Suryaamba Spinning Mills Ltd Management Discussions.


India has emerged as the faster growing major economy in the world as per the Central Statistics Organization (CSO) and International Monetary Fund (IMF). It is expected to be one of the top three economic powers of the world over the next 10-15 years. In 2018, the global economy began its journey on a firm footing with estimated global economic growth of 3.6%. During the second half of 2018, this rate of development gradually declined, owing to impending US-China trade dispute and some slowdown across developed markets. (Source: World Economic Outlook by International Monetary Fund (IMF).

The Indian economy is expected to improve and close the year 2019 with a GDP growth of 7.3% (Source: IMF). Economic growth in India is expected to accelerate moderately to 7.5% in FY 2019-20, according to a World Bank forecast, attributing it to an upswing in consumption and investment pick-up. Besides, it says that the economy is regaining after a temporary slowdown due to demonetisation and the implementation of GST. India will continue to retain its tag as the worlds fastest-growing large economy and its growth outlook is still robust.


The Indian Textile Industry is one of the largest and oldest industries in the country. The uniqueness of the industry lies in its strength both in the organized and unorganized sector. The Industry holds a dominant position in countrys economic structure because of its huge contribution towards employment generation. It is the second largest contributor towards employment generation, after agriculture, contributing 10% to the countrys manufacturing, owing to its labour-intensive nature. The Indian Textile Industry contributes approximately 5 per cent to Indias Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP).

The domestic textile industry in India is estimated to reach $223 billion by 2021 from $ 150 billion in November 2017, while cotton production in India, as estimated, have reached 36.1 million bales in FY19. In FY19, growth in private consumption is expected to create strong domestic demand for textiles. Exports have been a core feature of Indias textile sector. Indian textiles and apparel exports were estimated at $39 billion and is expected are expected to increase to $ 82 billion by 2021.

The Ministry of Textiles is encouraging investments through increasing focus on schemes such as Technology Up-gradation Fund Scheme (TUFS) under the Union Budget 2018-19, Rs 2,300 (US$ 355.27 mn) crore have been allocated for TUFS and Rs 30 crore (US$ 4.63 million) for the Scheme for Integrated Textile Parks, under which there are 47 ongoing projects. The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore job opportunities and attract investments worth Rs 800.00 billion (US$ 11.93 billion) during 2018-2020. Rising government focus and introducing other favourable policies is leading to growth in the textiles and clothing industry. Under Union Budget 2019-20, Government of India allocated around Rs 5,831.48 crore (US$ 808.24 million) for the Ministry of Textiles.

In line with the global trends and to remain competitive, your company continues to modernize, upgrade and expand its capacities so that it remains globally competitive in terms of cost and quality.


The world is looking at the India as suitable and reliable choice for their requirements of Garments. Global economy has started recovering and provides a good opportunity to the Indian textile Industry to increase its share in the Global Textile and Clothing. This is a huge opportunity and it must be availed by the Textile Industry so that it can increase its share in the Global market. The tariff war between two largest economies of the world- The USA and China is expected to have positive impact on Indias textile exports. This provides a huge opportunity to Indian Textile Industry to increase its share in the global exports.

India is competitively positioned in terms of low labour and power cost against most of the competing countries. Blockage of capital due to slow refunds and slow down in the lending for fresh projects by the Bank are cause of concern for the Textile Industry.

The raw cotton is the main Raw material and it is dependent on the Nature i.e. Good/Bad Monsoon, availability of raw cotton at reasonable prices is crucial for the spinning Industry. Any significant change in raw cotton prices can affect the performance of the Industry. The currency fluctuations are also impacting the financial performance of the Textile Industry. The Government through its proposed new Industrial Policy should support the industry by working out suitable strategies/ policies so that Textile Industry is able to enhance its competitive advantage to achieve sustained growth in Exports as well as Domestic markets.


The primary raw material forthe manufacturing of yarn is cotton which is an agriculture produce, its supply and quality are subject to forces of nature i.e. Monsoon. Any increase in the prices of raw cotton will make the things difficult for the Textile Industry resulting weak demand and thin margins. Thus availability of raw cotton at the reasonable prices is crucial for the spinning industry. Indian Textile Industry continues to face stiff competition from China, Bangladesh, Taiwan Sri Lanka and other emerging economies. The Spinning industry being more capital intensive requires huge funds, long term as well as short term in the form of working capital for its running. The high rate of interest is affecting the financial performance of the textile industry.

