Unit 41, unit 38 Coursework Example | Topics and Well Written Essays - 10000 words

Unit 41, unit 38 - Coursework Example Partnership is a type of business entity which is owned and run by two or more individuals, with their personal skills, resources, and money. Also, they share the profit and loss in accordance with stated terms of the partnership agreement. It has limited liability, therefore means if the accompany is in debt or obligation, the shareholders will not be liable for any debts of the company, other than for the value of their investment in that company. A Private Limited Company, also known as the LTD is a type of business entity which offers limited liability for its shareholders. Therefore if the company is in debt, it will only cost it’s investment to pay off the debt and the shareholders will not be liable for any obligation. A Public Limited Company, also known as the PLC is a type of business entity which offers their stock to be able to buy and sell by anyone on a stock exchange. It has unlimited liability, therefore means if the company is in debt or obligation, the shareholders will be liable for the debt and it will extend beyond the investment of the business’s owner to their personal asset. Apple Inc. is an American multinational cooperation that designs, develop, and sells consumers electronics. It belongs to the public sector and is driven by profit from the electronic items that they sell to the public. Apple also consists of a large number of shareholders worldwide, who invest a large amount of money from which they expect a profit. The main attraction to Apple and the way it leads to its success is that they are able to allocate the trend of people’s needs in this modern world, and being able to refurbish existing items such as an ordinary mobile phone into a brand new smart phone with niche function (IPhone). Throughout their development on their products, they have successfully created a niche market of their own and outrun their

Zara - strategic review report for the CEO Essay

Zara - strategic review report for the CEO - Essay Example Zara, a brand of Inditex, has achieved to establish its position as a leading firm in the global fashion industry.The strategies of Zara are reviewed in this paper in order to identify the key reasons of the brand’s success. These strategies are evaluated by referring to the organizational internal and external environment as involved in the brand’s operations and performance. Appropriate literature has been used in order to understand the brand’s current strategies and its prospects for future growth. The paper has been divided into four parts. In the first part emphasis is given on the analysis of Zara’s macro and micro environment. In this way, the effectiveness of the brand’s strategies, as aligned with the conditions in the brand’s environment can be evaluated. The second and the third parts of the paper focuses on the challenges that Zara has to face in regard to its internal strategic audit and the management of its stakeholders. In th e fourth part, certain strategic options are presented, as available to Zara under current market conditions. The review of the organization’s environment has proved that the growth of Zara can be related to the interaction of a series of factors, referring both to the internal and the external environment of the brand; the brand’s success cannot be considered as resulted by chance. Introduction This paper focuses on the review and the evaluation of Zara’s strategies taking into consideration the conditions in the brand’s environment. Particular reference is made to the UK market, as the basis for analyzing the performance of Zara, both currently and in the near future. The strategic decisions of Zara are reviewed and evaluated in order to check the brand’s future prospects. In addition, this analysis helps to identify the strategic options appropriate for securing the brand’s further growth. Question 1 [1059 words] In-depth analysis of the competitive forces and strategic issues shaping Zara’s industry from 2012 onwards 1.1 Macro-environment: PESTEL Analysis PESTEL analysis, as a strategic tool, is based on the idea that the performance of an organization can be affected by six factors related to its external environment (Henry 2008). The PESTEL analysis of the UK fashion industry would refer to six elements of this industry (Bowhill 2008): a) Political; Political environment in UK is quite stable; government supports organizational growth in regard to all industries. Recently, on the 13th of March, the British government has asked for an inquiry in regard to the status of the country’s retail sector (Holland 2013), probably under the fear that governmental decisions do not effectively support the

Can politics ever be considered just for Augustine Essay

Can politics ever be considered just for Augustine - Essay Example The great influence that his teachings had and continue to have in the modern period can be attributed to his persuasive nature, since the was able to influence the basic processes through which the Christian church operates today; not only the catholic church but also the Eastern Orthodox and the Protestants. With this in mind, it would be prudent to ensure that the teachings of this man are studied so that it can be determined whether he considered politics to be just or not. If one considers Augustine’s teachings, one would come to the conclusion that he believes politics can be just because of his belief in free will. Free will, according to Augustine, is an essential part of the human connection with God (Elshtain, 2004). While this may be the case, he lived during an age where many individuals were often subjected into lifelong servitude and slavery. The latter people did not have the free will to be able to make their own choices in life and only had to submit to the wi ll of their masters, a fact which would not have been in agreement with Augustine’s beliefs. ... democratic system where the free will of an individual is what determined whether he participated in the politics of his society or not (Visser, 2010). The fact that many of the individuals who lived in the Roman society lacked free will because of the autocratic government that was in place, may have had an influence on the teachings of Augustine, who, despite not having been born a Christian, was among those who developed the doctrine of free will in the religious and political scene of the time. According to Augustine, free will existed because it was granted by God, so that in order