textile study
TRANSCRIPT
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Textiles An Overview
Se tember 2012
Textile SomeFacts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance CompetitivenessOutlook on the
Sector
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Sna shot1. Profile
ext e ome acts
Importance of Textile in Pakistan
2. Risks
World Textile Demand and Supply DynamicsPerformance
Competitiveness
Textile SomeFacts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance CompetitivenessOutlook on the
Sector
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Textile Some facts
Textile means to weaveth
cottonrd
1
capacity in Asia and 5%
of the global spinningcapacity
Largest industrial sector
2
3
Sufficient availability ofraw material
Textile SomeFacts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance CompetitivenessOutlook on the
Sector
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Pakistan Agricultural Land use 4
Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance CompetitivenessOutlook on the
Sector
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44%
Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
Sector
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15%
Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
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Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
Sector
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Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
Sector
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Pakistan's Textile SectorYear
Installed
Capacity
(Looms)
Working
Capacity
(Looms)
2004-05 9 000 5 000FY12 (P) FY11 FY10 FY09 FY08
Pakistan & Textile Industry Exports
5
6
2005-06 9,000 4,000
2006-07 8,000 4,0002007-08 8,000 4,000
2008-09 8,000 4,000
2009-10 7 000 4 000
Pakistan Exports (USD mln) 24.6 24.8 19.3 17.7 19.1
Textile Exports (USD mln) 12.3 13.8 10.2 9.6 10.6%age of Textile Exports 50% 56% 53% 54% 55%
P: Provisional
2010-11 7,000 5,000
2011-12 7,000 5,000
6KHYBER TOTAL
I
MUnits
Spindles
000 Units
Spindles
000 Units
Spindles
000 Units
Spindles
000 Units
Spindles
000 Units
Spindles
000
2004-05 307 6,998 118 2,512 17 781 10 99 6 93 458 10,483
PAKHTUNKHWA PAKISTAN
Year
.
PO
R
T
- , , ,
2006-07 309 7,349 119 2,132 17 812 10 127 6 94 461 10,514
2007-08 309 7,349 119 2,132 17 812 10 127 6 94 461 10,514
2008-09 309 7,349 119 2,132 17 813 10 127 6 94 461 10,515
2009-10 316 7,606 118 2,056 17 745 9 125 6 94 466 10,6262010-11 316 7,841 116 2,188 17 712 9 130 6 94 464 10,965
A
N
CE
Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
Sector
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Pakistans Textile Sector Composition
Pakistans textile industry consists of large scaleorganized sector and highly fragmented
cottage/medium and small unitsOrganized sector : Large number of spinning units(464) and a small number of weaving units (60)
The rest of the downstream industry chain finishing,
7
ma eups, garmen s, owe an os ery av ng a greaexport potential, is largely segmented in un-organized
.
Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
Sector
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Pakistans Textile Sector at KSE
180 listed textile companies constituting threesegments: A) Spinning, B) Weaving, and C)
Composite.Textile Paidup Capital as at end-June Textile Market Capitalization as at end-June
3.8%
5.0%
6.3%
7.5%
15
20
25
30
Rin
mln
1.0%
1.5%
2.0%
2.5%
3.0%
30
45
60
75
90
KRin
mln
0.0%
1.3%
2.5%
0
5
10
2006 2007 2008 2009 2010 2011 2012
P
0.0%
0.5%
0
15
2006 2007 2008 2009 2010 2011 2012
P
Weaving
Weaving
SpinningComposite%age of total KSE Capital
Composite
%age of total KSE Capitalization
Textile Some
Facts
Importance of
Textile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness
Outlook on the
Sector
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Top Listed Spinning PlayersPKR in mln
31-Mar-12 30-Jun-11
PROFIT SHARESHARE IN SHARE IN
PROFIT
8
1 Fazal Cloth Mills Limited 14,183 1,101 18,934 8.0% 825 6.5% A- (PACRA) 98.9
SALES
.
NO.
