
52 Wires, Cables & Iron & Steel Ropes Info Desk. Shelf
53 Women Entrepreneurs in Pakistan Dir. Of Manu. & Exp. Info Desk. Shelf
54 Wooden Furniture Info Desk. Shelf
55 Writing Instruments Info Desk. Shelf


The Export Promotion Bureau has set up a help desk in the office. This idea has recently been
realized and keeping a close look on the problems and queries of the exporter the EPB realized
the need to open help desk at its offices. The person sitting there is a highly qualified and
experienced and expert in his field. The basic objective to establish help desk is to provide the
exporter timely information and help and assist them in making decision in export related arena.
Following are the functions that are normally provided by the help desk to the exporter

· These helpful provide basic information about the exports, countries, and research data.
· The exporter are normally first entertained at the help disk with information that want to export
their products.
· It provides information and guidelines for the exporter and importer to get them registered with
the Export Promotion Bureau.
· It helps them in maintaining the documentation that is necessary in the export procedure.
· It gets brochures and publications from the interested exporters and sends them to their
embassies and foreign offices to promote those products.
· It also help exporter to help them in making decision relating to export, what to export, where
to export, how to export and to whom to export.
· There is a large database of computerized network that is connected with other offices and with
the Internet to get timely information.
· The informations are provided to the exporter and queries are answered within no time through
the mail or through telephone or fax.
· There is large collection of books in the library that are really helpful to the exporter.
· It provides the helpful information about the world demand of the commodities and potential
markets for the products of the exporters.


In addition to the above mentioned publications, EPB has produced documentaries/video films
on different products and industries of Pakistan. Following are the wells know video
films/documentaries produced by EPB.

(i) Video film on Handlooms.
(ii) EPB’s Documentaries on various products (leather & leather goods/garments, furniture and
(iii) EPB’s commercial spots on various products (Mango, Rice, Leather, Onyx, Sports Goods,
Textiles, Ready-made Garments, Handloom products, Engineering Goods, artificial & Real
Jewelry, Handicrafts, Carpets & Furniture).


EPB is carrying out extensive promotional activities in the print media. Several advertisements
and press notes are released in the leading national and international newspapers/periodicals.

Electronic Media

On the close circuit system installed at airports and railway stations etc, EPB is showing
documentaries. Jinnah Terminal Karachi is one of these places. Weekly Radio program “Batain
Bramdat Ki” is also broadcast regularly. TV commercials envisaging export messages are also
released. Information technology (Internet/E-Commerce) is also being applied to promote the

EPB Website

Export Promotion Bureau helps the exporter in making export. It tries its best to make them
uptodate with information about exports. For this purpose the organization adopt different
methods that are mentioned above. One of them is the export promotion bureau website that is
updated. The website contains informative date and a guidelines for the export procedures.
Moreover the export procedures, delegation news, fairs and exhibition, and other export related
news are available on the website.
There is a guidebook of trade policy on the Internet. Moreover there is a database of international
buyers and sellers on a wide range of variety.
It has e-mail facilities and fax on the net. Information is provided timely and efficiently to the

ISO 9000 Quality Management Systems:

Pakistan has been endeavoring to create awareness of Quality Control among its business
community. To understand the requirements of ISO 9000 quality management systems and the
need to manufacture quality products, which can compete in the world, continuous market efforts
and proper training is essential at all levels, without which, export targets set by the government
of Pakistan cannot be achieved. Therefore, Export Promotion Bureau together with Pakistan
Institute of Quality Control and other organization, has embark upon a comprehensive program
of educating people on ISO 9000- quality control management system.


To encourage manufacturers/exporters to obtain ISO-9000/14000 certification for sustained
export growth in future, Ministry of Commerce, Government of Pakistan announced in the Trade
Policy for the year 1997-98, an incentive of Rs. 150000/- (one lake and fifty thousands) for
manufacturers/exporters who would obtain ISO-9000/14000 certification till 31st Dec, 2000. The
incentive has been reduced from Rs. 150,000/- to Rs. 100,000/- with effect from 01.01.2001.

The role a Pakistani Trade Officer is to increase the foreign exchange earning of Pakistan
through promoting and facilitating the expansion of Pakistan`s exports His principal
responsibilities are therefore:
· To enhance Pakistan`s reputation as reliable trading partner
· To develop favourable commercial relations between trading enterprises in Pakistan and his
post territory
· To ensure that relevant Government bodies, commercial organisations and the Pakistani export
community have up-to-date knowledge of trading conditions and export prospects and
opportunities in his territory
Through fulfilment of this role, the Trade officer will not only contribute to his Government`s
economic and trade related objectives, but also assist in the strengthening of Pakistan`s general
bilateral relations with the countries of his Post territory.
II. Functions:
To perform this role effectively, the trade officer will be expected to:
· Seek out and create opportunities for Pakistan`s exportable goods and service and to ensure that
concerned parties in Pakistan are quickly informed of the opportunities identified;
· Assist Pakistan exporters to exploit these opportunities fully through the provision of advice
and support to specific export initiatives;
· To contribute, through a systemic reporting programme, to the evolution of Pakistan`s trade
policy and export strategy.
· The collection and interpretation of economic, commercial and trade information relevant to
trade policy and export strategy and the dissemination of such information to appropriate
organisation and enterprises in Pakistan;
· The processing of trade inquiries originating in the both Pakistan and post territory and the
provision of assistance to the private sector, and to semi-government export enterprises in
Pakistan, in establishing contacts in the post territory in appointing local agents/representative
and in following up export opportunities and prospects;
· The organisation of a suitable publicity programme to support Pakistan`s export drive and the
provision of advice and assistance in Pakistanis participation in fairs and exhibitions;
· Through representational activities, the maintenance of cordial relations with government
officials and members of the business community of the post territory;
· The provision of assistance in the settlement of trade dispute;
· The provision of assistance in the procurement of imported supplies.
· In addition, the Trade Officer should seek to attract foreign investment into Pakistan, to
encourage Pakistan`s participation in major project abroad, and to stimulate tourist interest in

· Negotiate and sign sales and purchase contracts on behalf of Government and Semi-government
· Participate in bilateral and multilateral meeting convened in the post territory;
· Provide assistance on the securing and implementation of economic assistance programme.
Trade Officer may, in addition, be responsible for servicing Pakistani residents in post territory
with respect to provisions for imports into Pakistan against their foreign exchange earning under
the Gift Scheme and the Baggage Scheme. For this activity he should be guided by instructions
issued by the Central Board of Revenue, as amended from time to time.
The Trade Officer may also be requested by Pakistan Customs, on an adhoc basis, to verify cost
evaluations, as declared by Pakistani importers of goods being imported into Pakistan from the
post territory.
Institutions in Pakistan by EPB:

EPB has established a number of training institutions in the country in order to generate skilled
labour and workers through the export skill development council. This step has been taken
enhance the productivity and chiefly the quality of our products to increase their competitiveness
in the international market. Export Promotion Bureau initiates the establishment of training
institutes for specific industries involving relevant trade associations. EPB finances these
institutions through the Export Development Fund. These institutions arrangements has been
worked out to ensure that institutuion are managed on professional lines while remaining
responsive to the needs of the trade and industry, especially the export sector, and also have
access to required resources. You can contact these institution directly for your manpowed needs
as the student graduating from these institutions have been trained keeping in view, the needs of
the industry. Each new institution is run by EPB for a maximum of two years and is handed over
to the association of the industry it belongs to. Up to now, EPB has established the following
institutions in the province of Punjab:
1. Facility-Cum-Training Center For Leather, Kasur.
(Tanneries Association, Dingrah, Kasur) Leather
2. Kasur Tanneries Pllution Control Project.
(Tanneries Association Dingarh, D.C; Kasur Leather
3. Ready –Made Garments & Technical Training Institute, Lahore. (Pakistan Ready-Made
Garments Mfg. & Exporters Association)
4. Eco-Testing Laboratory, Lahore Garments
5. Pakistan School Of Fashion Desingn, Lahore.
By (Export Promotion Bureau, Lahore) Garments
6. Pakistan Knitwear Institute, Lahore
(Pakistan Knitwear And Sweater Exporter,Ass.) Garments
7. Carpet Institute, Lahore
(Pakistan Carpet Manufacturers & Exporters Ass) Carpets
8. Child Care Foundation, Lahore Carpets
9. Cast Metal Technology Center, Lahore.
(Ass Pakistan Steel Milers Association) Engineering
10. Institute Of Jewellery Development, Lahore Jewellery

Pakistan School of Fashion Design (PSFD), Lahore was conceived by the Bureau as an
institution to produce fashion designers for the local garment and apparel industry. The School
started to function in 1994 at 2-Sundar Das Road, Lahore with a Principal, appointed by the
Bureau on adhoc basis. The classes started on 7th January, 1995. Being the initiator and
financier, the Bureau ran the institution directly.

Although the School has grown every year, both in terms of number of students and the variety
of its courses, the administrative arrangements for running the school has not been satisfactory.

The subjects being taught at Pakistan School of Fashion Design are
(i) The formation of Patterns in 3 dimensions,
(ii) Machine & Hand-sewing,
(iii) Pattern making
(iv) Fashion Drawing.
(v) History of Fashion.
(vi) Textile Design
(vii) History of Art
(viii) French
(ix) English
(x) Design Theory
(xi) Computer Aided Design
(xii) Accessory Design which has been introduced recently.
These subjects are taught over four years to students admitted after a 2nd division in F.A / F.SC.
and A levels. The School being a professional institution encourages the mature Students and at
present there are many Students in Pakistan School of Fashion Design with a B.A. degree,
including M.A. & MBAs.
School is being recognized as a premier institution in the field of fashion design in the country.
The School is the prefect platform to launch the new image of Pakistani exports.

A fashion Cell was established in the EPB in 1994. The aim is to provide following facilities to
the clothing trade.
(i) Guidance on where to source high fashion manufacturing equipment.
(ii) News on innovative trends and designs.
(iii) A well equipped facility for reference on fashion forecasts.
(iv) Technical advice.
(v) Fashion forecasts.