for an individual to achieve it, it had to be granted by God (Valk, 2009). The fact that some individuals in the society did not possess free will was because God had not seen it fit to grant it to them and this ensured that they were not yet worthy of it. It can be said that those individuals who have the free will to participate in politics have been granted this privilege by God and since God is co nsidered to be just, then there is justice in politics. Free will is absolutely essential to human nature as this is what determines what individuals do with their live, whether good or evil. The ability to make this choice is among the most fundamental aspects of politics because it enables individuals to take differing viewpoints without necessarily having to see eye to eye on some matters. It was this teaching which came to be adopted by the protestant movement, especially the Calvinists, who accepted Augustine’s teaching that there is both free will and divine grace, and as such, the will of an individual is often predestined. One of the conditions which Augustine considers to be necessary for individuals to attain free will is the keeping and fulfilling of all the commandments of

Zara - strategic review report for the CEO Essay

Zara - strategic review report for the CEO - Essay Example Zara, a brand of Inditex, has achieved to establish its position as a leading firm in the global fashion industry.The strategies of Zara are reviewed in this paper in order to identify the key reasons of the brand’s success. These strategies are evaluated by referring to the organizational internal and external environment as involved in the brand’s operations and performance. Appropriate literature has been used in order to understand the brand’s current strategies and its prospects for future growth. The paper has been divided into four parts. In the first part emphasis is given on the analysis of Zara’s macro and micro environment. In this way, the effectiveness of the brand’s strategies, as aligned with the conditions in the brand’s environment can be evaluated. The second and the third parts of the paper focuses on the challenges that Zara has to face in regard to its internal strategic audit and the management of its stakeholders. In th e fourth part, certain strategic options are presented, as available to Zara under current market conditions. The review of the organization’s environment has proved that the growth of Zara can be related to the interaction of a series of factors, referring both to the internal and the external environment of the brand; the brand’s success cannot be considered as resulted by chance. Introduction This paper focuses on the review and the evaluation of Zara’s strategies taking into consideration the conditions in the brand’s environment. Particular reference is made to the UK market, as the basis for analyzing the performance of Zara, both currently and in the near future. The strategic decisions of Zara are reviewed and evaluated in order to check the brand’s future prospects. In addition, this analysis helps to identify the strategic options appropriate for securing the brand’s further growth. Question 1 [1059 words] In-depth analysis of the competitive forces and strategic issues shaping Zara’s industry from 2012 onwards 1.1 Macro-environment: PESTEL Analysis PESTEL analysis, as a strategic tool, is based on the idea that the performance of an organization can be affected by six factors related to its external environment (Henry 2008). The PESTEL analysis of the UK fashion industry would refer to six elements of this industry (Bowhill 2008): a) Political; Political environment in UK is quite stable; government supports organizational growth in regard to all industries. Recently, on the 13th of March, the British government has asked for an inquiry in regard to the status of the country’s retail sector (Holland 2013), probably under the fear that governmental decisions do not effectively support the

The Age of Innocence Essay Example | Topics and Well Written Essays - 1250 words

The Age of Innocence - Essay Example The underlying issue that the film revolves around is the issue of freedom or individuality against societal dictates. The film’s setting is New York in the late 19th Century. Edith Wharton wrote the book, which the movie was based upon and she was born in such a setting. She admitted that on the time she wrote the book, such age of innocence was long gone. Despite that, the main dilemma of the book (and consequently the film) is timeless as it is still affecting societies at the present time. Social mores are dictated upon an individual in order to be accepted and for order in the community to be maintained. On the other hand, the individual struggles against such restrictions, as she/he perceives it to be a hindrance to her/his own personal living. This tension is dramatically emphasized in the movie and the development of events within the movie show the moral dilemma that people go through when encountering the crossroad of choosing between your passion and the dictates of society. The plot revolves around the Newland Archer, a young affluent lawyer, who is about to marry May Welland, also coming from a rich and influential family. Marriage then was not decided by love but by the intention of keeping the wealth of the rich families intact and even gain more wealth. They lived in a society where the aristocracy reigned and where their movement was dictated by an invisible code common to all. The aristocrats were more than willing to live under such rules just to maintain the status quo. Selfish desires were set aside for the good of the class. Most, if not all, were fine with the set-up in fear of staining their reputation. Newland Archer is one of those who were content with the status quo of repressed emotions for the "good" of everybody and for the preservation of their culture and lifestyle. He had thoughts of his own and even observed the absurdity of this faade his society puts up with yet he accepts it for his own perceived good. In this society, people had to hide their individuality under their masks of blind compliance to their norms. This charade of theirs is even more emphasized by the shots Scorsese makes throughout the film. His usually fast-paced camera movement is tempered here to focus on the background. The grandeur of the drawing rooms, the flowers, and the painting-like backdrop of the scenes are emphasized by the scenes in the movie as if the director wants to convey to his audience that the focus is on the appearance or form and not the substance. It parallels the mind-set of the society portrayed in the film. Then, the movie proceeds with introducing the conflict in the form of May's cousin Ellen Olenska. Considered to be an outcast by the New York aristocracy for marrying against the society rules and living in "scandalous" European circles, here is a woman who thinks on her own and lives on her own rules. She seeks a divorce from her Polish husband and the family pushes Archer to dissuade her from doing so. This leads Archer to be enthralled by Ellen's disposition. He is captivated by her way of thinking and her bravura to face up against the same rules they share to be absurd. He gets a taste of freedom and he yearns for more. In a society that seems to be like an iron glove, it is all the more relevant that the most explosive scene in the movie involves gloves. In a movie that portrays repressed desire tasted and ends