AFTER
TAXATION
SALES
RATING PRICE
(PKR)SEGMENTSALES
SEGMENTPROFIT
NAME OF COMPANY (SPINNING) AFTER
TAXATION
n us ye ng anu ac ur ng ompany m e , , . , . .
3 Gadoon Textile Mills Limited 9,834 265 15,638 6.6% 2,156 17.1% Not Rated 69.3
4 Gulistan Textile Mills Limited 5,521 (413) 9,678 4.1% 250 2.0% Not Rated 17.5
5 Fatima Enterprises Limited 5,914 (305) 9,288 3.9% 116 0.9% Not Rated 14.3
. . p nn ng s m e , , . . o a e .
7 Din Textile Mills Limited 5,467 (668) 7,709 3.2% 851 6.8% Not Rated 17.4
8 Saif Textile Mills Limited 3,845 14 7,361 3.1% 608 4.8% Not Rated 10.0
9 Fazal Textile Mills Limited 3,347 100 5,607 2.4% 354 2.8% Not Rated 196.8
a man o on s m e , , . - . o a e .
Total 106,998 45.1% 7,656 60.7%
Total Spinning - Net of losses 237,196 100.0% 11,363 100.0%
, . , .
Source: KSETextile Some
Facts
Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
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Top Listed Weaving Players
c PKR in mln
30-Jun-1131-Mar-12 8C
1 Prosperity Weaving Mills Limited 4,024 7 5,952 22.3% 139 19.3% A- (PACRA) 10.4
TOTAL
SALES
WEAVINGSEGMENT
RATING
SHARE
PRICEWEAVINGSEGMENT
SR.
NO. NAME OF COMPANY (WEAVING)
AFTERTAXATION
TOTAL
SALES
AFTERTAXATION
2 Shahtaj Textile Limited 3,017 69 4,040 15.1% 205 28.5% Not Rated 30.0
3 Yousaf Weaving Mills Limited 1,790 (140) 3,829 14.3% 61 8.4% Not Rated 1.7
4 Zephyr Textiles Limited 2,347 37 3,574 13.4% 89 12.3% Not Rated 3.7 x , , . . .
6 Feroze1888 Mills Limited * 2,246 167 2,913 10.9% 151 21.0% Not Rated 36.1
7 ICC Textiles Limited 1,380 (66) 2,246 8.4% (99) -13.8% Not Rated 2.18 Ashfaq Textile Mills Limited 729 54 1,036 3.9% 30 4.1% Not Rated 10.5
*Formerly Nakshbandi Industries Limited
Total Weaving 26,687 100.0% 720 100.0%
Total Weaving - Net of losses 26,687 100.0% 621 100.0%
Source: KSETextile Some
Facts
Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
Performance CompetitivenessOutlook on the
Sector
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Top Listed Composite PlayersPKR in mln
30-Jun-11
PROFIT
31-Mar-12
SHARESR. NAME OF COMPANY TOTAL TOTALPROFIT COMPOSITECOMPOSITE
8
1 Nishat Mills Limited 32,513 2,526 48,565 14.9% 4,844 26.1% AA- (PACRA) 58.5
2 Gul Ahmed Textile Mills Limited 18,069 (279) 25,435 7.8% 1,196 6.4% Not Rated 26.7
TAXATIO
PRICENO. (COMPOSITE) SALES SALES
TAXATION
PROFIT
SALES
, , . , . .
4 Nishat (Chunian) Limited 13,380 298 20,322 6.2% 1,459 7.8% A- (JCR) 20.6
5 Masood Textile Mills Limited 14,157 537 18,525 5.7% 730 3.9% Not Rated 29.0
6 Azgard Nine Limited 8,129 (4,417) 17,603 5.4% (4,702) N.A. D 6.1, , . , . .
8 Mahmood Textile Mills Limited N.A N.A 15,098 4.6% 1,123 6.0% Not Rated 101.8
9 The Crescent Textile Mills Limited 8,995 (293) 14,759 4.5% (119) N.A. Not Rated 13.7
10 Quetta Textile Mills Limited 8,262 7 14,344 4.4% 584 3.1% D 27
Total 213,041 65.3% 8,647 N.MTotal Composite - Net of losses 326,065 100.0% 8,458 N.M
Total Composite 326,065 100.0% 18,581 100.0%
Textile Some
Facts
Importance ofTextile inPakistan
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Cotton Demand and Supply9
Chinacarrying
Millions of 480 lb.
