Reflection Paper Essay Example | Topics and Well Written Essays - 500 words - 14

Reflection Paper - Essay Example would ensure that all employees involved with corrupt deals are fired and employed other people who are qualified and have no history of corrupt behaviours. Corruption was not justified in Siemens Global despite the fact that bribery was legal in Germany up untill 1999. In case bribery was tolertaed within the company it could have meant that the company was not good at what they were doing and hence had to bribe the governments of other countries to do business with them. It is challenging for the Company to make a shift to refine their ethical practices when there are radical changes in the policy since they were used to corrupt ways to get contracts with other countries. However, the change in management and employees, starting a fresh with honest intentions will make the company have clear records and succeed since they will be on the right side of the law. Siemens Global has ensured a good reputation in various places around the world and it has become one of the leading companies in electrical engineering and electronics. This is because of the Business Conduct Guidelines that have provided the legal and ethical framework in which they maintain their activities successfully. The employees of Siemens Global are expected to comply with the law in all their activities,respect the rights of individuals and follow anti-corruption policies with their third parties among others. As a CEO of my company, I would ensure that the company has a code of ethics and core values that guide the employees towards achieving the goals and objectives of the Company. My Company’s code of ethics will include provisions that wll require individuals to comply with governement rules,laws and regulations, Secondly, proper use and protecting of company assets, and thirdly, accepting responsibility and reporting all manner of corruption. The corporate culture values in my company will be informed by accountability, integrity, honesty, decency and respect. I will infuse these

Canon Case Study Essay Example | Topics and Well Written Essays - 2000 words - 1

Canon Case Study - Essay Example As going to be discussed below, it can be noted that Canon employs various strategies and has to a greater extent managed to meet the strategic challenges and changes as a result of the key success story in its operation. However, in view of the above explanations, it can be noted that Canon instead has been successful in managing its strategies by virtue of embarking on an open approach in formulation of strategic plans rather than being imposed by the top management. Its strategies are influenced and driven by the strategic vision of Canon’s senior and other managers. This strategy is very flexible in that it promotes an open door policy where views from other equally important decision makers are taken into consideration towards the attainment of the overall organisational goals. In most cases, strategic planning is viewed as bureaucratic in nature where it is often regarded as a preserve for the top management to impose their views and vision about the company on the other work mates. Canon’s policy is flexible and open to accept ideas from other people within the organisation. Through technological differentiation, Canon has managed to grow from strength to strength to catch Xerox which had been a world leader in the photocopying market since the 1950s. They have managed their strategic challenges as well as changes by developing technology that was completely different from Xerox and this offered new features which were not very common by then which gave them the competitive advantage against this rival competitor. Technology is dynamic and is expected to change constantly hence taking into account these changes is one guaranteed way of trying to keep up pace with the new developments in the market which will also ultimately impact positively on any business. Another strategy that was used by Canon was to target the small photocopier niche markets which

7-Eleven Underpayment Scams

7-Eleven Underpayment Scams Introduction Human lives are directed by course of actions and decisions. Whether its personal life or professional conduct, humans are bound to follow proper code of ethics. In workplace, each organisation has guided rules and practices. Employers are bound to these rules and regulations in order for any organizations to work smoothly (Schermerhorn, 2010). Sometimes the morality of business decision is challenged due to individual preference or limitations. This scenario is called an ethical dilemma whereby individuals are forced to weigh the right and wrong of their actions (Westerholm, Nilstun, Ovretveit, 2004). This essay examines impact of ethical practices and leadership in taking business decision. The organisation that is used for ethical study is 7-Eleven convenient stores in Australia. It discusses how organisations commit fraud and mock award system by underpaying staff. The Ethical Problem The shocking revelation by ABCs Four Corners in August 2015 exposed exploitations at 7-Eleven stores gives an insight on how big corporations make profit without paying legit wages. A joint Fairfax Media-ABC investigation exposed that most of these exploited staff are international students who are forced to work long hours even after their visa condition restricts them to work only 40 hours per fortnight (Ferguson, Danckert Hatch, 2015). These students are easy targets for franchise operators as they are looking for extra money to manage their expenses. It shows that entire work structure at 7-Eleven is flawed and franchisees make profit by underpaying their staff is a common practice in most stores. The head office claims that most of the franchise stores are paying legit wages and the underpayment were done by a marginal store partners. This blame game has raised a debate that who is sole responsible for this scam; the head office authority or the franchise owner. According to head office, the payrolls are monitored by franchisees and company merely provides administrative supervision. They claim that underpayment issue has nothing to do with the franchise profit sharing model and only a small number of franchisees are doing this wrong practice. But similar malpractice in multiple stores reveal that this is an organised fraud. The franchisees are trained to run their stores in a particular manner to make profits and more than dilemma it is a thoughtful unethical practice. 