Ministry of Commerce, Government of Pakistan, announces in the mid-year, the Trade Policy of
Pakistan, which is generally for a period of one fiscal year. During the year, if the Government
feels it needs to bring some changes in its Trade Policy, S.R.O`s containing these changes are
notified in the official gazette.
In the area of trade and investment we sought out advice on policy preferences with the aim of
enabling the business community of Pakistan to unleash all its energies to secure for Pakistan its
rightful place in world Trade.
Trade Policy normally consists of:
(i) Export policy
(ii) Export Policy and Procedure Order
(iii) Import Trade and Procedure Order
Following are some kind of principles as are used in order to make the trade policy of the
(i) Consistency of policies. Indeed, many businessmen reminded me that they could perhaps live
with bad policies but not with shifting policies.
(ii) Market driven policies, with only a minimal governmental intervention to balance the
imperatives of equity and social justice.
(iii) Liberalization, deregulation and reducing the cost of doing business in Pakistan.
(iv) Stable macro-economic framework, especially in terms of inflation, interest rates, and
exchange rate.
(v) a vision, a road map, developed in concert with the stakeholders, for our trade and industrial
Some important characteristics and targets and changes that have been done by the government
in the current year trade policy of the year 2002-2003 are as follows.
§ Ministry of Commerce had developed five-year roadmaps (‘Vision’) in respect of four major
product groups i.e. Textile, Leather, Horticulture and Rice. We have now undertaken preparation
of road maps for the Engineering and Chemical sectors.
§ Special campaign to focus on Africa, where our current export levels do not match the growing
potential of the African markets. Through a combination of market access enhancement
initiatives, strong promotional measures, and supplier credit arrangements we propose to
increase the share of African markets in our exports by at least 20%. Sufficient funds for this
special effort have been earmarked.
§ Government is designing to invest in the scheme of warehousing abroad in order to induce
greater exporter interest in this important marketing tool.
§ Small and Medium enterprises, still require a lot of work. Ministry of Commerce’s own
capacity constraints have inhibited progress in this area. Government is trying to work for the
Small and Medium Enterprises and to boot them to come forward for export development.
§ Government is expecting a trade deficit to shrink further to US$ 0.7 billion. Imports are
projected to grow by 7.4% to $ 11.1 billion.
§ Government is looking at total exports of $ 10.347 billion, a 13.4% increase over the preceding
year. Besides the specific export enhancement measures that greater market access, spin-off from
investments in textile sector, and a continued inventory build-up in Europe and USA are the
supporting factors. Under-lying assumptions are that the exchange rate will remain stable to
favorable, that there will be a greater access to export finance, that the international raw cotton
prices will remain close to current levels, and that the trade environment will not be faced with
any unforeseen challenges.
§ Current year the government is trying to build National Export Strategy on the following
o·       Sound Macro-Economic framework
o·       Capacity development of exporting enterprises
o·       Enhanced market access
o·       Reduced anti-export bias
o·       Improved social & physical infrastructure
o·       Deregulation and ‘decongestion’
o·       Lowered barriers to fresh entry (new generation of exporters)
§ Duty and Taxes Remission for Export (DTRE) Rules 2001 are being revised to make them
more user friendly. It is also intended to consult with CBR to find a way to allow duty draw back
and sales tax refund on domestically procured tax-paid inputs in sectors where there is an
unavoidable reliance on substantial domestic procurement.
§ Participation in Trade Fairs and exhibitions is an important promotional tool. However, it is
expensive and requires considerable administrative and logistical resources. While we will
continue to strengthen our participation in trade fairs - last year we sponsored participation in 51
international trade fairs - there are certain categories of products (e.g. stationary products, wood
and glass products, handicrafts) where the returns are not commensurate with the expense. We
propose to introduce the concept of virtual exhibitions for such products. This concept entails
promotion through electronic means and use of satellite telephony.
§ It is proposed to bring about reasonable parity in the concessions available to the Export
Processing Zone and Export oriented units, defined as enterprises that have exported, on an
average, 60% of their production during the last three years. Cabinet has set up an inter-
ministerial committee to consider maximum possible facilities to Export Oriented Units.
§ Freight subsidy of 25% for ‘new products’ i.e. products whose annual export has not been
more than $ 5 million in any one of the last three years. Similar freight subsidy will be provided
for new markets i.e. Latin America, Africa, East Europe and Oceania; or for any country where
Pakistan’s total exports have averaged less than $ 10 million in the last three years and the rate of
presumptive income tax is 0.75% on these new products.
§ Export Processing Zones are important export promotional tools. This will enable exporters to
have duty-free input goods available to them on a ‘Just In Time’ basis. Also, greater re-exports
will take place, especially through the ‘consolidation business’. Cabinet has also set up an inter-
ministerial committee to examine the tax regime available to the KEPZ, as also restricting
custom duties to imported inputs only.
§ The Cabinet has also approved, in principle, to make Gawadar a Free Trade Zone. Necessary
instruments in this regard are being prepared.
§ The compulsory requirement for an exporter or importer to register himself with the EPB
before he can undertake trading activities is being done away with.
§ It has been decided to enhance the monetary limit on export of samples to $ 10,000 from the
existing $ 5,000.
§ Export of petroleum products is currently limited to public sector agencies. It has been decided
to remove this restriction and make petroleum products freely exportable.
§ It has been decided to do away with the restriction of minimum export price for Rice as
recommended by Rice Exporters Association. Pre-shipment quality check for Basmati Rice shall
continue in order to safeguard its image in international markets.
§ Currently bulk imports of Gold/Silver are controlled through licensing by Ministry of
Commerce, even though in such cases importer arranges for his own foreign exchange. Six
parties are currently licensed. It has been decided to do away with the licensing requirement and
allow import of gold/silver in bulk so long as the importer manages his own foreign exchange.
Normal duties and taxes will be applicable in the new trade policy.
§ Draft law for standardization of cotton has been prepared. This will not only help improve the
image of Pakistan Cotton in the world markets but also bring about a more sound basis for cotton
trading in Pakistan.
§ Fixation of duty-draw back rates, and their timely revision, has been a matter of concern for the
exporters. To fix duty-draw back rates on a professional basis government has set up, under the
CBR, the input-output co-efficient organization. In order to assist the exporters an inter-
ministerial committee to examine the feasibility of putting the input-output co-efficient
organization under the administrative control of EPB.
§ Currently Export Development Surcharge (EDS) is collected at the time of shipment. This
causes inconvenience to exporters, particularly when under/over shipments are involved. CBR is
being directed to collect EDS through the receiving banks upon remittance of export proceeds, as
is done in the case of export income tax.
During the course of international trade, commercial disputes between the exporters and the
importers may arise because of a variety of factors, ranging from non-payment of commission or
short supply and inferior quality of goods to non-shipment of the ordered goods or cancellation
of the order.
Such disputes between the two parties in an international trade contract can be resolved by
employing one of the following methods and means:
· Conciliation between the disputing parties through direct negotiations.
· Mediation.
· Litigation in a national court in either party`s country.
· Arbitration.
It is seen that the disputing parties generally fail to settle their dispute through direct
negotiations. Lawsuits are avoided because of costs, delays and other factors. To avoid expenses
of legal action or arbitration, the Export Promotion Bureau (EPB), in liaison with Pakistan`s
trade offices abroad, provides mediation services free of costs for amicable settlement of the
dispute arising out of export trade, if an exporter approaches it with a compliant against an
importer or vice versa.
The following procedure is adopted by the EPB to settle the trade disputes when an exporter
approaches it with his or her complaint against the buyer:
· The contract is examined to ascertain and substantiate the allegations by the terms and
conditions of the contract and a request is made to the importer for solving the dispute through
the EPB mediation.
· If the importer does not accept the request, the exporter is advised to resort to the method of
settlement as specified in the contract.
· If the contract does not specify any method of settling these disputes, the complainant is asked
to avail the arbitration facilities available with the International Chamber of Commerce (ICC) or
the local chamber of commerce or any other local or foreign arbitration institution.
· If, because of costs involved or some other consideration, the parties concerned are not willing
to refer the dispute to an arbitration tribunal, they are asked to authorise the EPB or the
Pakistan`s trade officers to arbitrate in the dispute. Both the parties are requested to submit in
writing that they will accept the decision of the arbitrator(s) as binding and final. If the exporter
does not accept the decision, the EPB can recommend cancellation of his or her export
Function of Commercial Courts
Commercial courts have been provided for in the Imports and Exports Control Act, 1950, which
empowers the Federal Government to establish as many Commercial Courts as it considers
necessary. In terms of powers vested in the Federal Governments two Commercial Courts, one
each at Lahore and Karachi, have been set up to adjudicate on trade disputes. The commercial
courts take cognisance of trade dispute on complaints in writing made by an officer of the Export
Promotion Bureau. The decision of the Commercial Courts is final and can not be questioned in
any courts of law.

The Information and Advisory Centre of the Export Promotion Bureau aims at micro-level
contact with buyers and sellers. It processes the enquiries received from importers abroad and
guides the local exporters accordingly. Enquires received directly from importers as well as from
Pakistan trade offices abroad are disseminated to exporters in Pakistan by the IAC through.
1- Global import/export statistics along-with comparisons with other markets.
2- A well organized library catalogued in sections containing trade directories and information
on products, export marketing, quality control, GSP, design, packing, customs tariff, trade fairs
& exhibitions, costing & pricing and statistics.
3- International and local periodicals/journals relating to export trade.
4- Photocopying, microfiche print-outs, computer printouts and diskette copying facilities.
5- Daily newspaper listings, faxes to trade associations.
6- Face to face counseling to resolve export problems.
7- Complete information about overseas export market.
8- A weekly “Export Information Bulletin” providing the latest foreign trade information &
9- Export training Courses for new exporters.
10- A Directory of Pakistani Exporters.
11- Computerized information on Exporters/Manufactures and Foreign Buyers.


The first thing the exporter has to do in conducting any export business is to find importers who
will buy your goods. There are many ways to find overseas buyers. Export Promotion Bureau
can assist the exporters in the following ways:
(1) Get in touch with the Information and advisory centre of Export Promotion Bureau whose
functions include introducing foreign buyers to Pakistani exporters.
(2) Export Promotion Bureau has a database of foreign importers that include the most updated
information gathered by trade Commercial Counsellors/Commercial
(3) EPB has also updated its database on exporters porfile within the country.
(4) Visit EPB`s Information and advisory Centre has a specialised international trade library
where references of company directories, yellow pages and trade journals from all over the world
are available.
(5) Sending offer letters on your products to the companies listed in such directories and journals
is one way to approach buyers.
(6) Visit foreign market, as a member of trade missions, and/or as an exhibitor in the trade fairs
and exhibitions.
(7) Get information from the Commercial section of foreign embassies or trade promotion
organisations stationed in Pakistan.
(8) Check the inquiry letter sent by foreign buyers to the local chamber of commerce offices.
The object of this fund is to assist by grants-in-aid the financing of projects relating to:
q Survey of foreign markets for specific Pakistani products and services.
q Designing of Pakistani products to meet the requirements of foreign markets.
q Development of foreign markets through opening offices abroad, publicity, participation in
exhibitions, sending of delegations and other measures.
q Dissemination of information relating to foreign markets amongst exporters through seminars,
publications, film shows etc.
q Extending of consultant marketing services to exporters, organizations and industries engaged
in exports.
q Promotion of marketing research organizations.
q Cooperation with international and national organization and agencies engaged in activities
relating to marketing of goods and services in foreign markets.
q Assistance to export marketing organization approved by the Export Promotion Bureau.
q Doing all such things as the Board of Administrators of the Fund may consider essential and
conductive to the attainment of any or all the objectives of the Fund mentioned above.
q Finance Training Institute for export oriented trading and industrial sectors.
q Subsidize delegations/sales missions/exhibitions and publicity abroad.
q Help in establishing the offices abroad of Federation Pakistan Chambers of Commerce &
Industry and exports associations and research & development activities, engaging consultants
Source of Funds
(i) Cess @ 0.25% of the export precedes
(ii) Receipts for services rendered to clients.
(iii) Donations and endowments.
(iv) Any other receipts declared legitimate contribution to the Fund by the Federal Government.


2001 2002
EXPORTS 3,025 3,478 15.00
IMPORTS 3,342 3,789 13.38
BALANCE (317) (311)
Trade balances
Upto September 2002

2001-2002 2002-2003
Total export 2.265 bn 2.581 bn
Balance 6.870 bn 7.819 bn
Total to achieve 9.135 bn 10.40 bn

These SRO’s Notifications Circular and different forms, with regard to exports are being issued
from time to time by the following organisations of Government of Pakistan:
(a) Ministry of Finance, Economic Affairs, Statistics and Revenue, Revenue Division
(b) Ministry of Commerce
(c) Centre Board of Revenue (CBR) (Revenue Division)
(d) State Bank of Pakistan
(e) Pakistan Custom and
(f) Export Promotion Bureau
Here are some of the important SRO’s that are issued by various departments to govern the trade.

1 417(I)2000 17-6-2000 Sales Tax Refund Rules, 2000
2 844(I)/98 23-7-1998 No Duty no Drawback Rules, 1998
3 843(I)/98 23-7-1998 Common Bonded Warehouse (Conventional) Rules, 1998
4 905(I)/98 12-8-1998 Duty Drawback Rules, 1998
5 583(I)/2000 12-8-2000 Exemption from payment of custom duties of Machinery and
Equipment by Fruit and vegetable exports
Facilities and incentives to the exporters

The primary objective of the organization is to promote export. So the organization and the
Government of the Pakistan is providing some kind of incentives and facilities to the exporter in
order to boost export. The government is providing loans on concessional rates. Moreover there
are some schemes introduced by the different institutions to finance the export. The finance is
available on or after the export for the production of the commodities or to make export.
Moreover there is tax exemptions to the exporters that attract to go for the export. There is sales
tax exemption to the exporter on the goods exporter and the refund is claimed by them on the
Following are some facilities as are provided to the exporter by the Government and by the

§ Export Financing @13% under the Export Finance Scheme of the State Bank of Pakistan.
§ Export financing under Foreign Currency Export Finance facility for purchase of Inputs
domestically or for imports of foreign inputs for exportable goods.
§ Export credit guarantees under Pakistan Export Finance Guarantee Agency
§ Income Tax @ 0.75% to 1.25% for different commodities under the Income Tax Ordinance
§ Facilities under Temporary Importation Scheme.
§ Facilities under Common Bonded Warehouse Scheme.
§ Facilities under the Pioneering Export Marketing & Product Upgradation Fund.
§ Payment of Commission to agents abroad.
§ Opening of offices abroad.
§ Protocol Passes to leading exporters for access to lounges at National Airports etc.

