Skyline Millars Ltd Management Discussions.

Macro-Economic Overview

The Real Estate segment went through fundamental adjustment in business approach due to the Real Estate Regulation Act (RERA) and implementation of GST. Overtime this is expected to bring more transparency and professional approach in doing business .

Despite these major changes buyer demand continues to be low. There remains a huge inventory of unsold properties across all categories . The only segment which witnessed growth is in the low cost housing category .

Skyline Millars Ltd. (SML), which now is mainly a Realty Company, was also impacted due to this slow down. This along with delay in receiving approvals for commencing construction and sales for two buildings at Ghatkopar has had a negative impact on the performance. SML still awaits approval and clearances and all efforts are being made to expedite them. Your company is hopeful of a positive outcome soon.

The realty division focus areas continued to be in Karjat and at Ghatkopar. At Karjat the construction of Wing G has been completed. The occupation certificate is expected soon. We enjoy good market reputation in the region. Already appx 70% of the flats have been booked.

At Ghatkopar we have been able to secure the occupation certificate for all buildings completed till date. We now have appx 635.45 square feet carpet area of office space available for sale. All efforts are being made to market the same at competitive prices.

Operations

The financial performance of the Company has been detailed in the Directors Report.

Outlook Opportunity and Threats

The long term outlook for the Real Estate Industry remains positive. Huge investments in infrastructure and modernisation of our cities coupled with changing buyer outlook for better quality and comforts are expected to fuel demand . With new regulations and controls in place, it is expected that the industry will reform and will adopt modern practices.

However, the areas of concern are the slow speed of regulatory approvals, frequent changes in norms and the high taxation levels.

Internal Control Systems and their Adequacy

SML has in place proper and adequate system of internal controls. All assets of the Company are adequately safe guarded and protected against loss or unauthorized use or disposal. It is ensured that all commercial transactions are duly authorized, recorded and reported correctly. The internal control systems are robust and are supplemented by extensive internal audits and periodic review by the management. The system is designed to adequately ensure that financial and other records are reliable for presenting financial information and other data including maintenance of fixed assets. The audit committee reviews observations and recommendations contained in the Internal Audit Reports during its periodic meetings wherein the internal auditors also participate during the discussion.

Risk Management

The Company has built in procedures and practices to effectively handle and mitigate the adverse effect of business risks. A risk management policy is in place and procedures are laid down to handle risks while carrying out the business and operations of the Company to the best advantage of all stakeholders, so as to ensure continuity of business and improve shareholder value. However, it is practically not possible to thwart all the risks and the Company has to absorb the impact of some of the risks in either the form of additional cost or losses for the same.

Human Resources and Industrial relations

The organizational structure at SML is continuously evolving so as to effectively meet the business challenges. There is ever a constant effort to follow good human resource practices. The Company strives to create a working environment which is motivating and challenging to all employees so that they can realize their full potential. Individuals are encouraged to think differently and innovate with new ideas while meeting the goals of the Company. The Company strongly believes that the quality and motivation and dedication of its employees is its strongest assets.

Cautionary Statement

This discussion and analysis contain forward looking statements that reflects our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in the forward looking statements on account of many uncontrollable factors.