7-Elevens survival on employee exploitation The Fair Work Ombudsman has conducted various raids at different stores and revealed that situation has worsen over the years. The entire work structure at 7-Eleven is flawed and franchisees make profit only by underpaying their staff who are international students and work limitless hours to make up for underpayment. The reason behind students breaching visa conditions is to manage their expenses because they are underpaid and only means to recover that loss is by working extra hours. The head office is not just turning a blind eye, its a fundamental part of their business. The reality is its built on something not much different from slavery, 7-eleven insider (Ferguson, Danckert, Hatch, 2015). It is evident that these scam happens under the watch of head office management. They cannot blame the franchisees alone for this malpractice. Unscrupulous employers allow students to work more hours but threaten to report them to authorities for breaching their visa if they complain about working conditions. Employers sheets and rosters are doctored to maintain the scam (Ferguson, Danckert, Toft, 2015). Companies can easily monitor the payrolls across the stores by surprise visits and take legal actions against frauds. Following the investigations, 7-Eleven Australian office has marginalized the issue by suggesting that there are only small numbers of Franchisees who are culprit of underpaying and head office will ask them to pay penalties. The 7-Eleven chief executive Warren Wilmot said: The key factor here is that the panel will receive, review, and process any claim of underpayment, and authorise repayment where this is appropriate, The practices continuous in other forms underpayment, employees are still asked to back-pay part of their wages. Theoretical Framework The given ethical dilemma is a conflict between moral and business ethics. Loucks (1987) suggests that ethics is seen as something beyond obedience and adherence to the law. It implies an understanding of what is the good, or right, thing to do and of an internal system of beliefs and values that guide those actions. Solomon (2001 cited in Singer, 2013) argues that there is some confusion in defining exactly what constitutes ethical behaviour in an organisation. The given ethical condition poses an important questions about personal honesty and organised fraud. The virtue of honesty is crucial for personal and business ethics. The choice of practising underpayments can be explained by two ethical theories; Utilitarian perspective and Subjectivism. The Utilitarian theory holds that what an individual ought to do is to promote the maximum good for everyone i.e. the general good (Wong, 2006). The maximum good for everyone should be assessed by being neutral and thinking from multiple perspective. On the contrary, Rachel (2001 cited in Singer, 2013) states that ethical subjectivism is a theory which says that in making moral judgements, people are doing nothing more than expressing their personal desires or feelings. The 7-Eleven scam is more about personal choices of the franchisee. They are legally entitled to pay fair wages but for their personal gains they malpractice. From franchisees perspective, it is assumed that the operational structure of the store asset management doesnt make enough profits and thats one of the reasons for underpayment. Another important factor that governs this malpractice is known as Agency Theory. The theory explains that business owners and managers emphasize more on maximizing profit as they believe it as business rule (Eisenhardt, 1989). The market trend tells the morality of the practices that what is right or beneficial for business. The moral choice is sometimes explained in terms of the influence of external factors, such as the environment or influence of others. All of these may bias judgment and action by shaping a decision makers perceptions (Morell, 2004). The franchisee believe that they are just following the ideal business model that will help them in managing operational funds by underpaying staff. In business ethical dilemma, there must be prominent line between personal choices and business needs. It is important to understand that personal choices are subjective and may affect other employees of the business. Therefore while taking business decision, a leader must abide by the corporate codes of conduct. As suggested by Thakor (2003), the dividing line between law and ethics is a constantly moving one. What is legal but unethical today may well become illegal tomorrow. It is essential in this case to reflect on the stakeholders view of ethics. It criticises the agency argument that business operators must constitute their leadership that look after and protects the interest of employees. The debate between moral values and business ethics in case of dilemma is mostly resolved by Utilitarian theory. However it is also necessary to understand that business situations can change how a professional takes decision based on personal choice and corporate needs. The franchisee may imply agency argument to protect their interest but from utilitarian perspective this directly affects the interest of the employees. The core issue is the leadership that has completely failed in case of 7-Eleven scam. Firstly, head office should have eradicated this malpractice at initial level. Secondly they need to develop a business structure that promotes mutual benefits and not just agency approach. Critical Analysis The underpayment by multinational companies is just the tip of the iceberg. We need to