Absorption vs. Variable Costing Essay Example for Free

Absorption vs. Variable Costing Essay This case study will look at Jokkmok Industries and one of its managers, Mr. Rosen, who is bucking for a promotion to CEO. His division uses absorption costing and has the ability to produce 50,000 units a quarter with a fixed overhead amount of $600,000. While the sales forecast shows that the company will only sell 25,000 units during each of the next two quarters, Mr. Rosen wants to double his budgeted production for the second quarter from 25,000 to 50,000 units. We will look at Mr. Rosen’s decision and see how it affects his company’s bottom line by putting the figures from last quarter and the next quarter into an absorption income statement and a contribution margin statement. From this we will be able to see the differences in production costs from the two income statements. These figures will let us be able to assess if Mr. Rosen has improved his division’s performance by increasing production. We will also be able to tell if absorption costing is a viable option for management to use when making decisions like increasing production when sales are not forecasted to improve. We will also discuss a few shortcomings of the absorption approach and how it relates to management. And finally, we will see if Mr. Rosen’s decision would allow him to be considered for the CEO position. Absorption vs. Variable Costing (Contribution margin) â€Å"The main difference between variable costing and absorption costing is the accounting for fixed manufacturing costs.† (Horngren C. n.d.) This is never more evident than in this case study. Income statements prepared using these different methods usually produce different net operating income, and they will also produce different costs per unit sold. In order to completely fill out the income statements we will need to look at the 1st quarter’s income statement listed in Table 1. From the data in table 1 we will need more data to input into the absorption and contribution margin income statements. This additional data is displayed in Table 2. Now we will plug these numbers into both the absorption and contribution margin income statements shown in tables 3 and 4 below for both the 1st and 2nd quarters. Information for setting up these tables was obtained from the article â€Å"Income Comparison of Variable and Absorption Costing† from Accountingexplanation.com. One can notice right away that there are some major differences between the two income statements especially in the 2nd quarter’s net operating income. Under absorption the net operating income is $650,000 and Mr. Rosen would think that his bottom line is looking better and he could almost see himself in the corner office. But running the numbers using the variable costing method in the contribution income statement, the increase in production shows the same net operating income as the previous quarter which was $350,000. So how can the bottom line look so much better under absorption than contribution? The main reasons have to do with fixed manufacturing overhead and inventories. Fixed manufacturing overhead are things like rent, facilities expenses, salaries, and insurance that do not change over a given period of time. â€Å"Since fixed overhead costs do not change substantially, they are easy to predict, and so should rarely vary from the budgeted amount.† (Bragg 20 13) This is demonstrated in the cost per unit sold difference between the first and second quarters. First quarter’s was $72 while 2nd was $60. The reason is because fixed manufacturing costs are involved in the equation. In absorption you have to take the fixed manufacturing costs ($600,000) and divide by the total units manufactured (50,000) to get $12 per unit. Now you add that to the cost per unit manufactured on Table 1 ($48) to get a total of $60 per unit manufactured. When the company only produced 25,000 units the cost was $72 per unit. ((600,000/25,000) + $48 = $72). Now the excess fixed manufacturing costs are rolled into inventory for the next quarter. As shown in the less ending inventory in Table 3 ($1,500,000), because 25,000 units of the units manufactured were not sold. Contribution margin or variable costing does not break up the fixed manufacturing costs, instead it puts in the entire amount of $600,000 into the quarter and does not roll over the fixed costs into inventory. (As shown in the line fixed manufacturing overhead below the contribution margin.) Ho wever, in variable costing, $48 of manufacturing cost per unit is rolled over in the inventory. Because variable costing accounts for the fixed costs entirely it is the better option for knowing where your company stands. Besides the problems with absorption costing listed above, it considers fixed manufacturing overhead as product cost which shows a higher cost per unit than variable costing. As a result, it does not help management decide the selling price of a product. In the example above table 3 shows $72 and $60 per unit sold, while table 4, the variable cost per unit sold is $55. Also absorption costing can make the bottom line look better than it is by removing product costs from the income statement by producing inventory. This way managers, like Mr. Rosen, who are evaluated on the basis of operating income can temporarily improve profitability by increasing production. But there some that still think there are advantages to absorption costing. â€Å"Advocates of absorption costing argue that all manufacturing costs must be assigned to products in order to properly match the costs of producing units of product with the revenues from the units when they are sold.