In addition to the above, the other concerns like currency volatility, reduction in the duty drawback, higher transaction costs, high cost of labour, manpower retention, fluctuating prices of raw material, are posing a risk to the growth of Indian Textile Industry.


The Companys internal control systems and procedures commensurate with the size and nature of its operations. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized, recorded and reported.

In addition to Statutory Audit, Internal Audit is conducted by independent Chartered Accountants, on a quarterly basis to examine, in addition to the financial controls, the adequacy and compliance with policies, plans and statutory requirements. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and the independent Audit Committee of the Board of Directors.


Suryaamba Spinning Mills Limited is one of the well-known producers of synthetic blended yarn for over a decade and a forward looking Company focused on building quality products and customers satisfaction. The Companys manufacturing Plant is located Mouza-Nayakund, near Ramtek, Nagpur, Maharashtra.

The Net Revenue of your Company increased 10.37% to ?16929.42 lakhs for the Financial Year 2018-19 is in comparison to ?15338.38 lakhs in the previous year.

Your Company has earned a Profit before Tax of ?436.57 lakhs in comparison to ? 354.56 lakhs in the previous year. The Company earned a profit after tax of ?375.14 lakhs in comparison to ? 266.26 lakhs in the previous year.

The production during the year was 10247 MTS in in comparison to 10539 MTS in previous year.

The Companys Earning per share is ? 11.67 as compared to ? 8.00 in the previous year.


Polyester has become the most preferred fiber in the textiles industry due to its better physical properties, lower price, versatility, and recyclability, which offer a completely unique set of benefits unmatched by any other fibers. Polyester fiber has been segmented into apparel, home furnishing, automotive, construction, filtration, and personal care and hygiene applications.

With the revival in demand, manmade fiber and yarn business is on a turnaround path. The revision in import duty, a positive approach for domestic polyester manufacturers. Further, Governments support to release input Tax credit, a big blocker for working capital would help the industry. Moreover, China, the worlds largest producer of textile products, due to higher labour and energy cost facing trade deficit and which have mitigated their international competitive advantage to some extent.

Sensing this opportunity, the Company focusses to expand its domestic markets and as well increase its share in exports.

Your Company sustained its production level. The changing market trends and emerging opportunities will be met by developing production system based on cost efficiency, high Productivity, quality assurance, etc.


Management recognizes that employees represent our greatest capital assets and it is only through motivated, creative and committed employees that we can achieve our aims. The Company provides to its employees favourable work environment that motivates performance and innovation while adhering to high degree of quality and integrity. Assignment, empowerment and accountability is the cornerstone of all the people led processes. The Company continuously nurtures this environment to keep its employees highly motivated and result oriented. Industrial relations during the year continued to be cordial and the Company is committed to maintain good industrial relations through effective communication. The total permanent employees strength of the Company was 923 as on 31st March, 2019.


i. Debtors Turnover: Increased by 18.53%

ii. Inventory Turnover: Reduced by21.19%

iii. Interest Coverage Ratio: Increased by 13.33%

iv. Current Ratio: Reduced by 2.86%

v. Debt Equity Ratio: Reduced by 27.08%

Explanation: Due to Reduction in borrowings.

vi. Operating Profit Margin(%): Increased by 11.69%

vii. Net Profit Margin (%): Increased by 32.03%

Explanation: Improved profitability due to better sales realisation.


There has been an increase in return on net worth by 13.06% in FY19 as compared to previous financial year, due to improved profitability.


In the preparation of the financial statements, the Company has followed the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules thereunder. The Significant Accounting Policies which are consistently applied have been set out in the notes to the financial statements.

Cautionary Statement

Though the statement and views expressed in the above said report are on the basis of best judgment but the actual future results might differ from whatever is stated in the report. The Company takes no responsibility for any consequence of decisions made based on such statements and holds no obligation to update these in future. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates.