SKIL Infrastructure Ltd Management Discussions

Your Company is one of the leading infrastructure development Companies in India, having pioneered the development of various first-of-its-kind-in-India projects such as Seaport, Logistics, Railway, Defence Shipyard, Offshore Asset Construction Yard and Special Economic Zone in the private sector. INDUSTRY STRUCTURE & DEVELOPMENTS: Infrastructure is the key to the success of Indian economy. Creating time bound world class infrastructure as well as upgrading and augmenting existing infrastructure will act as a catalyst to propel the economic growth and to ensure the countrys goal of becoming a US$ 5 trillion economy. Infrastructure at par with global standards is crucial for cost and efficiency benefits and therefore, investment in this sector is the need of the hour. However, this sector being extremely capital intensive coupled with long gestation period, it requires low-cost funding in addition to skilled yet cost-effective labor force, latest equipment, industry friendly regulations/reforms, strong and seamless technology/digital platforms to achieve completion targets expeditiously. To address all these issues, the government is relentlessly pursuing private investment in infrastructure sector apart from launching a slew of initiatives including the US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, to usher in systemic and effective reforms in the sector. 102 critical projects under this masterplan worth US$7.67 billion are to be completed by 2024, making 2023 a critical year for effective execution. Infrastructure Finance Secretariat is being established to enhance opportunities for private investment in infrastructure that will assist all stakeholders for more private investment in infrastructure. Global investment and partnerships in infrastructure, such as the India-Japan forum for development in the Northeast are also indicative of more investments. In Union Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to Rs.10 lakh crore (US$ 122 billion), which would be 3.3 per cent of GDP. India plans to spend US$ 1.4 trillion on infrastructure through ‘National Infrastructure Pipeline in the next five years. (Source: India Brand Equity Foundation Report 2023). In view of above, India is fully poised to take quantum leap to expand its infrastructure horizon in terms of volume, network, quality and timelines which makes it believable that Indian infrastructure sector/industry is well set for a prospective future ahead. OPPURTUNITIES & THREATS. The infrastructure sector is being given the top priority and focus by the government as is evident from the initiatives and policy reforms which are being brought in and implemented across the sector such as sector friendly policies, reforms related to ease of doing business, liberal FDI regulations, expeditious dispute resolutions in public private partnerships, faster land acquisition process, massive budgetary allocation. Rising demand for quality infrastructure along with all these favourable factors provide huge and excellent opportunities to domestic as well as foreign investors/players to participate in Indias infrastructure development boom which makes it the worlds 3" largest construction market. Notwithstanding the opportunities at hand, the most important success factor is timely completion of projects, especially the greenfield projects which are invariably delayed due to negative mindset of land owners that prolongs land acquisition. In addition to it, other factors such as cost/budget compliant execution, strict adherence to execution schedule, seamless coordination and expeditious decision making amongst all the stakeholders are required to be closely monitored to strike the right balance between planning and actual result. To create such ideal and hassle-free atmosphere is indeed a huge challenge which needs to be mitigated to ensure that maximum benefits are derived from the available opportunities. SEGMENT-WISE or PRODUCT-WISE PERFORMANCE: The Company, with its track record of having successfully developed greenfield iconic infrastructure projects, continues to explore various infrastructure development activities. OUTLOOK: Global Infrastructure spending has begun to rebound from the global financial crisis and is expected to grow significantly over the coming decade. Accelerated infrastructure spending will drive economic growth, create employment and deliver vital services in a cost efficient manner. One of the most important drivers of infrastructure spending, of course, will be financing, which presents vast opportunities for the billions of dollars of private capital available for investment. Dedicated infrastructure funds, pension funds, and other types of investors are looking forward to invest in projects around the world. Private investment in capital projects can free up public sector budgets and also provide more revenue to the government in form of tax collection. Emerging economies represent the biggest opportunities for infrastructure development and investment. As the global economy regains strength and emerging nations continue their rapid development, theres little doubt that the next decade will be favorable for capital project and infrastructure spending.