understand the factors that contribute to these foul practices. Profit Sharing model that restricts franchisees to manage operational expenses. International students who are eager to work extra hours to manage their funds. The lack of regulators responsibilities in creating awareness and monitoring the operations. The new Chief Executive of 7-Eleven Mr Michael Smith, who replaced Mr Withers in October 2015, said the company was making significant progress towards satisfactory remediation and prevention of wage abuse (Gartrell, 2016). The issue is now facing worse where many franchise stores are out for sales because franchisees believe that they do not have enough resources to pay running cost if they pay fair wages. This will also increase unemployment as a contributing factor. According to Ferguson, The regulator also needs to be better resourced and the government needs to give amnesty for a period to foreign workers to come forward and expose what is going on without the fear of being deported for breaching their visa conditions (Barraclough, 2015). The remedial option is to change the profit sharing model or head office sharing some per cent of the running cost that enables franchisees to operate store efficiently without underpaying staff. The cause of the issues is the operational model that needs a revision under the governance of regulators who can strictly monitor the fair practices at these franchise stores. From ethical point, franchisees need to understand the core business needs and personal interest. One critical aspect of this malpractice at huge level is the influence of franchisee network. The new franchisees learn from the existing practices of the old franchisees and thus this malpractice becomes their routine. Business model for Ethical practice 7-Eleven franchise model is unique in terms of how it shares the profit margin and it varies in different countries. In Australia, this model is unfair for franchise partner where head office takes 57 percent of the gross profit and franchisees are left with 43 percent to manage their expenses and overheads. The deficit is mostly paid by franchisees and they are left with only one options and thats underpayment and back-pay wages. The revelation has put all franchise stores under surveillance resulting in many store out for sales in past 1 year. The issue is pertained due to 7-Eleven Australian model that doesnt allow franchisees to make profit in that 43 percent profit share. The situation can only be resolved if head office shares 50-50 profit margin like other countries. It will allow franchisees to manage their overheads and pay fair wages to the staff. Another aspect of this malpractice was the discrimination in hiring the staff. Franchisees mainly hire international students from India, Pakistan, China and other Asian countries because they are willing to work at less pay. It also raise questions about the head office responsibilities as they didnt check the staff profiling or merit of recruitment. Most of these international students have trouble with English language and are less competent to work any other job. They are ideal fit for the 7-Eleven scam model because they are unaware about their work rights and hesitant to contact authorities for assistance. The ethical safeguarding of these employees is an integral part of store operations. Ideally, the head office should conduct induction training that includes work rights awareness. Leadership and Decision Making Such organised scams unveil how these big corporation make profits by exploiting their staff specifically vulnerable groups. The investigations also reveals how franchisee seek alternate payment methods to avoid taxes and super-annuations. The company claims that they do not have direct involvement in these practice but insiders reveal that it all happens under their watch. Companies need to monitor the working hours and payroll records to scrutinize frauds. Even though after such investigations company do take responsibilities and commit to help the victims. Such situations should be monitored from start and strict measures should be taken on head office part. The payback is not a solution to such huge scale scams that steals tax by doctoring the payrolls. Therefore it is necessary that organisation have a defined ethical policy for business dilemma cases. It will help the decision makers to think rationally but will also remind them about the corporate good. Partiality or personal preference will bring subjectivism in the decision making process. Hechter Kanazawa (1997) maintain that reservations about rational choice only arise where people misunderstand its application. The rational decision from an organisational perspective and individual perspective will differ depending upon the number of external factors influencing the decision. These ethical systems are normative in nature that means they imply the right or wrong factors but do not completely involve rational choice from multiple perspectives. They do tell us about what ought to be done and it helps in takin decision but it doesnt provide clarity of argument, basis for decision and personal stand on the dilemma. The company leaders need to be more specific about their operat ional plans and communicate the same values to the franchisees. It should be a wake-up call to make sure their house is in order. The world is changing and the community is becoming less tolerant of non-compliance to the law (Ferguson, 2015). The underpayment scam is not an issue that can be rectified by paybacks. The entire model of franchise stores needs to be reviewed considering Australian market stakeholders. This will allow fair share of profit to franchisees and will restrict them from ripping wages from the staff. The remedy needs to be planned in terms of reviewing head office responsibilities in cross checking payrolls and fair works. Strict actions should be taken against culprits to avoid further victimization of international students. Recommendations The investigations has only revealed one side of the scam. There