Annual Report - Orbit Corporation - 2009-2010

ORBIT CORPORATION LIMITED

ANNUAL REPORT 2009-2010

DIRECTOR'S REPORT

Dear Shareholders,

We are privileged to place before you the 10th Annual Report of your
Company together with the Corporate Governance Report', Management
Discussion and Analysis' & Audited Financial Accounts' for the Financial
Year (FY) ended 31st March, 2010.



Results of operations:

(Rs. in million)
Standalone Consolidated
2009-10 2008-09 2009-10 2008-09

Revenue 4,936 2,867 4,936 2,879
Expenditure 3,904 2,302 3,932 2,336
Profit before tax 1,032 565 1,004 543
Provision for taxation 72 188 53 188
Profit after tax 960 377 951 355
Minority Interest in Net Income - - (4) -
Profit after minority interest 960 377 955 355

Business:

During the financial year 2009-10, the total revenue of the Company
amounted to Rs.4,936 mn as against previous year revenue of Rs.2,867 mn on
standalone basis. Your Company has registered a Profit before Tax of
Rs.1,032 mn as compared to Rs.565 mn during the previous year on standalone
basis. The consolidated revenues for the current year amounted to Rs.4,936
mn as against Rs.2,879 mn compared to last year.

Awards and Recognitions:

Apart from operational and business excellence, this year has also been one
of our best years for various recognitions

'Best Residential Property' (under 1 lac square feet) for our project Villa
Orb - Annual CNBC Awaaz - CRISIL - CREDAI Real Estate Awards 2009

'Premium Residential Project of the Year' for our project Villa Orb -
Accommodation Times - 24th National Real Estate Award for excellence in
Real Estate for the year 2009

'Developer of the Year - Residential' - Realty Plus, India's leading Real
Estate monthly magazine, at Realty Plus Excellence Awards 2010

Increase in share capital:

During the year, your Company has issued and allotted 88,69,359 equity
shares on conversion of warrants issued at the time of IPO and 78,40,426
equity shares to Qualified Institutional Buyers pursuant to SEBI (DIP)
guidelines and 20,00,000 equity shares to the promoters of the Company on
conversion of 20,00,000 warrants out of 40,00,000 warrants issued on
preferential basis in terms of SEBI (DIP) Guidelines read with SEBI (ICDR)
Regulations 2009. After these allotments, total outstanding issued,
subscribed and paid up equity share capital of the Company has increased to
Rs. 54,98,09,450/- from Rs. 36,27,11,600/-.

Appropriation:

Dividend:

Your Directors recommend a final dividend of Rs. 1.50 per share (15% on
face value of Rs. 10/-). This coupled with the interim dividend of Re. 1
per share (10% on face value of Rs. 10/-) already paid, aggregated to a
total dividend of Rs. 2.50 per share for the year Financial Year 2009-10.

Your Directors recommend issue of bonus shares in the ratio of 1:1 i.e. one
new fully paid up equity shares of Rs. 10/- each for every one fully paid
up equity shares of Rs. 10/- each, to the eligible members of the Company
as on the record date to be decided by the Board later.

Transfer to Reserves:

We propose to transfer Rs. 96 mn to the general reserves of the Company.

Report on Corporate Governance:

The Corporate Governance Report is attached herewith as Annexure I and
forms part of this report.

The Certificate from Practicing Company Secretaries on Compliance with
Corporate Governance requirements by the Company is attached to the report
on Corporate Governance.

Management Discussion and Analysis:

Management Discussion and Analysis Report is attached herewith as Annexure
II and forms part of this report.

Particulars of Employees:

The statement of employees in receipt of remuneration exceeding the limits
prescribed under Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 is attached herewith as
Annexure - III.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
and Outgo:

The relevant data pursuant to Section 217(1) (e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 is annexed hereto as Annexure IV and forms part
of this report.

Directors:

Mr. Hafeez Contractor, Director retires by rotation and being eligible;
seeks re-appointment at the ensuing Annual General Meeting. In view of the
interest of the Company, your Board recommends his appointment.

Mr. Shailesh Vaidya, Director retires by rotation and being eligible; seeks
re-appointment at the ensuing Annual General Meeting. In view of the
interest of the Company, your Board recommends his appointment.

The Board also recommends the appointment of Mr. Shahzaad Dalal, who was
appointed as an Additional Director of the Company on 27th January, 2010
pursuant to the provisions of Section 260 of the Companies Act, 1956 to
hold office till the date of the ensuing Annual General Meeting and in
respect of whom the Company has received a notice under Section 257 of the
Companies Act, 1956 along with necessary deposit from a shareholder
proposing the candidature of Mr. Shahzaad Dalal as a Director of the
Company

Brief resumes of Mr. Hafeez Contractor, Mr. Shailesh Vaidya and Mr.
Shahzaad Dalal are furnished in the notes below the notice of ensuing
Annual General Meeting of the Company.