To maximize the exports various schemes of financing has been started by the financial
institutions. These institutions works closely with the Export Promotion Bureau. Maximization
of exports remains a cardinal objective of the country’s economic policy. Though no special
institution has been established for the exclusive of financing exports almost all commercial
banks take active part in this field. The state bank attached the highest importance to export
financing and seeks to ensure that adequate finance is available. One feature of foreign trade
financings is that, what is realization of Export proceeds? Time lag between the shipment of
goods and the realization of the export proceeds is longer than in the case of domestic trade.
However, it is noteworthy that, despite the longer time lag involved. Foreign trade financing is
not less safe for the banks as their credit covers specific shipment of goods and they have the
necessary documents in their possession giving them the title to the goods. Foreign trades
financing is what is a self-liquidating character.
The state bank has been providing liberal refinance facilities for exports. Special rediscounting
facilities have been:
What are non-traditional exports? Provided for cotton. While banking system in Pakistan has
provided adequate finance for traditional exports, it has not kept pace with the demand for credit
from newly emerging exports. In recent years, a number of nontraditional exports have emerged
and their aggregate contribution to foreign exchange earnings has become substantial. Realizing
that the small exporters do not enjoy the confidence and trust of the bankers and that the export
market of non-traditional items is highly competitive, the state bank has introduced a special
financial scheme for non-traditional exports. One of he basic problems is to tie up the problem of
export credit with the arrangements for guarantees and insurance. Under the scheme, non-
traditional exports have been defined as well commodities and goods except cotton, cotton
textiles, cotton yarn, cotton waste, wool, rice, hides and skins, leather, sports goods, surgical
instruments, and cement.

So different schemes has been launched by the institution to finance exports. They have different
requirements and different modes of financing. Moreover the government has given the tax
relaxation to the exporter in order to make export. The exports are exempt from the sales tax and
some other concessions are given in the taxes.

Import and export Registration

The import and export registration is done by the EPB. The importance of the registration is
declared from the fact that according to the Governmental rules no one can export anything to
the others without getting with registered by EPB.
This is the procedure used in import and export registration.
How to get Export & Import Registration.

q Export & Import Registration is granted by the export promotion bureau, head office and by all
its regional and sub regional offices. The applicant(s)/firm(s)company is required to apply for
registration as an importer or an exporter through banks to the offices of E.P.B. on specified
application form (appendix A) vied clause 2.1 of SRO 898(I)/99 dated 4th August 1999
regarding import and export procedure: -

q Application forms are available with the EPB offices and are supplied to the applicants free of
charge. Photocopy of application form is also acceptable by EPB.

q Every importer and exporter applying for registration or renewal of registration shall pay fees
as follows: -

i) Import Registration fee Rs. 1530/-. This includes RS. 1000/- as registration fee to be paid once
on registration. Rs. 500/- as renewal fee for five years @ 100/- per annum including the year in
which the registration is effected Rs. 30/- as cost of category passbook.

ii) Export registration fee Rs. 1500/-. This includes Rs. 100/- as registration fee to be paid once
on registration. Rs. 500/- as renewal fee for five years @ Rs. 100/- per annum including the year
in which the registration is affected.

In case the applicant desires to obtain both import and export registration the total fee shall be
Rs. 3030/-

Actually in the current year the Exporter and Importer registration has been abolished and this
restriction has been deleted and now they does not need to get them registered with the


The Generalised System of Preferences (GSP), is a system where-by preferential treatment by
way of a reduced or duty free tariff rate is granted by developed countries known as preference
giving or donor countries, to eligible products imported from the developing countries
It is believed that the main objectives of Generalised System of Preferences will be met by the
ways given below:
(a) To increase the export earnings of the preference receiving countries;
(b) To promote their industrialisation; and
(c) To accelerate their role of economic growth.

Export under GSP Scheme

· If an exporter wishes to benefit from Generalised System of Preferences he has to establish
classification of his products within the Customs Tariff Schedule of the country where he has an
export interest.
· When the exporter becomes ascertained that his products are eligible for GSP, he should
calculated the preferential margin of his product which will enjoy preferential treatment in a
particular market, so that he can calculate the prices for offering to the importer.
· The exporter must determine if his product(s) is subject to any quantitative lamination.
· The exporter must determine if his product(s) is subject to any quantitative lamination.
· The application for GSP treatment is supported by appropriate documentary evidence regarding
origin and details of the consignment of the products.
· The more informations can be obtained about GSP from Export Promotion Bureau.

As the EPB is a governmental body and the main objective is the promotion and facilitation of
the exporters to boost exports. It has established a large network in the country and a number of
branches here and internationally to support and facilitate the exports. These offices are provided
with qualified staff and facilities to equip them and to enable them to work for the best of the
organization. However there are some problems in the local branches. Actually the training and
research department is in the head office, Karachi. The main publication and research work is
there. Because we have done training in the branch so here was not training programme
structured. There is no such department as to train the students and the new people that come
here. But even though those people have cooperated with us and try their best to help us in
understanding the procedures and policies of the organization and to give us the depth of the
research and experience of the employees.
Actually they have established a help desk there in the Bureau supported with a big library
facilitated with thousands of books, magazines, research reports, periodicals and newspapers.
Moreover the Internet facility is there that is linked with the head offices. The communication
has become easy due to the use of the information technology. Moreover the informations are
processed and queries are answered by the Deputy Director, Ikram Ullah, a cooperative and
qualified person with experience present there to answer all types of queries.
People come here for getting information about the export procedures and policies as are adopted
by the Government. Moreover some new businessmen come here to get information to make
their business internationalize. They come with some queries as what are the markets for their
products? What are the methods and procedures they should have to use in order to introduce
their product in the international market? What are the methods to introduce themselves there
and some other export related problems.
Actually as I have mentioned that there is no structured training programme and no department
for the training so we have to work there for ourselves. Actually there is departmentalization in
the organization in Lahore office. The departments are finance, administration, promotional,
legal/registration and further divided in segments.
They have also made a classification according to product wise. The products are defined and
they have made incharge of one Assistant Director the head of that product to promote and to
make a research and deal with that product. That person is responsible for that product. He does
every thing and manages the whole procedure for those products. He promotes that product at its
own and maintains relationship with the product related persons. The main benefit of that
classification is that we can evaluate the performance of that person. Moreover there are some
person who have not been assigned any product but they are assigned some other work as
administration, legal, finance, exhibition, delegation, registration of the exporters and importers
and accounts.

As I have mentioned that there is no structured training system. The Deputy Director, Mr. Ikram
Ullah is responsible for the training programme. He manages the training procedure and
moreover deals with the daily administrative problems and queries.
The training programme in the organization was managed by the administration department.
They have divided days and two or three days were given to one director who was responsible
for that particular product. So we were asked to work with that person for that time in the form of
group. We were eight students in the group. The person sitting there briefs us about the working
of that department and then tells us about his work. He talks about his experiences and his
particular research and experience in that product. He tells the problems and drawbacks of that
products and the performance in export. The important information was provided about those
products exports and their due share in the export. More than one product was also dealt by one
person. for example the agricultural Director deal with every commodity except two or three
products as rice or cotton etc.
So we visited those directors and found information about the working of the departments the
responsibility of that person, research for that particular product and export related issues.
Moreover the arranging of the trade delegations, fairs, exhibitions was the responsible for those
particular products.
So in that period we visited about all the directors working there in this departments and worked
out information and research data on those prdocuts.
So I will give the short introduction of that particular director in my training programme and his
introduction in relation to that product. Then I will mention some problems, drawbacks, and
markets and competition of that product and the steps taken by the department in that respect.

Actually one thing I would like to mention here that the promotional measures taken for the
boosting of the products is the responsibility of the incharge of that particular product. He
arranges at its own to promote it. For example the Assistant Director of Woman Enterprises
works at its own to contact with the lady entrepreneurs and encourages them to come forward in
the field of the export. To make a contact she makes advertisement at its own and deals with

Functions of departments/directors
As in EPB office Lahore, departments are exist but all the working is being done under the
respective directors. So one can only observe the working of directors against departments.
Director (Mr. Waheed Raza Bhatti)
Mr. Waheed Raza is the director who deals with administration, human resource management at
Lahore office (under grade 12) and finance affairs at Export Promotion Bureau Lahore. He deals
in all the matters …
· Budgeting for office.
· ACRs of all the subordinates
· Payments
· Budgeting
· Transfer of employees within Export Promotion Bureau Lahore
· Planning for improvements
· Repairing of the building, vehicles etc.
Among all the functions of administration director, Budgeting is worth mentioning in some
details. Budget is prepared by the said director and is send to the ministry Islamabad for
approval. This is a totally separate budget from that of H.Q Karachi as it has no link with it.
Ministary gives approval as it is or after making amendments.

EDF (Export Development Fund)
Federal Government provides this fund separately for the development of exports. Export
Promotion Bureau can utilize this fund to meet the budget deficit.

EMDF (Export Marketing & Development Fund)
The source of this fund is Cess that is levied on the exports. Its value is 0.25% of the value of
exports. This fund is totally at the disposal of Export Promotion Bureau as it can spend it where
is finds necessary.
Mr. Waheed Raza is also admin director, so he control all the routine activities in office like
Office maintenance, Office transportation control,
Distribution of salaries, Performance appraisal.

Director (Mr. Sarfraz Ahmad)
Registration as exporter/importer: To become an exporter or importer of any commodity, one is
required to get registration of his company/firm with Export Promotion Bureau (EPB) as
exporter/importer. EPB gives registration certificate within 24 hours provided that the required
documents for the purpose are attached properly with duly filled prescribed forms that are
available at EPB offices. Export Promotion Bureau Lahore has made a separate section of
registration at its offices at Garden Town as I have mentioned in my internship report the
procedure for the export and import registration in the separate head so it is not necessary to
write the details for the requirements of the registration.
Director (Asaf Ghfoor)
Delegation and Exhibition.
One of the most important functions of Export Promotion Bureau is to promote Pakistani
products abroad for the purpose of exports. Export Promotion Bureau adopts a number of
strategies for this purpose. The most common and successful promotional programmes adopted
by the Export Promotion Bureau are as follows:
1. Seminars
2. Regular seminars
3. Two-day seminar on Basics of Exports
4. Delegations
5. Exhibitions
6. Participation In Trade Fairs And Shows
7. Local Exhibitions
As I have mentioned in the separate head all the above tools to promote the exports so here it is
not necessary to mention in detail.
Deputy Director (Dr. Nazim Latif)
Assistant Director (Saira Imdad)
Textile & Related products
Dr. Nazim with his department is responsible for textile quota management. As the quota will be
eliminated on 2005, by WTO, but till then all the , especially, developing countries have to face
this quota. In TQM the major functions of the department is

§ Arrange quota for Pakistani exporter
§ Auction of quota in Pakistan
§ Selection of reliable exporter for quota with collaboration of other departments of EPB.

Domestic conditions in textile.
For Pakistan, textile plays a crucial role in the economy excluding synthetic in 1998 its
contribution to the industrial production was 20% and its share to the total exports of the country
was more than 60%. The textile industry is mostly concentrated on spinning sector.
Due to these reasons Pakistan’s share in export of textile in world is only 2%. Pakistan is not
ready for the year 2005 when the WTO agreement is going to be implemented. One of the weak
areas of our industry is lack of skilled labor, poor marketing abilities and lack of application of
TQM (total quality mgt.). This is one of the reasons that Pakistan is under utilizing its quota of
woven shirts in EU countries. This is one of the weak areas of our industry that we have utilized
only 32.28 % and 21.23 % of the above said quota in the year 1999 and 2000 respectively.
Pakistan’s major textile related products
Ready Made Garments, Hosiery Knitwear, Bed wear, Cotton Fabrics, Soft/Stuffed Toys, Cotton-
Bags, erry-Towel.

