Assignment 1

ASSIGNMENT 1 MPIB, SEM I
INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT
ASSIGNMENT 1 & 2
SUBMITTED BY: ROHIT KAWERI M.P.I.B, SEM I
MASTERS PROGRAM IN INTERNATIONAL BUSINESS ASSIGNMENT 1
1. Management is not a profession but is heading towards that direction.Comment.

Answer: Over a large few decades, factors such as growing size of business unit, separation of ownership from management, growing competition etc have led to an increased demand for professionally qualified managers. The task of manager has been quite specialized. As a result of these developments the management has reached a stage where everything is to be managed professionally. A profession may be defined as an occupation that requires specialized knowledge and intensive academic preparations to which entry is regulated by a representative body. The essentials of a profession are: Specialized knowledge Formal education and training Social obligations Code of conduct Representative association
From above discussion, it is quite clear that management fulfills several essentials of a profession, even then it is not a full fledged profession because: a. It does not restrict the entry in managerial jobs for account of one standard or other. b. No minimum qualifications have been prescribed for managers. c. No management association has the authority to grant a certificate of practice to various managers. d. All managers are supposed to abide by the code formulated by AIMA, e. Competent education and training facilities do not exist. f. Managers are responsible to many groups such as shareholders, employees and society. A regulatory code may curtail their freedom. g. Managers are known by their performance and not mere degrees. h. The ultimate goal of business is to maximize profit and not social welfare. That is why Haymes has rightly remarked, The slogan for management is becoming - He who serves best, also profits most.
2.Decision making is the essence of management.- Comment.
One of the problems with being a manager is that you have to make decisions from time to time. This can be very troublesome, because decisions can blow up in your face. But do you really have to decide? Sometimes not. If you want to sidestep a decision without looking indecisive, you can often fall back on philosophical quotations such as "Sometimes the best decision is no decision" and "If it works, don't fix it."
DECISION: According to Stephen Robbins The process of selecting from several choices products or ideas, and taking action, is called Decision Making. The selection of a course of action from among alternatives Decision making is the essence of management and all managers are judged on the basis of outcomes of the decisions which they made. LEVELS OF MANAGEMENT INVOLVED IN DECISION MAKING: Managers at all levels are involved in decision making. That is, they make choices. EXAMPLES: Top Management: Top Management makes following decisions about their organization Defining Organizational Goals Where to locate Manufacturing facilities? How inter into new markets? Middle & Lower managers: They are involved in following types of decision making Decision about Production schedules Product quality problems Pay Raises Employee Discipline DECISION MAKING PROCESS Decision making is a process not just as a simple act of choosing among alternatives but decision making is something straightforward. Effective decision making determines the destiny of an Organizations life. A manager has to take much kind of decisions in an Organization, like How to quit his job to venture into business? How to increase the sales per month? How market can be hold on? And how discipline can be created in an organization?
3.What do you understand by planning?
Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said Well plan is half done. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective coordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. According to Urwick, Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals. According to Koontz & ODonell, Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur. Steps in Planning Function Planning function of management involves following steps:1. Establishment of objectives a. Planning requires a systematic approach. b. Planning starts with the setting of goals and objectives to be achieved. c. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts. d. Moreover objectives focus the attention of managers on the end results to be achieved. e. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective. f. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager. g. Such goals should be specified in qualitative terms.
h. Hence objectives should be practical, acceptable, workable and achievable.
2. Establishment of Planning Premises a. Planning premises are the assumptions about the lively shape of events in future. b. They serve as a basis of planning. c. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations. d. It is to find out what obstacles are there in the way of business during the course of operations. e. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent. f. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socioeconomic, political and economical changes. g. Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action a. When forecast are available and premises are established, a number of alternative course of actions have to be considered. b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization. c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made. d. After objective and scientific evaluation, the best alternative is chosen. e. The planners should take help of various quantitative techniques to judge the stability of an alternative.
4. Formulation of derivative plans f. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan. g. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans. h. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.
i. Derivative plans indicate time schedule and sequence of accomplishing various tasks. j. 4. Securing Co-operation a. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence. b. The purposes behind taking them into confidence are :a. Subordinates may feel motivated since they are involved in decision making process. b. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans. c. Also the employees will be more interested in the execution of these plans.
5. Follow up/Appraisal of plans a. After choosing a particular course of action, it is put into action. b. After the selected plan is implemented, it is important to appraise its effectiveness. c. This is done on the basis of feedback or information received from departments or persons concerned. d. This enables the management to correct deviations or modify the plan. e. This step establishes a link between planning and controlling function. f. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.
4.Motivation is the core of management.- Comment. Introduction: Motivation is one of the most important factors affecting human behaviour and performance. This is the reason why managers attach great importance to motivation in organizational setting. Rensis Likert, has called motivation as the core of management. Effective directing of people leads the organization to effectiveness, both at organizational and individual levels. Motivation and Its Definition: The willingness to exert high level of effort to reach organizational goals, conditioned by the efforts ability to satisfy some individual need. Robert Dubin defines Motivation as the complex forces starting and keeping a person at work in an organization. Motivation is something that moves the person to action. and continues him in the course of action of action already initiated Nature of Motivation: On the basis of the above description, the following characteristics of motivation can be identified 1. Motivation is a psychological concept. It is based on human needs which generate within an individual. Needs are feelings influence the behaviour and activities of the individual. 2. Motivation is total, not piece-meal. A person cannot be motivated in parts. An employee is an indivisible unite and he needs are interrelated. He cannot be motivated by fulfilling some of his needs partly. 3. Motivation is a continuous process. It is not a time bound programme or a touch-and-go affair. Human needs are infinite. A soon as one need is satisfied new ones arise. 4. Motivation causes goal-directed behaviour. A person behaves in such a way that he can satisfy his goals or needs. 5. Motivation may be financial or non-financial. The form of motivation depends upon the type of needs. Financial incentives include payallowance, bonus and prerequisites. Non-financial incentives consist of recognition, praise, responsibility, participation in decision-making, challenging job, etc., 6. Motivation is a complex process. There is no universal theory or approach to motivation. Moreover, individuals differ in what motivates them. Therefore, a manager has to analyse and understand variety of needs and has to use variety of rewards to satisfy them. He should not expect overnight results.
Theories of Motivation: A. Maslows Need Hierarchy Theory B. Herzbergs Motivation-Hygiene Theory C. McGregors Theory X and Theory Y D. Theory Z E. Alderfers ERG Theory F. Vrooms Expectancy Theory G. Porter-Lawler Model of Motivation
5. What do understand by management by objectives? For many people working in modern business environments, it's hard to remember a time when non-managerial employees weren't involved with, and interested in, corporate strategy and goals. We are regularly reminded about the corporate mission statement, we have strategy meetings where the "big picture" is revealed to us, and we are invited to participate in some decisions. And we're aware of how our day-to-day activities contribute to these corporate goals. This type of managing hasn't been around forever: It's an approach called Management by Objectives; a system that seeks to align employees' goals with the goals of the organization. This ensures that everyone is clear about what they should be doing, and how that is beneficial to the whole organization. It's quite easy to see why this type of managing makes sense when the parts work in unison the whole works smoothly too. And by focusing on what you're trying to achieve, you can quickly discriminate between tasks that must be completed, and those that are just a waste of valuable time.
Background: Management by Objectives was introduced by Peter Drucker in the 1950s and written about in his 1954 book, The Practice of Management. It gained a great deal of attention and was widely adopted until the 1990s when it seemed to fade into obscurity. Partly, the idea may have become a victim of its own success: It became so much a part of the way business is conducted that it no longer may have seemed remarkable, or even worthy of comment. And partly it evolved into the idea of the Balanced Scorecard, which provided a more sophisticated framework for doing essentially the same thing.
Using Management by Objectives Peter Drucker outlined the five-step process for MBO shown in figure 1, below. Each stage has particular challenges that need to be addressed for the whole system to work effectively.
6.Elucidate the nature and scope of business economics. How is it different from traditional economics?
Business Economics, also called Managerial Economics, is the application of economic theory and methodology to business. Business involves decision-making. Decision making means the process of selecting one out of two or more alternative courses of action. The question of choice arises because the basic resources such as capital, land, labour and management are limited and can be employed in alternative uses. The decision-making function thus becomes one of making choice and taking decisions that will provide the most efficient means of attaining a desired end, say, profit maximation. Different aspects of business need attention of the chief executive. He may be called upon to choose a single option among the many that may be available to him. It would he in the interest of the business to reach an optimal decision- the one that promotes the goal of the business firm. A scientific formulation of the business problem and finding its optimals solution requires that the business firm is he equipped with a rational methodology and appropriate tools. Business economic meets these needs of the business firm. This is illustrated in the following presentation. Economic Theory And Methodology Decision and problems in Business
Business Economic Application of Economic Theory and Methodology to solving Business problems
Optimal Solution to Business Problems it may be that business economics serves as a bridge between economic theory and decision-making in the context of business. According to Mc Nair and Meriam, Business economic consists of the use of economic modes of thought to analyse business situations. Siegel man has defined managerial economic (or business economic) as the integration of economic theory with business practice for the purpose of facilitating decisionmaking and forward planning by management.
We may, therefore, define business economic as that discipline which deals with the application of economic theory to business management. Business economic thus lies on the borderline between economic and business management and serves as a bridge between the two disciplines. Nature of Business Economics: Traditional economic theory has developed along two lines; viz., normative and positive. Normative focuses on prescriptive statements, and help establish rules aimed at attaining the specified goals of business. Positive, on the other hand, focuses on description it aims at describing the manner in which the economic system operates without staffing how they should operate.The emphasis in business economics is on normative theory. Business economic seeks to establish rules which help business firms attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly understand their environment. This requires the study of positive or descriptive theory. Thus,Business economics combines the essentials of the normative and positive economic theory, the emphasis being more on the former than the latter.Scope of Business Economics :As regards the scope of business economics, no uniformity of views exists among various authors. However, the following aspects are said to generally fall under business economics. 1. Demand Analysis and Forecasting 2. Cost and production Analysis. 3. Pricing Decisions, policies and practices. 4. Profit Management. 5. Capital Management. These various aspects are also considered to be comprising the subject matter of business economic
7. What is Demand Forecasting?