Directors' Responsibility Statement:

Pursuant to the requirements of Section 217(2AA) of the Companies Act,
1956, your Directors confirm the following:

- that in the preparation of the annual accounts, the applicable accounting
standards have been followed;

- that the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company as at 31st March, 2010 and of the profit of the Company for that
period;

- that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;

- that the annual accounts for the year ended 31st March, 2010 have been
prepared on a going concern basis.

Auditors:

M/s. Sharp & Tannan, Chartered Accountants, the Statutory Auditors of the
Company retire at the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. Members are requested to appoint the
Statutory Auditors for the current year and to authorize the Board to fix
their remuneration.

Auditors' Report:

The observations made by the Statutory Auditors in their Report read with
the relevant notes as given in the Notes to Accounts for the financial year
ended 31st March, 2010 are self explanatory and therefore do not call for
any further comments under Section 217(3) of the Companies Act, 1956.

Deposits:

Your Company has not accepted any deposit in terms of the provisions of
Section 58A of the Companies Act, 1956 read with the Companies (Acceptance
of Deposits) Rules, 1975, as amended, during the year under review.

Orbit Employees Stock Option Scheme (ESOS) 2009:

Your Company has introduced Orbit Employees Stock Option Scheme for the
employees of the Company. The details of the options granted during the
year are as follows:

Total options authorized by the Plan 3,00,000

Total options granted during the year
ended 31st March, 2010 1,88,000

Pricing formula at the date of grant of options
(on the price determined as per the provisions
of the Orbit ESOS - 2009) At a discount of 30%

Exercise of options NIL

Details of options granted to the Senior
Management Personnel

1. Mr. Ramashrya Yadav : 10,000 equity share }
}
2. Mr. Raajhesh Shah : 8,000 equity shares } Total 34,000 equity
} shares
3. Mr. Hari Kumar : 8,000 equity shares }
Kurup }
}
4. Commodore Vasudevan : 8,000 equity shares }
Iyer }

Utilization of funds as on 31st March 2010:

IPO Funds
(Rs. in million)

Particulars Proposed Amount Utilised Amount

Acquisition of New Projects 500 500

Project Development cost for
the current projects and
investment in Wholly Owned
Subsidiaries for projects
developed by subsidiaries 423 423

IPO Issue Expenses 78 78

Total 1001 1001

Balance of un-utilised funds
out of IPO, lying in Liquid
Funds / IPO Bank Account NIL NIL

QIP Funds

(Rs. in million)
Particulars Proposed Amount Utilised Amount

Execution and completion
of new & existing projects,
repayment of debt obligations,
strengthen the capital base of
the Company and general corporate
purposes 1396 1396

QIP Issue Expenses 54 54

Total 1450 1450

Balance of un-utilised funds out of QIP NIL NIL

Consolidated Accounts:

In accordance with the requirements of Accounting Standard (AS) 21
prescribed by the Institute of Chartered Accountants of India, the
Consolidated Accounts of the Company and its subsidiaries are annexed to
this Report.

Subsidiary Companies:

A statement pursuant to Section 212 of the Companies Act, 1956, setting out
the particulars of subsidiary companies namely, Orbit Highcity Private
Limited, Orbit Residency Private Limited and Ahinsa Buildtech Private
Limited is attached herewith and forms part of this report.

Orbit Highcity Private Limited (OHPL):

Orbit Highcity Private Limited, a subsidiary of your Company was
incorporated on 19th December, 2007 with the objective of developing large
sized projects like gated townships in the Mumbai Metropolitan Region. OHPL
is in the process of developing a project called 'Orbit Mandwah' situated
at Mandwa, Alibaug, which is planned as a proposed gated township with high
end amenities and features. The Company has entered into Investment
Agreement on 27th January, 2010 with IL&FS Trust Company Limited, IIRF
India Realty X Limited, Moltana Holdings Limited, Rodere Holdings Limited
and Orbit Corporation Limited to raise funds for the development of project
on the property situated at Mandwa, District Alibaug, Maharashtra. As on
31st March, 2010 your Company holds 87% in OHPL.

Orbit Residency Private Limited (ORPL):

Orbit Residency Private Limited, a wholly owned subsidiary of your Company,
was incorporated with the prime objective to acquire and develop projects
of up to 1000 sq. mts. or yielding a saleable area of less than 35000 sq.
ft. hinsa Buildtech Private Limited Ahinsa Buildtech Private Limited, a
subsidiary of your Company, has acquired the property called Orkay Mills
situated at Kurla Andheri Road, Saki Naka, Andheri East and is developing a
residential project called 'Orbit Residency Park'.

Implementation of Global Best Practices:

Your Company has initiated to prepare financial statements in compliance
with International Financial Reporting Standards (IFRS). This is to align
our reporting systems and processes, business practices, accounting and
information technology systems to address the needs of IFRS reporting
requirements. We intend to undertake full convergence from I-GAAP to IFRS
way ahead of its mandated date which is from the financial year commencing
1st April, 2011.