is a need to review head offices responsibilities in auditing these franchised stores. Temporary paybacks will not solve the evident fact that the entire 7-Eleven model is flawed for Australian market. Franchisees will keep finding such malpractice until they get fair share from the profit. This not only affect the employees but also damages the brand in the market. This is just the tip of the iceberg and there are many other companies who are in line for malpractice. This issue can only be settled with strong ethical framework that shares rights for franchisees and employees by maintaining transparency and accountability. The world is changing and the community is becoming less tolerant of legislative non-compliance. There is strong need to modify the Franchising agreement for transparency and compliance. These are some of the majors that companies can implement; Develop code of conduct to immediately terminate a franchise agreement if there is serious breach of workplace legislations by a franchisee. Develop an auditing model that shares equal responsibilities between company and franchisees to monitor the operations Take severe disciplinary actions against employees complaint and investigate based on evidence Monitor recruitment process and diversity of employees to ensure minorities or vulnerable groups are not victimized The company must hire independent investors and mystery shoppers to identify culprit franchisee for noncompliance. Company must develop forum to share store practices and employees feedback that are anonymous and directly under the higher management The franchisees can develop union and workout a model that supports equal benefit for multi-stakeholders The companies need to ask whether underpayment is an act of being strategic in organizing businesses. This will decide the approach for business operations and compliance. Underpayment should never be considered as an options for managing expenses. Instead, business operators must generate revenue from other sources. It is not ethical operate a business that makes profit by sacrificing the employees interest. Even after accepting their mistake, company operator must redevelop their operational framework to ensure that such incidents does not happen in future. This can only be achieved by strong compliance and transparent auditing. Conclusion The exploitation still exist at other franchise chains like McDonalds, Pizza hut who operates on the somewhat similar franchise model like 7-Eleven. The scandal uncovered that such exploitations are common practice and mostly organized at management level. Underpayments not only affects the business but it also destroys the brand reputation in global market. It also brings bad name for the country considering that most of the staff are international students who work in stores to manage their expenses. Without remedial process this exploitation will become part of work policies and there will be no one answerable for wrong-doings. Although, this revelation has opened a Pandora box for other business operators but until there is a strong compliance legislation, such scams will continue. The Fair work Ombudsman and government has tough task in eliminating such organised frauds and support workforce. Such scams forces business operators to assess their business ethics policies against the impact they create for multiple stakeholders. If business operators follow ethical leadership then they will have better control over compliance and mutual benefits for the business. The operational model can be modified to increase the stakeholders share and it will eventually help both parties to take ownership. References       Barraclough, C. (2015). Calls for action after the Inconvenient Truth about 7-Eleven is revealed Procurement and Supply Australasia. Procurement and Supply Australasia. Retrieved 31 January 2017, from http://procurementandsupply.com/2015/09/calls-for-action-after-the-inconvenient-truth-about-7-eleven-is-revealed/ Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74. Ferguson, A. (2015). 7-Eleven wage abuse scandal has lessons for all directors ACAPMAg The voice of downstream petroleum. ACAPMAg The voice of downstream petroleum. Retrieved 30 January 2017, from http://acapmag.com.au/home/2015/10/7-eleven-wage-abuse-scandal-has-lessons-for-all-directors/ Ferguson, A., Danckert, S., Hatch, P. (2015). 7-Eleven scandal: Company announces review of pay practices. The Sydney Morning Herald. Retrieved 31 January 2017, from http://www.smh.com.au/business/workplace-relations/7eleven-scandal-company-announces-review-of-pay-practices-20150831-gjbof4.html Ferguson, A., Danckert, S., Toft, K. (2015). 7-Eleven: A sweatshop on every corner. The Sydney Morning Herald. Retrieved 30 January 2017, from http://www.smh.com.au/business/workplace-relations/7eleven-a-sweatshop-on-every-corner-20150827-gj8vzn.html Gartrell, A. (2016). Malcolm Turnbulls financial stake in 7-Eleven under scrutiny. The Sydney Morning Herald. Retrieved 30 January 2017, from http://www.smh.com.au/federal-politics/political-news/malcolm-turnbulls-financial-stake-in-7eleven-under-scrutiny-20160204-gmlikw.html Hechter, M., Kanazawa, S. (1997). Sociological rational choice theory. Annual review of sociology, 23(1), 191-214. Loucks, V.R. (1987) A CEO looks at ethics. Business Horizons, March-April, 2-5 Morrell, K. (2004). Decision making and business ethics: the implications of using image theory in preference to rational choice. Journal of Business Ethics, 50(3), 239-252. Schermerhorn Jr, J. R. (2010). Management. John Wiley Sons. Singer, P. (Ed.). (2013). A companion to ethics. John Wiley Sons. Thakor, A. (2003) Competence without credibility wont win in the long run. in N. Tichy and A. McGill (Eds.) The Ethical Challenge (2005) San Francisco: John Wiley and Sons Inc. pp. 125-134. Westerholm, P., Nilstun, T., Ovretveit, J. (2004). Practical Ethics in Occupational Health. Abingdon: Radcliffe Publishing. Wong, P. W. H. (2006). A study of business ethical practices in Australian organisations: a multiple case study. Theses, 47.