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets. Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market. Necessity of Forecasting Often forecasting demand is confused with forecasting sales. But, failing to forecast demand ignores two important phenomena.[1] There is a lot of debate in demand-planning literature about how to measure and represent historical demand, since the historical demand forms the basis of forecasting. The main question is whether we should use the history of outbound shipments or customer orders or a combination of the two as proxy for the demand Stock effects The effects that inventory levels have on sales. In the extreme case of stock-outs, demand coming into your store is not converted to sales due to a lack of availability. Demand is also untapped when sales for an item are decreased due to a poor display location, or because the desired sizes are no longer available. For example, when a consumer electronics retailer does not display a particular flat-screen TV, sales for that model are typically lower than the sales for models on display. And in fashion retailing, once the stock level of a particular sweater falls to the point where standard sizes are no longer available, sales of that item are diminished. Market response effect The effect of market events that are within and beyond a retailers control. Demand for an item will likely rise if a competitor increases the price or if you promote the item in your weekly circular. The resulting sales a change in demand as a result of consumers responding to stimuli that potentially drive additional sales. Regardless of the stimuli, these forces need to be factored into planning and managed within the demand forecast. In this case demand forecasting uses techniques in causal modeling. Demand forecast modeling considers the size of the market and the dynamics of market share versus competitors and its effect on firm demand over a period of time. In the manufacturer to retailer model, promotional events are an important causal factor in demand. These promotions can be modeled with intervention models or use a consensus to aggregate intelligence using internal collaboration with the Sales and Marketing functions. Methods No demand forecasting method is 100% accurate. Combined forecasts improve accuracy and reduce the likelihood of large errors. Reference class forecasting was developed by professor Bent Flyvbjerg, University of Oxford, to reduce error and increase accuracy in forecasting, including in demand forecasting.[2][3] Daniel Kahneman, Nobel Prize winner in economics,
calls Flyvbjerg's counsel to use reference class forecasting to de-bias forecasts, "the single most important piece of advice regarding how to increase accuracy in forecasting.[4] Other experts have shown that rule-based forecasts produce more accurate results than combined forecasts.[5] Methods that rely on qualitative assessment Forecasting demand based on expert opinion. Some of the types in this method are,

Unaided judgment Prediction market Delphi technique Game theory Judgmental bootstrapping Simulated interaction Intentions and expectations surveys Conjoint analysis jury of excecutive method
Methods that rely on quantitative data Discrete Event Simulation Extrapolation Reference class forecasting Quantitative analogies Rule-based forecasting Neural networks Data mining Causal models Segmentation Some of the other methods
a) time series projection methods this includes:

moving average method exponential smoothing method trend projection methods
b) casual methods this includes:

chain-ratio method consumption level method end use method
8. Differentiate between Perfect Competition and Monopoly.

Monopoly and perfect competition represent two extremes along a continuum of market structures. At the one extreme is perfect competition, representing the ultimate of efficiency achieved by an industry that has extensive competition and no market control. Monopoly, at the other extreme, represents the ultimate of inefficiency brought about by the total lack of competition and extensive market control. Monopoly is a market structure with complete market control. As the only seller in the market, a monopoly controls the supply-side of the market. Perfect competition, in contrast, is a market structure in which each firmhas absolutely no market control. No firm in perfect competition can influence the market price in any way. The best way to compare monopoly and perfect competition is the four characteristics of perfect competition: (1) large number of relatively small firms, (2) identical product, (3) freedom of entry and exit, and (4) perfect knowledge.
Number of Firms: Perfect competition is an industry comprised of a large number of small firms, each of which is a price taker with no market control. Monopoly is an industry comprised of a single firm, which is a price maker with total market control. Phil the zucchini grower is one of gadzillions of zucchini growers. Feet-First Pharmaceutical is the only firm that sells Amblathan-Plus, a drug that cures the deadly (but hypothetical) foot ailment known as amblathanitis. Available Substitutes: Every firm in a perfectly competitive industry produces exactly the same product as every other firm. An infinite number of perfect substitutes are available. A monopoly firm produces a unique product that has no close substitutes and is unlike any other product. Gadzillions of firms grow zucchinis, each of which is a perfect substitute for the zucchinis grown by Phil the zucchini grower. There are no substitutes for Amblathan-Plus. Feet-First Pharmaceutical is the only supplier. Resource Mobility: Perfectly competitive firms have complete freedom to enter the industry or exit the industry. There are no barriers. A monopoly firm often achieves monopoly status because the entry of potential competitors is prevented. Anyone can grow zucchinis. All they need is a plot of land and a few seeds. Feet-First Pharmaceutical holds the patents on Amblathan-Plus. No other firm can enter the market. Information: Each firm in a perfectly competitive industry possesses the same information about prices and production techniques as every other firm. A monopoly firm, in contrast, often has information unknown to others. Everyone knows how to grow zucchinis (or can easily find out how). Feet-First Pharmaceutical has a secret formula used in the production of Amblathan-Plus. This information is not available to anyone else.
The consequence of these differences include:
First, the demand curve for a perfectly competitive firm is perfectly elastic and the demand curve for a monopoly firm is THE market demand, which is negativelysloped according to the law of demand. A perfectly competitive firm is thus a price taker and a monopoly is a price maker. Phil must sell his zucchinis at the going market price. It he does not like the price, then he does not sell zucchinis. Feet-First Pharmaceutical can adjust the price of Amblathan-Plus, either higher or lower, and so doing it can control the quantity sold. Second, the monopoly firm charges a higher price and produces less output than would be achieved with a perfectly competitive market. In particular, the monopoly price is not equal to marginal cost, which means a monopoly does not efficiently allocate resources. Although Feet-First Pharmaceutical charges several dollars per ounce of Amblathan-Plus, the cost of producing each ounce is substantially less. Phil, in contrast, just about breaks even on each zucchini sold. Third, while an economic profit is NOT guaranteed for any firm, a monopoly is more likely to receive economic profit than a perfectly competitive firm. In fact, a perfectly competitive firm IS guaranteed to earn nothing but a normal profit in the long run. The same cannot be said for monopoly. The price of zucchinis is so close to the cost of production, Phil never earns much profit. If the price is relatively high, other zucchini producers quickly flood the market, eliminating any profit. In contrast, FeetFirst Pharmaceutical has been able to maintain a price above production cost for several years, with a handsome profit perpetually paid to the company shareholders year after year. Fourth, the positively-sloped marginal cost curve for each perfectly competitive firm is its supply curve. This ensures that the supply curve for a perfectly competitive market is also positively sloped. The marginal cost curve for a monopoly is NOT, repeat NOT, the firm's supply curve. There is NO positively-sloped supply curve for a market controlled by a monopoly. A monopoly might produce a larger quantity if the price is higher, in accordance with the law of supply, or it might not. If the price of zucchinis rises, then Phil can afford to grow more. If the price falls, then he is forced to grow less. Marginal cost dictates what Phil can produce and supply. Feet-First Pharmaceutical, in comparison, often sells a larger quantity of Amblathan-Plus as the price falls, because they face decreasing average cost with larger scale production.
9. Discuss the role of Reserve bank of India.

The central bank of the country is the Reserve Bank of India (RBI). It was established in April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of the Hilton Young Commission. The share capital was divided into shares of Rs. 100 each fully paid which was entirely owned by private shareholders in the begining. The Government held shares of nominal value of Rs. 2,20,000. Reserve Bank of India was nationalised in the year 1949. The general superintendence and direction of the Bank is entrusted to Central Board of Directors of 20 members, the Governor and four Deputy Governors, one Government official from the Ministry of Finance, ten nominated Directors by the Government to give representation to important elements in the economic life of the country, and four nominated Directors by the Central Government to represent the four local Boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi. Local Boards consist of five members each Central Government appointed for a term of four years to represent territorial and economic interests and the interests of co-operative and indigenous banks. The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank. The Bank was constituted for the need of following:

To regulate the issue of banknotes To maintain reserves with a view to securing monetary stability and To operate the credit and currency system of the country to its advantage.
Functions
of
Reserve
Bank
of
India
The Reserve Bank of India Act of 1934 entrust all the important functions of a central bank the Reserve Bank of India. Bank of Issue
Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate Issue Department which is entrusted with the issue of currency notes. The assets and liabilities of the Issue Department are kept separate from those of the Banking Department. Originally, the assets of the Issue Department were to consist of not less than two-fifths of gold coin, gold bullion or sterling securities provided the amount of gold was not less than Rs. 40 crores in value. The remaining three-fifths of the assets might be held in rupee coins, Government of India rupee securities, eligible bills of exchange and promissory
notes payable in India. Due to the exigencies of the Second World War and the post-was period, these provisions were considerably modified. Since 1957, the Reserve Bank of India is required to maintain gold and foreign exchange reserves of Ra. 200 crores, of which at least Rs. 115 crores should be in gold. The system as it exists today is known as the minimum reserve system.
10.What do you understand by Bank Negotiation documents?