Acknowledgements:

Orbit Corporation Limited is grateful to the Customers, Suppliers, Bankers,
Statutory Authorities, Financial Institutions, Business Associates and the
Government of India, particularly Ministry of Corporate Affairs, Ministry
of Finance, the Reserve Bank of India, the Securities and Exchange Board of
India, Stock Exchanges and other Government Agencies for their co-operation
and guidance and looks forward to their continued support in the future.

The Board of Directors place on record their appreciation for the
contributions made by the employees at all level, whose outstanding
professionalism, commitment, initiative and solidarity has made the
organization grow successfully and continues to drive its progress.
Finally, the Board of Directors express their gratitude to the members for
their trust and support.

For and on behalf of the
Board of Directors

Place : Mumbai Ravi Kiran Aggarwal
Dated : 10th May, 2010 Chairman

Management Discussion and Analysis:

The Management of Orbit Corporation Limited is pleased to present
Management Discussion and Analysis for the year ended 31st March 2010.

Business Environment:

Post the tumultuous times of global economic crisis, Indian economy has
shown signs of revival both in terms of industrial production as well as
financial markets. The resilient growth in GDP, especially in services and
industrial sector was due to strong fundamentals of the economy backed by
several timely measures taken by government as well as the Reserve Bank of
India.

Real Estate Scenario in India:

Real estate demand in 2008 was estimated to be ~200 Mn sq. ft. across key
segments and is likely to increase to ~240 Mn sq. ft. by year 2012 (Source:
Cushman & Wakefield Report)

As per the Planning Commission, India is currently estimated to have a
housing shortfall of 24.7 Mn units. Growing income levels, rapid
urbanization, easier availability of finance and favourable regulatory
measures have contributed to the rise in demand and the sector now
contributes about 4-5% of the country's total GDP. The real estate sector
is further witnessing a metamorphosis with infusion of organized capital.

However, global meltdown took its toll on the rising real estate prices
upto Q4 FY2009, by when prices had corrected by as high as 30% of their
year 2007 peaks. During Q1 FY2010, consumer confidence started building up
backed by steep discounts and formation of stable government at centre.

Real Estate Scenario in Mumbai:

Mumbai, the commercial capital of India, is fast emerging as an
international financial centre. It comprises several micro-markets with
very distinct supply-demand characteristics, consumer profiles and price-
points ranging from Rs. 2,000 per sq. ft. to ~ Rs. 80,000 per sq. ft. While
the primary demand supply dynamics revolve around development of Central
Business Districts (CBDs) or Industrial Areas or Centres of Trade and
Commerce, other factors like connectivity, civic amenities as well as
social and cultural aspects also affect development of residential spaces
in these areas.

Micro markets in Mumbai:

Micro-market Supply Scenario Indicative Rates
(Rs. / sq. ft.)

South Mumbai Very Low supply 24,000 - 80,000

South-Central Mumbai Potential Over-Supply
in 2 to 3 years 12,000 - 40,000

Central Mumbai Moderate Supply 7,000 - 15,000

Western Suburbs - Low Supply 8,000 - 30,000
Bandra to Andheri

Distant Western Moderate Supply 5,000 - 15,000
Suburbs - Jogeshwari
to Dahisar

Eastern Suburbs Over Supply 5,000 - 10,000

Extended Western Potential Over Supply 2,500 - 5,000
Suburbs

Navi Mumbai Potential Over Supply 4,000 - 12,000

Business Overview:

We are a real estate development company in Mumbai Metropolitan Region
(MMR), with significant operations in the Island City of Mumbai. We aim to
be providers of premium realty solutions in Mumbai by leveraging the
strength of our brand, our project execution skills and maintaining our
competitive advantage through location and international quality of our
projects. Our customers include High Net Worth individuals and eminent
personalities from corporate houses.

Our business model is primarily driven by redevelopment of cessed and
dilapidated buildings in Island City of Mumbai. We believe that the demand
in areas of our operation is inelastic to price, but at the same time
responsive to innovative and premium housing solutions thereby helping us
differentiate our product offerings.

Key Business Highlights:

Rewards and Recognition:

The innovative efforts of Orbit bore fruits when one of the earliest
projects of Orbit Corporation Limited, namely Villa Orb was conferred 2
awards in a span of less than 4 months. Villa Orb is one of the premium
projects in Napean Sea Road which is aura and vaastu conformed. Its
structure comprises of high quality stainless steel bars with 5 floors of
car parking equipped with high-tech elevators. As testimony to quality
standards of our products, we received the following accolades in
appreciation of our work:

- Best Residential Property (less than1 lakh sq. ft.) conferred to Villa
Orb at the Annual CNBC Awaaz - Crisil CREDAI Real Estate Awards 2009

- Premium Residential Project of the Year conferred to Villa Orb by
'Accommodation Times', a premium fortnightly real estate magazine.