† (Accountingexplanation .com n.d.) But given the reasons stated above variable costing is still the way to keep the books for the decision makers. I would not recommend Mr. Rosen for the CEO position because he seems to have cooked the absorption books in his favor. By increasing his production he manipulated the fixed manufacturing costs to show them lower than they really are and thus showing a better net operating income. But the real costs are rapped up in inventory for the next quarter to worry about, like kicking the can down the road. There is something that Mr. Rosen could do, or might have been planning to do, to correct the inventory problem. He could plan on selling more units. What if market research shows that sales will increase by nearly 20% if Lokkmok drops prices by 5% to gain a competitive edge in the 3rd quarter? Look at Tables 5 and 6 below to show how dropping the prices and increasing sales to get rid of inventory would help the bottom line. Notice the difference between keeping the status quo of pricing and sales compared to the ‘what if’ third quarter numbers on both income statements. Now notice the difference of the bottom line between the absorption ‘what if’ 3rd quarter and the contribution margin income statement, the bottom  line suffers under absorption because sales are eating into the inventory, which is a good thing. But in reality the increase sales has increased revenue, eating away at inventory and actually helping the bottom line, as is the case on the contribution income statement which shows net operating income went up over 21%. Conclusion We have discussed the shortfalls of absorption costing, while showing the many benefits of variable costing and the contribution income statement. Whether it showing the correct net operating income for a company that increases production, or that selling more units, cutting into inventory, and increases revenue actually helps the bottom line, variable costing is correct tool for decision makers. Attached to the submitted Case assignment is the excel worksheet I used. I learned a lot about accounting and excel to complete this assignment. I had a fun time crunching the numbers to see how sales, fixed/variable costs, unit pricing and the like affect the income statement. Please feel free to open and change the yellow highlighted sections to see the outcomes. Please give me any feedback on the excel spreadsheet, for I was a broadcast journalism major 18 years ago and have not tinkered with spreadsheets too often. Thank you. References Horngren C. (n.d.) Chapter 9: Absorption/Variable Costing Retrieved from http://www.csus.edu/indiv/p/pforsichh/accountinginfo/121/documents/newCh09In-ClassProblemsHorngren13e-MYCOPY-X2.pdf Bragg, S (2013) What is fixed overhead?, AccountingTools. Retrieved from http://www.accountingtools.com/questions-and-answers/what-is-fixed-overhead.html Accountingexplanation.com. (n.d.). Advantages, Disadvantages, and Limitations of Variable Costing Systems. Retrieved from http://www.accountingexplanation.com/advantages_disadvantages_limitations_of_

Driving Forces Of Change In Textile Industries Commerce Essay

Driving Forces Of Change In Textile Industries Commerce Essay This project is given us as final assignment in strategic management class the topic is The driving forces those forcing to change the textile industry of Pakistan the Pakistan is agriculture base country and the textile is the back bone of Pakistan economy. The purpose of doing such types of assignment is to getting the practical exposure of industries the implantation of knowledge and also familiar with the challenges and issues which currently the industries is facing. Driving forces play an importance role for the development of economy and for the growth of industries.Through this project assignment we are all familiar with the industries knowledge and experiences and get the depth knowledge of industries and the issues,challenges, problem, norms and value of the industry.During our project we also found that Textile industry of Pakistan is facing several problems due to political and economic environment. Currently interest rate of country is very high which has increased cost of production and makes it difficult for the industry to become cost competitive in the global market. A part interest rate problem, Production of the industry is very disturbed due to power shortage and law and order situation of the country. This assignment is providing the knowledge of industry and how to solve such issues challenges and problem and how to get the competitive advantage and how to compete rivalryand how to cope up with these changes and how to develop the directions of industries in particular situations and how sustainable in these changes which is due to the driving forces of industries. Chapter 02: Literature Review: Background: Research Statement: The driving forces those are forcing to change the textile industry in Pakistan Research Objective: Our research objective is following To identify the link between the driving forces and textile industries To explore the impact of driving forces on textile industries To identify the different driving forces prevailing in the Pakistan economy To find out the solutions for driving forces To find out the reason of driving forces Limitation of Research: Our research is limited in Pakistan country only and in the textile industry and the driving force whose impact on textile the research is conducted through the data analyzing. Scope of Research: The research is conduct only in Pakistan and the research cover the driving forces which is prevailing in Pakistan economy and those who impact the textile industry only. Methods of Research: The method for the research we use the data which is taken from different source and then we analyze the data through the study and through the statically tools research method is most depend upon the data that we gather from different sources and though the online collection of data and implementation. Data Gathering: The data for this topic is gathering from employee who is currently working in textile industry and from the Pakistan textile journals, different authors articles, textile mills websites, government official ministry of textile website, all Pakistan association of textile mills, Google documents, researches etc. Variables: Variable for this research is below Textile industries of Pakistan Driving forces in Pakistan Hypothesis: If driving forces is their will it impact the textile industries. If driving forces