I) Documentation as per requirements of the contract: Commercial Invoice Packing List Insurance Certificate/Policy Bill of Exchange Shipment Advice Certificate of Origin Inspection Certificate Transportation Documents: -Bill of Lading -Airway Bill - Combined Transport Document II) Documentation as per requirement of Government of India: Export Licence, if necessary, AR4/AR5 Form Preshipment Inspection Certificate Export Declaration Form GR/PP/VPP/COD/SOFTEX Form Shipping Bill
III) Documents as per requirement of the importing Country: Customs Invoice GSP Certificate of Origin IV) Documents required for claiming export assistance: Application form Shipping Bill duly authenticated by customs Commercial invoice attested by bank Bank certificate Statement of Exports certified by the negotiating bank Registration cum membership form of concerned export promotion council. Another way of looking at the documents is to classify them as principal and auxiliary documents. Principal Documents These are: 1. Commercial Invoice 2. Packing List 3. Marine Insurance Policy/Certificate 4. Bill of Exchange 5. Letter of Credit 6. Bill of Lading 7. Airway Bill 8. Combined Transport Document 9. GR/PPNPP/COD/SOFTEX Forms 10. Export Inspection Certificate 11. AR4/AR5 Forms 12. Shipping Bill 13. Certificate of Origin 14. Shipment Advice 15. Consular Invoice
11.What do you understand by exchange risk management?
Statement of Objectives To provide a standard of best practice to banks for the implementation of an effective and sound Foreign Exchange Risk Management System. Introduction Foreign exchange risk is the exposure of a companys financial strength to the potential impact of movements in foreign exchange rates. The risk is that adverse fluctuations in exchange rates may result in a reduction in measures of financial strength. It is acknowledged that specific foreign exchange risk practices may differ among banks depending upon factors such as the institutions size, and the nature and complexity of its activities. However, a comprehensive foreign exchange risk programme should deal with, at a minimum, good management information systems, contingency planning and other managerial and analytical techniques. General 1) Board of Directors and Senior Management Oversight A Board of Directors should: a) approve a policy on foreign exchange risk; b) review, at least once a year, the policy, techniques, procedures, and information systems referred to in that policy; c) ensure adherence to the policy techniques, procedures and informational systems referred to in that policy; d) ensure that qualified and competent persons i.e. senior management, are employed to manage and control the banks exposure to foreign exchange; and e) direct senior management to submit a comprehensive written report to the board of directors of the bank on the management of exposure to foreign exchange risk at least once a year, and to submit such other reports at such intervals as the board may require. 2) Strategy Monitoring and control A bank should establish a written policy on foreign exchange risk that:
a) includes a statement of principles and objectives governing the extent to which a bank is willing to assume foreign exchange risk; b) establishes prudent limits on a banks exposure to foreign exchange risk; and c) clearly defines the levels of personnel who have the authority to trade in foreign exchange. d) Clearly identifies the different currencies, which have been approved for transaction within the company. A bank should also develop and implement techniques that accurately and continually measure its exposure to foreign exchange risk and its foreign exchange gains and losses. This would include the development and implementation of procedures and information systems that will ensure adherence to the aforementioned policy. 3) Internal Audit a ) Banks should have in place adequate internal audit coverage of the foreign exchange and the settlement process to ensure that operating procedures are adequate to minimise risk. A banks board of directors either directly or through its audit committee - should ensure that the scope and frequency of the foreign exchange internal audit programme is appropriate to the risks involved. b) The board of directors or its audit committee should ensure that audit reports are distributed to appropriate levels of management for information and so that timely corrective action can be taken. Management should detail, in writing, the action taken. The board of directors or its audit committee should regularly review this and consider any outstanding issues. Where appropriate it should ensure that a follow-up audit is undertaken. c) When audit findings identify areas for improvement in the foreign exchange or settlement area, other areas of the bank on which this may have an impact should be notified. This could include credit risk management, reconciliations/accounting, systems development, and management information systems. In automated settlement processing, the internal audit department should have some level of specialisation in information technology auditing, especially if the bank maintains its own computer facility.
12.What are the factors influencing the entry in the global market?
Factors Influencing FDI Foreign direct investment not only brings in capital, it also brings in latest technologies and modern management practices. Such investments are crucial to ensue that any countrys industries would be able to create products and services in future that can be sold in international markets. As such FDI is important not just for the developing countries, it is also equally important for developed nations. Industrialized nations are among the largest recipient of FDI. Factors that are important for a country to attract FDI are give in the following; Supply factors: Lower production costs for certain products / industries compared with other countries attract foreign investment in those industries Better logistics, warehousing and transportation infrastructure and systems (by air, sea or over land) also attract foreign direct investment Abundant availability of natural resources and other factors of production lead to cheaper prices of these resources and may attract foreign direct investment Firms also make foreign direct investment in foreign countries to access to key technologies Demand factors: Closer and good customer access also factors to bring in foreign direct investment Advantages in marketing, being closer to customers, may also bring in FDI Firms may need to establish operations in foreign markets for exploiting of competitive advantages Companies that have strong global brands may want to have full control over their brands in world markets and my engage in FDI for preservation of brand names and trade marks Customers of firms are also often traveling / moving to foreign countries. Firms may also need to establish operations in foreign countries due to their customers mobility Political factors: Firms may also invest in foreign countries for avoidance of any trade barriers posed by the home of host countries Home country or foreign country government may provide economic development incentives for FDI, encouraging firms to invest overseas.
13. What are the various steps involved in an Effective Market research? Market research for small business involves applying some basic guidelines and techniques to ensure your marketing plan and business decisions are right on the mark. The eight steps of market research As with any business activity, your market research should be carefully planned, written down and carried out. If your business is already up and running, you probably do market research every day in your routine management activities without even realizing it. Market research simply makes the process more orderly and ensures no bias. The eight steps of market research are: Step1 State the situation you are facing. For example, many adults in southern Alberta go to work every day without first eating breakfast. There are very limited food choices, often only sweet pastries, available at worksites for mid-morning snacks. Step2 Clearly define your product or service. You want to market two varieties of low-fat, highfibre homemade muffins - carrot pineapple and zucchini bran. Step 3 State the objective(s) of your market research. What do you need to find out? Think about what decisions you want to make from the information you will get. An objective may be identifying or verifying a target market, identifying or verifying customer needs and wants, finding new opportunities and new markets, or estimating the size of markets. A well-written objective is clear, concise, complete, realistic and commercially worthwhile. One objective may be to find out whether working people in the community are interested in more nutritious mid-morning snacks. Another objective may be to learn whether or not your nutritious muffins appeal to the tastebuds of these people. A third objective may be to discover whether the local high school will sell them in its snack shack. Step 4 Look at the information you already have. Research may simply mean organizing and analyzing existing information. Check sales receipts for your saskatoon cranberry muffins from the past three years. They may show a steady increase in sales, indicating your market is ready for more muffin varieties. Step 5 Collect additional information if needed. Begin by doing some indirect market research. Find information that is already available such as government or nutrition studies which look at peoples' breakfast habits, the importance of nutrition in peoples' food choices and the importance of a low-fat, high-fibre diet for good health. Then, if need be, do some
direct market research. Generate some information yourself by doing a taste test of your new muffin varieties at a local supermarket or farmers' market. Don't be afraid to let the cat out of the bag. You need to talk to all kinds of people about your idea as part of your research to help determine if your idea is feasible. You can be assured that the advice you get from a professional consultant or government department/agency will remain confidential. Step 6 Organize and analyze the information collected. Make sure your research answers the questions who, what, where, when and why, so you don't jump to conclusions. Is there anything else you need to know? Who is your competition? Who else is producing muffins, breakfast bars or non-nutritious snack foods? Information from every source should be compared, ie. all similar types of snack foods available in local and nearby supermarkets. Contradictions or gaps in information mean more information is needed. You may learn that your target market is interested in nutritious snacks and likes the taste of your muffin varieties. However, if you don't know whether they are willing to pay $1.25 for a muffin, $0.25 more than a pastry costs, you'd better find out. Step 7 Make decisions based on what you have learned. If all questions are answered, including customers' willingness to pay $1.25/muffin, make a decision to add these two new muffin varieties for a three-month trial basis. Step 8 Watch the results of your decision and learn from them. If sales receipts and customer feedback during the trial period indicate that fewer carrot/pineapple muffins are sold than your other types, you may want to further explore the reasons for this. The information will help you decide whether to scrap the muffin variety or simply make a minor recipe modification.
14.Explain Product positioning.

Product Positioning "Product positioning" is a marketing technique intended to present products in the best possible light to different target audiences. The method is related to "market segmentation" in that an early step in major marketing campaigns is to discover the core market most likely to buy a productor the bulk of the product. Once segmentation has defined this group ("active seniors," "affluent professional working women," "teens") the positioning of the product consists of creating the message likely to reach this group. Positioning involves symbol and message manipulation, including displays and packaging. Two expert definitions: Al Ries and Jack Trout, in their book Positioning: The Battle for Your Mind, introduce the subject by saying: "[P]ositioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect. So it's incorrect to call the concept 'product positioning.' As if you were doing something to the product itself. Not that positioning doesn't involve change. It does. But changes made in the name, the price and the package are really not changes in the product at all'. Positioning is also the first body of thought that comes to grips with the problems of getting heard in our overcommunicated society." Louis E. Boone and David L. Kurtz, in their book Contemporary Marketing, put it this way: "Product positioning refers to consumers' perceptions of a product's attributes, uses, quality, and advantages and disadvantages relative to competing brands. Marketers often conduct marketing research studies to analyze consumer preferences and to construct product position maps that plot their products' positions in relation to those of competitors' offerings." IN MASS MARKET PRACTICE Concepts like "segmentation" and "positioning" typically arise in the "large" rather than in the "small" business context. The underlying concepts apply to both, but access to the mass market requires substantially more preparation. These methods have thus developed of necessity and in order to save money. They do not represent some kind of "high sophistication" the small business has overlooked. Small business owners practice segmentation and positioning as much as the giants and multinationalsbut the small business owners think of these things differently and do not use the phrases. The preparation of major product introductions and related packaging design, promotional and advertising campaigns, incentives for the supply channel, etc. can be very costly. Money can be wasted unless careful planning comes quite early. Market segmentation, an early step in the positioning of products, is intended both to limit the costs of sales and marketing and also to channel the money to the most cost-effective points in the communications network. Related market research, distinct from segmentation, is often used to set price points, identify competitive aspects of the product, etc.
Some product lines, of course, have obvious and built-in segmentation: the marketing of baby foods will be directed at young mothers; wheel-chairs will typically be advertised on TV channels watched by the elderly. A whole category of television drama is called the "soap opera" because these morning shows were watched by women who did the laundry. Lipsticks and cosmetics are rarely advertised on televised football games. And so on. Market segmentation is ultimately a highly developed extension of such quite common-sense linkages between social, demographic, income, and gender groups and the products these typically buy or shun. It might be argued that segmentation studies have gone too far, that the slicing and dicing of sub-sub-sub groups has reached rather silly extremes, but those who spend the money on highly elaborate market surveys and focus groups at least believe in the effectiveness of such techniques. And they have a certain scientific grounding. Segmentation studies invariably attempt to capture opinion and then to extrapolate it using statistical methods. Groups are selected and interviewed based on pre-selected characteristics to determine their reactions to products, features, packaging concepts, pricepoints, appearance, symbols, and message contents. It is vital in these studies that the participants be "representative" of groups that can be measured objectively using census data, for example, urban working women between 30 and 45 with children in the home. To the extent that participants in the study meet the criteria, it is then assumed that the opinions of a small sample will be the same as the opinions of the total population in that category. Segmentation, therefore, is one category of opinion polling as a whole. Its effectiveness depends on the design of the research and is measured by results latermuch as political polling is upheld or falsified by election results. A rather vast body of knowledge, expertise, and interpretation has developed around this type of research in order properly to discern what consumers really mean, how their views and actions correspond, and so on. The amount of effort expendedand professional skills deployedis directly related to the very large amounts of money expended on persuasion generally. Product positioning is derived from segmentation and similar marketing studies. Research of this type will determine the different reactions of distinct and measurable groupings of consumers. Some will have a high level of enthusiasm, others will be indifferent. The largest grouping returning a favorable opinion is then selected as the target market; the marketing message is tailored to appeal most specifically to this group and will be shown most frequently in media this group routinely uses. Positioning, of course, may extend to several secondary groups as well, so that a product may be launched with somewhat different emphases and approaches in different media depending on who is watching, listening, or reading. Positioning becomes a very complex process in that attempts are made to coordinate all aspects of the symbology, to echo the very words people used in focus groups, and to select those images, packages, and lifestyle linkages identified earlier. Occasionally it happens, contrary to the opinion expressed by Ries and Trout, that the product itself may be significantly modifiedespecially if most consumer groups polled found fault with some features.
IN SMALL BUSINESS PRACTICE Probably the biggest difference between mass marketeers and small businesses is that small operations practice product positioning but without the very costly machinery of elaborate and formal segmentation, market research, and testing paid for by the big companies. To be sure, some small businesses (those of the larger kind and able to spend such dollars) do conduct studies quite similar to the majors. But in most small businesses the positioning of products is based on the opinions of the business owner, his or her family, and selected friends and customers; they are the "sample." To some extent small businesses also conduct what might be called "experiential" studies once products are launched. They observe who buys most of the product, receive feedback from the market, and then later, in response, modify the ways in which they advertise, where they advertise, how they label, how they display product in the store, and even how they package. If the product is initially at least moderately successful, this type adaptation based on experience is much more effective because it reflects consumer behavior rather than consumer opinion .
15.Discuss Product planning and product development.