We were also awarded Developer of the Year - Residential was instituted by
Realty Plus, India's Leading Real Estate\Monthly Magazine at Realty Plus
Excellence awards 2010.

Key projects:

Orbit commands the highest market share in terms of area under development
in premium locations such as Napean Sea Road in South Mumbai. We have
successfully completed the award winning project Villa Orb, while projects
Orbit Arya, Orbit Haven that are under execution have been fully sold out.
Our future pipeline of projects in the vicinity consists of four projects
comprising of approximate saleable area of 1 mn sq. ft.

We are also one of the market leaders in South Central Mumbai with three
projects Orbit Eternia, Orbit Terraces and Orbit Grand with total saleable
area of -0.4 Mn sq. ft. of which 53% has already been sold. Additionally we
have a saleable potential area of 0.9 Mn sq. ft. in pipeline in this
locality.

As part of extension to the company's strategy to leverage its brand value
in the premium mid segment residential market, the company launched
projects in the Mumbai suburban areas like Andheri and has pipeline under
maturity in Santacruz.

We are also gearing up for the launch of the gated community township at
Mandwa during 01 FY11. The Mandwah project is an extension of our premium
offerings providing luxurious villas to our highend customers at just 16
minutes away (by sea route) from the Gateway of India.

i) Project Portfolio as on March 2010:

Ongoing Projects / Projects Under Development:

Project Start / Expected Start
of Construction*

1. Orbit Arya 2007

2. Orbit Haven 2008

3. Orbit Eternia 2007

4. Orbit Terraces 2008

5. Orbit WTC 2007

6. Orbit Grand 2009

7. Orbit Residency Park 2009

8. Villa Orb-Annex 2010

Projects under Pipeline for launch during FY2011

1. Orbit Laburnum 2011

2. Orbit Mandwah Phase 1 2011

3. Orbit Enclave 2011

4. Orbit Residency Park 2 2011

5. Orbit Ocean Parque 2011

Projects under Pipeline beyond FY2011

1. New Project - N S Road 2012

2. N S Road Block 2012

3. Orbit Grandeur 2012

4. Lalbaug Block 2012

5. Orbit Mandwah Phase 2 2012

*Refers to Calendar Year

ii) Projects Completely Sold:

Project Location Area Sold Financial Year
(sqft) when fully
sold

Orbit Plaza BKC 86,547 2006-07

Villa Orb Napean Sea Road 64,167 2007-08

Orbit WTC BKC 3,16,000 2007-08

Orbit Heights Nana Chowk 82,553 2009-10

Orbit Eternia Lower Parel 31,085 2009-10

Villa Orb - Annex Napean Sea Road 45,000 2009-10

Orbit Arya Napean Sea Road 80,872 2009-10

iii) Projects Launched in FY2010

Project Location A B C

Orbit Haven Napean Sea Road 45,000 45,000 -
Villa Orb - Annex Napean Sea Road 45,000 45,000 -
Orbit Terraces Lower Parel 2,79,081 1,19,813 1,59,268
Orbit Grand Lower Parel 79,600 54,200 25,400
Orbit Residency Andheri 2,84,000 1,36,169 1,47,831
Park 1
Total 7,32,681 4,00,182 3,32,499

A = Saleable Area (Sqft)
B = Area Sold (sqft)
C = Area Balance (sqft)

iv) Projects proposed to be Launched in FY2011:

Project Location Saleable Area (Sqft)

Orbit Laburnum Gamdevi 50,000
Orbit Ocean Parque Napean Sea Road 34,000
Orbit Enclave Nana Chowk 23,000
Orbit Residency Park 2 Andheri 2,50,000
Total 3,57,000
Orbit Mandwah Phase 1 Mandwah 9,14,760

Total 12,71,760

v) Projects in pipeline:

Project Location Estimated Potential
Area (Sqft)

Lalbaug Block Lalbaug 9,00,000

Orbit Grandeur Santacruz 5,69,507

New Project - N S Road Napean Sea Road 5,50,000

N S Road Block Napean Sea Road 3,00,000

Total 23,19,507

Orbit Mandwah balance
except Phase 1 Mandwah 24,82,920

Total 48,02,427

Project Realizations:

Location Average Realization in FY10 (INR)

Napean Sea Road 43,352
Nana Chowk -
BKC -
Lower Parel 15,849
Andheri 7,417

New Launches:

- Orbit Residency Park 1, Andheri

This was the first residential project of the company in the Mumbai suburbs
located in Saki Naka, Andheri launched in 03 FY2010. The project received
grand response on launch and the company was able to sell 1,36,169 sq. ft.
at an average of approx Rs. 7,500 /sq.ft. in FY2010. The area in particular

has tremendous potential given close proximity to domestic and
international airport, upcoming metro station and proximity to CBD ('Bandra
Kurla Complex').

