Rap Corp Ltd Management Discussions

This Management Discussion and Analysis report provides the analysis of financials and business of previous year future budget, expectation, planning of the company and may contain "forward looking statements" within the meaning of applicable laws and regulations and actual results may differ.

Industry overview

The Indian real estate sector continued to demonstrate resilience during FY 2025-26, supported by sustained economic growth, rapid urbanization, infrastructure development and increasing demand across residential and commercial segments. Government initiatives such as PM Gati Shakti, Smart Cities Mission, improved infrastructure connectivity and continued emphasis on ease of doing business have further strengthened the long-term outlook for the sector.

While the residential market remained the primary growth driver, commercial real estate also witnessed gradual recovery led by office leasing, warehousing and mixed-use developments. However, retail malls, particularly in Tier-11 and Tier-Ill cities, continue to face structural challenges arising from changing consumer behaviour, increasing penetration of e- commerce and evolving retail formats.

Against this backdrop, the Company continues to pursue a strategy of prudent asset management, monetization of mature assets and selective participation in development opportunities that offer sustainable value creation.

Review of financial and operating performance

RAP Corp Limited is engaged in the business of real estate development, ownership, leasing, management of real estate assets.

During the year under review, despite of challenges related the development of Agra property, the Company successfully completed the monetization of its Agra property, which was stock-in-trade as part of the Companys asset monetization strategy. This transaction significantly strengthened the Companys financial position and resulted in substantial revenue and profitability during FY 2025-26.

The Company continues to evaluate opportunities relating to its remaining real estate assets, including its property at Meerut, while also exploring future development opportunities through its investment in White River Properties LLP, which owns land in Pune having long-term development potential.

1. Paid up share capital:

The Company paid-up capital stood at 5.88 crores as on 31st March 2026 consisting of 58,81,000 equity shares of Rs. 10 each.

2. Reserves and Surplus

Reserves and Surplus stood at Rs. 48.79 crores as compared to last year Reserves and Surplus Rs. 4.93 crores.

3. Secured Loan:

The Company has not taken any secured loan.

4. Turnover:

The Company reported Revenue from Operations of 6,783.00 lakhs due to sale of its stock in trade property at Agra compared with Nil in the previous financial year

5. Profits /Loss:

Operating expenses (excluding depreciation and finance costs) stood at 2,547.12 lakh, resulting in Profit Before Interest and Depreciation (PBID) of Rs. 4,396.66 lakh. After charging depreciation of 17.89 lakh, the Company earned a Profit Before Tax of Rs. 4,378.77 lakh.

Net Profit after Tax amounted to Rs. 4,384.55 lakh, compared with a standalone loss of 69.32 lakh and a consolidated loss of 161.79 lakh in the previous financial year. The improvement primarily reflects successful execution of the Companys asset monetization strategy and disciplined cost management.

BUSINESS ANAYSIS

The Company remains focused on maximizing value from its real estate portfolio through strategic monetization, redevelopment and efficient asset management.

The successful monetization of the Agra property demonstrates the Companys ability to unlock value from its existing assets. Going forward, management continues to evaluate opportunities for monetization and redevelopment of its remaining properties in line with prevailing market conditions.

The Companys investments in Associates provides exposure to projects with development potential in Pune/ Mumbai, Indias established real estate markets. Subject to regulatory approvals and commercial viability, these investments are expected to create long-term value.

Opportunities and risks Opportunities

The Company believes that several opportunities exist for long-term growth:

• Continued demand for quality residential and mixed-use developments across India.

• Monetization of existing real estate assets to improve liquidity and strengthen the balance sheet.

• Development opportunities through Associates.

• Strong financial position with negligible external debt, enabling the Company to evaluate future investments as suitable opportunities arise.

Risks

The real estate sector remains exposed to several inherent risks, including:

• Economic slowdown affecting demand for real estate.

• Changes in government policies, taxation and regulatory approvals.

• Delays in obtaining statutory approvals for development projects.

• Price fluctuations in the real estate market.

• Reduced demand for traditional retail malls in Tier-ll cities due to changing consumer preferences and increasing online retail.

• Liquidity and execution risks associated with real estate development.

During the year under review, White River Properties LLP, an associate of the Company, witnessed changes in its partnership structure. Consequently, one of the existing partners exited the LLP and a new partner was inducted during the year. Pursuant to the reconstitution of the LLP, the Companys interest in White River Properties LLP stands at 33%.

Due to differences amongst partners the proposed development of the land held by the LLP is delayed and affected the availability of financial information for the consolidated financial statements. The management continues to monitor the progress of the LLP closely.

The Company remains committed to protecting its investment and pursuing opportunities for value creation through its investment in its Associates.

Outlook:

The Company remains focused on creating long-term value through prudent management of its real estate portfolio and disciplined capital allocation. Following the successful sale of one of its immovable properties during the year, the Companys financial position has strengthened considerably, providing greater flexibility to pursue future business opportunities.

Going forward, the Company intends to evaluate opportunities for the development, strategic utilization and monetization of its existing real estate assets, subject to prevailing market conditions and regulatory approvals.

While the real estate sector continues to be influenced by macroeconomic conditions, regulatory developments and market dynamics, the Board remains optimistic about the Companys long-term prospects and is committed to pursuing opportunities that enhance shareholder value.

Internal Controls and its adequacy:

The Company has in place adequate internal financial controls and internal control systems commensurate with the size, nature and complexity of its business. These controls are designed to ensure the orderly and efficient conduct of business operations, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The Companys internal control framework is supported by well-defined policies, procedures and an appropriate delegation of authority. The Audit Committee periodically reviews the adequacy and effectiveness of the internal control systems, significant audit observations and the implementation of corrective actions, wherever necessary. During the year under review, the management did not identify any material weakness in the design or operating effectiveness of the Companys internal financial controls.

The Company had 16 employees on its rolls during the year ended 31st March 2026. There were no significant changes in the key financial ratios. The Return on Net Worth for the FY 2025-26 was at 80.20 percent as compared to negative (6.41) percent for the FY 2024-25.