Deputy Director (Rana Shahzad Ahmad)
Product: Fruits and vegetables

At present, Pakistan has significant portion in world market of fruits and vegetables with respect
to Pakistan’s other commodities. yet our exports in this sector are meager regarding to our
competitors. However, the situation is improving with the passage of time and we are making
head in this sector. Export Promotion Bureau is playing its due role properly to boost the export
of fruits & vegetables. Export Promotion Bureau frequently holds seminars and exhibition both
with in the country fruits are being exported from the country(listed according the volume of
a) Citrus especially kinow
b) Mangoes
c) Apples
d) Dates
Among Vegetables following are being exported (again listed according the volume of export)
a) Potato
b) Onion
c) Radish
Problems in Exporting Fruit &Vegetables
1. Lack of basic infrastructure
2. Lack of knowledge pre harvest & post harvest techniques
3. Tough price-competition in international market

Recommendations by Export Promotion Bureau
§ Farmers should be provided sound knowledge as well as financial support for the adoption of
pre harvest & post harvest techniques washing.
§ Grading of the products should be done.
§ Vapor Treatment plants should be imported and installed to enhance export.
§ Vexing techniques be adopted for the export of citrus fruits
§ Storage facilities at airports should be provided.
§ Subsidiary of 25% on freights charges (by PIA) should be restored that has been abounded this
year. Our major competitor India is giving 50% subsidiary on freight charges.

Deputy Director (Dr. Javed Akhtar)
Products: Pharmaceutical & chemicals

Dr. Javid Akhtar has worked on pharmaceutical and chemicals in Pakistan as an export
commodity. He describe the two sides regarding pharmaceutical and chemical products that are:
i) Supply side
ii) Marketing side
In supply side the efforts are made to develop the supply chain of pharmaceuticals and
chemicals. For this purpose Export Promotion Bureau helps manufactures of pharmaceuticals to
resolve difficulties in importing raw material used for the manufacture of life saving drugs. All
this in done to ensure the availability of medicines in surplus (than local needs) for export
purpose According to Mr. Javid Akhtar 95% of raw material used in the production of medicines
is imported from other countries. India produces 95% raw within the country & is self reliant in
this sector. 75% of total production of medicines within the country is done by the local
manufacturer while the rest by multinationals.
Pakistani pharmaceuticals are being exported and Export Promotion Bureau is trying hard to
increase Pakistan’s share in the world market especially in the African countries that are market
for our pharmaceuticals. We cannot export medicines to developed countries like USA, Canada,
Saudi Arabia, UAE, etc because the export to these countries requires certification by FDA
(Food & Drug Agency of America) and to get this certification for our local manufactures is hard
task due to many factors like lengthy and expensive procedures of application, laboratory tests,
price and above all prejudice.

Export Promotion Bureau is trying to convince our local manufactures who produce quality
medicines to get FDA certification, as this will boost our exports in this sector by expanding the

Assistant Director (Madam Fozia Perveen Ch.)
Products: Precious, Semi-precious Stones & Jewelry.
Mines of precious and semi-precious stone are located in the Northern areas of Pakistan i.e.
Swat, Gilgit, Kashmir and Hunza valley.
Precious stones that are found here, are Saffaire, Ruby & Emerald Semi-precious stones found in
Pakistan are Peridot & Topaz. Peridot is mined in Gilgit at Daso and Topaz is found in Hunza
valley. Topaz that is found in Pakistan is of very good quality due to its unique pink colour. In
other countries it is created to make pink.
In international market stones are measured in carat, Its prices varies according to 4Cs that are
1. Colour
2. Clarity
3. Cent
4. Carat

Pakistan’s export of precious stones and semi-precious-stones is not up to the mark. We produce
the stones but our exports of finished stones are very meager. It is due to three main reasons:
(i) Blasting of mines is unscientifically due to outdated techniques and technology. So, the
natural beauty and good quality is affected badly.
(ii) It is not given industry status in Pakistan
(iii) Cutting and polishing facilities are not available in Pakistan.
(iv) Shortage of skilled artisans in also one of the reasons of poor performance of this sector.
India is at 2nd position in world export of gemstones while Thailand is at first position. India
produces the stones but in lesser quantity than Pakistan while Thailand’s production of raw
stones is almost nil. The reason of their good performance is technology and skill they have for
finishing these stones. From Pakistan, raw stones are smuggled to India about the worth o of 25
million dollars.
Export Promotion Bureau is not taking steps to increase the export of precious and semi-precious
stones. A Geosciences Laboratory has been established in Islamabad for testing the quality of the
stones. Actually Export Promotion Bureau persuaded the Govt. to established this laboratory, as
it was indispensable for increasing the quality stones export. Another positive step is the
establishment of Gemstone Institute in Peshawar. Up to now Rs. 49 million have been spend on
the project and it is still under construction.

These are some problems that our industry is facing in context of exports. These can be
summarized as below:
i) Design problem
ii) Standardization problems
iii) Most of the work is done manually
i) Self-consignment is the only way of exporting jewelry.

Product: Rice
i) Marketing (Have been discussed in detail in functions of Export Promotion Bureau section
ii) Regulatory: Before discussing regulatory functions of Export Promotion Bureau for the export
of Rice, let us first have a bird’s eye view on where we are standing in its world production and
trade as Rice has lion’s share in our total exports.
Rice Production in Pakistan
In the first table “World Paddy Production” it has been demonstrated that Pakistan stands at 12th
position in the Production of Rice in the World.
Our farmers produce two types of Rice:
§ Irri
§ Basmati Pakistan produces world’s best rice in the form of Basmati rice.
Regulatory Function of Export Promotion Bureau for Rice
Government of Pakistan has imposed strict rules and regulations for the export of rice due to
certain negative image of Pakistani rice exporters (dishonesty, lake of commitment, unhealthy
competition, under weighing etc etc). In 1999, cabinet of Nawaz Govt. decided to make quality
inspection committee for inspecting various matters about rice export. Under the regulations that
are imposed through quality review committee (QRC), rice exporters are bound to fulfill some
requirements before the shipment of their consignment. These are:
§ After getting registration with Export Promotion Bureau as exporter, the exporter of rice has to
get registration with REAP (Rice Exporters Association of Pakistan).
§ Each and every consignment is to be registered with Export Promotion Bureau for export.
§ Declaration is made according to contract with importer.
Responsibilities of QRC
Quality review committee consists of four members, two from Export Promotion Bureau and two
from REAP. DG Lahore is the head of the committee while the product officer is the active
member. It has four cells in each provincial head quarter i.e. Lahore, Karachi, Quetta, Peshawar.

Deputy Director (Mr. Faiz Rasool)
Product: Carpets A THING OF BEAUTY

Hand knotted carpets are not only the value for money, but they have also aesthetic value. The
proud owners appreciate their exquisite craftsmanship, enchanting patterns and mystical beauty.
Oriental rugs have fascinated and enchanted viewers and owners the world over for centuries.
Wool is the basic raw material for weaving hand-knotted carpets- better the wool the finer the
end product. Special advantage of wool is its flexibility, durability and beauty. These have codes
that are:
HS Code Product group
5701 Knotted carpets
5702 Woven carpets
5703 Tufted carpets
5704 Needle felt carpets
5705 Other carpets
Pakistan’s Export of Carpets
Our exports of carpets are reasonably good. During the financial year 2000-2001, we exported
carpets of 276 million dollars.
Competitions: India, Nepal, Iran, China, Afghanistan (Previously).
Markets: Scandinavian countries, Europe USA, Canada
From Pakistan Hand knotted exported most although woven and machine carpets are also
exported. The most concentrated areas of production are Gujranwala, Sheikhupura, Peshawar
and Multan. 80% export of carpets takes place from Lahore while 20% from Karachi.
Child-Labor Issue in Carpet Industry
During the last few years, child labor issue has affected Pakistan’s carpet export as our exports
declined to a great extent.
Child-labor exits actually due to many reasons like over population, poverty, low-wages and
above all, children make good knot due to their small soft hands and fingers.

Nevertheless, the situation has improved as Pakistan govt. and a number of international business
organizations and donor agencies have set up welfare programs and schools for children. Child-
labor issue is being monitored by international agencies and they are more satisfied with our
progress on the issue. Hence we are reviewing our exports in this sector.

Assistant Director (Mr. Nauman Aslam Sheikh)
Engineering Goods

Engineering goods manufacturers play very profound role in the growth of any industry. In
Pakistan this sector is not well established. EPB is planning to upgrade this sector. First to deal
conveniently this sector is contacted through its representative associations and these are:
1. Engineering Components & Machinery Manufacturers Association.
2. Pakistan Association of Automotive Parts & Accessories Manufacturers.
3. Ceramics and sanitary ware Manufacturers association.
4. Pakistan Electric Fan Manufacturers Association.
5. Pakistan Pottery Manufacturers Association.
6. All Pakistan Cycle Parts Vendors Association.
7. Pakistan Sanitary Fitting Manufacturers Association.
8. Heating, Ventilation, Air Conditioning and Refrigeration Society.
EPB is working hard on a program to know the problems of Engineering Sector and the task of
unearthing the problems of this sector, how these can be made competitive?, and what are the
mall practices which are needed to be changed. At present EPB is helping out these people in
getting the ISO certifications. Like EPB pays half of the charges on the part of any manufacture
who want to obtain ISO9000. In this way EPB is helping them out to make their worldwide
recognition easy.

Assistant Director (Mr. Shahzad Ahmad Rana)
Leather Goods

Leather is one of very important and rapidly growing exportable product of Pakistan. In last year
its exports were almost doubled than previous year i.e. US$ 25m,though these are good figures
but if we see Pakistan’s share in the world market of US$ 5.741that is only 1.5%. There are
about 200 tanneries plants of worth Rs.10m or more. The ISO 14002 that is for minimum health
standards in only certified to about 50 plants. These 50 plants have almost all the facilities
required including the recycling plants. The most dangerous component in the industrial waste of
leather waste is Chrome; it causes diseases like Lungs cancer.
Remain competitive in the world market
By the extinction of European live stock Pakistani exporters got a chance to access the European
market. Now the question is how to maintain today’s increasing exports even in the future? The
simple & comprehensive answer to this question is add value. For example in Pakistan there are
only 33 foot-ware plants.
competing in the world market with a variety of products can be counted on the
finger-tips. We do have quality leather processing plants.
Assistant director (Miss Nudrat Hussain Khan)
Women Entrepreneurs

The concept for the production of a Directory of women entrepreneur was developed originally
within the Export Promotion Bureau. On commissioning of this study, a new instrument was
developed and pretested, and comprehensive lists were prepared form existing sources. Data was
collected for the following three categories of women producers:
Ø Large-scale producers
Ø Medium-scale producers
Ø Small-scale producers
Based on the data collection instrument, a database was then developed and all the
women/businesses entered (approximately 2500 entries). This database will provide quick and
easy access to information on women entrepreneurs from a number of perspectives. These
perspectives include names, addresses, geographical location, product line, production unit,
production quantity and capacity, number and type of machinery.

Export Promotion Bureau is an institution of the government that was established with a primary
objective to boost exports and to facilitate the exporters with information and guidelines in
making exports. So it has tried to keep and maintain a large network of exporters and importer
and a cotact with buyers and seller in the intenational market and provides the exporter with
information that are helpful to them in making decision relating to export and help them with
funds and information to ease the export of the country. Our SWOT analysis will be in that
context. Although the differences and difficulties and opportunities has been discussed with all
the products, yet an overall SWOT analysis will be helpful in understanding the overall
opportunites and threats and its overall performance.