Orbit Grand, Lower Parel:

With strong demand potential in the Lower Parel area currently, the Company
launched its third project offering approximately 80,000 sq.ft in 01
FY2010. The project has close proximity to commercial complex, office
spaces, global CBD of Lower Parel. The project received an overwhelming
response and so far Company has already sold approximately 68% of the total
saleable area.

Orbit Haven, Napean Sea Road:

The 45,000 sq.ft. project was launched in 02 FY201 0 and was fully sold
out at an average price of approx Rs.42,300/sq.ft.

Orbit Terraces, Lower Parel:

Initially conceptualized as a commercial space, the design of the project
was modified as residential project to better suit the needs of real estate
market dynamics in FY2010. The project was launched in Q2 FY2010. Designed
by world renowned space designer -Hafeez Contractor, the project is
proposed to span a total of 60 storeys constituting approx 2,79,000 sq. ft.
We have already sold approx 1,19,813 sq. ft. at an average rate of approx
Rs 16,300/sqft.

Villa Orb - Annex, Napean Sea Road:

The project is a vertical extension of our award winning Villa Orb. The
project, comprising of approx 45,000 sq.ft., was completely sold off on its
launch in March 2010. It fetched an average realization of Rs. 45,300/-
sq.ft., clearly illustrating the strong foothold of Brand Orbit in the
Napean Sea Road Region.

Financial Highlights:

(Rs. in millions)
2009-10 2008-09

INCOME
Operating income 4,871 2,835
Other income 65 43
Total Income 4,936 2,879

EXPENDITURE
Operating, General and Admin Exp. 2,569 3,273
Depreciation 46 35
Interest and Finance Charges 908 793
(Increase) / Decrease in Inventory 410 (1,771)
Misc. expenses w/o - 4

Total Expenses 3,932 2,335

Profit Before Tax (PBT) 1,004 543
Provision for Taxes 53 188
Profit After Tax (PAT) 950 355

SOURCES OF FUNDS

Shareholders' Funds
Share Capital 551 364
Promotors Warrant Money 95 -
Reserves and Surplus 7,842 5,091

8,488 5,455

Miority Interest 4 -
Loan Funds
Secured Loans 6,000 3,939
Unsecured Loans 3,072 2,774

9,072 6,713

Deferred Tax Liability 512 506

Total 18,076 12,674

APPLICATION OF FUNDS

Fixed Assets
Gross Block 386 292
Less: Depreciation 110 64
Net Block 276 229
Capital work-in-progress 27 -

303 229

Investments 74 1
Current Assets, Loans and Advances
Inventories 5,484 5,894
Sundry Debtors 4,630 2,622
Cash and Bank Balances 485 9
Loans and Advances 9,590 5,968

20,189 14,492

Less: Current Liabilities and Provisions
Liabilities 1,684 1,533
Provisions 806 515

2,490 2,048

Net Current Assets 17,699 12,444

Total 18,076 12,674

Operating performance:

Total Income:

The total Income in FY2010 has rose to Rs.4936 Mn as compared to total
income of Rs.2879 Mn in FY 2008-09, an increase of 72%. The increase in
total income has been due to better realisations as well as increased
volumes.

Primary contributor for the revenue during the financial year was Orbit WTC
which accounted for -46% of total revenue. With the completion of Orbit
Heights, balance of its revenue was also recognized. Other projects like
Orbit Terraces, Orbit Arya and Orbit Haven, being in various stages of
completion brought in close to 50% of total revenue for the year.

The following projects contributed to the revenues for the entire FY2010.

Project A B C

Orbit WTC - 2,240 -

Orbit Haven 1,900 621 45,000

Orbit Arya 509 854 14,063

Orbit Terraces 1,686 888 98,613

Orbit Eternia 95 200 5,900

Orbit Heights 66 68 2,518

Orbit Grand 594 - 37,100

Orbit Residency Park 1 1,010 - 1,36,169

Villa Orb - Annex 2,040 - 45,000

Total 7,900 4,871 3,84,363

A = Sale Value in FY2010 (Rs. Mn.)
B = Revenue Recognized in FY2010 (Rs. Mn.)
C = Area Sold In FY2010 (sq. ft.)

The following projects contributed to the revenues for FY2010. The table
below provides the information regarding the total sales value of the
projects, the cumulative revenues recognized and outstanding book size of
these projects.

Project A B C D

Orbit WTC 7659 6868 90% 791

Orbit Haven 1900 621 33% 1,279

Orbit Arya 2976 2846 96% 130

Orbit Terraces 1950 994 51% 956

Orbit Eternia 457 445 97% 12

Orbit Heights 1190 1190 100% -

Orbit Grand 808 0 NA 808

Orbit Residency 1010 0 NA 1,010
Park 1

Villa Orb - Annex 2040 0 NA 2,040

Total 19990 12964 7,026

A = Cumulative Sale Value (Rs. Mn.)
B = Cum. Revenue Recognized (Rs. Mn.)
C = % completion
D = Outstanding book size (Rs. Mn.)