Bales
Aug 08 - July
09
Aug 09 - July
10
Aug 10 - July
11
Aug 11 - July
12
Aug 12 - July
13
September*
World Cotton Ending Stocks
recor eveending
China 22.4 15.2 11.6 30.6 35.5
India 10.6 9.4 9.9 7.7 8.2Brazil 5.0 4.4 7.9 8.0 6.0
United States 6.3 2.9 2.6 3.4 5.3
Austrailia 1.0 0.7 2.6 3.3 3.5
consumed
raduall
Pakistan 3.4 3.0 2.7 3.1 3.4
Turkey 1.7 1.9 1.7 1.7 1.8
Rest of World 12.2 10.2 10.5 12.2 12.9
World Total 62.5 47.8 49.5 69.9 76.5* Estimated
Huge worldstocks
Point to note: Due to sufficient,
in the current prices is expected
Textile Some
Facts
Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness Outlook on the
Sector
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10
300
350
12,000
14,000
Country Wise Cotton Price ComparisonHighercotton
200
250
8,000
10,000
Cents
KR
pr ces nChina
100
150
4,000
6,000 US
support
rice00
,
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Pakistan (PKR/Maund) USA (Cts/Lb)
China (Cts/Lb) India (Cts/Lb)
Pakistan (Cts/Lb)
Textile Some
Facts
Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
Performance Competitiveness Outlook on the
Sector
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Textile and Clothing Supply11
Sr. #
2006 2007 2008 2009 2010
World Textile (USD bln) 220.4 240.4 250.2 209.9 250.7
Top 10 Leading Exporters of Textile (%age share in World Textile Trade)Increasingshare of
1 China * 22.3 23.5 26.1 28.3 30.7
2 European Union 32.6 33.9 32.1 29.5 26.8
3 India 4.3 4.0 4.1 4.3 5.1
na an
reducingshare of the . . . . .
5 Korea 4.6 4.4 4.1 4.3 4.4
6 Taipei 4.5 4.1 3.7 3.7 3.9
7 Turkey 3.5 3.7 3.8 3.7 3.6
EU
Stagnant8 Pakistan 3.4 3.1 2.9 3.1 3.1
9 Japan 3.2 3.0 2.9 2.9 2.8
10 Indonesia 1.6 1.6 1.5 1.5 1.8
Total 85.8 86.5 86.2 86 87.1
performanceof Pakistan
*Including Hong Kong
Textile Some
Facts
Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
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Textile and Clothing Supply
Sr. #
2006 2007 2008 2009 2010
Top 10 Leading Exporters of Clothing (%age share in World Clothing Trade)
na eleader in theworld textile
or ex e n . . . . .
1 China * 30.6 33.4 33.2 34.0 36.92 European Union 26.8 29.9 31.1 30.7 28.1
3 Ban ladesh 2.8 2.9 3.0 3.4 4.5
and clothingexports
4 Turkey 3.8 4.1 3.8 3.7 3.6
5 India 3.3 2.8 3.0 3.6 3.2
6 Veit Nam 1.7 2.1 2.5 2.7 3.1
ang a esstrengthening
its resence in7 Indonesia 1.8 1.7 1.7 1.9 1.9
8 USA 1.6 1.2 1.2 1.3 1.3
9 Mexico 2.0 1.5 1.4 1.3 1.2
the worldclothing trade
. . . . .
Total 75.8 80.8 82.1 83.8 85.0
*Including Hong Kong
a stan not aprominent
la er
Textile Some
Facts
Importance ofTextile inPakistan
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SupplyDynamics
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Textile and Clothing Demand
Sr. #
2006 2007 2008 2009 2010
Top 10 Leading Importers of Textile (%age share in World Textile Trade)The EU andthe USA
. . . . .