New products are a vital part of a firms competitive growth strategy. Leaders of successful firms know that it is not enough to develop new products on sporadic basis. What counts is a climate of a products development that leads to one triumph after another. It is commonplace for major companies to have 50percent or more of their current sales in products introduced within the last 10 years. Some Additional facts about new products are: Many new products are failures. Estimates of new product failures range from 33%90%, depending on industry. New product sales grow far more rapidly than sales of current products, potentially providing a surprisingly large boost to a companys growth rate; Companies vary widely in the effectiveness of their new products programs; A major obstacle to effectively predicting new product demand is limited vision; Common elements appear in the management practices that generally distinguish the relative degree of efficiency and success between companies. In one recent year, almost 22 000 products were introduced in supermarkets, drugstores, mass merchandisers and health food stores. Idea Generation Every product starts as an idea. But all new product aides do not equal merit or potential for economic or commercial success. Some estimates indicate that as many as 60-70 ideas are necessary to yield one successful product. To develop a new product the following step must be realized: 1. Idea generation; 2. Idea screening; 3. Project planning; 4. Product development; 5. Test marketing; 6. Commercialization. Cause of New Product Failure Many new products with satisfactory potential have failed to make the grade. Here is a brief list of some of the more important causes of new product failures after the products have been carefully screened, developed and marketed: 1. No competitive point of difference, unexpected reactions from competitors; 2. Poor positioning; 3. Poor quality of product; 4. Non-delivery of promised benefits of product; 5. Too little marketing support;
6. Poor perceived price/quality value; 7. Faulty estimates of market potential and other marketing research mistake; 8. faulty estimates of production and marketing costs; 9. Improper channels of distribution and marketing costs; 10. Rapid change in the market after the product was introduced.
Need for research The keystone activity of any new product planning system is research nut just marketing research, but technical research as well. This need will be more clearly understood if some of the specific questions commonly raised in evaluating product ideas are examined: 1. What is the anticipated market demand over time? Are the potential applications for the product restricted? 2. Can the item be patented? Are there any antitrust problems? 3. Can the product be sold through present channels and sales force? 4. At different volume levels, what will be the unit of manufacturing costs? 5. What is the most appropriate package to use in terms of color, material, design and so forth? 6. What is the estimated return on investment? 7. What is the appropriate pricing strategy?
16.How should ethical standards be measured in large Corporate entities?

The Ethical Quotient of organizations is seen as a combination of the following parameters: ORGANIZATIONAL ETHICAL STANDARD is wherein the code of ethics is clearly laid down by the management. It is communicated to all employees and there is a monitoring system in place to take care of any breach in the code. EMPLOYEES ETHICAL PERCEPTION talks about the different perceptions the employees have about the code of ethics and the expectations of ethical behaviour of the organization from the employees. ETHICS OF FINANCE AND ACCOUNTING INFORMATION is related to creative accounting, earnings management, misleading financial analysis, insider trading, securities fraud, bucket shops, foreign exchange scams [concerning (criminal) manipulation of the financial markets], executive compensation which concerns excessive payments made to corporate CEO's and top management, bribery, kickbacks, facilitation payments (while these may be in the (shortterm) interests of the company and its shareholders, these practices may be anti-competitive or offend against the values of society). There have been several accounting scandals like Enron, WorldCom and off late, Satyam in India. ETHICS OF HUMAN RESOURCE MANAGEMENT It covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee. Majorly in this fall the discrimination issues including discrimination on the bases of age (ageism), gender, race, religion, disabilities, weight and attractiveness. Sexual harassment plagues employees in some form or the other. Then there are issues surrounding the representation of employees and the democratization of the workplace including union busting and strike breaking. Issues affecting the privacy of the employee like workplace Forum on Public Policy18 surveillance and drug testing affect employees to a great extent. Issues affecting the privacy of the employer taking the form of whistle-blowing are also critical concerns the organizations face in current times. There are issues relating to the fairness of the employment contract and the balance of power between employer and employee. Finally, the concern by the organization for the employees related to occupational safety and health. ETHICS OF SALES AND MARKETING refers to the case of marketing which goes beyond the mere provision of information about (and access to) a product may seek to manipulate our values and behavior. To some extent society regards this as acceptable, but where is the ethical line to be drawn? Marketing ethics overlaps strongly with media ethics, because marketing makes heavy use of media. However, media ethics is a much larger topic and extends outside business ethics. There are pricing issues related to price fixing, price discrimination and price skimming. There are anti-competitive practices which include but go beyond pricing tactics to cover issues such as manipulation of loyalty and supply chains. There also are specific marketing strategies like viral marketing, spam (electronic) and
planned obsolescence. The content of advertisements which includes attack ads, subliminal messages, sex in advertising and products regarded as immoral or harmful is also under scrutiny. There are concerns related to children and marketing whereby companies do marketing in schools or use children in advertisements to increase the product sale. The concept of black markets and grey markets is another area of concern. ETHICS OF PRODUCTION is the area of business ethics deals which with the duties of a company to ensure that products and production processes do not cause harm. Some of the more acute dilemmas in this area arise out of the fact that there is usually a degree of danger in either the product or the production process and it is difficult to define a degree of permissibility, or the Forum on Public Policy 19 degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk. Defective, addictive and inherently dangerous products and services (for example tobacco, alcohol, weapons, motor vehicles and chemical manufacturing) are of grave concern to the corporations. Ethical relations between the company and the environment with respect to pollution, environmental ethics and carbon emissions trading have assumed more significance in the current environment. Ethical problems that need to be taken care of are those arising out of new technologies like genetically modified food, mobile phone radiation and health need to be taken care of. There are product testing ethics especially related to animal rights and animal testing, use of economically disadvantaged groups (such as students) as test objects. There are several cases in the history of business environment like Ford Pinto scandal, Peanut Corporation of America and Bhopal Gas Tragedy in India which have made corporations to sit up and take notice of their production processes like never before. ETHICS OF INTELLECTUAL PROPERTY, KNOWLEDGE AND SKILLS is also important.Knowledge and skills are valuable but not easily ownable as objects. Nor is it obvious whoever has the greater rights to an idea: the company who trained the employee or the employee themselves? The country in which the plant grew or the company which discovered and developed the plant's medicinal potential? As a result, attempts to assert ownership and ethical disputes over ownership arise. Patent infringement, copyright infringement, trademark infringement, misuse of the intellectual property systems, patent misuse, copyright misuse, patent troll and submarine patent to stifle competition are all serious concerns. Employee raiding which is the practice of attracting key employees away from a competitor to take unfair advantage of the knowledge or skills they may possess is also confronted by organizations. The Forum on Public Policy 20 practice of employing all the most talented people in a specific field, regardless of need, in order to prevent any competitors employing them is also seen in todays times.
17.Explain the logistics in international trade.