Ø Having information offices in all over the world, Export Promotion Bureau is playing an
important role in providing the customers and the exporters with timely information and
guideline that is helpful and make them ease in making decision that what country is best and
why and for what products.
Ø Proud able Human recourse is available with the EPB that helpful for the exporters.
Ø As the Export Promotion Bureau is the single organization that is working in the country to
promote exports on the governmental level. So the organization is financed by the government
funds. So it can dispose off funds like EDF (Export Development Funds) & EMDF(Export
Marketing Development Funds).
Ø The EPB is a governmental organization so it has a support from the Government in
implementing its policies to govern the export related problems.
Ø Information Technology is used in the offices here and a computerized database that is linked
with the internet for the timely information from one place to another place.
Ø High co-ordination among the departments is there in the organziation
Ø Export Promotion Bureau has established different training institutes in order to provide
skilled manpower to export based industry.
Ø Export Promotion Bureau maintains a large database of foreign buyers, which is very helpful
for the exporters.
Ø Export Promotion Bureau also maintains very sensitive statistical data, which is necessary to
enter in any foreign market.
Ø Implementation of online communication, as EPB has its own website and computerized
Ø Worldwide office network.
Ø Export Promotion Bureau website is very important and comprehensive source of information
for the exporters.
Ø Export Promotion Bureau receives full co-operation from the foreign embassies of Pakistan all
around the world.
Ø To maintain international quality standards the EPB provides financial and consultancy
services to the exporters.
Ø It has maintained a large database of foreign buyers that is helpful for the exporter in making
Ø A statistical research is made relating to export and to enter the market.
Ø Exporters are facilitated in getting visa for the joining of trade delegation and in participating
the trade fairs.
Ø International disputes are being settled with the help of EPB that gives legal help to the

Ø Less emphasis on training and development of export-related skills, all over the country e.g.
creation and encouragement of vendor industries down the line.
Ø Failure of creating an ‘export culture’ in Pakistan as a national priority.
Ø Political instability of Pakistan.
Ø The most of the employee’s qualification is not related to their job.
Ø Website is not updated properly.
Ø Employees are eager to do work, but they don’t know the business techniques, as they are not
from relevant field.
Ø The promotional activities of Export Promotion Bureau are not attractive enough to stimulate
the foreign buyers.
Ø EPB has not proper authority to implement its decision.
Ø Influenced by slow process of its own and other ministries.
Ø There is no reward for outstanding performance.
Ø There is not some kind of structured policies for the training of its own employees.
Ø Lack of professional commitment and commercial attitude;
Ø Lack of vision and sense of direction to face highly sensitive and fluid international markets;
Ø Preference of career orientation by EPB personnel over the target achievement.
Ø Too much of bureaucratization backed-up by highly centralized and rigid organizational
Ø Less participative policy – making and arbitrary decision making;
Ø Rampant inefficiency and corrupt practices.
Ø The promotional activites of theorganization are not very attractive so that to attract the
foreign buyers.
Ø Funds are being utilized sometimes on unproductive ways that contribute a problem for the
promotional activities.
Ø The decision making is done in a traditional manner and no stimulation to employees with low
Ø Flow of information between the other departments is very low. So it leads to the unnecessary
delays in the decision making process.
Ø Employee job satisfaction is very low because no incentives and rewards are given on
outstanding performance.

Ø Growing economic trend of the world.
Ø By improving quality of our products we can get our due share in the internationl markets.
Ø By focusing on the new markets as Africa and Middle East we can improve our exports.
Ø Helping the exporters with information and finance will improve our exports.
Ø Elimination of quota restriction.
Ø By improving competitiveness demand of Pakistani products in international market can be
Ø As quota restrictions are going to eliminate on 1st January, 2005 Pakistan will get free market
for its exports.
Ø Fast development and reforming in Pakistan, encourage the business inside Pakistan so it will
also increase the export.
Ø In globaliation we can improve our products export by entering the foreign markets with
quality and lower costs.
Ø Information technology is helping and has improved our production that will helpful in
reducing cost and improving quality.
Ø More expo centre should be established that will helpful in the promotion of exports.
Ø Reputation of Pakistan is not good in the international market. The quality standards are not
properly observed and cost is very high that is a threat for the exports.
Ø Taxation problems are there in Pakistan that discourages the export of the country.
Ø Downsizing trend is there in every organization so employee has a fear so they can not
contribute very much .
Ø Image of Pakistan being a Muslim country.
Ø Political instability of Pakistan’s trade members.
Ø Political instability hurts the performance of Export Promotion Bureau.
Ø Commitment of the employee is not there in the organization .
Ø Clashed of interest between Export Promotion Bureau and Central Board of Revenue hinder
Export Promotion Bureau’s policies.
Ø Due to recent trend of down sizing employees are feared.
Ø Sudden changes in the government policies spoil relationship between Export Promotion
Bureau and exporters.
Ø Increasing efficiency of Pakistan’s competitors.

The Export Promotion Bureau faces different challenges, as it find out the opportunities and
planning for the promotion of Pakistan’s export in all over the world. Although it has no
authority to force exporter in their work, but it try hard to train and educate them. The Bureau, as
mentioned earlier, was established in 1963 with the sole aim of providing the Pakistan export
community with update marketing information. Export Promotion Bureau’s vital role is to bring
about and appreciable increase in Pakistan’s experts and raise foreign exchange earnings by
providing encouragement to producers to organize themselves properly in order t achieve this
goal and to coordinate with different government agencies to formulate effective export policy.
Export Promotion Bureau is playing a role of platform, as it arranges the place where meeting of
exporters and foreign buyers are held. Prospective buyers who are unable to visit Pakistan but are
interested in business contacts with Pakistani counterparts can utilize Export Promotion Bureau’s
services through written enquiries.
The information center of Export Promotion Bureau is computer4ized to provide regular
dissemination of information to the export community. The information and Advisory Center
(IAC) of the Export Promotion Bureau has added news dimensions to its central catalyst role i.e.
of valuable contribution towards enriching the country’s image.
The IAC of Export Promotion Bureau maintains a comprehensive record on Pakistani exporters/
manufacturers and their product profiles. The information is useful when attending to foreign
enquiries by Pakistan’s Trade Offices abroad.
The Export Promotion Bureau produces a number of documentary films each year that are
distributed to our embassies for screening before potential buyers and at trade fairs abroad.

At present, there are over 40 trade offices abroad. The main purpose of these trade offices is to
boost Pakistani exports, which can be achieved through initiative on the part of our trade
officers. The Export Promotion Bureau maintains a close working relationship with all of them.

In order to introduce Pakistan’s exportable commodities to the world, Export Promotion Bureau
has been arranging permanent display of products within Pakistan and abroad to attract
prospective foreign buyers. One of the most important roles of Export Promotion Bureau is its
participation in international and national trade fairs. Annually Pakistan participates in not less
than fifty major international exhibitions.

Pakistan as a member of community of the developing nations has developed policies aimed at
exploiting the international market. Opting for a policy of export promotion instead of import
substitution entails a strong orientation towards overseas markets and a liberalization of the
domestic market for goods, services and capital, as well as of imports and exports.
It is aimed at increasing the competitiveness of Pakistani exporters. Quality consciousness and
efficient production techniques are being encouraged through massive investment in human
resource development. A large number of research and training institutes are being set up and
emphasis is being put on private sector development and market oriented policies.

The govt. is focusing on rapid industrialization through a series of investments in infrastructure
development such as energy and communications. At the same time, privatization and
denationalization program has been is going on and reforms in the tariff as well as exchange
control has been initiated.

In order to take the utmost advantage of these reforms with a view to maximizing the export
potential of Pakistan and take on the challenge of adapting our approach to one which takes into
account the rapidly changing world economic climate, the Export Promotion Bureau is
expanding its promotional activities and attempting to position the “Made in Pakistan” label as
hallmark of quality.

Considering the determination of the present policy makers of Pakistan in swiftly implementing
structural reforms, there is no reason why Pakistan should not become one of the newly
industrialized nations in the near future. The EPB is facing the challenges and try hard to make
Pakistan economy, a strong economy.

· The main problem with the organization is that the recruitment policy is not suitable with the
requirement of the job. The job requires a professional skill and devotion but the mostly people
appointed here are not professional.
· At presents the organization is using the internet and information technology to promote
exports and keep themselves with contact with the exporter and importeerr of the foreign
countries. But they did not respond in time and are not using that level of technology that
requires quick response and feed back from the organization.
· Export Promotion Bureau website should really present a good view of export related
information. There is a limited data on the website. The website should concentrate purely on the
export procedures and research reports to help the exporters in making decisions.
· The organization should arrange seminars and special lectures about export related procedures
and the promotional measure as is used by the organization to keep the people aware and to
encourage them to come forward. They seminars should be arranged in the universities and
colleges and these can also be arranged in the relevant associations.
· The organization should try to find ladies specially in the field of designing, Jewellery and
· The organization should work closely with the others Government departments to optimize the
resources to boost export.
· The organization should work with the associations and also encourage individual
entrepreneuer to come forward.
· The potential exporter should be encouraged but the main focus should be on quality and
· The adverting and multi channel adverting can be used in this respect. Moreover the
information technology can be used for this purpose. Our Finance Minister has also mentioned in
the speech that we should use Internet and information technology in order to promote our
products. The delegations, exhibitions, and trade fairs are an expensive way of promoting the
· The product director should be expert in their field and do the research work in that particular
field that should be really helpful the new comers and the existing exporter in making decisions.
· It should conduct researches on different sectors of Pakistan for current data.
· It should guide government properly and fearlessly in policy making.
· It should improve the relations with soft ware export sector, so that Pakistan get more benefits
with under record transaction.
· It should demand for increase in funds.

Export Promotion Bureau is a public sector organization financed by the Government and it
works on behalf of the Government. The organization does not publish its annual reports. So I
could not get the published data.
As financial analysis is the integral part of the internship report so I with the prior approval of
Miss. Sajida Nisar, analyzed the financial statements of the Sitara Textile Mills Ltd.

Haji Main Bashir Ahmed engraved the name of Sitara in Textile Industry just after the creation
of Pakistan in 19947 and it would not be wrong to saying that is a pioneer name in textile
industry. Its head office in Faisalabad and sub office in Karachi. Sitara holds more than 4.5
billion worth of assets. It holds a marksmanship over the home textile industry and product
quality matching according to the moods and demand requirements of the customers.
Sitara Textile is one of the largest manufacturer and leading exporter of textile goods in Pakistan,
exporting quality products throughout the world. With latest “Stat-of-the-art” machinery and
equipments, it is a complete printing, dying, finishing and the most modern stitching unit. The
unit is capable of producing high quality products with the capacity of 150 km of finished cloth
In the year 2000 the total turnover of Sitara Textile was 18 Million US Dollars and it exported
86% of its production and invested about 12 Million US Dollars. And in the year 2001 the total
turnover of the organization was 25 Million US Dollars and it exported 885 of its production and
it invested 13 Million of Us Dollars.
Objectives of Financial Analysis:
The particular objectives sought to the served by financial analysis determine the type of ratios
as well as the extent and depth of ratio analysis to be carried out to draw conclusions. Financial
analysis is carried out by;
Business Concern:
· For assessment of profitability of the business.
· For assessment of stability and financial strength of the business entity.
· Assessment of efficiency of resources utilization.
· Assessment of potentials of profitability.
· Evaluation of different management controls.
· Assessment of earnings and divided prospects.
· Growth in economic value of investments vis-à-vis risks undertaken.
Bankers/Creditors Concern:
· Assessment of the ability of the business to service its debt obligations.
· Debt coverage.
· Proper utilization of assets financed.
Government Concern:
· Evaluation of the economic contributions of the business entity.
· Determination of the entity’s financial strength to carry social and development programs.
Ratio Analysis of the Organization:
Liquidity Ratios:

Current Ratio:
Current Ratio is equal to current assets divided by current liabilities
Current Ratio = Current Assets
Current liabilities

For year 2001:

Current Ratio = 589,328,199
Current Ratio = 1.095

For Year 2000:

Current Ratio = 507,958,549
Current Ratio = 0.952

For Year 1999:

Current Ratio = 389,355,500

Current Ratio =0.926

Current ratio is a general and quick measured of liquidity of firm. It represents the margin of
safety or cushion available to the auditor. It is the index of the firm’s financial stability. It is also
an index of the financial solvency and index of strength of working capital.
In 1999 the current ratio is 0.926 I.e.0.926: 1 or 0.93 is available to pay the obligation of Rs. 1. It
shows that firm’s liquidity position is not strong enough. It cannot pay its short-term liabilities.
Firm’s financial position is not strong in 2001 also because current ratio for 2000 is 0.952: 1and
in 2001 the firm’s current ratio is good than the previous years. It has current ratio 1.095:1 that is
it has 1.095 Rs. To pay its liabilities of 1 Rs.
Acid Test (Quick) Ratio:
Acid Test (Quick) ratio is equal to Current assets less inventories divided by current liabilities.
Acid Test (Quick) Ratio = Current assets – (stock in trade+store, spare and loose tools)
Current liabilities
For Year 2001:

Acid Test Ratio = 589,328,199 – (231,419,567+38,592,084+610,207)
Acid Test Ratio =0.59
For Year 2000:

Acid Test Ratio = 507,958,549 –(227,262,149 + 81,599,084 + 284,436)
Acid Test Ratio =0 .37
For Year 1999:
Asset Test Ratio = 389,355,500-(138,268,151 + 87,082,695 + 94,789)
Asset Test Ratio =0.39

The quick asset test ratio is a very useful measuring of the liquidity position of the firm. It means
that firm’s ability to pay its short-term obligations or current liabilities immediately and is a
more rigorous test of liquidity than the current ratio.
In year 1999 the quick ratio was 0.39:1 It has asset of .39 to pay of its debts of Rs. 1. It does not
showing a good position. In 2000 quick ratio was 0.37:1 which also not showing a good position.
And in 2001 it was 0.59:1 which is also not good but it is better than the previous year. A low
liquidity ratio does not mean a bad liquidity as inventories are not absolutely non liquid.