The Inverted Pyramid and The Evolution of Newswriting :: essays papers

The Inverted Pyramid and The Evolution of Newswriting Newswriting, as it exists today, began with the adoption of the telegraph, which roughly coincided with the start of the American Civil War. The necessity of getting at story through before the telegraph’s occasional malfunction forced a radical change in the style of writing used in reporting. Before the telegraph, much of writing news was just that: writing. News was reported much like books were written. The reporter would set the scene with a detailed account of the setting or the mood and tell the tale just like any other narrative that one might read simply for pleasure. Since the telegraph made it possible for news to be printed the day after it happened; it was immediately adopted as the preferred method of getting news to the newsroom. Occasionally, however, the telegraph line would go down. Often this happened during a transmission, and the remainder of the message could not be sent until the line was repaired. Since a detailed description of the setting and the mood are useless without the actual piece of news, the system of writing, now known as the inverted pyramid, in which the most important items are written first in a concise manner, was born. The inverted pyramid system, born of necessity, was absorbed into newswriting over the proceeding century, and exists today as the standard style for reporting news. At the beginning of the civil war, the protracted narrative style still predominated the newswriting of the period. For the most part, stories were verbose almost to the point of obsequy and read more like an intellectual discourse on the topic, rather than a report of news. In a story on the front page of the Times of April 11, 1861, the reporter, who is begins his story, â€Å"Every good citizen must rejoice that the new administration manifests a disposition to guard more faithfully its State secrets than did its predecessors. The promulgation of the purposes of the Government while those are not yet entirely formed, or when disclosure would tend to defeat or embarrass them, is quite as weak as it is undignified. But this reticence may be carried to far, and lead to more mischief than it is designed to prevent.† It is important to note that these lines come not from an editorial, but from a story on the front page of the paper and that this is not a follow up to a new s story about the administration’s decision to be more careful with its secrets.

School Physical Plant Management

School Physical Plant Management What do you understand with the term school plant? The school plant is the totality of all things that make up a school system. It involves the physical and material facilities in form of buildings, school site and the environment that embody the school. Moreover, a school plants include the site, the building and equipment and this include the permanent structures like workshop, libraries, classrooms, laboratories and semi permanent structures like the educational system itself.The school facilities consist of all types of buildings for academic and non-academic activities, equipment for academic and non- academic activities, areas for sports and games, landscape, farms and gardens including trees, roads and paths. Others include furniture and toilet facilities, lighting, acoustics, storage facilities and packing lot, security, transportation, ICT, cleaning materials, food services, and special facilities for the physically challenged persons. Descri be the 2 major functions of school plant?An Environment to Facilitate Learning The primary purpose of the teaching and learning process is to bring about in the learner desirable change in behavior through critical thinking. This process does not take place in a vacuum but rather in an environment structured to facilitate learning. Hence, this environment of an organization as all elements relevant to its operation and they include direct and indirect action elements. School facilities, constitute the major components of both direct and indirect action elements in the environment of learning. Feature Article –Â  Country School – Allen CurnowThese facilities play pivotal role in the actualization of the educational goals and objectives by satisfying the physical and emotional needs of the staff and students of the school. Knezevich (1975, p. 563) emphasized that the physical needs are met through provision of safe structure, adequate sanitary facilities, a balanced visual environment, appropriate thermal environment, and sufficient shelter space for his work and play. His emotional needs are met by creating pleasant surrounding, a friendly atmosphere, and an inspiring environment.The educational system has undergone tremendous changes in the form of its philosophy, broadened goals and objectives, new approaches to service delivery and architectural design, quantum leap in school enrolment, multiplicity of curricula programmes and extra-curricula activities, introduction of Information and Communication Technology (ICT) and expanded academic support services such as guidance services to students, teachers and the community, integration of the school and community. 3. In what ways does instructional program influence the nature of school plant? Schools exist for the purpose of teaching and learning.Human and material resources are deployed for this purpose. School facilities are the material resources provided for staff and students to optimize their productivity in the teaching and learning process. The realization that the transfer of knowledge does not only take place in the four walls of the classroom from the teacher to the students but rather that learning takes place through discovery, exploration, interaction with the internal and external environment has necessitated the creative and innovative development of teaching and learning facilities that reflect these changes.Schools exist to serve socio-economic and political needs of the ever-changing society, consequently, they are in constant interaction with their external environm ent. They receive inputs from the external environment in the form of human and material resources, processes them and empty same into the society as finished products and services. The quality of the products bears a direct relationship with the quality of the facilities deployed in the process of the production.This demands that state of the art facilities are provided in schools to prepare school leavers for life in the global village. Several studies have shown that a close relationship exists between the physical environment and the academic performance of students. Nwagwu (1978) and Ogunsaju (1980) maintained that the quality of education that children receive bears direct relevance to the availability or lack thereof of physical facilities and overall atmosphere in which learning takes place.For example, research findings have shown that students learn better when a combination of methods and materials are employed during teaching. Furthermore, emphasis has shifted towards gi ving individual attention to students as against teaching large classes which presupposes that all students in a class have the ability to learn at the same pace. The implication of the foregoing is that in designing school plant, provision should be made for individual and small group interaction and for large groups for academic and social activities.