Logistics involves the delivery of products or services for the client with assured quality and quantity. The logistics industry also depends on the timeliness in which products are delivered to a destination. Promptness is of utmost importance, as delayed delivery can result in significant losses to the recipient of the consignment in most cases. 'Better late than never' does not work well for the logistics provider. The logistics industry depended previously on transportation more than anything. Nowadays, however, good infrastructure and record-keeping have been improved by advancements in technology, integration, globalization, legislation, and confederations. The immense growth witnessed by the retail and manufacturing industries has brought warehousing and logistics facilities closer to towns and cities. Previously situated in remote areas near waterfronts and rail tracks, these facilities are now increasingly being located within rural areas and city borders. Logistics forms an important part of the supply chain and involves the planning, implementation, and effective forward and reverse flow of goods, services, and related information from origin to recipient. A logistician controls the smooth functioning at every stage within legal boundaries enabling logistics management. Logistics management is comprised of materials management, channel management, physical distribution, and supply chain management. It also includes the warehouse management system which takes control of stocks, and streamlines the movement of goods in the storage units. Logistics Industry Trends Certain logistics activities can be outsourced to third-party logistics (3PL) providers, which include transporters who ferry goods from company warehouses to a port or vice versa. Fourth-party logistics (4PL) providers use resources, capabilities, and technology to manage the entire logistics process for a customer, unlike a 3PL provider who takes care of only one function. A 4PL provider manages other 3PLs, including truckers, forwarders, and custom house agents comprising the entire supply chain. The immense growth in the logistics industry, especially in the emerging economies over the past decade, ensures a bright future with 3PLs. Shipping logistics companies have gained a lot in these regions, with a large contribution coming from 3PLs such as transporters, warehouse facility owners, and brokers in freight-related jobs. Non-asset-based logistics providers do not include transporters or couriers. The term refers to providers who undertake consultation services on packaging and transportation, freight quoting, financial settlement, auditing, tracking, customer service, and issue resolution. These experts do not own any physical assets, but rather possess freight industry knowledge, information technology know-how, and associated assets.
On-demand transportation is an evolving field within the 3PL industry. The on-demand model includes services like full truck load (FTL), hotshot (direct, exclusive courier), next flight out, or commercial airline shipping, and international expedited. As this field caters to the special needs of clients, it comes at a premium price and hence is profitable for 3PL providers.
18.Can you comment on the role of Shipping agents, Freight brokers and Stevedores?
A broker is a businessman who buys or sells for another in exchange for a commission. On similar lines, a ship cargo freight broker is a businessman who acts as an agent between people wanting ships to transport the cargo they possess and cargo ship owners. Ship cargo freight brokering is a highly competitive field and as such a shipping freight broker is a much sought after professional in the shipping cargo business. A ship cargo freight broker might be operating on an individual basis or he might be a part of a professional organisation which has many such shipping freight brokers in its rosters.
There are several pointers that a cargo broker needs to keep in mind in order to make sure that the best results for his client in terms of the shipping cargo transaction are obtained. A few of the same can be enumeratedThe shipping freight brokers primary interest needs to be vested in his client i.e. the person/people in need of cargo ships This said the freight shipping brokers need to ensure that the deal that gets cut out between the clients and the ship owners is transparent and the client does not get cheated in any way. The ships reliability and overall utility needs to be the first lookout for the cargo broker as any problems in these two areas could lead to a massive loss to his client and ultimately to the broker himself If the cargo ship freight broker is satisfied with all the elements of the prospective deal, then he prepares what is known as the Charter Party. In essence, this document states all the necessary terms and conditions to the deal and must be signed by both parties to the aforesaid transaction It becomes the shipping freight brokers responsibility and duty to be aware of the currently prevailing market scenario in the area of cargo shipping. If by any chance, there is a lack of knowledge on the brokers part, then he is expected to gain the requisite through fellow agents employed in the profession. This is so because any lack of knowledge on the brokers part would lead to a loss for his client. The clients trust in the brokers vouching as an established professional is faulted, as a resulting consequence The commission to the broker is paid by the cargo owner
Ship cargo freight brokers are a part of a huge industry which is growing and developing every day. As such their skill also needs to widen to suit the enhancement of the whole cargo shipping arena. Ultimately, only brokers who successfully enhance and widen the scope of their knowledge about the profession along with the subtleties and nuances that it carries will be able to thrive in this unique and singular profession.
A shipping agent is a person who deals with the transactions of a ship in every port that the ship visits or docks. In simple terms, it is a shipping agent who with a local expert acts as a representative of the owner of the ship and carries out all essential duties and obligations required by the crew of the ship.
1) Prepare a profile on any five countries of your choice comprising information such as population, GDP, per capita income, form of government, language, currency, and Foreign trade.
A) India Population: 1.22 billion (as per 2012) Language: Hindi Currency: Rupee Form of government: Federal GDP: The Gross Domestic Product (GDP) in India was worth 1847.98 billion US dollars in 2011, according to a report published by the World Bank. The GDP value of India is roughly equivalent to 2.98 percent of the world economy. Per capita income: Rs. 53, 331 Culture and Foreign trade: Trade and commerce have been the backbone of Indian economy right from ancient times. Textiles and spices were the first products to be to be exported by India. The Indian trade scenario evolved gradually after the countrys independence in 1947. Indias trade imports comprise mainly of crude oil machinery, military products, fertilizers, chemicals, gems, antiques and artworks. The exports of India include mainly engineering and textile products, precious stones, petroleum products, jewelry, sugar, steel chemicals, zinc and leather products. The culture of India is one of the oldest and unique. In India, there is amazing cultural diversity throughout the country. The South, North, and Northeast have their own distinct cultures and almost every state has carved out its own cultural niche. There is hardly any culture in the world that is as varied and unique as India. India is a vast country, having variety of geographical features and climatic conditions. India is home to some of the most ancient civilizations, including four major world religions, Hinduism, Buddhism, Jainism and Sikhism. B) China Population: 1, 339, 724, 852 Currency: Renminbi Language: Mandarin Form of government: Single-party state, Communist state, Socialist state
GDP: The Gross Domestic Product (GDP) in China was worth 7298.10 billion US dollars in 2011, according to a report published by the World Bank. The GDP value of China is roughly equivalent to 11.77 percent of the world economy. Per Capita income: US $2364.71 Culture and foreign trade: China has diplomatic relations with 171 countries and maintains embassies in 162.[149] Its legitimacy is disputed by the Republic of China and a few other countries; it is thus the largest and most populous state with limited recognition. In recent decades, China has played an increasing role in calling for free trade areas and security pacts amongst its Asia-Pacific neighbors. In 2004, China proposed an entirely new East Asia Summit (EAS) framework as a forum for regional security issues, pointedly excluding the United States. The EAS, which includes ASEAN Plus Three, India, Australia and New Zealand, held its inaugural summit in 2005. China is also a founding member of the Shanghai Cooperation Organisation (SCO), along with Russia and the Central Asian republics. In 2000, the United States Congress approved "permanent normal trade relations" (PNTR) with China, allowing Chinese exports in at the same low tariffs as goods from most other countries. Both Bill Clinton and George W. Bush asserted that free trade would gradually open China to democratic reform. Bush was furthermore an advocate of China's entry into the World Trade Organization (WTO). China has a significant trade surplus with the United States, its most important export market.In the early 2010s, U.S. politicians argued that the Chinese yuan was significantly undervalued, giving China an unfair trade advantage. Sinophobic attitudes often target Chinese minorities and nationals living outside of China. Sometimes, such anti-Chinese attitudes turn violent, as occurred during the 13 May Incident in Malaysia in 1969 and the Jakarta riots of May 1998 in Indonesia, in which more than 2,000 people died. In recent years, a number of anti-Chinese riots and incidents have also occurred in Africa and Oceania. Anti-Chinese sentiment is often rooted in socio-economics. Since ancient times, Chinese culture has been heavily influenced by Confucianism and conservative philosophies. For much of the country's dynastic era, opportunities for social advancement could be provided by high performance in the prestigious Imperial examinations, which were instituted in 605 AD to help the Emperor select skilful bureaucrats. The literary emphasis of the exams affected the general perception of cultural refinement in China, such as the belief that calligraphy and literati painting were higher forms of art than dancing or drama. Chinese culture has long emphasized a sense of deep history and a largely inwardlooking national perspective. A number of more authoritarian and rational strains of thought were also influential, with Legalism being a prominent example. There was often conflict between the philosophies for instance, the individualistic Song Dynasty neo-Confucians believed that Legalism departed from the original spirit of Confucianism. Examinations and
a culture of merit remain greatly valued in China today. In recent years, a number of New Confucians have claimed that modern democratic ideals and human rights are compatible with traditional Confucian values. C) Canada: Population: 34,482,779 Currency: Canadian Dollar Language: English, French GDP: $1.74 trillion Form of Government: Parliamentary system,Constitutional monarchy Per capita Income: $38,555 Foreign Trade and Culture: Canada's culture draws influences from its broad range of constituent nationalities, and policies that promote multiculturalism are constitutionally protected.In Quebec, cultural identity is strong, and many French-speaking commentators speak of a culture of Quebec that is distinct from English Canadian culture. However, as a whole, Canada is in theory a cultural mosaic a collection of several regional, aboriginal, and ethnic subcultures.Government policies such as publicly funded health care, higher taxation to redistribute wealth, the outlawing of capital punishment, strong efforts to eliminate poverty, an emphasis on multiculturalism, strict gun control, and the legalization of same-sex marriage are further social indicators of Canada's political and cultural values.[ Historically, Canada has been influenced by British, French, and aboriginal cultures and traditions. Through their language, art and music, aboriginal peoples continue to influence the Canadian identity.Many Canadians value multiculturalism and see Canada as being inherently multicultural.American media and entertainment are popular, if not dominant, in English Canada; conversely, many Canadian cultural products and entertainers are successful in the United States and worldwide.The preservation of a distinctly Canadian culture is supported by federal government programs, laws, and institutions such as the Canadian Broadcasting Corporation (CBC), the National Film Board of Canada (NFB), and the Canadian Radio-television and Telecommunications Commission (CRTC). D) United States of America: Population: 314,686,189 Language: English Currency: US Dollar GDP: 15.09 trillion USD
Form of Government: Constitution, Democracy, Federal republic, Presidential system, Republic, Constitutional republic Culture and Foreign trade: The United States is a multicultural nation, home to a wide variety of ethnic groups, traditions, and values. Aside from the now small Native American and Native Hawaiian populations, nearly all Americans or their ancestors immigrated within the past five centuries.Mainstream American culture is a Western culture largely derived from the traditions of European immigrants with influences from many other sources, such as traditions brought by slaves from Africa.More recent immigration from Asia and especially Latin America has added to a cultural mix that has been described as both a homogenizing melting pot, and a heterogeneous salad bowl in which immigrants and their descendants retain distinctive cultural characteristics. American culture is considered the most individualistic in the world. The American Dream, or the perception that Americans enjoy high social mobility, plays a key role in attracting immigrants. While the mainstream culture holds that the United States is a classless society, scholars identify significant differences between the country's social classes, affecting socialization, language, and values. The American middle and professional class has initiated many contemporary social trends such as modern feminism, environmentalism, and multiculturalism. Americans' self-images, social viewpoints, and cultural expectations are associated with their occupations to an unusually close degree. While Americans tend greatly to value socioeconomic achievement, being ordinary or average is generally seen as a positive attribute. U.S. foreign trade and global economic policies have changed direction dramatically during the more than two centuries that the United States has been a country. In the early days of the nation's history, government and business mostly concentrated on developing the domestic economy irrespective of what went on abroad. But since the Great Depression of the 1930s and World War II, the country generally has sought to reduce trade barriers and coordinate the world economic system. Americans are convinced that trade promotes economic growth, social stability, and democracy in individual countries and that it advances world prosperity, the rule of law, and peace in international relations. Over the past decade, U.S. exports accounted for about a quarter of the economic growth. The United States also maintains a trade surplus in services, $79.7 billion in 2006. The biggest U.S. services export category was travel by foreigners to the United States, $85.8 billion that year. In contrast, the United States runs a large and growing deficit in merchandise goods trade. While the United States exported more than $1 trillion in goods in 2006, it imported
more than $1.8 trillion worth. By far the top imports that year were autos and auto parts, $211.9 billion, and crude oil, $225.2 billion. The top sources of U.S. imports were Canada, China, Mexico, Japan, and Germany. Among the top U.S. exports in 2006 were autos and auto parts, semiconductors, and civilian aircraft. The top U.S. export destinations were Canada, Mexico, Japan, China, and the United Kingdom. In 2000-2006, even though U.S. goods exports increased 33 percent, U.S. goods imports went up even faster, 52 percent. The United States supported trade liberalization and was instrumental in the creation of the General Agreement on Tariffs and Trade (GATT), an international code of tariff and trade rules. One other principle the United States traditionally has followed in the trade arena is multilateralism. Despite its commitment to multilateralism, the United States in recent years also has pursued regional and bilateral trade agreements. The emergence of electronic commerce also is opening a whole new set of trade issues. In 1998, ministers of the World Trade Organization issued a declaration that countries should not interfere with electronic commerce by imposing duties on electronic transmissions, but many issues remain unresolved. The United States would like to make the Internet a tariff-free zone, ensure competitive telecommunications markets around the world, and establish global protections for intellectual property in digital products. E) Japan: Population: 127,817,277 Language: Japanese Currency: Japanese yen Form of Government: parliamentary government with a constitutional monarchy GDP: 5.867 trillion USD Foreign trade and culture: Japanese culture has evolved greatly from its origins. Contemporary culture combines influences from Asia, Europe and North America. Traditional Japanese arts include crafts such as ceramics, textiles, lacquerware, swords and dolls; performances of bunraku, kabuki, noh, dance, and rakugo; and other practices, the tea ceremony, ikebana, martial arts, calligraphy, origami, onsen, Geisha and games. Japan has a developed system for the protection and promotion of both tangible and intangible Cultural Properties and National Treasures. Sixteen sites have been
inscribed on the UNESCO World Heritage List, twelve of which are of cultural significance.
2) Motivation is the core of management- Comment. The term motivation has its origin in the Latin word mover which means to move. Thus, motivation stands for movement. One can get a donkey to move by using a carrot or a stick, with people one can use incentives, or threats or reprimands. However, these only have a limited effect. These work for a while and then need to be repeated, increased or reinforced to secure further movement. The term motivation may be defined as the managerial function of ascertaining the motives of subordinates and helping them to realize those motives. According to Dubin motivation could be defined as the complex of forces starting and keeping a person at work in an organisation. Motivation is something that moves the person to action, and continues him in the course of action already initiated. Motivation refers to the way a person is enthused at work to intensify his/her desire and willingness to use and channelise his/her energy for the achievement of organisational objectives. It is something that moves a person into action wand continue him in the course of action enthusiastically. The role of motivation is to develop and intensify the desire in every member of the organisation to work effectively and efficiently in his position. In the words of Dalton E. McFarland, motivation is the way in which urges, desires, aspiration, striving or needs direct, control or explain the behaviour of human being. Motivation has very close relationship with the behaviour. It explains how and way the human behaviour is caused. According to McFarland motivation is a form of tension occurring within individual, with resulting behaviour aimed at reducing, eliminating or diverting the tension. Understanding the needs and drives and their resulting tensions helps to explain and predict human behaviour ultimately providing a sound basis for managerial decision and action. Thus, motivation is the term, which applies to the entire class of urges, drives, desires, needs and similar forces.
3) Explain briefly social responsibilities of business. Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. A trade-off always exists between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone whose any action impacts the environment. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals.
4) Discuss Deemed Exports in detail. "Deemed Exports" refers to those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange. Following categories of supply of goods by main / sub-contractors shall be regarded as Deemed Exports under FTP, provided goods are manufactured in India:

Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA; Supply of goods to EOUs or STPs or EHTPs or BTPs; Supply of capital goods to holders of Authorisations under EPCG Scheme; Supply of goods to projects financed by multilateral or bilateral agencies / Funds as notified by Department of Economic Affairs (DEA), MoF under International Competitive Bidding (ICB) in accordance with procedures of those agencies / Funds, where legal agreements provide for tender evaluation without including customs duty; Supply and installation of goods and equipment (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral agencies / Funds as notified by DEA, MoF under ICB, in accordance with procedures of those agencies / Funds, which bids may have been invited and evaluated on the basis of Delivered Duty Paid (DDP) prices for goods manufactured abroad; Supply of capital goods, including in unassembled / disassembled condition, as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till stage
of commercial production, and to fertilizer plants;
spares to extent of 10% of FOR value
Supply of goods to any project or purpose in respect of which the MoF, by a notification, permits import of such goods at zero customs duty; Supply of goods to power projects and refineries not covered in (f) above; Supply of marine freight containers by 100%EOU (Domestic freight containers-manufacturers) provided said containers are exported out of India within 6 months or such further period as permitted by customs; Supply to projects goods to nuclear opposed to ICB. funded power by UN agencies; and (j) projects through competitive Supply bidding of as
5) Explain in detail Duty exemption scheme. The Government may exempt wholly or part of customs duties for import of inputs and capital goods under an export promotion scheme through a notification. Importers of such exempted goods undertake to fulfil certain export obligations (EO) as well as comply with specified conditions, failing which the applicable normal duty becomes leviable. A few illustrative cases where duty exemptions were availed of without fulfilling EOs/conditions, are discussed in the following paragraphs. The total revenue implication in these cases is Rs. 24.30 crore. These observations were communicated to the Ministry through 42 draft audit paragraphs. The Ministry/department has accepted (till January 2010) the audit observations in 31 draft audit paragraphs with a revenue implication of Rs. 14.07 crore, of which Rs. 3.53 crore has been recovered. 2.1 Export oriented units (EOUs)/Export processing zone (EPZ) scheme Short/non-levy of education cess on DTA clearances Education cess was imposed on imported and indigenous goods with effect from 9 July 2004 in terms of section 91, 92 and 94 of Finance Act, 2004. It is levied on imports as duty of customs (customs education cess) at two stages
on (i) additional duty of customs (CVD) and (ii) on total duties of customs consisting of basic customs duty (BCD) and CVD plus customs education cess on CVD at (i) above. It is also levied as duty of excise (central excise education cess) on clearances of excisable goods at the same rate on total excise duty. Further, as per section 3 (1) of the Central Excise Act, 1944, the total excise duty in the case of sale of goods by 100 per cent export oriented unit (EOU) in domestic tariff area (DTA) shall be equal to the aggregate of duties of customs leviable under the Customs Act, 1962, as if the goods were imported into India. The duties of customs consisting of BCD, CVD and customs education cess in two stages at (i) and (ii) above, thus shall be the aggregate duties of customs, to be collected in terms of the aforesaid section 3 (1) of the Central Excise Act as excise duty and on this central excise duty education cess is leviable. 2.2 Advance licencing scheme Non-fulfilment of export obligation on finalisation of adhoc norms As per paragraph 4.7 of HBP Vol.-I, 2004-09, advance authorisation shall be issued, where SION are not fixed, based on self declaration and an undertaking by the applicant for a final adjustment as per adhoc norms/SION fixed by the Advance Licensing Committee (ALC). In terms of paragraph 4.24 of HBP Vol.-I (2004-09), the advance licence holder has to submit the documents in fulfillment of the export obligation (EO) within two months from the date of expiry of the EO period. According to paragraph 4.28 of HBP, Vol.-I, in the case of default in fulfillment of export obligation, the licencee is required to pay to the customs authorities, the customs duty on value of the unutilised imported material alongwith interest. Export promotion capital goods (EPCG) scheme Non-fulfilment of export obligation
According to paragraphs 6.11 and 6.12 read with paragraph 6.19 of the HBP Vol.-I, 1997-02, an EPCG licencee is permitted to import capital goods at concessional rate of customs duty and required to achieve the prescribed blockwise proportionate export obligation over the specified period. For monitoring of its export obligation, the licencee should submit to the licensing authority block wise report, periodically, on the progress made in fulfillment of the export obligation. In the event of failure to discharge a minimum of 25 per cent of the export obligation prescribed for any particular block of two years for two consecutive blocks, the licencee will be liable to pay forthwith the whole duties of customs alongwith applicable interest. Vishesh krishi gram udyog yojana (VKGUY) scheme terms of paragraph 3.8.2.2 (c) of the FTP 2004-09, as amended, the exports made by the SEZ units and EOUs during 2006-07 are not entitled for duty Report No. 14 of 2009-10 Union Government (Indirect Taxes - Customs) 20 credit entitlement under the VKGUY scheme. Further, in terms of paragraph 3.8.2.1 of the FTP 2004-09, as amended in 2007, the export incentive was extended to EOUs with effect from 1 April 2007, subject to the condition that such units shall not avail of direct tax benefits and also subject to the applicability of other conditions prescribed in paragraph 3.8.2.2.
6) What do you understand by Import-export code number and briefly explain its importance.
EC Code is unique 10 digit code issued by DGFT Director General of Foreign Trade, Ministry of Commerce, and Government of India to the Companies. No person or entity shall make any Import or Export without IEC Code Number. Registration for IEC Code : An application for grant of IEC number shall be made by the Registered/Head Office of the applicant and apply to the nearest Regional Authority of Directorate General Foreign Trade. Only one IEC is issued against a single PAN number.
Definition of IEC Code IEC Code is unique 10 digit code issued by DGFT Director General of Foreign Trade , Ministry of Commerce, Government of India to Indian Companies. Full form of IEC Code Full From of IEC Code is : Importer Exporter Code . To import or export in India, IEC Code is mandatory. No person or entity shall make any Import or Export without IEC Code Number. IEC Code No Notification Directorate General of Foreign Trade(DGFT) issued a Policy Circular No.15 (RE2006)/2004-2009 Date: 27th July, 2006) for New System for issuance of Importer-Exporter Code Number. Eligibility, Legal Provisions and Conditions for IEC Code Number Eligibility condition and Legal Provisions are given for IEC Code Number Application in Foreign Trade (Regulation) Rules, 1993 Ministry of Commerce, Notification No. GSR 791 (E), dated 30-12-1993.
7) What are the documents required for IEC application? Application for Grant of IEC Number An application for grant of IEC number shall be made by the Registered/Head Office of the applicant and apply to the nearest Regional Authority of Directorate General Foreign Trade, the Registered office in case of company and Head office in case of others, falls in the Aayaat Niryaat Form - ANF2A and shall be accompanied by documents prescribed therein. In case of STPI/ EHTP/ BTP units, the Regional Offices of the DGFT having jurisdiction over the district in which the Registered/ Head Office of the STPI unit is located shall issue or amend the IECs.
8) Explain the role played by Export promotion councils in promoting Indian Exports. The Export Promotion Councils are non-profit organisations registered under the Indian Companies Act or the Societies Registration Act, as the case may be. They are supported by financial assistance from the Government of India. Role The main role of the EPCs is to project India's image abroad as a reliable supplier of high quality goods and services. In particular, the EPCs encourage and monitor the observance of international standards and specifications by exporters. The EPCs keep abreast of the trends and opportunities in international markets for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports.
Functions The major functions of the EPCs are as follows: To provide commercially useful information and assistance to their members in developing and increasing their exports
To offer professional advice to their members in areas such as technology upgradation, quality and design improvement, standards and specifications, product development and innovation etc.
To organise visits of delegations of its members abroad to explore overseas market opportunities.
To organise participation in trade fairs, exhibitions and buyer-seller meets in India and abroad.
To promote interaction between the exporting community and the Government both at the Central and State levels
To build a statistical base and provide data on the exports and imports of the country, exports and imports of their members, as well as other relevant international trade data.
9) Discuss the significance of project import regulation. In terms of Regulation 4 of the Project Import Regulations, 1986 (PIR) the basic requirement for availing the benefit of assessment under Tariff Heading No.98.01 is that the importer should have entered into one or more contracts with the suppliers of the goods for setting up a project. Such contracts should be registered prior to clearance in the Custom House through which the goods are expected to be imported. The importer shall apply for such registration in writing to the proper officer of Customs. 3.2 Regulation 5 provides in the manner of registering contracts, as follows: (i) Before any order is made by the proper officer of Customs permitting the clearance of the goods for home consumption; (ii) In the case of goods cleared for home consumption without payment of duty subject to re-export in respect of fairs, exhibitions, demonstrations, seminars, congresses and conferences, duly sponsored or approved by the Government of India or Trade Fair Authority of India, as the case may be, before the date of payment of duty. 3.3 To expedite registration, the importers are advised to submit the following documents alongwith the application for registration: (i) Original deed of contract together with true copy thereof. (ii) Industrial Licence and letter of intent, SSI Certificate granted by the appropriate authority with a copy thereof. (iii) Original Import licence, if any, with a list of items showing the dimensions, specifications, quantity, quality, value of each item duly attested by the Licensing Authority and a copy thereof. (iv) Recommendatory letter for duty concession from the concerned Sponsoring
Authority, showing the description, quantity, specification, quality, dimension of each item and indicating whether the recommendatory letter is for initial set-up or substantial expansion, giving the installed capacity and proposed addition thereto. (v) Continuity Bond with Cash Security Deposit equivalent to the 2% of CIF value of contract sought to be registered subject to the maximum of Rs.50,00,000/- and the balance amount by Bank Guarantee backed by an undertaking to renew the same till the finalisation of the contract. The said continuity bond should be made out for an amount equal to the CIF value of the contract sought to be registered. (vi) Process flow chart, plant layout, drawings showing the arrangement of imported machines along with an attested copy of the Project Report submitted to the Sponsoring authorities, Financial Institution, etc. (vii) Write up, drawings, catalogues and literature of the items under import. (viii) Two attested copies of foreign collaboration agreement, technical agreement, know-how, basic/detailed engineering agreement, equipment supply agreement, service agreement, or any other agreement with foreign collaborators/suppliers/ persons including the details of payment actually made or to be made. (ix) Such other particulars, as may be considered necessary by proper officer for the purpose of assessment under Heading No. 9801. 3.4 After satisfying that goods are eligible for project imports benefit and importer has submitted all the required documents, the contract is registered by the Custom House and as a token of registration the provisional duty bond is accepted by the Assistant/ Deputy Commissioner of Customs, Project Import Group. The details of the contracts are entered in the register kept for the purpose and a Project Contract Registration
Number is assigned and communicated to the importer. The importer is required to refer to this number in all subsequent correspondence. 10) Explain different methods of valuation of imported cargo. India is presently following the provisions of the WTO Agreement on Customs Valuation (ACV) for determination of value on imported goods where Customs duty is levied with reference to value (ad-valorem rates). However, this does not apply to cases where tariff values have been fixed (see legal provisions below). 2. India is a founding Member of the GATT (presently WTO) and was actively involved in the GATT negotiations (Tokyo Round, 1973-79), which developed the Agreement on Customs Valuation (ACV). India implemented the ACV in August 1988. Legal provisions 3. Section 2(41) of the Customs Act, 1962 defines Value in relation to any goods to mean the value thereof determined in accordance with the provisions of sub-section (1) of Section 14 thereof. 4. Sub-section (1) of Section 14, in turn, states that when a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be: "The price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale". 5. The provisions of sub-section (1) of Section 14 apply for the valuation of both imported goods and export goods. However, a common valuation law at international level applies only to imported goods and its basic principles are laid down in Article VII of General Agreement on Tariffs and Trade (GATT), 1948, currently known as GATT 1994 (administered by the World Trade organization, WTO). The Indian valuation law under Section 14(1) of the Indian Customs Act is based on the principles of Article VII of the GATT. This is, however, a deemed value allowing uplifting (loading) of declared value in a given case even when it represents the actual price of transaction. The Agreement on Customs Valuation (ACV), which came into force on 1st January 1981, lays down well defined methods of valuation to be strictly followed so as to ensure uniformity and certainty in valuation approach and to avoid arbitrariness.