vanished what will effect on textile industries. If driving forces aretheir will effect and how much it effect the industry. Driving Forces: The driving forces are the key internal forces micro environment (such as knowledge competences workforce of management and macroenvironment as well (such as economy competition technology) that shape the future of the organization Change in industries is due to the driving forces is participants and driving forces is major cause to bring change in industries competitive condition driving forces are emerge from internal and external environment. Driving forces can include changes in social, technological, environmental, economic andpolitical factors, for example: Demographic factors (population increase, in/out migration, changing age/genderstructure, etc). Laws and regulations (affecting land ownership, labour relations, environmental protection measures, etc). Policies (subsidies, price controls or guarantees, import/export controls, quotasand tariffs, exchange rates, etc). Markets and competition (size of or access to, local, national and internationalmarkets; growing competitiveness of producers in other regions, countries etc). Technology (availability of new genotypes, machinery, etc). Institutions (new actors, influences, social organization). Information (availability, communications technology). Non-agricultural employment opportunities (processing, manufacturing, business,services, migration/ remittances, etc.) Natural resources (characteristics of watershed, water availability, groundwaterlevels, land degradation, etc). Driving Forces Analysis: Driving force can be analyzed in two steps Identify relevant driving force Assessing the impact they will have Types of Driving Forces: Some of the common driving forces of industries. Increasing globalization of industry Changes in cost and efficiency Shifting from standardized to differentiated products (or vice versa) Regulatory influences government policy changes Changing societal concerns, attitudes, lifestyles Changes in degree of uncertainty risk Changes in long-term industry growth rate Changes in who buys the product how they use it Product innovation Technological change/process innovation Marketing innovation Entry or exit of major firms Diffusion of technical knowledge Driving forces In Textile industries of Pakistan: Pakistans textile industry faces several factors, both internal and external, that affect its competitive edge in global trade. An increase in production costs because of the heavy cost of credit finance Government levies and taxation have weighed heavily on the industry, Domestic cotton has not met qualitative needs of the growing spinning and textile sectors. Pakistans downstream users have also impacted the market, Government-backed supportive policies and heavy subsidies of our regional rivals like China, Bangladesh, India and Sri Lanka. External trade and tariff barriers, such as high import duties by the U.S. and anti-dumping duties by European Union. Pakistans loss of preferential access under the Generalized System of Preferences (GSP) in the E.U. Other Driving forces in textile industry: Pakistani Mills Look For the Competitive Edge RGST to affect value-added textile sector Zero rated status for all exports to be maintained Government restores zero-rating for textiles Textile Policy 2009-14 Analysis Finance Bill to Burden Industry Further Increasing Cost of Production Electricity Crisis Tight Monetary Policy Removal of subsidy on Textile sector United States EU cuts imports of textile from Pakistan Raw material Prices Effect of Inflation Pakistani Mills Look For the Competitive Edge: Pakistans cotton and textile industries have adapted to changes in the global cotton trading environment during recent years by investing more than U.S. $6 billion in production and technology upgrades. Because of that, Pakistans domestic consumption has surpassed production by about  3 million bales. But even with increasing consumption, Pakistans textile industry faces several factors, both internal and external, that affect its competitive edge in global trade. Many mills have incurred losses during the last two years. Those mills which could not adopt the necessary changes in the new business environment because of their financial restraints and heavy liabilities have experienced the greatest losses. To make their projects viable and to minimize losses, mills are generally curtailing their production by going into fine count yarns or closing parts of their units. Current Forecast: Pakistan emerged as a major player in world cotton trade after a phenomenal increase in its spinning capacity in the last few years. Traditionally, most of the mills in Pakistan still prefer to use Pakistani cotton due to its known spinning characteristics and easy availability for making medium-count yarns. But many mills have now developed permanent plans and blends based on imported cotton to bridge the shortfall in the local cotton supply.Recently, some mills have bought about 15,000-20,000 tons of Brazilian 2008 crop on call basis for shipment in 2008, and several other mills are inquiring to buy Brazilian cotton on the same basis. Some Brazilian businesses have reported as far as 2009. Some of the mills use this mode of buying to secure their short position in Pakistani cotton. If domestic price goes up, they opt to take shipment, and if prices come down to their desired level, they mange to get their import contracts settled with the shipper with mutual consent.According to pr ivate estimates, about 2.5 million bales of different growths have been booked in 2006/07 through the end of April. By February 2007, about 1,900,521 bales (170 kgs each) had reached the country. Pakistan may need to buy another 300,000-400,000 bales, which they may cover mostly from U.S., Brazil, West Africa and Uzbekistan. Pakistans Supply And Demand 05/06 06/07 07/08 (E) Beginning Stock 4.45 3.50 3.00 Production 12.40 12.40 14.20 Imports 2.05 2.85 2.20 Total Supply 18.90 18.75 19.40 Consumption 15.00 15.50 16.00 Exports 0.40 0.25 0.40 Ending Stock 3.50 3.00 3.00 Total Distribution 18.90 18.75 19.40 (all figures in million bales of 170 kg. each) Cotton vision 2015 Under cotton vision 2015, the government plans to bring more area under cotton cultivation particularly in Balochistan and Khyber Pakhtunkhwa. According to the plan, the government wanted to increase cotton production by 20 million bales through potential areas of Balochistan and KP. Having considered various options for production enhancement, it was