Page 60 - InterloopAnnualReport2020

DIRECTORS’ REPORT

The Directors of Interloop Limited are After the outbreak of COVID-19 in March, apparel and textile
pleased to present the Annual Report of goods exports from South Asian nations including Pakistan
the Company, together with the audited witnessed a sharp decline in Mar, Apr and May 2020. As
a result, Pakistan’s textile and apparel exports dropped
financial statements of the Company for by over 6% to $12.526 billion in FY20, as compared to
the year ended Jun 30, 2020. $13.327 billion in FY19. However, apparel and textile exports
from South Asian nations are showing signs of gradual
Economic & Industry Overview recovery from the impact of COVID-19 as lockdowns have
been eased and global retailers have started accepting
Financial Year 2019-20 (FY20) was a very difficult year for shipments of goods put on hold or canceled earlier.
the whole world due to the COVID-19 pandemic. Global
and domestic business environment remained highly The Government and the State Bank of Pakistan (SBP)
challenging, with impact of COVID-19 spreading across the responded swiftly, slashing the policy rate by a cumulative
whole world within weeks. COVID-19 was also catastrophic 625 basis points, between mid Mar to end Jun 2020. SBP
for Pakistan’s already ailing economy. The scale of this launched new refinancing schemes to support employment,
shock is underscored by the fact that for the first time in new investments and BMR. Together with the government’s
68 years, as per the provisional estimates, Pakistan’s real stimulus package, these measures are helping to cushion
GDP is set to contract at 0.4 per cent in FY20. However, the impact of COVID-19 outbreak. Beyond their immediate
this contraction is not as severe as expected in most parts positive impact, these measures are expected to support
of the world due to COVID-19. Higher inflation and rupee the post-COVID-19 economic recovery as well. As such,
devaluation continued to exert significant pressure on the the situation in Pakistan has witnessed a sharp recovery in
overall economy in general and the manufacturing industry Jul 20, with exports increasing by 14.40% as compared to
in particular, during FY20. the corresponding period. Sustainability of the exports and
economic recovery of the region will also depend on how
The pandemic disrupted the global supply chain as effectively the countries will be able to control the spread of
lockdowns were exercised worldwide to prevent the spread the virus. If the situation continues to improve further and
of coronavirus, which forced factory production and sales the global economy witnesses a pause in the crisis, we can
at stores to shutdown operations, while people kept hope that the economic activities will start growing.
themselves isolated at homes. As a result, the whole supply
chain was disturbed and consumptions also fell across the
globe. This caused severe financial stress for most of the
businesses, including textile retail chains. However, massive
government stimulus packages, as much as up to 20% of
the GDP, amid lifting of the lockdowns globally have helped
contain the fallout and led to a recovery in retail sales.

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