Yuranus Infrastructure Ltd Management Discussions

This report covers the operations and financial performance of the Company for the year ended March 31, 2023 and forms part of the Annual Report.

BUSINESS SCENARIO:

India is a fast growing major economy. The Government has taken significant initiatives to strengthen the economic credentials of the country. Various measures have been announced by Government providing economic relief, strengthening the health system and providing impetus to growth and employment. With the vaccination-programmes having covered the bulk of the population, economic momentum building back and the likely long-term benefits of supply-side reforms in the pipeline, the Indian economy is expected to gain momentum. The various initiatives of Central Bank have infused liquidity into the banking system to nurture nascent growth impulses and support a durable recovery.

The increase in global demand as the world economy recovers from pandemic and Russian -Ukraine war led to increase in crude prices, which also impacted the domestic economy. The government through various initiatives/reforms, inter- alia, deregulation of numerous sectors, simplification of process and privatization has helped in reducing the imbalance of demand and supply in the overall economy. A rise in domestic investments has been one of the most significant contributions to the Indian growth story and the public and private sectors have enabled and sustained these investments.

Apart from being a critical driver of economic growth, Foreign Direct Investment (FDI) has been a major non-debt financial resource for the economic development of India. The Governments favourable policy regime and robust business environment has ensured inflow of the foreign capital. Inflation is expected to remain elevated due to volatile commodity and crude prices on the back of geopolitical tensions due to the Russia-Ukraine conflict.

India has undertaken a number of reforms, such as formalization of its economy, incentivizing domestic manufacturing, digitalization, import substitution, increasing exports which has helped in providing flexibility to the government in terms of monetary policy. With an improvement in the economic scenario, there have been investments across various sectors of the economy. The Indian economy is poised to grow at a quick pace backed by various initiatives taken by the government. Initiatives under Atma Nirbhar Bharat including introduction of structural and procedural reforms, record vaccinations, various PLI schemes designed to attract investments, Make-in- India programme to boost domestic manufacturing capacity, reduction of corporate tax rate, etc and steps to improve operational efficiency have helped the economy to grow.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Indian textile industry has a significant presence in the economy as well as in the international textile economy. Its contribution to the Indian economy is manifested in terms of its contribution to the industrial production, employment generation and foreign exchange earnings. It contributes 20 percent of industrial production, 9 percent of excise collections, 18 percent of employment in the industrial sector, nearly 20 percent to the countrys total export earning and 4 percent to the Gross Domestic Product.

The textile industry continues to be the second-largest employment generating sector in India. It offers direct employment to over 35 million people in the country.^ India is the worlds second largest exporter of textiles and clothing, and in the fiscal year 2022, the exports stood at US$ 44.4 billion.^ According to the Ministry of Textiles, the share of textiles in total exports during April—July 2010 was 11.04%. During 2009-2010, the Indian textile industry was pegged at US$55 billion, 64% of which services domestic demand.^ In 2010, there were 2,500 textile weaving factories and 4,135 textile finishing factories in all of India.

The textiles and apparel industry in India has strengths across the entire value chain from fibre, yarn, and fabric to apparel. It is highly diversified with a wide range of segments ranging from products of traditional handloom, handicrafts, wool, and silk products to the organized textile industry in India. The organized textile industry in India is characterized by the use of capital-intensive technology for the mass production of textile products and includes spinning, weaving, processing, and apparel manufacturing.

The Indian textile industry is aiming to export products worth $40 to $100 billion within 2027. The promotion of this industry through several government schemes has been the greatest in the last three decades. The apparel industry is progressing fast with the manufacturing of more varieties of products. This textile business is also spreading in more countries across the world, leading to more earning of foreign money.

COMPANY OVERVIEW:

Yuranus Infrastructure Limited, formerly known as Pankhil Finlease Limited was incorporated on 22nd February 1994 as a Non Banking Financial Company (NBFC) with the object of carrying the business of Leasing, Hire Purchase, Financing, Trading, Merchant banking and Advisors to the Public Issue. The companys business activities included financing the business via Joint Venture, partnerships, mutual agreement and carry on the business or transaction which may seem capable of being carried on or conducted so as, directly or indirectly to benefit the company. The company deals with financing of all kind of immovable and movable property including lands and buildings, plants and machinery, equipments, automobiles, computers and all consumers commercial and industrial items.

With the growth in the infrastructure, real estate field and textile sector, the Company wanted to increase its portfolio of activities in the same sector and wanted to focus on the infrastructure, real estate and textile sector as the main business activity. The Company wanted to act as promoters, organizers, developers and traders of land, estate, property, cooperative housing societies, association, housing schemes, shopping-office complexes, townships, farms, farm houses, holiday resorts, hotels, motels and to finance with or without security for the same and to deal with and improve such properties either as owners or as agents. And so the Company surrendered its NBFC license and changed the name to Yuranus Infrastructure Limited on dated 17 April 2012 to carry out the new business purpose. The same has been informed to the respective regional stock exchange where the company is listed and the respective Registrar of Companies.