Financial Leverage Ratios:
Debt to Equity Ratio:
Debt to equity ratio is equal to total debts divided by shareholder’s equity.
Debt to Equity ratio = *Total Debts
Shareholder’s equity

For Year 2001:
Debt to equity ratio = 693,442,307

Debt to equity to ratio = 7.45

For Year 2000:

Debt to equity ratio = 645,605,626
Debt to equity ratio = 8.54

For Year 1999:
Debt to Equity Ratio = 476,382,443
Debt to Equity Ratio =7.48
*Total debts = long term debts + short term debts

This ratio indicates the proprietor’s claims of owners and outsiders against the firm’s assets. The
purpose is to get an idea of the cushion available to outsiders and the liquidity of the firm. The
interpretation of the ratio depends upon the financial and business policy of the firm.
Debt to equity shows the relationship between the external equities or outside funds and internal
equities and shareholder’s funds. In year 1999 debt to equity ratio is 7.48:1 that is 885 is
financed by debts and the shareholders finance 12 %. Which shows that firm is more relying on
debts from outside and external sources. In year 200 it was 8.54:1 that is 87% is financed by
debts and 13 % is financed by shareholders and in year it was 7.45:1 that is 88.16 5 is financed
by debts and 11% is financed by shareholders.
Debt to equity ratio is very that is a negative point to management that the more of their business
is financed by debts this will increase their financial charges or interest expense and firm’s
liquidity and hence decreasing the company’s profit. The lower the ratio the higher the firm’s
financing that is provided by the shareholders and larger the creditors cushion (margin of
protection) in the extent of shrinkage of assets values or outright loss.
Debt to Total Asset Ratio:
Debt to Total Asset ratio is equal to total debts divided by total asset.

Debt to Total Asset Ratio = Total debts
Total asset
For Year 2001:

Debt to total asset ratio = 693,442,307
Debt to total asset ratio = 0.882
For Year 2000:

Debt to total asset ratio = 645,605,626
Debt to total asset ratio = 0.91

For Year 1999:
Debt to Total Asset Ratio = 476,382,443
Debt to Total Asset Ratio =0.882

It can be defined as how much sufficient our assets are in retrieving the total debts. We can
observe in our analysis that for every rupees one of assets we have 0 .882, 0.91 and 0.882 for
year 1999, 2000 and 2001 respectively. We can say that how much is that external financing in
our total assets. Now if the firm is liquidates the creditors will get 0.882, 0.91 and 0.882 and rest
will go to share holders.
Long Term Capitalization:
Long Term Capitalization is equal to long term debts divided by total capitalization.

Long Term Capitalization = Long Term Debts
*Total Capitalization

For Year 2001:
Long term capitalization = 155,610,149
Long term capitalization = 0.63

For Year 2000:

Long term capitalization = 112,235,552
Long term capitalization= 0.61

For Year 1999:
Long Term Capitalization =55,478,843
Long Term Capitalization = 0.46

*Total capitalization = long term debts + shareholder’s equity

Long-term capitalization can be defined as how the total financing of the company has taken
place. The long-term debts to total capitalization is increasing over the years because of external
liabilities have been increasing and the shareholder’s share in the capital has been increasing as
compared to external borrowing.

In year 1999 long-term debts to total capitalization was 0.46:1, in year 2000 it was 0.61:1 and it
was 0.63:1 in year 2001 that is showing increasing trend. Which is not good for the company.
Management should think to decrease this ratio. Because debts are more than shareholder’s
equity which is a negative point going in the way of management.
Coverage Ratios:
Interest Coverage Ratio:
Interest coverage ratio is equal to earning before interest and taxes divided by interest expense.
Interest Coverage Ratio = Earning Before Interest and Taxes
Interest expense
For Year 2001:

Interest coverage Ratio = 77,146,281

Interest Coverage Ratio = 1.802

For Year 2000:
Interest coverage Ratio = 66,165,458
Interest Coverage Ratio = 1.572

For Year 1999:
Interest Coverage ratio = 52,358,710
Interest Coverage ratio = 1.455
The interest coverage ratio is a very important from the lender point of view. It indicates the
number of times interest is covered by the profit available to pay interest charges. It is an index
of the financial strength of the enterprise. A high ratio assures the lender a regular and periodic
interest income. But weakness of the ratio may create some problems for the firm’s financial
manager in raising funds from the debts sources.
In 1999 the ratio is 1.455 times, in 2000, 1.572 and in 2001 it is 1.802. The ratio is quite high and
helps financial manager to raise funds from the debts sources.

Activity Ratios:
Receivable Turnover Ratio:
Receivable turnover ratio is equal to annual net credit sales divided by receivables.

Receivable Turnover Ratio = Annual Net credit Sales
For Year 2001:

Receivable Turnover Ratio = 1,410,695,105

Receivable Turnover Ratio = 18.47 times

For Year 2000:

Receivable Turnover Ratio = 1,059,598,567
Receivable Turnover Ratio = 21.37 times
For Year 1999:

Receivable turnover ratio = 715,986,259
Receivable turnover ratio =19.270 times

Receivable Turnover Ratio in Days:
Receivable Turnover Ratio in days is equal to days in year divided by receivable turnover ratio.

Receivable Turnover Ratio in Days = Days in year
Receivable turnover ratio

For Year 2001:
Receivable turnover ratio in days = 365
Receivable turnover ratio in days = 19.80 days

For Year 2000:
Receivable turnover ratio = 365

Receivable turnover ratio = 17.08 days

For year 1999:
Receivable turnover ratio in days = 365
Receivable turnover ratio in days = 18.941 days

This ratio measures the quality of debtors. A short collection period implies prepayment by
debtor’s .It reduces the chances of bad debts.
In year 1999 the average collection period is 18.941 days, in 2000 it was 17.08 days and in 2001
19.80 days. In year 1999 and 2000 the average collection period is quite good. And it is also
better in the year 2001; it shows the efficiency of the management that they are receiving their
receivables in a short period of time.
Payable Turnover Ratio:
Payable turnover ratio is equal to annul credit purchase divided by account payable.

Payable Turnover Ratio = *Annual credit Purchase
Account payable
For Year 2001:
Payable Turnover Ratio = 1,207,339,751

Payable Turnover Ratio =9.52 times

For Year 2000:

Payable Turnover Ratio = 988,764,465

Payable Turnover Ratio = 10.25 times

For Year 1999:

Payable turnover ratio = 601,572,391
Payable turnover ratio = 5.89 times

*Annual Credit Purchase ={Cost of Goods Sold + Ending Inventory} – Beginning Inventory
Working of Annual Net Credit Purchase:

For year 2001:

Annual net credit purchases = {1,203,182,333 + 231,419,567} – 227,262,149

Annual net credit purchases = 1,207,339,751
For Year 2000:

Annual net credit purchases = {899,770,467 + 227,262,149} – 138,268,151

Annual net credit purchases = 988,764,465

For Year 1999:

Annual Net credit purchases ={611,107,520 + 138,268,151} – 147,803,280

Annual credit purchases = 601,572,391
Payable Turnover Ratio in Days:

Payable turnover ratio in days is equal to days in year divided by payable turnover ratio.

Payable Turnover Ratio in Days = Days in year
Payable turnover ratio

For year 2001:

Payable Turnover Ratio in Days = 365
Payable Turnover Ratio in Days = 38.34 days

For Year 2000:

Payable Turnover Ratio in Days = 365
Payable Turnover Ratio in Days = 35.61 days

For Year 1999:

Payable turnover ratio in days = 365
Payable turnover ratio in days =61.97days

It shows or represents the no of days taken by the firm to pay to its debtors. If it is Higher than it
is beneficial for the management.
In year 1999 the payable turnover ratio was 61.97 days. In 2000 it is 35.61 days and in year 2001
it was 38.34 days. In year 1999 the ratio is quite good that it is taking the advantage of higher
payable turnover days but in year 1999 the company has suffer a loss this why it has high ratio.
In 2000 and 2001 it is quite low that company is not taking the advantage of credit facilities
allowed by the creditors.

Inventory Turnover Ratio:
Inventory Turnover Ratio is equal to Cost of Goods Sold divided by Inventory.

Inventory Turnover ratio = Cost of Goods Sold
For Year 2001:

Inventory Turnover Ratio = 1,203,182,333

Inventory Turnover Ratio = 5.199 times
For Year 2000:

Inventory Turnover Ratio = 899,770,467

Inventory Turnover Ratio =3.96 times

For Year 1999:

Inventory turnover ratio = 611,107,520
Inventory turnover ratio = 4.419 times
Inventory turn over ratio measures the velocity of conversion of stock into sales. In other words
how rapidly inventory is turning into receivables through sales.
In 1999-inventory turnover ratio was 4.419 times, in 2000 it was3.96 times and in 2001 it was
5.199 times. In 2000 the ratio was low because of over investment in inventories. In year 1999 it
is quite good and in 2001 it is even better that is 5.199 times in year, which is quite good, which
because of good management and polices.

Inventory Turnover Ratio in Days:
Inventory Turnover Ratio in Days is equal to inventory multiply by days in year and then divided
by cost of goods sold.

Inventory Turnover Ratio in days = Inventory * days in year
Cost of goods sold

For Year 2001:
Inventory turnover in days = 231,419,567 * 365

Inventory turnover in days = 70.20 days

For Year 2000:

Inventory turnover ratio in days = 227,262,149 * 365
Inventory turnover ratio in days = 92.19 days

For Year 1999:

Inventory turnover ratio in days = 138,268,151 * 365

Inventory turnover ratio in days = 82.584 days

Inventory turn over ratio measures the velocity of conversion of stock into sales. In other words
how rapidly inventory is turning into receivables through sales.
In 1999-inventory turnover ratio was 82.584 days times, in 2000 it was 92.19days times and in
2001 it was 70.20 days. In 2000 the ratio was low because of over investment in inventories. In
year 1999 it is quite good and in 2001 it is better that is 70.20 days in a year to move inventory
through sales, which is quite good, which because of good management and polices.
Operating cycle And Cash Cycle:
Operating Cycle:
Operating cycle measures the length of time from the commitment of cash for purchases until the
collection of receivable resulting from the sale of goods or services.

Operating Cycle = Inventory Turnover in days (ITD) + Receivable turnover in days (RTD)

For Year 2001:

Operating Cycle = 70.20 + 19.8

Operating Cycle = 90 days

For Year 2000:

Operating Cycle = 92.19 + 4.71

Operating Cycle =96.9 days

For Year 1999:
Operating Cycle = 82.584 + 18.941

Operating Cycle = 101.525 days

The length of time from the commitment of cash for purchase until the collection of receivables
resulting from the sale of goods or services.
Operating cycle of the year 1999 is 101.53 days, in year 2000 it was 76.9 days and in year 2001
it was 90 days. Company’s trend is going in the positive way. Un the year 2001 the operating
cycle of the company is good. This shows that the operating cycle of Sitara Textile Industries
Ltd. I.e. period of purchase to collection of receivables is better which is showing the efficiency
of the management. That is why inventory is regulating efficiently. A firm with very short
operating cycle can operate efficiently with a relative small amount of current assets and
relatively low current and acid test ratio. This firm is liquid in a dynamic sense that it can
produce products , sell it and collect cash for it. Relative short operating cycle would than also
reflects favorably to firm’s liquidity.
Cash Cycle:
Cash Cycle measures the length of time from the actual outlay of cash for purchases until the
collection of receivables resulting from the sale of goods and services.

