Management Discussion and Analysis Global Economic Condition The world economy is going through turmoil. Europe in particular is going through a difficult economic situation. Greece has defaulted on loan repayment and even Spain and Portugal are in stress. The growth in the United States is still tepid. In Asia Chinese growth rates have come down to 7% and its real estate sector is in stress as demand is contracting. Overview of Indian Economy Indian economy showed early signs of growth post various initiatives and reform measures undertaken by the Central Government. Post the revision in the base year for calculation of GDP to FY'12 from FY'05 earlier, FY'14 GDP at factor cost stood at 6.6%. Advances estimates from the Central Statistics Office pegs the FY'15 growth estimates to 7.4% (YoY) The Company believes that public and private investment spending to drive the capex growth will be critical to India's growth outlook. The Government has taken measures to boost spending by increasing the capex allocation towards infrastructure projects by reforms in the budget. The Government is also taking various initiatives to unlock stuck investments in the core and infrastructure projects, revive investments from the private sector by reforming policy environment, improving the ease of doing business and accelerating the project related approvals. The Reserve Bank of India is also reducing the lending rates which will help to spur growth. Overview of Real Estate Sector in India Indian Real Estate is the second largest industry next only to agriculture in terms of the contribution it makes to the gross domestic product (GDP) and the employment generation. The real estate sector continued to face a challenging environment due to lacklustre demand scenario, various policy hurdles, delay in approval cycle, continued high borrowing costs both for industry and the consumer. Various reforms announced by the Government such as 'Housing for all by 2022', development of 'Smart Cities' and the proposed real estate regulatory bill are expected to benefit the sector over the medium and long-term. The year end stock of Retail Segment across the seven metro cities in India was estimated at approximately 71.6 msf, with vacancy levels of approximately 17% across the sector. The current year witnessed historical low levels of supply and demand primarily due to the boom in the e-commerce market in India and partially due to FDI policy uncertainties. Our Business Our Company is a real estate developer focused on conceptualizing, designing, creating and management of Shopping Malls-cum-Multiplexes. The Shopping Malls-cum-Multiplexes segment of the real estate sector was hit the hardest by the recent slowdown and also due to the boom in the e-commerce market. Foot falls at the malls have declined sharply. Mall owners had to agree with lower rents as retailers renegotiated rent agreements so as to remain in business. As more and more malls are coming up rents are increasingly coming under brssure as supply is increasing than demand. Performance The total income of the Company was Rs.184.08. lacs as compared to Rs.183.30 lacs of the brvious year. The loss after tax was Rs.23.03 lacs as compared to loss of Rs.11.23 lacs of the brvious year. The Company has kept all its projects on hold due to adverse market conditions. Our Mission RAP Media is committed to redefining retail shopping experience and developing lifestyle shopping centers where footfalls automatically turn into conversions. We focus on creating Malls-cum-Multiplexes in the non metro cities of India with a view to provide new growth opportunities to businessmen and catering to quality conscious consumers across India. Cautionary Statement Statement in the Management Discussion and Analysis describing the Company's objectives, estimates, expectations or projections may be 'forward looking statement' within the meaning of applicable laws and regulations. Actual results could differ materially from those exbrssed or implied. Important factor that could make a difference to the Company's operations include Government regulations, patent Laws, Tax regimes, Economic Developments, litigations and other allied factors. For and on behalf of the Board of Directors RUPINDER SINGH ARORA Chairman & Managing Mumbai, Dated: 30,July, 2015 |