2 USA10.2 9.6 8.8 8.6 8.8
3 China* 7.1 6.7 6.2 6.7 6.7
4 Japan 2.7 2.5 2.6 3.0 2.7
majordemand
5 Turkey 2.0 2.4 2.1 2.1 2.5
6 Viet Nam 1.4 2.0 - 2.7 2.3
7 Mexico 2.6 2.3 2.0 1.9 1.9
Slow
economic ang a es - - - - 1.99 Korea 1.7 1.7 1.6 1.6 1.8
10 Indonesia - - 1.2 - 1.6
activityhurting the
. . . . .
*Including Hong Kongex edemand
Textile Some
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Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
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Textile and Clothing Demand
11
Sr. #
2006 2007 2008 2009 2010
Top 10 Leading Importers of Clothing (%age share in World Clothing Trade)
Reducingshare of the
1 European Union 43.6 45.5 47.3 48.5 44.7
2 USA 25.6 23.7 22.0 21.8 22.33 Japan 7.4 6.7 6.9 7.7 7.3
4 Canada 2.1 2.1 2.3 2.3 2.3
USA
5 Russia 2.5 4.1 5.7 2.2 2.0
6 Switzerland 1.4 1.4 1.5 1.6 1.4
7 Austrailia 1.0 1.0 1.1 1.2 1.3
8 Korea 1.2 1.2 1.1 1.0 1.2
9 Turkey 0.7 - 0.6 0.7 0.8
10 U.A.E 0.6 1.4 1.5 0.8 0.7
Total 86.1 87.1 90.0 87.8 84.0
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Importance ofTextile inPakistan
World Textile Demand &
SupplyDynamics
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12
QuantityValue YoY Quant. YoY Rate
QuantityValue
QuantityValueCommodity Units
FY12 FY11 FY10
34%
Raw Cotton 000 Kgs 264,076 470,133 57.0% -21.8% 168,210 383,151 177,947 215,954
Cotton Yarn 000 Kgs 572,047 1,794,575 6.7% -23.6% 536,128 2,201,405 625,418 1,433,094
Cotton Cloth 000 Sq Mtrs 1,971,757 2,454,701 -15.7% 10.9% 2,337,804 2,623,195 1,787,659 1,800,055
Yarn Other than Cotton Yarn 000 Kgs 12,214 41,520 -11.6% -1.4% 13,819 47,632 13,646 35,693
Knitwear 000 Doz 97,520 1,974,228 -22.2% 10.1% 125,351 2,305,554 108,669 1,764,959
Bed Wear 000 Kgs 248,912 1,748,327 -19.1% 3.5% 307,734 2,088,898 324,025 1,744,250Towels 000 Kgs 143,922 684,183 -17.2% 8.4% 173,786 762,308 192,490 668,239
Tents,Canvas & Tarpulin 000 Kgs 28,593 98,826 86.6% 12.8% 15,323 46,954 20,741 61,527
Readymade Garments 000 Doz 25,437 1,634,593 -26.0% 24.5% 34,353 1,773,661 27,661 1,269,338
, , , - . . , , , ,
Madeup Articles 584,772 N.A. N.A. 624,955 537,237
Other Textile Materials 328,738 N.A. 322,592 245,216
-
Textile Some
Facts
Importance ofTextile in
Pakistan
World Textile Demand &
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Textile - Credit Behavior13
PKR in bln
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 CAGR
Total Loans 3,567.6 3,518.5 3,714.3 3,717.4 3,776.7 3,666.5 3,746.2 3,846.4 15%
Total Loans Excluding Textile Loans 2,963.9 2,928.8 3,009.2 3,012.2 3,109.0 3,068.9 3,065.9 3,161.0 15%
Pakistan's Banking Sector Loans
Textile Loans 603.7 589.7 705.2 705.2 667.7 597.6 680.3 685.4 16%
Share in Total Loans 17% 17% 19% 19% 18% 16% 18% 18% -
PKR in bln
Pakistan's Bankin Sector Non-Performin Loans
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 CAGR
Total NPLs 459.8 494.0 547.8 573.5 579.2 613.2 607.1 608.8 19%
Total NPLs Excluding Textile NPLs 319.5 345.7 376.3 396.9 396.2 424.8 413.0 407.3 16%
ex e s 140.4 148.4 171.5 176.6 183.0 188.4 194.2 201.4 21%
Share in Total NPLs 31% 30% 31% 31% 32% 31% 32% 33% -
Pakistan's Banking Sector Infection Ratio
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Total Infection Ratio 13% 14% 15% 15% 15% 17% 16% 16%
Total Infection Ratio Excluding Textile Infection Ratio 11% 12% 13% 13% 13% 14% 13% 13%
Textile Infection Ratio 23% 25% 24% 25% 27% 32% 29% 29%
Textile Some