OPPORTUNITIES:

The Indian textile industry is one of the largest in the world, with a massive raw material and textile manufacturing base. The industry is divided into two major categories, the organised sector and the unorganised sector. The organised sector includes large-scale textile mills and garment manufacturers, while the unorganised sector includes small-scale cottage industries, khadi and village industries, power looms, handlooms, and hand-knitting. The sector manufactures a wide range of products, including cotton, polyester, and synthetic fabrics, yarns, threads, and garments.

India is a global powerhouse in the textile industry, being the worlds largest cotton and jute producer. Cotton is the main raw material used in the production of textiles. Nearly 70% of global jute production originates from India. The sector is also the second-largest production base of silk and fibre. Other fibres produced in India include wool and manmade fibres. Cotton cultivation in India is mostly carried out in the states of Gujarat, Maharashtra, Punjab, Uttar Pradesh, and Madhya Pradesh.

India is well-positioned to maintain its leadership in the textile industry with a robust industrial base that consists of a resilient supply chain extending from weaving to garment and processing and a wealth of raw materials. To realise the true potential of the industry and create more employment opportunities for the Indian workforce, it is essential to tap into the elements and forces that have been fuelling its tremendous expansion

The Union Budget announced by the Textile Ministry and Finance Minister has provided a major boost to the industry. The Governments plans to set up seven mega textile parks across India is a move that will not only create more employment opportunities but also strengthen the MSME sector. These parks are equipped with advanced infrastructure and provide tax and other benefits to textile companies. An even bigger proposal that was announced is the Production-Linked Incentives (PLI) worth $1.4bn, which will help the textile and apparel manufacturing units realise their capacity potential. These initiatives by the Government are positive steps in facilitating the growth of the industry.

THREATS, RISKS AND CONCERNS:

Although cotton textile is one of the most important industries of India, it suffers from many problems. Some of the burning problems are briefly described as under:

1. Scarcity of Raw Cotton:

Indian cotton textile industry suffered a lot as a result of partition because most of the long staple cotton growing areas went to Pakistan. Although much headway has been made to improve the production of raw cotton, its supply has always fallen short of the demand. Consequently, much of the long staple cotton requirements are met by resorting to imports.

2. Obsolete Machinery:

Most of the textile mills are old with obsolete machinery. This results in low productivity and inferior quality. In the developed countries, the textile machinery installed even 10-15 years ago has become outdated and obsolete, whereas in India about 60-75 per cent machinery is 25-30 years old.

Only 18-20 per cent of the looms in India are automatic whereas percentage of such looms ranges from cent per cent in Hong Kong and the USA., 99 per cent in Canada, 92 per cent in Sweden, 83 per cent in Norway, 76 per cent in Denmark, 70 per cent in Australia, 60 per cent in Pakistan and 45 per cent in China.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The total income of the Company during the financial year 2022-2023 was Rs. 59.04 Lakhs as against Rs. 51.78 lakhs during FY 2021 -2022. The Company had profit after tax of Rs.3.77 Lakhs during FY 2022-2023 as against profit of Rs. 3.89 Lakhs during FY 2021-2022.

The earnings for company in the textile industry have grown per year, this means that more sales are being generated overall, and subsequently their profits are increasing too.

OUTLOOK:

Yuranus Infrastructure Limited is a reputed company that is committed to providing high-quality services to its customers. As with any organization, there may be instances where customers or stakeholders may have grievances or complaints. In order to address these issues in a timely and effective manner, Yuranus Infrastructure Limited has established an email address for grievance Redressal.

Apart from the email address for grievance Redressal, Yuranus Infrastructure Limited also has several other communication channels that customers and stakeholders can use to get in touch with the company.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

We have an adequate system of internal control to ensure that transactions are properly authorized, recorded and reported apart from safeguarding our assets. The internal control system is supplemented by well-documented policies, guidelines and procedures. All these measures are continuously reviewed and necessary improvements are implemented

The Company maintains an adequate system of Internal Controls including suitable monitoring procedures to ensure accurate and timely financial reporting of various transactions, efficiency of operations and compliance with statutory laws, regulations and Company policies. Suitable delegation of powers and guidelines for accounting has been issued for uniform compliance. In order to ensure that adequate checks and balances are in place and internal control systems are in order, regular and exhaustive Internal Audit of Office/plant are conducted by the in-house Internal Audit Division and external professional audit firm. The Internal Audit covers all major areas of operations, including identified critical/risk areas, as per the Annual Internal Audit Programme.

The Audit Committee of Directors periodically reviews the significant findings of different Audits, as prescribed in the Companies Act, 2013 and in the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Companys relations with the employees continued to be cordial and harmonious with its employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company. The Company acknowledge that its principal assets is it employees. The Company has continued its efforts in building a diverse and inclusive workforce.

The total number of Permanent employees on roll in the Company as on 31st March, 2022 was 24 . The Company will continue to create opportunity and ensure recruitment of diverse candidates without compromising on meritocracy.