Total Expenditure:

2009-10 2008-09

EXPENDITURE:

Operating, General and Admin Exp. 2,569 3,273
Depreciation 46 35
Interest and Finance Charges 908 793
(Increase) / Decrease in Inventory 410 (1,771)
Misc. expenses w/o - 4
Total Expenses 3,932 2,335

Increased execution and completion level in FY 2010 saw inventory reduction
during the year, as compared to FY 2009.

Profits and Profitability:

The EBITDA Margins of the Company have been similar to the margins in
FY2009. The Company has been able to stabilize the EBITDA Margins even
during the slowdown also.

Our business strategy of conceiving a product to address an identified
demand - supply gap and focus on target customer, has cushioned us from
cyclicality of the real estate market movement when compared to other
market players. The strategy helps us to maintain our profitability margins
as our due diligence prior to project commencement ensures that we work on
projects with a minimum threshold operating profit ratio of -35%.

The PAT Margins have improved significantly in FY2010 as compared to the
PAT Margins in FY2009. The PAT Margins in FY2010 are 19% as compared to 12%
in FY 2009. Primary contributor to this improvement in margin is the
company's revenue performance that commensurate the size of operational
bandwidth that company works with.

Sources of funds during FY 2010:

During the year FY2010, directly or indirectly through its wholly owned
subsidiaries, company raised funds to the extent of Rs. 5,574 Mn in form of
equity and debt to fund the operations. Through different refinancing
options, company was able to bring down the average cost of debt in FY2010
by more than 10 bps as compared to FY 2008-09. At the same time, debt level
was also kept under control by maintaining it at comfortable levels.

Details of funds raised during the year are provided in table below. Funds
to the tune of Rs. 250 Mn was earmarked and deployed for the construction
and development of Mandwah project.

Purpose Particulars Nature of A B
fund

Expansion IPO Warrants Equity Orbit Corp. Ltd. 394

Expansion Conversion of Equity Orbit Corp. Ltd. 380
Promoter
Warrants

Expansion & QIP Equity Orbit Corp. Ltd. 1,450
Debt

Debt Corporate Loans Debt Orbit Corp. Ltd. 3,100

Project - Private Equity Part Equity Orbit High City Ltd. 250
Mandwah Funding

A = Company in which fund is raised
B = Amt Raised (Rs. Mn.)

The Company has been able to reduce its D/E ratio from 1.23 in FY2009 to
1.06 in FY201 0. With the objective of ensuring optimum leverage of balance
sheet and solvency level to meet debt obligations as well as providing
value to our investors, the strategy of the company has always been to
delevarage itself during better market cycles and fund the projects from
both equity and internal accruals. During tight liquidity situations,
company taps its leveraging capacity to fund the projects through debt
financing.
Cost of Debt

In FY2010, we managed to bring down cost of funds from unsecured loans
helping us bring the overall cost of debt down from 13% as on March 2009 to
12.89% as on March 2010.

Indebtedness:

As of March 31, 2010, we had Rs.5,999 Mn of principal amount of secured
loans outstanding, consisting of term loans from banks and financial
institutions of Rs. 4,212 Mn in principal amount and 1500 secured non
convertible debentures of Rs.1 Mn each aggregating to Rs.1,500 Mn
subscribed by insurance companies. These loans and debentures were secured
by, among other things, our inventory of ongoing projects and other movable
and immovable assets, including certain parcels of land owned by us and
assignment of receivables along with personal guarantee of our Promoters,
i.e. Mr. Ravi Kiran Aggarwal and Mr. Pujit Aggarwal.

The repayment schedule in relation to our indebtedness is set forth
below:

(In Rs. Mn)

Particulars As at March 31, 2010 Repayment in Fiscal 1-3 years
Year 2011

1500 secured 1,500 - 1,500
NCDs of Rs.1
Mn each

Loans from a 3078 1380 1,698
financial
institution

Loans from Bank 1134 24 1110

Loans from Others 250 250 -

Credit Period from Suppliers:

We believe we benefit from economies of scale and better credit terms based
on our relationships with suppliers and contractors. We normally enjoy a
credit period of three to four months for the projects based on the size of
transaction and project duration. Any change in the credit period from our
suppliers could adversely affect our cash flows and results of operations.

Inventory:

Inventory levels have reduced almost 7% from Rs. 5,894 Mn in FY 2008-09 to
Rs. 5,484 Mn in FY2010. This drop is on account higher completion level of
Orbit - WTC. Current Inventory level is attributed primarily to Orbit
Terraces, Orbit Grandeur, Orbit Residential Park 1 and Mandwah which
contribute to more than 80% of total inventory lying on the balance sheet
date.