Analysing Financial Statement of Gul Ahmed Textile Mill LTD Essay

OBJECTIVE: Objective of our analysis is that we are a bank and we will provide loan to Gul Ahmed because Gul Ahmed has applied for a loan, so we are going to check the credit worthiness of Gul Ahmed by analyzing their financial statements in detail to see whether providing loan to Gul Ahmed will be appropriate or not. COMPANY PROFILE: Gul Ahmed is one of the largest home textile manufacturing companies in Pakistan. Since its inception in 1953, the company has been a trend-setter in the Pakistani textile industry and has serviced a diverse range of customers across the globe. Gul-Ahmed is a completely vertical textile mill comprising of  state-of-the-art spinning, weaving, yarn-dyeing, piece-dyeing, printing (pigment and reactive on rotary as well as flat bed), stitching, embroidery and quilting facilities. The vertical structure gives Gul Ahmed much better control over the quality of its products as compared to other mills. Apart from the state of the art production facilities, Gul Ahmed is also equipped with the latest effluent treatment plant, caustic recovery, steam recovery and waste heat recovery plants. This makes Gul Ahmed one of the greenest and most socially responsible textile mills in the region. Gul-Ahmed’s product range is quite diverse, and includes sheets, comforters, multi needle quilts/duvets, decorative pillows, window hangings, table & Kitchen Linen etc. Gul Ahmed also has the capability to do foam-back/black-out curtains and lining, as well as acrylic coating and flocking. TEXTILE INDUSTRIES OF PAKISTAN: The Pakistan textile industry total export is around 9.6 billion US dollars. The textile industry contributes approximately 46 percent to the total output or 8.5 percent of the country GDP. In Asia, Pakistan is the 8th largest exporter of textile products providing employment to 38 percent of the work force in the country. However, the textile industry currently faces massive challenges. The textile sector enjoys a pivotal position in the exports of Pakistan. In Asia, Pakistan is the 8th largest exporter of textile products. The contribution of this industry to the total GDP is 8.5%. It provides employment to about 15 million people, 30% of the country work force of about 49million. The annual volume of total world textile trade is US$18 trillion which is growing at 2.5 percent. Out of it, Pakistan’s share is less than one per cent. The development of the Manufacturing Sector has been given the highest priority since Pakistan’s founding with major stress on Agro-Based I ndustries. For Pakistan which was one of the leading producers of cotton in the world, the development of a Textile Industry making full use of its abundant resources of cotton has been a priority area towards industrialization. At present, there are 1,221  ginning units, 442 spinning units, 124 large spinning units and 425 small units which produce textile products. Pakistan’s textile sector earned US$5.77 billion during the 2003 year, compared with US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%. The total exports of textile sector in 2004 were US 5.7 billion which shows 2.5% growth it increase to 4% growth in 2005 as compared to 2004.The textile sector shows 8% negative growth in 2006.The negative growth continue in 2007 aslo with the value of 5%.The textile sector shows 15% growth in 2008. Now we will discuss the main reasons of crisis in textile industry step by step in detail. a. Lack of Modernize Equipment Moreover, critics argue that the textile industry has obsolete equipment and machinery. The inability to timely modernize the equipment and machinery has led to the decline of Pakistani textile competitiveness. Due to obsolete technology the cost of production is higher in pakistan as compared to other countries like India, Bangladesh & china. b. 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 effect the cost of production badly. The increase in raw material prices fluctuate rapidly due to double digit inflation. Sealand Logistics Solutions is helping textile oriented comanies with the help of logistics solutions in importing modern equipment and make valuable connections with reliable leading raw material provider at very competitive prices. INDUSTRY OVERVIEW Textile industry has the biggest share of Pakistan exports from raw material to finished goods in different global markets. During FY 2011-12 the country’s textile exports have drastically reduced by 10% to $12.529 billion against $13.975 billion of FY 2010-11. One of the major causes of underperformance is the persistent electricity and gas load shedding plaguing the industry which has hindered the performance and competitiveness of the textile industry. The consumer sentiments in US and EU remained bearish, causing a decline in textile related purchases. Up till March 2012,  global textile exports declined by 9.4 %. A major reason for this was excess stocks built up by the retailers and stuck up within the supply chain. It took almost a year for the supply chain to free itself from legacy stocks. Finally activity has started to pick up across large retailers in the west and we expect to see significant improvements this year. AUDITORS: The present auditor is Hyder Bhimji & Co. Chartered Accountant for Gul ahmed Textile retire and wait for other appointment, they have been winning the trust