Cash Cycle = Operating Cycle (ITD + RTD) - Payable turnover in days (PTD)

For Year 2001:

Cash Cycle = 90 days - 38.34 days

Cash Cycle = 51.66 days
For Year 2000:

Cash Cycle = 96.9 days - 35.61 days

Cash Cycle = 61.29 days

For Year 1999:

Cash Cycle =101.525 days - 61.97 days

Cash Cycle = 39.56 days

Cash cycle shows the length of time from the actual outflow of cash for purchases until the
collection of receivables resulting from sale of goods.
Cash Cycle of Sitara Textile Ltd. Is, in year 1999 it was 39.56 days, in year 2000 it was 61.29
days and in year 2001 it was 51.66 days. It indicates the period that starts from actual cash flow
of cash and actual inflow of cash. The lesser the days of completing the cash cycle the higher
will be the business activity and company efficiency.
It indicates the better circulation of cash. In 2001 the cash is better relative to 2000 and in year
1999 it is quite better relative to year 2000. Long cash cycle might be warning of excessive
receivables and inventory and would reflect negatively on the firm’s true liquidity. Short cash
cycle is sign of good management. This firm is quick to collect cash from sales once it pays for
purchases in year 1999 and 2001.
Total Asset (or Capital) Turnover Ratio:
Total asset turnover ratio is equal to net sales divided by total assets.
Total Asset Turnover Ratio = Net Sales
Total assets
For Year 2001:
Total Asset Turnover Ratio =1,410,695,105
Total Asset Turnover Ratio = 1.793 times
For Year 2000:
Total Asset Turnover Ratio = 1,059,598,567
Total Asset Turnover Ratio = 1.469 times

For Year 1999:
Total Asset Turnover Ratio = 715,986,259
Total Asset Turnover Ratio = 1.326 times
It shows that firm must manage its total assets efficiently and should generate maximum sale
through their proper utilization. As the ratio increases there is more chances of revenue generated
per rupees of total investment in assets. The firm ability to produce a large volume of sales from
a small total assets base is an important part of the firms over all performance in term of profits.
In the year 1999, 2000 and 2001 this ratio is 1.326, 1.469 and 1.793 respectively. In this firm is
showing that it is producing 1.236, 1.469 and 1.793 Rs. Of sales per rupee of investment in total
asset. So it is showing a very strong position in all the years. So the total asset turnover ratio is
very high for the year 1999, 2000 and 2001 respectively.
Profitability Ratios:

Profitability in Relation To Sales:

Gross Profit Margin:
Gross profit margin is equal to net sales less cost of goods sold (r gross profit) divided by net

Gross Profit Margin = Gross Profit
Net Sales

For Year 2001:

Gross profit margin = 207,512,772 * 100
Gross profit margin = 14.71 %
For Year 2000:

Gross profit margin = 159,828,100 * 100

Gross profit margin = 15.08 %

For Year 1999:

Gross Profit Margin =104,878,739 * 100
Gross Profit Margin =14.65 %


Gross profit margin or gross profit ratio is the ratio of gross profit to net sales expressed as
percentage. In 1999 company earned a gross profit of 14.65 %, in 2000 it increased to 15.08 %
and in 2001 it decreased to 14.71 %. The reason why the gross profit increase in 2000 that sales
volume increased by 47.99 % as compared to 1999 but cost of good decreased by 47.22%. It is
due to management efficiency and polices. In the 2001 the gross profit decrease because sales
volume increase by 33.13% relative to 2000 but also increase in cost of sales by 33.72 % relative
to 2000. Because in this period the rate of inflation and dollar fluctuation was high. The gross
profit is sufficient to recover all operating expenses and to build up reserve after paying all fixed
interest charges and all dividends.
Net Profit Margin:
Net Profit Margin is equal to net profit after tax divided by net sales.

Net Profit Margin = Net Profit (loss) after tax
Net Sales

For Year 2001:

Net Profit Margin = 17,549,411 * 100

Net Profit Margin = 1.24%

For Year 2000:

Net Profit Margin = 11,894,438 * 100

Net Profit Margin = 1.12 %
For Year 1999:

Net Profit (Loss) Margin = (1,017,790) * 100
Net Profit (Loss) Margin = (0.167) %


This used to show the overall profitability and hence it useful to the proprietors. Higher the ratio
better for the organization .It shows the firm’s ability to turn each rupee of sale into profit. In
1999 the net profit ratio or net profit (loss) margin was (0.167)%, which shows that firm has
suffered a loss in the year 1999. Because firm has lesser sales and higher cost of sales. In 2000
the net profit ratio is 1.12% and in 2001 the net profit ratio is 1.24 %. In 2000 net profit ratio
increased by 1.287 % relative to 1999 and increased by 0.12% in 2001 relative to 2000. Higher
ratio shows firm’s capacity to with stand adverse economic condition.

Profitability in Relation with Investment:

Return on Investment:
Return on Investment is equal to net profit after tax divided by total assets.

Return on Investment (ROI) = Net Profit (loss) after tax
Total Assets

For Year 2001:

Return on Investment (ROI) = 17,549,411 * 100

Return on Investment (ROI) = 2.23%

For Year 2000:

Return on Investment (ROI) = 11,894,438 * 100

Return on Investment (ROI) = 1.65%

For Year 1999:

Return on Investment (ROI) = (1,017,790) * 100
Return on Investment (ROI) = (0.189) %

Due Pont Approach and Return on Investment:
Earning Power = sales profitability * asset efficiency


Return on Investment (ROI) = Net Profit (loss) Margin * total asset turnover

For Year 2001:

Return on Investment (ROI) = 1.24 * 1.7930

Return on Investment (ROI) = 2.22 %

For Year 2000:

Return on Investment (ROI) = 1.12 * 1.469

Return on Investment (ROI) = 1.65 %

For Year 1999:

Return on Investment (ROI) = (0.165)* 1.326

Return on Investment (ROI) = (0.22 %)

Return on investment is an important ratio in measuring the trend of the organization and
thorough analysis of the company. Neither the net profit margin nor the total assets ratio it self
provides adequate measure for over all effectiveness. The net profit margin ignores the
utilization of assets and total asset turnover ratio ignores the profitability on sales. One variation
in Due Pont’s approach is to understanding the firm’s return on investment. The return on
investment ratio or earning power resolves this shortcoming. An improvement in the earning
power of the firm will result if the is increase in total asset turnover ratio, an increase in net profit
margin ratio or both.

In year 1999 the return on invest is negative because company suffered a loss in this year by
which net profit (loss) margin is negative so overall return on investment is negative. But in
years 2000 and 2002 there is a positive trend and there is increase in return on investment.
Return on investment increased because of the increase in both net profit margin and total asset
turnover ratio. This is showing the efficiency and effectiveness of the management. This shows
that both profitability on sales and utilization of sales are increased due to better management

Return on Equity:
Return on equity (ROE) compares net profit after taxes (preferred stock dividend if any) to the
equity that the shareholders have invested in the firm.
Return On Equity (ROE) = Net Profit (loss) After Taxes
Shareholders Equity

For Year 2001:

Return on Equity (ROE) = 17,549,411
Return On Equity (ROE) = 0.189 =0.189*100= 18.9%

For Year 2000:

Return On Equity (ROE) = 11,894,438
Return On Equity (ROE) =0.157 =0.157 * 100= 15.7%

For Year 1999:

Return On Equity (ROE) = (1,017,790)

Return On Equity (ROE) =(0.0169) = (0.016)* 100= (1.61)%

Due Pont’s Approach And Return On Equity (ROE):

This ratio tells us the earning power on shareholder’s book value investment. A high return on
equity often reflects the firm’s acceptance of strong investment opportunities and affective
expense management.
Return On Equity (ROE) is equal to net profit margin multiply by total asset turnover ratio
multiply by equity multiplier.

Return On Equity = Net Profit Margin * Total Asset Turnover Ratio * Equity Multiplier

Where Equity Multiplier is equal (1 + Debt-to-Equity Ratio)

For Year 2001:

Return On Equity (ROE) = 1.24% * 1.79 * 8.45

Return On Equity (ROE) =18.76 %

For Year 2000:

Return On Equity (ROE) = 1.12 % * 1.47 * 9.54

Return On Equity (ROE) = 15.71%
For Year 1999:

Return On Equity (ROE) = (0.17) % * 1.33 * 8.48

Return On Equity (ROE) = (1.92) %

Working of Equity Multiplier:

Equity Multiplier is another measure of financial leverage. The Higher the Debt-to-Equity ratio
the higher will be equity Multiplier.

Equity Multiplier = 1 + Debt – To- Equity ratio


This ratio is one of the most important ratio used for measuring the over efficiency and
performance of the firm. As the primary object of firm is to maximize its profit. This ratio is a
great importance to shareholders as ell as management of the company. This shows that how ell
the company’s reserved is being efficiently used. A high return on equity shows the firm’s
acceptance of investment opportunities and effective expense management.

In 1999 the return on equity is (1.92) % that shows that company suffer a loss in this year. So
there is very less rather no investment in this Year. In 2000 return on equity is 15.71 % and in
2001 it is 18.76 %. That is after a loss in the 1999 the company has manage to pull the trend of
company in a positive that is increasing direction. In year 2000 and 2001 company return on
equity is very good. But also high return on equity shows that it might be the simply result of
assuming excessive debts. In year 2001 the reason of increase in return on equity is that there is
increase in sales and relatively less increase in cost of goods sold that resulted in over all profit.

Trend Analysis:

Common Size Analysis (Vertical Analysis):

In Common Size Analysis, we express the various components of balance sheet as percentages
of total assets of the company. And also for the income statement but here item are related to net

Sitara Textile Industries Ltd. Faisalabd
Balance Sheet
As at June 30, 199,2000,2001

Assets: Regular Rs. (in Thousands) Common-Size (%)
1999 2000 2001 1999 2000 2001

Current Asset
Stores, spares & loose tools
Stock in trade
Trade Debts associ. Undertakings
Loans & advances
Deposits & prepayments
Other Receiv.
Cash &bank bal.

Long term Deposits, prepayments and deferred cost






































Fixed Capital Expenditure
Leasehold land at cost
Operating assets
Capital work in progress
Total Assets





















Liabilities & Capital Regular Rs. (In thousands) Common-Size (%)
1999 2000 2001 1999 2000 2001
Current Liabilities
Short term borrowing
Current positing of long term liabilities
Creditors, accrued & other liabilities
Deferred Liabilities
Staff retirement gratuity
Due to associ undertaking
Against asset subject to finance lease

Long term loans

































Capital And Reserve

Issued, subscribed & paid up capital
Unappropriated Profit
Total capital & Liabilities












Common – Size Analysis (Vertical Analysis)

Common- size Analysis is basically developing the amount cum percentage of various years with
respect to some specific measures that is Sales, Total assets and Total Liabilities in order to
summarize the business success.
Interpretation of Balance Sheet:

Asset side:

Fixed Assets:

Decrease in fixed assets shows that the firm is more interested in making investments in current
assets as compared to the fixed assets. Decreased in the fixed assets also shows that there is less
capital work in progress in year 2000 and 2001. In 2000 capital work in progress is equal to
4.33% and in year 2002 it was 0.03%.

Long Term Deposits, Prepayments and Deferred Cost:

Long term deposits, prepayments and deferred cost showing that firm is interested in investment
in current asset rather than long term deposits , prepayments and deferred cost.

Current Assets:

Currents assets are showing satisfactory position; from balance sheet it is clear that stock in trade
has a increasing trend which is showing the management is inefficient in regulating their stock in
trade to generate sales.

Increase in the trade debtors have resulted in the increase of company’s liquidity.

Cash and Bank Balances are showing decreasing trend that depicts payment to creditors as
investment. That there is more accounts receivables that is showing an increasing trend this why
cash and bank balances are showing decreasing trend.

Formula Used:
Asset Side Item * 100
Total Assets
Liabilities Side:

Capital And Reserves:

Increasing reserves show that company’s financial position is running adequately in better
Shareholder’s Equity:

Shareholder’s equity shows that high percentage of equity with respect to sales less invested by
owners and greater by external sources.
Long-Term Loans:

Long-term loans are showing an increasing trend, which shows that firm, is relying on the
external sources for running of the business. The management should think about it and should
reduce this percentage.

Current Liabilities:

Decreasing short term borrowing from 49.32% and 41.41% show that company’s liquidity
position has become good.
Increase in the number of creditors show that the company is inefficient to pay creditors in time
that is payable turnover ratio is high.