6. Sub-section 1 A of the Indian Customs Act 1962 requires that the value of imported goods shall be determined under the Rule made in this behalf. The Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 lays down the methods of valuation based on the ACV. Transaction value, which is the price paid or payable for the imported goods, is the primary basis for valuation. If the transaction value method is not applicable in a specific case, the other methods of valuation prescribed in the Rules (based on ACV) have to be followed in a hierarchical order, subject to certain exceptions 7. Under the Customs Act, 1962, the Central Government has also been empowered to fix Tariff Values (sub-section (2) of Section 14) for any product. If Tariff Value is fixed for any goods, then ad-valorem duties are to be calculated with reference to such Tariff Value. The tariff values may be fixed for any class of imported or export goods having regard to the trend of value of such or like goods and the same has to be notified in the official gazette. This measure is resorted to only in rare cases where the price fluctuations in the market are rampant having significant economic impact. Currently tariff values have been fixed in respect of imported Crude Palm Oil, RBD Palm Oil, Crude Palmolein, RBD Palmolein, Crude Soyabean Oil and Brass Scrap. 8. As far as export goods are concerned, provisions of sub-section (1) of Section 14 provide a complete code of valuation by itself and there are no separate valuation rules for that purpose. Methods of Valuation 9 The Customs Valuation Rules, 1988, lays down six methods for the valuation of imported goods. The primary basis for valuation is the "Transaction Value". However, it is subject to adjustment by certain Valuation Factors (see Rule 9). There are also certain conditions for the transaction value method to be applicable (see sub-rule 2 of Rule 4). In certain situations, the Customs authorities could reject the declared value (transaction value method), if the truth or accuracy of the declaration is reasonably suspected (see Rule 10 A). In all such cases where the transaction value method is not applied, goods shall be valued by applying the subsequent methods in a strictly hierarchical order (see Rule 3). 10. In order to enable the Customs to determine the value by application of the most appropriate method, the importer is required to truthfully declare the full particulars concerning the goods under import. These include full description and specifications of the goods, basis of valuation applied, relationship with the supplier, conditions and restrictions if any attached with the sale, elements of cost not included in the invoice price, royalty and license fee payable in relation to the imported goods, etc. These details
are to be declared in a special Valuation Declaration Format designed for the purpose. This is in addition to the entry declaration (Bill of Entry). In respect of EDI processing, the valuation declaration is integrated as a part of the Electronic Declaration. The importer should also provide copies of invoice, purchase contract and other supporting documents. Transaction Value method: 11. Rule 3(i) of the Customs Valuation Rules, 1988 states that the value of imported goods shall be the transaction value. Rule 4(i) thereof defines transaction value as the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9. 12. The price actually paid or payable should be adjusted to include all the costs and services (dutiable valuation factors) specified in sub-Rule 9 (1) (see below) if not already included in the invoice value. In short, the transaction value should be determined by suitably adjusting the declared value so as to include all payments made as a condition of sale of the imported goods by the buyer to the seller or by the buyer to a third party to satisfy an obligation of the seller. Since the assessment is on CIF basis, the invoice value should be suitably adjusted to include the freight, insurance and handling charges as applicable under sub-Rule 9 (2).
Valuation factors:
13. Valuation Factors (see Rule 9) are the various elements (dutiable factors), which should be added while determining the Customs value. The factors should be added to the extent they are not already included in the price actually paid or payable (invoice value). These dutiable factors are: Commissions and brokerage, except buying commissions; The cost of containers which are treated as being one for Customs purposes with the goods in question; The cost of packing whether for labor or materials; The value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in
connection with the production and sale for export of the imported goods, to the extent that such value has not been included in the price actually paid or payable:material, components, parts and similar items incorporated in the imported goods; tools, dies, moulds and similar items used in the production of the imported goods; materials consumed in the imported goods; engineering, developing, artwork, design work, and plans and sketches undertaken elsewhere than in the importing country and necessary for the production of imported goods; Royalties and license fees related to goods being valued that the buyer must pay either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable; The value of any part of the proceeds of any subsequent resale, disposal or use of the goods that accrues directly or indirectly to the seller; Advance payments; Freight charges up to the place of importation; Loading, unloading and handling charges associated with transporting the goods; Insurance.
Non-dutiable Factors:
14. The following charges are not to be added for the purposes of determining the Customs value provided they are clearly distinguishable and separately declared in the commercial invoice:Buying commission: Interest charges for deferred payment;
Post-importation charges (e.g. inland transportation charges, installation or erection charges, etc.); Duties and taxes payable in India.
Transaction value method not applicable to certain cases
15. The Transaction value method cannot be applied in cases where the transactions do not comply with the definition under Rule 4 (1). Thus, if there is no sale for export to India in respect of any importation, such as gifts and consignment imports for subsequent sale, there is no transaction value and hence the method is not applicable.
16. The conditions referred to under Sub-Rule 4(2) are also required to be satisfied for applying the transaction value method. These are:
The sale is in the ordinary course of trade under fully competitive conditions;
The sale does not involve any abnormal discount or reduction from the ordinary competitive price;
The sale does not involve special discounts limited to exclusive agents;
Objective and quantifiable data exist with regard to the adjustments to be made under Rule 9;
There are no restrictions concerning the disposition or use of the goods by the buyer (subject to certain exceptions);
The sale or price is not subject to some condition or consideration;
No part of the proceeds of the goods (by resale, disposal or use) after importation accrues to the seller;
Buyer and seller are not related, and if related, the relationship should not have influenced the price.
17. Transaction value method also does not apply to situations where valuation fraud (under valuation, wrong description, misdeclaration of quantity, grade, specifications, etc) are shown to have taken place. These are cases where Customs do have adequate evidence to establish the fraud. In cases of suspected fraud, Rule 10 A could be applied to reject the declared value and the transaction value method (see below).
Related Party transactions
18. The transaction value method cannot be applied in cases where the buyer and seller are related and the relationship has influenced the price. The scope of relationship is defined in Sub-Rule 2 (2) of the Customs Valuation Rules. In such cases the burden of proof shifts to the importer, who should satisfy the Customs that the declared price closely approximates to the test values prescribed in sub-Rule 4(4). If the importer fails to discharge this responsibility, the declared value could be rejected and valuation done under any of the subsequent methods applied in hierarchical order.
Other valuation methods:
19. Transaction value method cannot be applied for determination of Customs value in several situations. These include cases where there is no sale for export, restrictions under Sub-Rule 4 (2) apply, relationship between buyer and seller has influenced, cases where valuation fraud has taken place and cases of suspected valuation fraud (see rule 10 A). In all such cases, the valuation should be under the subsequent methods. These methods are to be applied in sequential order, unless otherwise permitted under the valuation Rules. There are five such valuation methods:
Transaction Value of Identical goods (Rule 5). This is based on the previously determined transaction value of identical goods, as defined in the Valuation Rules (see Sub-Rule 2.1), imported at or about the same time; Transaction Value of Similar goods (Rule 6). This is again based on the transaction value of similar goods (defined in Su-Rule 2.1) imported at or about the same time; Deductive Value Method (Rule 7). This is calculated based on the selling price of imported goods or identical/similar goods in India after deducting selling expenses, margin of profit, duties and taxes; Computed Value Method (Rule 7 A). The computed value is arrived at from the cost of materials used in production of imported goods, cost of fabrication or other processing charges at the country of production, profit and general expenses, and other dutiable factors as may be applicable under Rule 9; Fallback Method (Rule 8). These include a flexible application of previous valuation methods in a manner consistent with the provisions of Section 14(1) of the Customs Act.
Rule 10 A
20. Rule 10 A provides a unique procedure for rejection of transaction value method in cases of suspected valuation fraud. The Authority for this Rule is not from the Customs valuation Agreement itself, but from a separate decision by the WTO Valuation Committee (Decision 6.1). This applies to cases where there is reason to doubt the truth or accuracy of the value declared by the importer, but there is no evidence with the Customs to establish fraud. It was one of the results of Uruguay Round negotiations (which led to the establishment of World Trade Organization (WTO) in 1994) based on
an Indian proposal. The Indian proposal was to provide adequate flexibility in the Valuation Agreement to deal with cases of suspected fraud, particularly those where the declared value was far below a series of contemporaneous transactions. In such cases the Customs could ask the importer to produce additional information and evidence to justify the declared value. If the information/ documents produced are not adequate to dispel the doubt regarding the truth or accuracy of the declaration or if the importer fails to produce any supporting evidence, the Customs could reject the declared value. An appealable order should be issued in such cases after giving the importer a reasonable opportunity to be heard. The goods should then be valued by applying any of the subsequent methods as laid down in the Valuation Rules. In short, Rule 10 A provides only an authority to reject the declared value and is not a method of valuation by itself.
21. The National Import data Base (NIDB) provides reliable tool for comparison of declared values with contemporaneous import prices. It is an electronic database previous importations which have been analyzed by a special software (see brief under NIDB). The NIDB is made available on a weekly basis to all Customs stations. It is also made available on the Directorate of Valuation Web site (www.dov.gov.in).
Export value information from exporting country
22. It is also possible to seek information on export value declared at the exporting country in cases; where under valuation on import is reasonably suspected. The export value information could be used to establish valuation fraud at the importing country. The mechanism for Exchange of Customs valuation information among Member countries has been made possible paragraph 8.3 of the Doha WTO Ministerial Decision (see details under WTO decisions).
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11) Write brief notes on: 1. 100% EOUs: Units undertaking to export their entire production of goods and service, except permissible sales in the DTA, as per the Export Import Policy are referred to as Export Oriented Units (EOU). The Electronic Hardware Technology Park (EHTP) Scheme and the Software Technology Park (STP) Schemes are two special variants of the general EOU scheme. These units can undertake manufacture of goods including repair, remaking, reconditioning, re-engineering, rendering of services like development of software data processing & conversion, data management and call center activities. The purpose of EOU scheme is to boost exports by creating additional production capacity. 2) The EOUs basically function under the administrative control of the concerned Development Commissioner of Export Processing Zones i.e., under the Commerce Ministry, Government of India. Powers of the Development Commissioner are delegated to the Director, STPI under the Ministry of Communication and Information Technology, Government of India in respect of EHTP & STP units. These units can be an individual STP / EHTP units by themselves or in an area designated so by the Ministry of Information Technology. 3) EOU scheme is governed under the provisions of Chapter VI of EXIM policy and Appendix 14-I under para 6.1 of Hand Book of Procedures, Ministry of Finance, Department of Revenue have, vide their Customs Notification NO.52/2003 Cus. dated 31.3.2003 as amended and Central Excise Notification No.22/2003 CE dated 31.3.2003 as amended, prescribe the eligibility, limitations and guidelines for the EOUs. In addition, the provisions of Chapter IX of the Customs Act, 1962 pertaining to warehousing read with Manufacture and Other Operations in Warehouse Regulations, 1966 are also applicable to all EOUs. The salient features of these notifications / legal provisions are as follows: (i) All goods specified in the notifications (including capital goods, raw materials, spares / consumables, office equipment, material handling equipment, computer furniture, security system, pollution and quality control equipment, etc.) are exempt from payment of all the customs / central excise duties when imported or procured indigenously for manufacture or development of software or any other activity as mentioned above. (ii) The EOU unit is to be licensed as a bonded warehouse under Section 58 of the CA1962. The entire EOU premises will be a customs bonded and all the duty free goods brought in the EOU unit are required to be bonded therein. (iii) EOU unit is obliged to export their entire production, except as may be permitted by the CSEZ / STPI (Cochin Special Economic Zone & STPI, Bangalore Zone cover the are under Bangalore Customs) for DTA sales. Prior to 1.4.2003, an EOU Unit was obliged (a) to achieve 10% NFEP (net foreign exchange earning as a percentage of export) and (b) to discharge export obligation equal to 3 or 5 times the CIF value of