of Gul ahmed from 2009 to till today before that till 2007 were Gardezi & Co. Chartered Accountant. The Auditor statement for 2012 was as Balance sheet, P & L, Cash flow and other comprehensive income statement were in accordance with the Company Ordinance 1984, in our opinion proper books of account have been kept by the company’s ordinance, 1984. IMPORTANT KEY POINTS: Mr.Zain Basheer, Director of GAMT and son of Muhommad Ali Basheer Chairman of GAMT when found out that price of yarn was about to increase at the start of the 2012 year, realized that purchase of yarn in bulk quantity can result in big profits. So, he decided to purchase yarn in big quantity and as he planned GAMT invest a huge amount in buying yarn. But luck was not really in their favor and the price of yarn falls down with a big margin and they face a real difficult time and as a result their Cost of Sales increases which results in big losses in 2012 as compared to 2011 in which they hit the gigantic mark of 26 billion Rupee which made them the best textile in this era. Their Expenses also increase because they paid the big amount in Murabaha also in 2012. Interest Expenses and Taxation also shows the clear difference in 2012 from 2011 that also was one of the reason of losses. If you see on the vertical analysis Equity section their Capital and Reserves increase that is why the loss which fall to -1.25 from positive figure 5.23 hard to figure in overall equity section but the reserves was at the beginning of 2012, which means it was covered in 2011 and by the end of 2012 their reserves are less because of huge loss. PERFORMANCE EXPECTATIONS: Performance expectation after analyzing the financial statement of Gul ahmed is very good compared to any other textile mill. The Company’s sales amounting to Rs. 25,064 million is declined by 1.46% a compared to the corresponding year. Drop in exports have been compensated by increase in local sales. Decline in gross profit is due to the inflation without any corresponding increase in selling prices. During the fiscal year (FY) 2012 tight financial conditions, weak confidence and fiscal consolidation in various advanced economies hampered the economic progress. Many emerging economies were also hit by decreased investment and anticipated growth uncertainty, which led to equity price declines, capital outflows and currency depreciation. As perth World Economic Forum, the world GDP growth on YoY basis will drop from 4% in 2011 to about 3.5% in 2012. Domestically, GDP for FY 2012 was 3.7% (FY 2011: 3%) as per Economic Survey of Pakistan 2012. The increase was mainly due to the growth in commodity producing sectors, specially the agriculture sector in the country.Total investment and exports showed a significant contraction. The total investment, as a percentage of GDP, has fallen to 12.5% in FY 2012 (FY 2011:13.1%), which does not bode well for the future productive capacity of the economy. Inflation in June 2012 was 11.3% (June 2011: 13.1%) on YoY basis which was due to increase in energy and oil prices, supply disruptions due to heavy rains earlier at the start of the fiscal year and increased borrowings by the government. During the first half of the year 2012, State Bank of Pakistan (SBP) reduced the policy rate by 200 basis point lowering it to 12% and kept the rate unchanged during the second half. The reduction of 200 basis point was made to improve the falling private investment which is compromising the medium term productive capacity of the economy, and to control future inflation. After assessing the impact of reduction in the  first half, SBP realized that continued energy shortage is a major factor behind low demand for private credit for fixed investment. Return on Equity shows also a clear increasing trend for GATM, Equity is growing as it is a growing industry and in 2011 it shows a great impact in equity as it was the year which change the history for GATM they cossed the gigantic mark of 25 billion rupee then in 2012 it is slightly decreasing. Sales in Millions Lawsuits and contingencies: The Group owns and possesses a plot of land measuring 44 acres in Deh Khanto, which is appearing in the books at a cost of Rs. 64 million. The Group holds title deeds of the land which are duly registered in its name. Ownership of the land has been challenged in the Sindh High Court by some claimants who claim to be the owners, as this land was previously sold to them and subsequently resold to the Group. The claim of the alleged owners is fictitious. The Group is confident that its title to the land is secure and accordingly no provision has been made in these financial statements. The Group has filed a suit in the Sindh High Court for recovery of Rs.33.409 million (2011: Rs. 33.43 million) included in other receivables. The Group’s management and its legal counsel are of the opinion that the case will be decided in the Group’s favour and as such no provision has been made there against. The Group has filed a Petition in the Sindh High Court against order passed by the Board of Trustees, Employees’ Old-Age Benefits Institution (EOBI) for upholding the unjustified additional demand of payment raised by EOBI for accounting years 2000-01 and 2001-02 amounting to Rs. 50.827 million (2011: Rs. 50.827 million). This demand has been raised after lapse of more than two years although the records and books of the Group were