India

The infrastructure led development as envisioned in the 2023 Union Budget is beneficial not just for the infrastructure sector alone but is rather favourable for the holistic growth of the entire economy. The Indian economy has already risen from tenth to fifth in the world in terms of size and during times of adverse global economic setting. A 33 per cent rise in infrastructure investment capital spending, or Rs. 10 lakh crores for 2023-24, or 3.3 per cent of GDP, is unprecedented in Indias economic history and will substantially improve the economy by opening up new avenues of employment for 600 million population that are in employable age of 18 to 35. Infrastructure-infused development is a crucial component for lowering delivery costs, facilitating physical mobility for both people and things, removing productivity barriers, and boosting competitiveness. A paradigm shift in Indias demographic trend leading to rapid urbanisation has created huge demand for megacities which is expected to create enormous need for new infrastructure. The outlook for such infrastructure development and the economic growth it will foster is encouraging. Your Company It is imperative to note that although the domestic and global economic scenario is forward looking, any unforeseen and/or any adverse event can have resultant effect on your Companys efforts in monetization/divestment of its assets. RISKS & CONCERNS: Apart from various other factors, the challenging external environment marked by global supply chain disruptions from two years of pandemic and the geopolitical conflict in Europe are the main concerns world over. However, as far as India is concerned, governments strong emphasis on infrastructure development, huge domestic demand driven market, international players coming to the fore, massive workforce, increasing urbanisation etc. are favourable factors that will help the country to resiliently navigate through turbulent uncertainties that the other countries are facing. DISCUSSION ON RESULTS OF OPERATIONS: There is no operating revenue during this year. The amount of Rs.1,171.34 lakhs (PY Rs. 6,585.77 lakhs) reflected as credit to profit and loss account mainly consist of amounts written back and other such accounting entries. The loss before exceptional items and tax is Rs. 5,026.99 lakhs for the FY 2022-23 as against loss of Rs. 16,234.24 lakhs for the previous financial year. The net loss during the financial year 2022-23 was mainly due to finance cost. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS OF THE COMPANY: There is significant change in Interest Coverage Turnover (calculated by dividing earnings before interest, taxes & depreciation by the interest expense and principal repayment of long term debt) which was 0.02 in FY 2021-22 in comparison to NIL in FY 2022-23. This was due to increase in Income (Other) and reduction in expenses. The Current Ratio (proportion of the Companys current assets to its current liabilities) remained unchanged at 0.01% in FY 2022-23. There is significant change in Debt Equity Ratio (calculated by dividing the Companys total Debt by its shareholder equity) which was 5.25 in FY 2021-22 as compared to 2.67 in FY 2022-23. This was mainly on account of accumulated interest. As far as Debtors Turnover Ratio, Inventory Turnover Ratio, Operating Profit Margin and Net Profit Margin are concerned, the Company did not have the same either in FY 2021-22 or in FY 2020-21. With regards to Return on Net Worth (calculated by dividing the Companys net income by shareholders equity; net income used is for past 12 months), the Company did not have Net Income either in 2021-22 or in 2020-21 and therefore there is no Return on Net Worth. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY: In line with the regulatory and business requirements, the management has formulated various policies, procedures and guidelines and the Companys internal financial control framework is based on the same. The management, the Statutory Auditors and the Internal Auditors, from time to time, examine and test those policies, procedures and guidelines to check its efficacy. The Company has set up following Committees as part of the Companys internal control systems:

1. Audit Committee of the Board

2. Nominations and Remuneration Committee

3. Stake Holders Relationship Committee

4. Independent Directors Committee

5 Security Allotment and Transfer Committee

MATERIAL DEVELOPMENTS IN HUMAN RESOURECES/INDUSTRIAL RELATIONS:

The Company is making conscious efforts in continuous improvement of its work culture amongst the employees and for that purpose, the Company strives to imbibe work values of accountability, upgradation of skill-sets and adaptability to the ever-evolving digital transformation leading to all-round growth. CAUTIONARY STATEMENT. Forward-looking Statement in this Annual Report, particularly those thatrelate to the Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, generally identified by words such as ‘may, ‘believe, ‘outlook, ‘plan, ‘anticipate, ‘continue, ‘estimate, and ‘expect, may constitute forward-looking statements within the meaning of applicable laws and regulations. Such statements are necessarily dependent on projection and trends and constitute our current expectations based on reasonable assumptions. However, the actual results might differ from those expressed or implied in such forward-looking statements due to risks, uncertainties, and other external factors.

SUBSIDIARY COMPANIES AND THEIR ROLE AND INPUTS:

Currently, the Company has one subsidiary namely SKIL Advanced Systems Pvt. Ltd. (SASPL). It was formed with a view to tap the defense sector potential business. However, due to various reasons/factors, there has been no business so far. Currently, the Company is exploring the option of either closing down SASPL subject to fulfilment of all statutory requirements or to rope in suitable buyer from the defense sector to take over SASPL subject to mutually agreed terms and conditions.