Formula Used:
Liabilities Side * 100
Total Liabilities
Sitara Textile Industries Ltd.
Income Statement
For the year ended June, 30 1999,2000,2001

(Thousands) 2000
(Thousands) 2001
(Thousands) 1999 (%) 2000
(%) 2001

Cost of sales
Gross Profit
Operating xp.
Operat. Profit
Other Income

Other charges
Financial Participation fund

Net Profit bef. Tax
Prior’s year
Net Profit (loss) after taxation























Common – Size Analysis (Vertical Analysis)

Common- size Analysis is basically developing the amount cum percentage of various years with
respect to some specific measures that is Sales, Total assets and Total Liabilities in order to
summarize the business success.
Interpretation Of Income Statement:

Cost of Goods Sold:

It has been observed that cost of goods sold with respect to sales have been reduced in year 2000
which interprets that company has now controlled its production cost by introducing new
techniques. One of the techniques is TQM but in the year 2001 it again increased showing the
inability of the management to control it.

Gross Profit:

The increase in the gross profit margin is a good indication. It increased in the year 200 cost of
good sold was low in this year but the gross profit reduced in the year 2001 because of the cost
of units produced in this year.

Operating Expenses:

Operating expenses are increasing in the coming years showing the inefficiency of the
management. These rose because of the extensive advertisement.

Operating Profit:

Operating profit has considerably increased in the years 1999 due to introduction of various
techniques of production. In the years 2000 and 2001 it reduced because of the increase in cost of
goods sold and operating expenses.

Earning Before Interest and Taxes (EBIT):

Earning before interest and taxes has decreasing trend trough out the years because of increase in
the operating charges. In 1999 earning before interest and tax was 7.3%, in 2000 it was 6.24%
and in the year 2001 it was 5.47%.
Financial Charges:

The management has shown its effectiveness and efficiency in reducing the financial charges in
the coming years that is in 1999 it was 5.03% but it reduced to 3.97% in 2000 and further
reduced to 3.04% in the year 2001, which is showing the effectiveness of the management.


Taxation is low in the year 2000 and 2001 as compare to year 1999 because may be there is
some advance payment in the previous year.

Net Profit After Tax:

Net profit has shown in year 2000 & 2001.the increase in the net profit demonstrates that the
management is satisfied with the performance and the owner feels that their funds are properly
utilized and generating adequate profit margins. But in the year 1999 company suffered loss of
1.42% because of the increase in financial charges, taxes& cost of goods sold.

Formula used is;

Particular items *100
Index Analysis(Horzental Analysis):
In the index analysis we mearure percentage of financial statement items as indexes relative to a
base year. In the base year we take all the items as 100 percent and than calaculate the
percentages of the other years relative to base year.
Sitara Textile Industries Ltd. Faisalabd
Balance Sheet
As at June 30, 199,2000,2001

Assets: Index (%)

Regular (in Thousands)
1999 2000 2001 2000 2001
Current Asset
Stores, spares & loose tools
Stock in trade
Trade Debts associ. Undertakings
Loans & advances
Deposits & prepayments
Other Receiv.
Cash &bank bal.

Long term Deposits, prepayments and deferred cost

































Fixed Capital Expenditure

Leasehold land at cost
Operating assets
Capital work in progress
Total Assets















Liabilities & Capital Regular (in Rupees) Index (%)
1999 2000 2001 2000 2001
Current Liabilities
Short term borrowing
Current positing of long term liabilities
Creditors, accrued & other liabilities

Deferred Liabilities
Staff retirement gratuity
Due to associ undertaking
Against asset subject to finance lease

Long term loans


























Capital And Reserve

Issued, subscribed & paid up capital
Unappropriated Profit
Total capital & Liabilities











Interpretation of Balance Sheet:

Asset side:

Fixed Assets:
Fixed assets in the year 2000 have been increased by 26.30% as compared to previous year and
similar fashion is noticed in the year 2001. We have noticed that the sales volume in the year has
been increased this is due to increase in the fixed assets.

Long Term Deposits, Prepayments and Deferred Cost:

Long-term deposits, prepayments and deferred cost are showing a positive sign in the years 2000
and 2001. In the year 2001 long-term deposits, prepayments and deferred cost decrease very
much as compared to previous year 2000. In the year it was increased because there was political
stability in the country and company wants to invest more but in the next year 2001 it decreased
because of company’s policies to invest more in the current assets and to enhance sales by
increasing the production.

Current Assets:

Current assets comprising of stores, spares and loose tools have shown a decreasing trend in the
year 2000 and 2001 respectively because of the increase in the sales volume.

Stocks in trade are showing the increasing trend in the year 2000 and 2001, which is showing the
inefficiency of the management. Because management has failed to dispose off the stock in trade
in time. The management of the company is not using its current assets efficiently to generate
sales and ultimately earning profit on sales.

Trade debtors, which include accounts receivables, and debtors are showing an increasing trend
in the year 2000 and 2001. Which shows following:

a) Company’s collection of receivables is slow
b) Company is selling the goods on credit terms rather than cash.
c) Management should take remedied measures to lessen the trade debtors and accounts

Short term investment in cash and bank balance have increased in 2000 showing the positive
picture to meet the requirement of the working capital of the company. But in the year 2001 the
balance is reduced because of inefficiency of the management and due to this it has reduced the
ability to meet the requirement of the working capital.
Formula Used:

Chain base method is being used

Current Year – Previous year * 100
Previous Year

Liability Side:

Issued, Subscribed and Paid up Capital:
We have observed that the issued, subscribed and paid up capital of the company remained same
through out the years.

Shareholder’s Equity:

Shareholder’s equity is showing a positive sign that the shareholder’s shares in the business have
been increased.

Long Term Loans:

Long Term loans or long term liabilities have been increased due to management have expanded
the business for more production. It also shows that management want to expand the sales of the
business by expanding the business.

Deferred Liabilities:

Deferred liabilities increased in the year 2000, which is the prime interest of the debtors. But in
the year 2001 it decreased by 28.76% that shows the efficiency of the management retiring them

Liabilities Against Assets subject to Finance Lease:

Liabilities against assets subject to lease finance lease shows the decreasing trend in the year 200
and 2001 that shows firm’s took less loans against assets in these years.

Current Liabilities:

Current liabilities show the liquidity position of the firm.

Short Term borrowing of the company have been increased in the years 2000 but it is showing
the decreasing trend in 2001 representing its control over the borrowing depicting the efficiency
and effectiveness of the management.

Creditors, accrued and other liabilities have also been showing positive trend in years 2000 and
2001, which illustrates that payments in accounts is slow and company is postponing the
payments to creditors. Creditors may find it inconvenient in their receiving of money. The
Company should take some steps to lessen the volume of creditors. Purpose dividend / dividend
payable shows that company has accumulated greater profit which would be devisable after
some time.

Formula Used:

Chain Based Method is being used

Current Year – Previous Year * 100
Previous Year

Sitara Textile Industries Ltd.
Income Statement
For the year ended June, 30 1999,2000,2001

Rupees 2000
Rupees 2001
Rupees 2000
(%) 2001

Cost of sales

Gross Profit
Operating exp.

Operat. Profit
Other Income

Other charges
Financial Participation fund
Net Profit before taxation
Prior’s year

Net Profit (loss) after taxation





























Index Analysis (Horizontal Analysis):

Index analysis shows the direction upwards or downwards and involves the competition of
percentages relation ship that each statement item bases to same item in the previous year.

Interpretation of Income statement:


The increase in sales illustrates that it is showing an upward trend due to increase in the
wholesale price of the commodity in the market. The units produced were also been increased
and company also captured more buyers in year 2000 and 2001 resulting a greater sales volume
in the year 2001 as compared to previous year.

Cost of Goods Sold:

Increasing trend in the cost of goods sold is due to increase in the production because there is an
increasing trend in sales volume. Also increasing trend in cost of goods of sold shows that
company incurred more variable and fix cost and other operating cost as compared to in year
1999 in the years 2000 and 2001.

Gross Profit:

Gross profit is showing an upward trend trough year 2000 and 2001. Because sales volume has
increased in the respective years and cost of goods sold doesn’t increased with this respect.

Operating Expenses:

Operating expenses are showing an upward trend in years 2000 and 2001 as compared to the
previous year because sales volume in the year 2000 and 2001 has increased in these years the
company has spent a lot on advertisement and also in administration. Due to this increase in the
operating expenses are showing a upward trend.

Earning Before Interest & Tax (EBIT):

Earning before interest and tax has increased in the years 2000 and 2001 because in these years
the sales volume has been increased but cost of goods sold has not increased with respect to sales
increase, therefore, resulting high gross profit ratio that ultimately results in increase in earning
before interest and tax (EBIT).

Financial Charges:

Financial charges are showing an upward trend in the years 2000 and 2001 as compared to 1999
due to inefficiency of the management to control such expenses. The Management should take
steps to control over and try decrease in these expenses. These expenses are high because
company is mainly relying on debts to run the business that is they have greater amount of long-
term liabilities and they have to pay greater amount in form of financial charges.


Taxes are lived by the Government and it can increase or decrease the amount of tax when it
likes or feels necessary. In the year 2000 tax decreased relative to the year 1999 because in year
2000 the new Government enforced low tax rates by which amount of tax in the year 2000 is
reduced. In the year the Government increased 2001 the amount of tax increased due to increase
in profits and also tax rates.

Net Income After Taxes:

Net income has an upward direction in the year 2000 and 2001. In the year 2000 net income
increased by so much percentage because of the company suffered a loss in the year 1999 due to
this there is a great percentage increase in the net income or net profit in the year 2000. In the
year 2001 net profit or net income also increased because of increase in sales volume and slightly
decrease in the cost of goods sold.

Ø Sitara Textile debt to equity ratio is 7.45:1 which means that 88% of the business is financed
by debts and 12 5 is financed by shareholders. Due to high debt to equity ratio financial charges
are increasing and consuming major portion of the profit. Management should have to reduce
this debt to equity ratio to reduce financial charges to increase the net profit.

Ø Company’s average collection period is increasing that is the situation not favorable for the
company and reducing the current ratio eventually. To manage this management should take
steps to offer incentives to debtors for early payment of debts. It will help them to increase our
current ratio and reduces the high receivables turnover ratio in days to complete the operating

Ø As we observe that company is borrowing short-term finance to meet its accrued liabilities,
which is not a positive sign for a good management. Because of increase it will adversely affect
our current ratio. Because if liabilities increased the current ratio will decrease. So management
should try to collects its debts by offering incentives and using this cash for paying its debts. It
will help to reduce the liabilities and hence decrease in the financial charges and hence increase
in the net profit.

Ø Due to high debt to equity Ratio Company will also find it difficult if they apply for loans.
Because no financial manager will like to invest in this organization due to high debt to equity

Ø Company’s current ratio is 1.095 but the favorable current ratio is 2.1. So company is lacking
behind in the current ratio. So company should try to decrease its liabilities to increase in the
current ratio. Because in the current ratio current liabilities are in the denominator so if the
liabilities are less then there will be increase in the current ratio. Which is beneficial; for the

Ø Operating and cash cycle of Sitara Textile is good so company should maintain this positive
trend to increase the profit and business activity. If cash circulates rapidly through out the year it
will be beneficial for the organization.

Ø Company is earning a healthy operating profit ratio of 5.033% of sales where as net profit
margin is 1.24% of sales. Major of the operating profit is observed by operating and financial
expenses and reducing the net profit margin. Management should have to decrease the financial
and other charges in order to increase in the
net profit.

Ø Company is maintaining a high and healthy return on equity and showing a upward trend
which is a good and positive sign for the management. Management should maintain this
improvement and increasing trend in the return on equity. Higher the return on equity or increase
in return on equity shows the positive policies of the management.
Ø The total asset turn over ratio of the Sitara textile company is increasing year by year which is
a positive sign for the management. Management should maintain this increasing trend because
total asset turnover ratio shows that how efficiently assets are utilized.

Ø The inventory turnover ratio of the Sitara Textile Industries is going in a positive direction that
is declining in days. Because the lesser the inventory turnover ratio the higher will be the sales
and hence earning profit on sales. So management should maintain this positive trend in order
move its current asset efficiently and effectively.

Ø Company’s interest coverage ratio has increasing sign for the management of Sitara Textile
Industries because it would have more cushions for paying of the interest charges. In year 2001
interest coverage ratio is 1.802 times means that company can pay 1.802 times of its interest
charges. So company should maintain this positive trend.

“Overall Sitara Textile is one of the best organization in the Textile Industry in Pakistan.”

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