verified by the EOBI to their entire satisfaction and finalization of all matters by EOBI. The Honorable Sindh High Court has already restrained EOBI from taking any action or proceedings against the Group. No provision has been made there against in these financial statements as the Group is confident of the  favorable outcome of the Petition. The Group has filed a Constitution Petition in the Sindh High Court against the City District Government of Karachi for striking down the unjustified demand of payment of Ground Rent of Rs. 10 million. The Honorable Sindh High Court has already restrained the City District Government of Karachi from taking any coercive action against the Group. No provision has been made there against in these financial statements as the Group is confident of the favourable outcome of the Petition. INVESTMENTS: By looking at the financial statements of GATM, we don’t find any unwise investment made by the company. The following information from cash flow gives a clear idea about all current cash generating from cash flows for the following year. Addition to property,plant & equipment. Would you recommend a buy/sell/hold on stock given on the current price stock prices? Why? Price targeted have been updates at GATM, if you see the present condition as investor’s overview Earning per share at year ended 2012 was (1.89) and P/E ratio was (11.17), a negative EPS numbers are usually reported as â€Å"not applicable† for quarter on which company reported  a loss. Investor buying a company with negative P/E should be aware that they are buying a share of a company that has been losing money per share of it’s stock. For now it is hard to recommend buy of stock unless it is better to hold it’s stock for some time because gulahmed past performance had been better on scale. What is Company’s secret? Gul-ahmed has always work on bringing innovation to the product development because they know the importace of being tech-savy and innovative from decades they have been working with the latest technology of that era. The installation of first full automatic wider width Air jet looms, 21 color rotatory printing machines and a modern laboratory in entering into 21st century, Another world-class idea came to our mind and retail outlet Ideas open in every part of the country. They have always been working on their U.S.P to make it better than others and it had paid off. At present they are working on high tech saving machines which is fully computerized and functions task of more than 20 men and this machine is only owned by GATM in Pakistan, this played major part in crossing gigantic mark of 25 billion rupee in 2011 which is by far the best output by any textile industry in Pakistan. Being tech-savy is the spirit implies two opposing forces of providing fast and flexible response to c ustomers, yet building efficient mechanisms and systems that are efficient and waste-free. The concept is to provide the right product and information, at the right time, in the right amount, in the right manner, while maintaining high standards of efficiency and cost control. IMC practices this contradictory idea in our daily activities to control their capital locked in inventory and to maintain a healthy customer relationship. Q7: Is it a growing/declining industry? It is a growing industy because if you see their progress from when they start they have reached the top of textile industry and serving it’s customer from more than last 50 years, they have always come up with new technology and innovative ideas. One of the current creative idea is, a 136.17 MW private power plant at Korangi Industrial Area of Karachi. The  project is a joint venture of Gul Ahmed Group, Toyoda Tsusho Corporation of Japan, International Finance Corporation (IFC) and Wartsila Diesel Oy of Finland. Gul Ahmed Energy Limited is backed by â€Å"GUL AHMED GROUP† which is one of Pakistan’s leading industrialist / business group since 1948 with a much diversified portfolio of trade, manufacturing, banking, industries, businesses and investments. Business ventures range from Finance, Energy, Beverages, Real Estate, Information Technology and Textile (the Group’s main forte) The Group is involved in the manufacturing of cotton yarns, grey and fini shed cloth and textile made ups and is one of the leading exporters of textile products from Pakistan Some of the companies forming part of the Group are provided below: Interpretation: Earnings per share is that amount you earn on every single ratio gulahmed is order to grab them and organization like gulahmed tries to maintain their goodwill with investor rather than giving them extra incentives and in 2012 they are negative, which is imposible for EPS because no one can pay negative value. CONCLUSION & FINDINGS: We as a Bank have walked upon a decision that we should gave the loan to Gul-ahmed after studying their financial statements they are a very growing organization. If we see their present condition in 2012, they are in loss but this was due to one bad decision by Director of GAMT which was made to amazed the world once again after 2011 gigantic mark sales in 2012 but it did not paid off. Financial ratios shows a slight change except R.O.E, E.P.S and P/E Ratios which are negative in 2012 as GAMT was in loss in present year. Before that E.P.S was growing and in 2011 it was 9.42 which is a very healthy earning per share.