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Importance ofTextile in
Pakistan
World Textile Demand &
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FACTORS FRAMEWORKRISK
Competitiveness
High capital requirement to enter in theindustry
New Entrants
spinning and weaving segment Cost and/or quality advantages areen o ed b the existin la ers
Low
Substitute of
May have substitute Addition of quality and branding
sense robabilit of customer Mediumswitching gets lower
Bargaining China - supplier of choice
ower oBuyers
(Demand
Increasing competitive pressure fromBangladesh, Vietnam and Turkey in
High
cenar o .
Textile SomeFacts
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Demand &SupplyDynamics
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FACTORS FRAMEWORKRISK
Competitiveness
Bargaining
Power of
Numerous players with varied size andpower.
Suppliers
(SupplyScenario)
, ,
spinning units and 50 composite units Low threat of forward integration
Low
Degree of
Rivalry among
Strong commitment of the participants
Price competition (or respond to such HighCompetitors share and to cover fixed costs is high
InventoryRisk eav y epen en on co on Government intervention ow -Medium
Textile Some
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Pakistan
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uc ua on n co on pr c ng: e y o rema n arge y a
the current level
prevailing slowdown in the major importing economies
continue to pose a threat
Textile Some
Facts
Importance ofTextile in
Pakistan
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SupplyDynamics
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Business Risk:
Spinning and weaving Segments: Low
Value Added Segments: Medium
Whats the outlook | Stable
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Pakistan
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Bibliography
1. Pakistan Economic Survey 2010-11: Manufacturing and Mining | Section 3.2
2. Pakistan Textile Journal | February - 2010 | Pakistan: The third largest spinner country in Asia byDr.Noor Ahmed Memon
3. Contributes 46% of the total manufacturing: Pakistan Economic Survey | 2011-12|Manufacturing and
Mining | Section 3.24. Pakistanpaedia : http://www.pakistanpaedia.com/maps/maps-of-pakistan.html
5. State Bank of Pakistan : Economic Data | Export Receipts by Commodity | Archive Monthly
6. All Pakistan Textile Mills Association: http://www.aptma.org.pk/Pak_Textile_Statistics/Gctipw.asp
7. All Pakistan Textile Mills Association: Member Directory
8. Karachi Stock Exchange: Downloads | Analysis Reports
9. United States Department of Agriculture: http://www.fas.usda.gov/cotton/Current/
10. All Pakistan Textile Mills Association
11. World Trade Organization : International Trade Statistics 2011, 2010, 2009, 2008, 2007
12. All Pakistan Textile Mills Association
13. State Bank of Pakistan: Statistics of the Bankin S stem editions: Se 10 Se 11 Dec11 and Mar12
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Analysts Aisha Khalid Omaira Amjad M. Shahnawaz A. Khanzada
DISCLAIMERPACRA has used due care in preparation of this document. Our information has been obtainedfrom sources we consider to be reliable but its accuracy or completeness is not guaranteed.The information in this document may be copied or otherwise reproduced, in whole or in part,
prov e e source s u y ac now e ge . e presen a on s ou no e re e upon asprofessional advice.