FINANCIAL RESULTS:

The Companys financial performance for the year ended on March 31,2023 is summarized below:

(Rs. in Lakh except EPS)

PARTICULARS	F.Y. 2022-2023	F.Y. 2021-2022
Revenue form Operation	40.28	35.55
Other Income	18.76	16.22
Total Income (Total Revenue)	59.04	51.78
Total Expenditure (Excluding Depreciation)	53.41	46.31
Profit before Financial costs, Depreciation and amortization expenses and Taxation	5.63	5.47
Less: Finance Costs	0.12	0.08
Operating profit before Depreciation and amortization expenses and Taxation	5.51	5.40
Less: Depreciation and amortisation	-	0.03
Profit before Tax	5.51	5.37
Less: (1) Current Income Tax	1.74	1.55
Less: (2) Income Tax (Prior Period)	-	-
Less: (3) Deferred Tax	-	(0.08)
Profit after tax	3.77	3.89
EPS (Basic)	0.11	0.11
EPS (Diluted)	0.11	0.11

Note: Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure and may not be comparable with the figures reported earlier.

KEY FINANCIAL RATIOS:

The key Financial Ratios during Financial Year 2022-2023 vis-a-vis Financial Year 2021-2022 are as below:

Particulars	Numerator		Denominator	2022 2023	2021 2022	% of variance	Explanation for change in the ratio by more than 25%
Liquidity Ratio
Current Ratio (times)	Current Assets		Current Liabilities	6.46	10.63	39.18%	During the current year, the Company has paid off majority of its outstanding vendors as on 31 March 2023. This led to substantial decrease in current liabilities with consequential improvement in current ratio.
Profitability ratio
Net Profit Ratio (%)	Net Profit		Total Turnover	9.36%	10.95 %	-14.52%	The Company has shifted its focus towards higher-margin products (Organic Cotton) and the Company has implemented cost-saving measures to reduce its expenses. This is as a result of improved efficiencies, renegotiated supplier contracts, or a restructuring program.
Return on Equity Ratio (%)	Profit After Tax - preference dividend (if any)		Average Shareholders Equity	1.73%	1.82%	-4.87%	The Company evidenced good amount of growth over past years. Because of which substantial increase in equity resulted in lower ROE for current year as compared to previous year.
Return on Capital employed (%)		Earnings before interest and taxes	Net Worth + Total Debt + Deferred Tax Liability - Deferred Tax Assets	1.72%	1.80%	-4.83%	During the current year, the Company has taken real estate properties on lease pursuant to which the lease liabilities has been recognised as on reporting date. This led to increase in denominator of current year ratio.
Return on Investment (%)		Income generated from investments	Weighted average invested funds			NOT APPLICABLE
Utilization Ratio
Trade Receivables turnover ratio (times)		Revenue from operations	Average Trade Receivables	1.60	1.44	11.14%	Not Applicable
Trade payables turnover ratio (times)		Cost of Material Consumed + Changes in Inventories	Average Trade Payables	1.28	2.62	51.07%	The Company has improved its cash management practices, it lead to a decrease in trade receivables and trade payable ratios. This are due to factors such as better invoicing and collection processes, improved credit policies, or more efficient supply chain management.
Net capital turnover ratio (times)		Revenue from Operations	Working Capital	0.18	0.17	10.80%	In FY 2022-23 International Cotton Industry is experiencing a downturn, it led to reduced demand for goods, which in turn led to lower sales.

Note: Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure and may not be comparable with the figures reported earlier.

Note: Reason for Variance are provided in case of changes of 25% or more as compared to Financial Year 2021 -2022

HEALTH, SAFETY AND ENVIRONMENT

The safety and health of employees, partners, service providers and the public are a priority at Yuranus. The wellbeing of stakeholders and the minimization of impact on the natural environment are extremely important to us.

Continuous efforts to achieve safety awareness and eliminate unsafe practices are made through employee engagement.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company have been prepared in accordance with Accounting Standard ("AS") notified under the Companies (Accounting Standards) Rules, 2021 read with section 133 of the Companies Act, 2013.

CAUTIONARY STATEMENT

The statements in the Management Discussion and Analysis Report with regard to projections, estimates and expectations have been made in good faith. The achievement of results is subject to risks, uncertainties and even less than accurate assumptions. Market data and information are gathered from various published and unpublished reports. Their accuracy, reliability and completeness cannot be assured.

Registered office:	For and on behalf of the Board of Directors
		Yuranus Infrastructure Limited
		CIN: L74110GJ1994PLC021352
8th Floor, Office No. 810, One World West,
Near Bopal Approach, SP Ring Road,
Iscon - Ambali Road, Bopal, Ahmedabad -
380058, Gujarat, India
	Nitinbhai Govindbhai Patel	Kushal Nitinbhai Patel
Date: September 06, 2023	Additional Director	Additional Director
Place: Ahmedabad	DIN: 06626646	DIN: 06626639