realized that the production level of 20 million bales could be achieved by 2015 with a modest increase in sowing areas in potential cotton growing areas of Balochistan and NWFP coupled with an average of 5% growth in per hectare yield. The sources said that cotton alone contributes nearly 65 percent of the foreign exchange earnings of Pakistan. To bring more area under cultivation and ensure food security, the government plans to purchase 100 bulldozers for land development work in Balochistan with financial assistance of Italian government. The bulldozers procured will be deployed for development of 78 thousand hectares of land (70 pe rcent new and 30 percent existing) throughout the life of the bulldozers. The bulldozers would be given to the farmers at the rate of Rs 550 per hour against operational cost of Rs 3994.60 per hour involving 86 percent subsidy. (February 16, 2011) RGST to affect value-added textile sector RGST bill was most complicated than on-going GST and urged the government not to impose RGST that was going to push the export-oriented and labor intensive Textile Value Added Textile Sector to the wall. He said that the textiles exporters had strong exceptions to the government for continuously ignoring the reservations of the exporters regarding the imposition of the RGST and Zero Rate facility would not be withdrawn. But it is fact the Govt. had not yet cleared the outstanding refund claims of billions of rupees so far. He mentioned that the government was also holding up millions of exporters money under export rebate which was at present around 1%. Now it seems impossible in the present state of functioning that FBR could smoothly release 15% of GST refunds. To meet this shortfall in working capital, textile exporter/entrepreneur would resort to bank for financing its export for which mark-up rate itself is on a parallel rise. Thus Textile Value Added Textile Sector would be lead to an ultimate collapse, which facing shortage and day-by-day growing bills of Gas, Electricity and basic raw material. RGST may lead textile industry to bankruptcy He said textile industry was consuming 15 percent (600mmcfd) of total load of 4000mmcfd but the shortage is already being shifted on the industry which is unfair. According to him, textile industry has already lost $1.5 billion exports last year as a sizeable capacity remained idle on account of non-availability of gas. This loss is likely to touch $3 billion this year due to increase in value of commodities, if the gas supply to the industry is discriminatory suspended. He feared industry production loss to the extent of 30 percent ahead in case textile industry is denied gas during peak load period starting from November till February. Textile industry has already suffered from 44 days unprecedented gas load shedding during summer. The industry worries are piling up fast with regard to the next 12 months load management policy. Government restores zero-rating for textiles The government has restored the zero-rating for textile exporters and lowered the rate of general sales tax (GST) to four to six percent on sales of textile goods in local markets from the earlier notified 17 percent. Now manufacturers will not have to pay GST on their purchases if the goods manufactured are meant to be exported. If a registered taxpayer or exporter buys yarn with an aim to sell finished products made of it (yarn) in local markets, then he will pay four percent GST. And afterwards, four percent GST will be charged at every level of value-addition instead of 17 percent. If an unregistered taxpayer buys yarn, then he will be liable to pay six percent GST, and four percent GST will be charged on every step of the value-addition chain. Moreover, authorities have also clarified that the special excise duty will only be charged from other than zero-rated sectors. And those imports that are made for the purpose of exports will also remain zero-rated. The rate of withholding tax has been fixed at one percent. All these decisions will come into force with effect from April 012011. The decisions announced in these respects on March 15 through presidential ordinances and subsequently notified through statuary regulatory orders (SROs) have become null and void. The new decisions were taken by finance minister Abdul HafeezShaikh and chairman of FBR Salman Siddique at a grand meeting with textile makers. Delegates from Federation of Pakistan Chambers of Commerce and Industry, chambers of commerce of different cities and representatives of textile bodies participated in the meeting held at Islamabad. This is a win-win situation for the government and textile makers, said a participant of the meeting. There was consensus on the rates of taxes.Officials agreed to implement four to six percent GST on local sales instead of 17 percent after they were made to realize the menace of Afghan Transit Trade (ATT). If the government had not lowered the taxes, it would have encouraged smuggling under ATT and through other channels. According to an estimate, goods worth $2.5 billion were smuggled into the country last year under the garb of Afghan transit trade. Textile Policy 2009-14 Analysis The first ever National Textile Policy was announced by the government in 2009 and is being generally hailed by the stakeholders since it not only addresses some of their key concerns and demands but also shows (albeit after a long wait) the required commitment and assumption of ownership by the Textile Ministry for providing meaningful policy direction to this largest national manufacturing sector. While the announced policy tends to be quite comprehensive and well researched its success will largely depend on the team assigned to micro manage its implementation and the operational strategy it then goes on to adopt. More often than not, perfectly good policies in the past failed to yield the desired results owing to blatant micro-management failures. Further, we find that embedded in the policy itself are measures that represent its core strength but ironically remain beyond the executionary ambit of the Textile Ministry. For example, it is all very well to announce Priority in Gas and Electricity Load Management, but to be able to effectively carry this out poses some serious practical challenges. First, to implement such a measure requires equal assurance and willingness by the related yet different ministries, namely Water Power and Oil Gas. Second, the textile industry itself is scattered and does not draw power from either dedicated textile feeders or textile specific po wer stations. Therefore ensuring continuity of supplies only to textile mills while switching off others, may operationally not be doable. Third, the textile industrial units (especially the small and medium sized) are so grossly intertwined with residential areas in virtually all industrial centers such as, Faisalabad, Gujranwala, Sialkot, Sheikhupura, Multan, etc., that it gets to be virtually impossible to separate the gas and electricity supply lines of domestic users from the industrial ones. Perhaps a better approach would have been to consult with relevant ministries and announce that a) Textile units in all sizes are entitled to alternative feeder arrangement that ensures continuity of supply from one feeder while the other is switched off for load management, b) Gas to be made available at the doorstep of textile units (like in the earlier days) to overcome the current prohibitive cost of simply getting a gas connection installed; a cost that at present literally denies a significant portion of the industry from cheap, efficient and clean fuel in shape of natural gas, c) Since gas supply management is there to stay, especially in winters, why not just announce a reduced gas tariff (like in Bangladesh) for industry that can in-turn help average out additional fuel costs undertaken by the industry during the period when gas is not available, and d) An establishment of a joint cell consisting of representatives from related ministries and the industry to create a forum that is easily accessible to mill managements and that can at the same time ensure to resolve problems that emerge on an on-going basis. Increasing Cost of Production Textile industry of Pakistan is facing problems in competing in the international market due to increase in the cost of production. The increase in the cost of production is due to the facts like interest rate, inflation and the continuous depreciation of Pakistani rupee value.Textile exporters rightfully demand reduction of Kibor rate to 8% to avoid a severe decline in exports. A three-year comprehensive textile policy is expected to be announced before budget 2009-10. The textile policy has been designed to enhance the exports of textile sector to $ 25 billion in next three years. This was stated by the Minister for Textile Industry RanaFarooqSaeed Khan. Textile Minister further informed that the spinning and weaving sector would get its due share from the Export Investment Support Fund, worth Rs. 40 billion allocated in the Federal Budget 2009-10. Electricity Crisis As a consequence of load-shedding the textile production capacity of various sub-sectors has been reduced by up to 30 per cent. The joint meeting of APTMA other related organization was held at APTMA House to formulate a joint strategy to address the alarming electricity crisis being faced by the textile industry. The meeting unanimously decided to constitute a joint working group of electricity management for the textile industry in the larger interests of the value chain of the textile industry. The joint working group will meet shortly to design a detailed plan to pursue the following goals; immediate total exemption from Electricity load shedding for the textile industry value chain; Rationalization and reduction of electricity tariff. The load-shedding of electricity cause a rapid decrease in production which also reduced the export order. The cost of production has also risen due to instant increase in electricity tariff. Due to load shedding some mill owner uses alternative s ource of energy like generator which increase their cost of production further. Due to such dramatic situation the capability of competitiveness of this industry in international market effected badly. Fig.1. illustrates comparison between electricity production and consumption (Business Recorder Pakistan -Special report, 2009). Tight Monetary Policy Due to the stiff monetary policy the cost of production is high. Due to high interest rate financing cost increases which cause a severe effect on production. The withholding tax of 1% also effects the production badly. The high cost of doing business is because of intensive increase in the rate of interest which has increased the problems of the industry. The government should take immediate measures to remove slowdown in the textile sector. Removal of subsidy on Textile sector The provisions of Finance Bill 2009-10 are not textile industry friendly at all. Provisions like reintroduction of 0.5% minimum tax on domestic sales, 1% withholding tax on import of textile and articles etc., are nothing but last strick on industrys back. Reintroduction of minimum tax on domestic sales would invite unavoidable liquidity problem, which is already reached to the alarming level. The textile industry was facing negative generation of funds due to unaffordable mark up rate. United States EU cuts imports of textile from Pakistan United States cancel more than 50% of textile orders of Pakistan .US also impose a high duties on the import of textile of Pakistan which effect the export in a bad manner. US EU are the major importer of Pakistan textile which create a huge difference in export of Pakistan textile after imposing a restriction on import of Pakistani textile goods. Raw material Prices Prices of cotton other raw material used in textile industry fluctuate rapidly in Pakistan. The rapid increase in the price raw material effects the cost of production badly. The increase in raw material prices fluctuates rapidly due to double digit inflation instable internal condition of Pakistan. Due to increase in the cost of production the demand for export home as well decreased which result in terms of downsizing of a firm. Hence the unemployment level will also increase. Government should take serious step to survive the textile industry. In order to decrease the price raw material for textile we need to increase our production capability. Simultaneously, the government should make arrangement for introducing international system of Cotton Standardization in Pakistan to enhance quality and value of Pakistan lint cotton by utilizing the technical services of Pakistan Cotton Standard Institute. Effect of Inflation Inflation rate is measured as the change in consumer price index (CPI).Inflation is basically a general rise in the price level. It is decline in the real value of money. Inflation can have adverse effect on economy. Pakistan is one of prey of inflation. It still faces high double digit inflation. The increase in inflation causes the increase in the cost