Karachi: Suraj Cotton Mills Limited grappled with economic turbulence characterized by high inflation and a decline in exports in the financial year ending 30 June 2024, according to the company's latest Chairman's Review.
The Pakistani economy faced considerable challenges throughout the year, marked by elevated interest rates and rising utility costs which contributed to a broader inflationary trend. This environment resulted in a consistent drop in exports and stifled growth across various industries. Despite these conditions, the Pakistani rupee managed to hold its ground against major global currencies.
The textile sector, a significant component of Pakistan’s exports, witnessed a continuous decline in demand. Although the year's cotton crop showed improvement over the previous year and maintained competitive pricing, issues with the import of raw cotton affected the industry adversely. Early indicators for the current year's cotton crop do not suggest promising outcomes in terms of quantity and quality, exacerbated by extreme weather conditions including excessive heat followed by abnormal rainfall.
On a positive note, the central bank has initiated steps to ease monetary policies as the inflation rate begins to show signs of decrease. This shift is expected to provide some relief and potentially foster economic growth in the coming months.
In terms of corporate governance, Suraj Cotton Mills has adhered to all critical regulations outlined in the Companies Act, 2017, and the Listed Companies (Code of Corporate Governance) Regulations, 2019. The annual evaluation of the Board of Directors confirmed satisfactory performance, emphasizing their strategic vision and engagement in significant corporate decisions.
The Board’s diversity and effective mix of executive, non-executive, and independent directors have been pivotal in maintaining robust governance and strategic oversight. Their diligence in managing corporate affairs and their proactive approach in monitoring the company’s business activities have been crucial in navigating through the challenging economic landscape.
According to information available from the Pakistan Stock Exchange (PSX), the company continues to strive for operational excellence and governance integrity, which is evident from the effective control environments and adherence to best practices in corporate governance.
The Chairman extended gratitude to the Board of Directors for their guidance and to all stakeholders for their continued trust and support. With the collective efforts of the management and employees, Suraj Cotton Mills is hopeful to overcome the prevailing economic challenges and improve its operational outcomes in the future.