imported capital goods or US $ 0.25 million whichever is higher. However w.e.f. 1.4.2003, they are required to achieve only a positive Net Foreign Exchange Earning (NFE). The period to achieve the above is five years from the commencement of production. (iv) The export performance is monitored by the CSEZ / STPI. They are also approving authorities for units issuing of LOP, accepting of legal undertaking, attestation (listing and permission) for procuring capital goods by import or from indigenous sources and for enhancement of value limits of capital goods so permitted. (v) The power to accept the Bond, issue of Block Transfer, Procurement Certificate for import, CT-3 certificate for indigenous goods, permissions for re-export, Inter Unit Transfer, common sharing, DTA sale, de-bonding assessment, destruction etc. are with the Customs. (vi) The duty free capital goods and raw material should be installed and put to use within a period of one year and three years respectively (or as extended) from the date of import / procurement, failing which, duty foregone along with interest is charged. (vii) DTA sale of the produce is permitted to the extent of 50% of FOB value of exports on payment of applicable Central Excise duties under Section 3 of Central Excise Act, 1944 read with Notification No.23/2003 (CE) dated 31.3.2003 as amended. (viii) Re-export, Third party export, Inter-unit transfer, Temporary removal for display, Job work etc. are allowed as per the conditions stipulated in the notification and policy. (ix) De-bonding of duty free goods is allowed on payment of duties on the depreciated value of the capital goods at the rate of 20% per annum in case of IT items and 10% per annum on other goods. (x) Destruction of goods is permitted on satisfaction of conditions of notification.
(xi) The initial warehousing / bonding period of capital goods and raw material is 5 years and 3 years respectively under the provisions of Section 61 of the Customs Act. Thereafter specific permission for extension of the warehousing / bonding period is required from the Commissioner of Customs. 4) Bangalore Customs have provided detailed guidelines about the conditions, limitations and procedures to be followed by the EOUs in its comprehensive public notices 104/2001 dated 17.10.2001 and 138/2002 dated 19.9.2002. Various other Public Notices have also been issued from time to time. These Public Notices and other useful information is available on Bangalore Customs Commissionerate web site at www.kar.nic.in/blrcustoms.
2. Letter of credit: A letter of credit is a document that a financial institution or similar party issues to a seller of goods or services which provides that the issuer will pay the seller for goods or services the seller delivers to a third-party buyer.[1] The seller then seeks reimbursement from the buyer or from the buyer's bank. The document serves essentially as a guarantee to the seller that it will be paid by the issuer of the letter of credit regardless of whether the buyer ultimately fails to pay. In this way, the risk that the buyer will fail to pay is transferred from the seller to the letter of credit's issuer.The letter of credit also insures that all the agreed upon standards and quality of goods are met by the supplier. Letters of credit are used primarily in international trade for large transactions between a supplier in one country and a customer in another. In such cases, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits applies (UCP 600 being the latest version).They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are the supplier, usually called the beneficiary, the issuing bank, of whom the buyer is a client, and sometimes an advising bank, of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without the consent of the beneficiary, issuing bank, and confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and traveler's cheques.
12) What do you understand by preshipment and post shipment credit. Pre-shipment Credit in Foreign Currency (PCFC) 1.1.1 Definition 'Pre-shipment' means any loan or advance granted or any other credit provided by a bank to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment, on the basis of letter of credit opened in his favour or in favour of some other person, by an overseas buyer or a confirmed and irrevocable order for the export of goods from India or any other evidence of an order for export from India having been placed on the exporter or some other person, unless lodgement of export orders or letter of credit with the bank has been waived. 1.1.2 General With a view to making credit available to exporters at internationally competitive rates, authorised dealers have been permitted to extend Pre-shipment Credit in Foreign Currency (PCFC) to exporters for domestic and imported inputs of exported goods at LIBOR/EURO LIBOR/EURIBOR related rates of interest as detailed below. 1.1.3 Scheme (i) The scheme is an additional window for providing pre-shipment credit to Indian exporters at internationally competitive rates of interest. It will be applicable to only cash exports. (ii) The exporter will have the following two options to avail of export finance: (a) to avail of pre-shipment credit in rupees and then the postshipment credit either in rupees or discounting/ rediscounting of export bills under EBR Scheme mentioned in paragraph 2.2. (b) to avail of pre-shipment credit in foreign currency and discount/rediscounting of the export bills in foreign currency under EBR Scheme. POST-SHIPMENT EXPORT CREDIT 2.1 Definition 'Post-shipment Credit' means any loan or advance granted or any other credit provided by an institution to an exporter of goods from India from the date of extending credit after shipment of goods to the date of realisation of export proceeds.9 2.2. Rediscounting of Export Bills Abroad Scheme (EBR) 2.2.1 General Banks are also allowed to rediscount export bills abroad at rates linked to international interest rates at post-shipment stage. 2.2.2. Exporters' Choice
The exporters have the option to avail of pre-shipment credit and postshipment credit either in rupee or in foreign currency. However, if the pre-shipment credit has been availed in foreign currency, the postshipment credit has necessarily to be under the EBR scheme since foreign currency pre-shipment credit has to be liquidated in foreign currency. 2.2.3 Scheme (i) It will be comparatively easier to have a facility against bills portfolio (covering all eligible bills) than to have rediscounting facility abroad on bill by bill basis. There will, however, be no bar if rediscounting facility on bill to bill basis is arranged by an bank in case of any particular exporter, especially for large value transactions. (ii) Banks may arrange a "Bankers Acceptance Facility" (BAF) for rediscounting the export bills without any margin and duly covered by collateralised documents. (iii) Each bank can have its own BAF limit(s) fixed with an overseas bank or a rediscounting agency or an arrangement with any other agency such as factoring agency (in case of factoring arrangement, it should be on "without recourse" basis only). (iv) The exporters, on their own, can arrange for themselves a line of credit with an overseas bank or any other agency (including a factoring agency) for discounting their export bills direct subject to the following conditions: (a) Direct discounting of export bills by exporters with overseas bank and/or any other agency will be done only through the branch of a bank designated by him for this purpose. (b) Discounting of export bills will be routed through designated bank from whom the packing credit facility has been availed of. In case, these are routed through any other bank, the latter will first arrange to adjust the amount outstanding under packing credit with the concerned bank out of the proceeds of the rediscounted bills. (v) As soon as terms and conditions of BAF/lines of credit or similar facility with overseas bank/discounting agency or any other agency have been finalised, these may be advised by the bank or by the designated branch in the case of lines of credit negotiated directly by the exporter to the ECD, RBI, Central Office, Mumbai10 together with a copy of the agreement entered into by the bank/exporter with overseas bank/discounting agency/any other agency, as the case may be. (vi) The limits granted to banks by overseas banks/discounting agencies under BAF will not be reckoned for the purpose of
13) Explain mates receipt, Clearing agents, Proforma and Commercial invoice. Mates receipt: Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel. It is not a document of title and is issued as an interim measure until a proper bill of landing can be issued. Clearing agents: Clearing Agencies are self-regulatory organizations that are required to register with the Commission. There are two types of clearing agencies -- clearing corporations and depositories. Clearing corporations compare member transactions (or report to members the results of exchange comparison operations), clear those trades and prepare instructions for automated settlement of those trades, and often act as intermediaries in making those settlements.1 Depositories hold securities certificates in bulk form for their participants and maintain ownership records of the securities on their own books.2 Physical securities are maintained in vaults, and ownership records are maintained on the books of the depository. Clearing corporations generally instruct depositories to make securities deliveries that result from settlement of securities transactions. In addition, depositories receive instructions from participants to move securities from one participant's account to another participant's account, either for free or in exchange for a payment of money. Clearance may be accomplished on a trade-by-trade basis or through netting3 of several trades either bilaterally between the two counterparties or multilaterally among all members of a clearing corporation to yield balance orders reflecting a single day's trades or all open positions to date (continuous net settlement or "CNS"). 4 The majority of equity trades in the United States are cleared and settled in CNS systems. CNS systems net the securities delivery obligations and the payment obligations of all clearing corporation participants. Clearing corporations notify participants of their securities delivery and payment obligations each day. In addition, the clearing corporation guarantees the completion of all transactions and interposes itself as the contraparty to both sides of any transaction. As with trading systems, the different clearing and settlement systems can be manual, semi-automated, or fully automated and different types tend to predominate for certain securities. Proforma and Commercial invoice: PROFORMA / COMMERCIAL INVOICE A Customs Invoice is required when sending dutiable goods (generally above US$10 in value) to countries outside the EU. The requirements are set by the Customs Authorities in each country. Contact DHL Customer Services if you need to check requirements for the country you are shipping to. Failure to complete the invoice
correctly can result in shipments being held or returned to origin. Select Proforma Invoice when sending goods of no commercial value (ie. goods that are not for resale) or personal shipments. Select Commercial Invoice when the goods are part of a commercial transaction or when shipping to Eastern Europe. Commercial Invoices should preferably be printed or typed on the companys headed paper. Three original copies of the Customs Invoice will usually be required. Invoice Number For Commercial Invoices, enter your sales invoice number. For Proforma invoices, assign a unique reference number. An invoice number must be stated for all shipments to Eastern European countries, such as Bulgaria, Hungary, and Romania. Terms of Delivery If unsure, tick ExWorks (EXW). If shipping to Eastern Europe add the origin city name eg. EXW Dublin. For more information please see the Incoterms section of the International Chmabers of Commerce web site www. iccwbo.org/incoterms Terms of trade provide information in respect of the carriage of goods, export and import clearance and the division of costs between the parties involved. Failure to specify terms of trade may result in the return of shipments if rejected by Customs. Description Detailed description of the items being shipped. The description should be understandable to non-specialists (ie. abbreviations for contents are not acceptable). Where items are contained in sets, it is not sufficient to list
them as one item eg. 'software sets' should be given as CD ROMs, software and brochures with the quantity of each listed separately. For clothing and fabric, state the material name and composition.

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ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

SUBMITTED BY: ROHIT KAWERI M.P.I.B, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

MASTERS PROGRAM IN INTERNATIONAL BUSINESS ASSIGNMENT 1

1. Management is not a profession but is heading towards that direction.Comment.

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

2.Decision making is the essence of management.- Comment.

ASSIGNMENT 1 MPIB, SEM I

3.What do you understand by planning?

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

h. Hence objectives should be practical, acceptable, workable and achievable.

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

7. What is Demand Forecasting?

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

a) time series projection methods this includes:

moving average method exponential smoothing method trend projection methods

b) casual methods this includes:

chain-ratio method consumption level method end use method

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

8. Differentiate between Perfect Competition and Monopoly.

The consequence of these differences include:

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

9. Discuss the role of Reserve bank of India.

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

10.What do you understand by Bank Negotiation documents?

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

11.What do you understand by exchange risk management?

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT

ASSIGNMENT 1 MPIB, SEM I

ASSIGNMENT 1 MPIB, SEM I

INDIAN INSTITUTE OF EXPORT AND IMPORT MANAGEMENT