of production of textile good which return in downsizing. The double digit inflation causes reduction in exports of textile. (FPCCI) Chapter 03: Industry Profile: Background: World Textile Industry was initially started in Britain at the beginning of the 18th century was the production of textilesas the spinning and weaving machines were invented in that country.Preston barber Richard Arkwright in 1769, patented a machine that would take cotton spinning from home to the factory. Arkwrights water frame was the first textile machine to use water power rather than muscle power. From this marked the factory system started, which later spread to other industries.According to statistics, the global textile market possesses a worth of more than $400 billion presently. The industry has faced high competition and opportunities in a more globalize environment. It was forecasted that Global textile production will grow by 25% between 2002 and 2010 and Asian region or the Asian countries will largely contribute in this sector.The WTO has taken so many steps for uplifting the textile industry sector. In 1995, WTO had renewed its MFA and adopted agreement on textiles a nd clothing (ATC), which states that all quotes on textile and clothing will be removed among WTO member countries.However the level of exports in textiles from developing countries is increasing even if in the presence of high tariffs and quantitative restriction by economically developed countries.Moreover the role of multifunctional textiles, eco-textiles, e-textiles and customized textiles are considered as the future of textile industry. Types of Textile Industry: These are the industry lie in the textile sector Cotton industry Woolen industry Silk industry Linen industry Pakistan Textile Industry Description: Whenever we think of manufacturing industry in Pakistan, it is textile industry that immediately comes to mind that is playing an important position in terms of the employment generation and value added special contribution towards the exports. Pakistans textile industry is one of the most important sectors of Pakistan. We can say that after agriculture sector, the textile industry is the backbone of Pakistan as it contributes significant part to the country GDP, exports as well as employment. s the fourth largest cotton producer in the world. Because of its plentiful, indigenous cotton supply, the textile industry is central to the Pakistani economy. The Pakistan textile industry has strong base of raw material, started its journey from non existence in 1947 with meager size of 78000 spindles and merely 3000 looms that was unorganized sector, and only 8% domestic demand was catered. The industry has gone through a long way and now possesses 443 units, 8.4 million spindles and 166,000 rotors, 20,000 shuttles less looms, 200,000 power looms, over 600 processing units and over 2500 garments units.Textiles and Clothing, no doubt is the largest industrial sector of Pakistan from the investment, employment and export point of view. It accounts for approximately 27 percent of total industrial output, absorbs about 38 percent of industrial labor force, and contributes around 60 to 65 percent to export earnings. [Pakistan Economics Survey]. The cotton countryà ¢Ã¢â€š ¬Ã‚ ¦.. Fourth largest producer of cotton after USA, China and India. Third largest consumer of cotton. Third largest exporter of cotton textiles. Second largest supplier of cotton yarn with 26% share of the international market. These are the main sectors of Textile Industry: Spinning Weaving Finishing Dyeing/ Printing Pressing Fashion designing Spinning It is the process of converting raw material into yarn. The raw materials may be natural materials such as cotton or manmade fibers such as polyester. Sometimes, the term spinning is also used for production of manmade filament yarn. Weaving It is the process of making cloths like t-shirts, jeans and all, rugs, blankets and other products by crossing two set of threads over and under each other. Now, weaving machines are used for this process. Weaving is the most important sub-sector of textile. The exports of woven fabrics and other related woven made-ups form a major portion of textile exports from Pakistan. Finishing Finishing of cloth is one of the chief arts in the textile industry. The appearance of the any product is the first concern, and the appearance of any fabric is just because of the methods of finishing. Dyeing/ Printing The Dyeing of clothing and other materials is a fairly simple process. It doesnt consume much time and workactually it often depends on what type of dye you purchase. Printing is something through which cloths are printed with different designing and prints. Pressing The cloths which came after the process of dyeing and printing would go for the pressing. It is simply pressing the cloths. Fashion Designing It is new in the textile industry, actually the popularity of fashion designing begin from previous couple of years. It is the applied art dedicated to clothing and lifestyle accessories created within the cultural and social influences of a specific time. Process of Textile Value Chain Challenges to textile: Frequent fashion changes. Anti dumping policies imposed by major importers. Non tariff barriers may increase such as standards relating to child labour, human rights, wages and working conditions, use of carcinogenic chemicals, inflammable materials, etc. Increased competition from India, China, Turkey, Caribbean Sub-Saharan countries and others who have preferential trade arrangements with major importing countries. High power cost frequent power cuts. Lesser usage of eco-friendly materials.   Lack of international marketing efforts. Higher rate of interest on loans for modernization and expansion.   Less awareness in acquiring international quality certifications. Chapter 04: Company Profile: Name Owner Location Adil Textile Gulistan Textile Mills Limited Quetta. Text Accord Textile Gulistan Spinning Mills Limited Quetta Textile Mils Ltd Ahmed Hassan Textile Mills Limited Gulshan Spinning Rashid Text. Ahmed Spinning Mills Limited Hafiz Textile  Ã‚   Ravi Textile Mills Al -Azhar Textile Hajra Textile Redco Textiles Al-Abid Silk Mills Hala Spinning Regent Textile Ali Asgahar Textile Hamid Textile Mills Reliance Cotton Alif Textile Harnai Woolen Mills Reliance Weaving Al-Jadeed Textile Haroon Oils Resham Textile Allawasaya Textiles Harum Textile Ruby Textile Mills Al-Qadir Textile I.C.C. Textiles Rupali Polyester Limited Amazai Textile Ibrahim Fibre Ltd. Sadoon Textile A