Debtors:

Debtors to the tune of Rs. 2381 Mn out of Rs. 4630 Mn as on 31st March,
2010 are for the period exceeding 6 months. Of the total receivable
outstanding, almost 70% is constituted by Orbit WTC, Orbit Arya and Villa
Orb which are in advanced stage of completion. The value of receivables are
more based on the individual collection agreements.
Cash Flow

2009-10 2008-09

A) Net Cash Generated from Operations (2,978) (2,594)

B) Net Cash Generated from Investing (181) (27)

C) Net Cash Generated from Financing 3,635 790

Net (Dec) / Inc in Cash & Cash Equivalents (A+B+C) 476 (1,832)

Cash & Cash Equivalents at the beginning of the year 9 1,841

Cash & Cash Equivalents at the end of the year 485 9

Cash operating profit before working capital adjustments for FY2010 stood
at Rs. 1,944 Mn as compared to Rs. 1,362 Mn in FY2009. However, working
capital requirement in FY201 0 grew by Rs. 4,729 Mn as against Rs. 3,687 Mn
for FY2009. This working capital requirement was primarily driven by
increase in receivables on account of large number of projects nearing
completion and high volume of project execution undertaken during the year.

Investing cash flow includes primarily purchase of fixed assets to the
extent of Rs. 120 Mn and investments in liquid funds of Rs. 73 Mn.

For FY2010, Operations and Investment activities were financed primarily
through borrowed funds to the extent of Rs. 2,368 Mn (net) and equity to
the net extent of Rs.2231 Mn. There was a net interest payout of Rs. 917
Mn.

Business Strategy:

Our business strategy has withstood the financial crisis and we continue to
believe that our strategy remains relevant and potent for the growth of the
Company. The key components of our strategy are as follows:

1. Strategically conceived and positioned projects:

Unlike the conventional land-bank approach and fitting a development story
around it, we follow a strategy of identifying visible demand-supply gaps
and a relevant customer segment. We then conceive our product around the
segment's requirements and identify an appropriate land-bank that meets all
demands of the conceived product.

As a result of this strategy, we will not be left with a stagnant land bank
and we are able to maintain our profitability (a threshold of -30%
operating margins).

2. Focus on Financial Strength and Liquidity:

We strive to ensure a healthy balance of funding options to ensure optimum
leverage of our balance sheet and remain solvent to meet our debt
obligations as well as provide value to our investors. Our sound business
approach and vision for the company has been the driving force behind the
support we have received from lenders as well as equity investors.

3. Building Customer Loyalty and hence a strong Brand Image:

With our strategic approach, we have been successful in understanding the
psyche of our target customer classes and have accordingly developed
products at appropriate locations with right demand attributes. We have
been able to fulfil all real estate needs of our customers and thereby have
widened our scale.

A concomitant advantage of our development strategy in Mumbai is the
flexibility that we have in controlling our land acquisition costs. We
intend to develop land for our South & Central Mumbai projects through the
redevelopment route. A key advantage of the re-development route is the
flexibility a developer has in controlling its acquisition & entitlement
costs. Unlike the conventional method of buying open plots by making
upfront cash outflows towards acquisition, redevelopment in Mumbai requires
staggered cash out-flows towards land entitlement as well as tenant
settlement and rehabilitation. This allows us to control our cash out-flows
keeping in view the business cycle, pace of development and macro economic
conditions.

Outlook:

Business Outlook for the Company:

In our view, while the real estate market in Mumbai will see a stability or
a marginal decline in prices in some areas, rates in the high end premium
lifestyle properties is likely to see medium to long term growth backed by
rebounding income growth, growing investor confidence and infrastructure
development in the city. Moreover, with changing lifestyles, greater
exposure to housing concepts across the globe, customers are evolving to
the next level by aspiring beyond quality of construction to more value
added offerings and a range of amenities adding convenience and luxury to
their day to day lives. We are not only geared up to serve their
requirements but we believe that our projects have been instrumental in
increasing their awareness and hence contributing to their evolution. We
are confident of a strong response from our customer base to the launch of
our mega project in Mandwa as well as redevelopment projects in South and
Central Mumbai and a sound growth of the company in future.

Opportunities:

- The secular growth story of India, with GDP growing at around 7-8% and
the consequent impact on the real estate sector including the Mumbai
market, remains intact. We continue to believe that we are in a sector that
is positioned to capture the benefits of this economic growth.

- There is a steady supply of dilapidated and cessed buildings in prime
areas of South Mumbai for which premium prices can be quoted for 'Grade A'
residential and commercial developments.

- The concept of lifestyle real estate products, smart homes, theme
buildings, service residential apartments and lifestyle retail has been
well received.

- Mumbai, where our focus remains, will improve significantly with a slew
of key infrastructure projects that are being planned.

- At the same time, due to crunch in space, Mumbai presents opportunities
in horizontal expansion in the Mumbai Metropolitan Region in various forms
like Integrated Townships and IT Parks.

Threats:

Labour shortage due to non-receptive political conditions in Mumbai can
lead to increase in labour costs and reduce profitability of operations due
to possible scarcity of labour and consequent delay in project
construction.

With RBI's measures on increasing provisioning for credit to real estate
sector and its expression of concern on the asset price bubble, cost of
debt is likely to go up for real estate company.

Risks and Concerns:

Missing out on Mass housing & mid-size housing opportunity:

- With the economy back on track, mass housing or the mid-size housing
requirement is expected to witness good growth over the next two years due
to lower interest rate on housing loans, increase in disposable income with
salaried class, increase in urban middle class population, shift in
preference from rented house to owned house, tax incentives, etc.

- Most of our projects are targeted at high end or up market buyers and
this segment may not witness growth in revenues and profits in line with
mass housing market.

Execution risks:

- Our business requires, among others, getting consent from at least 70% of
thetenants, consensus between various groups of tenants, providing
temporary alternate accommodation to them during the interim period of
demolition and construction, obtaining consents and rehabilitation. Delay
in any of the aforesaid activities can thus have adverse financial
implications.

- Any delay in the construction or prolonged construction period will lead
to increased cost and the same will affect our profitability.

Competition:

- The entry of new and established players with local and national presence
can affect our acquisition of potential targets in the existing and new
markets.

Other risks:

- Implementation of IFRS: While the company is geared up for implementation
of IFRS in compliance with statutory norms, guidelines in the new standards
could have significant downside implications on reported financials.
However, this is not likely to hamper the operations and cash flows in the
normal course of business.

- Debtor Recoverables: With growing number of projects under execution and
the nature of individual agreements with clients, the outstanding amount
gives an illusion of high receivables in the form of Debtors.

- Changes in the policies of Government of India, Government of
Maharashtra, Municipal Corporations and MMRDA related to environment, FSI
and implementation of infrastructure projects and other matters can
adversely impact the real estate scenario and hence our business and
prospects.

- Sudden deterioration in the credit worthiness of our clients / debtors
can adversely affect our collections and impact financial performance.

- Our operations and results are also subject to general economic factors
like the economic, income & demographic conditions of Mumbai.

Depending on the type of risk, the Company is combating each risk by
various means like strategic tie-ups with regional players in construction,
qualitative market research, quicker decision making, strategizing the
sales and prices with timelines. Moreover, the Company has strengthened its
processes related to legal due diligence further during the year so as to
reduce the risks of getting into projects with longer gestation period
mainly due to legal intricacies.

Organization:

Human Resources:

We endeavour to constantly nurture a culture of quality and team spirit
among our employees. We value the role played by our employees and have
taken several measures to increase employee engagement through various
initiatives. Personal / professional achievements, achievement of certain
milestones, various festivals and green' initiatives are recognised and
celebrated. We continuously encourage our employees to undergo training and
be a part of various forums for furthering their careers. The Company
invested over 2500 human-hours in training during the year on topics widely
spread across quality, operations, domain specific learning interventions
as well as behavioural and leadership skills.

Training Programs for the year 2009-2010:

Training Programs Man Hours Cost of Training
(Rs.)

Technical / Domain Training 670 3,58,860

Behavioural & Professional Skills Training 1,417 2,67,455

Training for Process Improvement 336 -

Personal Health & Wealth Management 96 -

Total Employee Hours 2519 6,26,315

Statement of changes in Human Resources:

OCL only OCL + Outsourced +
Subsidiaries

Opening number of employees 127 199
as on 1st April 2009

Added 59 122

Attrition 35 44

Closing number of employees 151 276
as on 31st March 2010

New Initiatives:

We have introduced several new organization-wide initiatives as part of the
quest to transform the company into a world class organization.

a. IFRS Coverage:

We have initiated the exercise of preparing our financial statements in
compliance with International Financial Reporting Standards (IFRS). This
initiative targets to align our reporting systems and processes, business
practices, accounting and information technology systems to address the
needs of IFRS reporting requirements. We intend to undertake full
convergence from I-GAAP to IFRS way ahead of its mandated date which is
from the financial year commencing April 01, 2011.

b. ERP Implementation:

To address the increasing demands from scaling up operations, we have
initiated the implementation of Enterprise Resource Planning (ERP) software
from In4velocity customized for our specific business needs.

We are an ISO 9000:2000 certified organization and we are in the process of
upgrading to ISO 9001:2008 standard. As a comprehensive approach to
quality, we are aligning our processes to the standards of ISO 14001:2004
and OHSAS 18001:2007. (The company has not applied for the aforesaid
certifications).

Internal Controls and their Adequacy:

The Company has an adequate system of internal controls commensurate with
its nature of business and scale of operations. Well established and robust
internal audit processes, both at business and corporate levels,
continuously monitor the adequacy and effectiveness of the internal control
environment across the Company and the status of compliance with operating
systems, internal policies and regulatory requirements.

The Internal Audit function consisting of professionally qualified
accountants, engineers and IT specialists, also review the quality of
planning and execution of all ongoing projects involving significant
expenditure to ensure that project management controls are adequate.

Segment Reporting:

The Company's business activities fall within single segment, viz. real
estate and redevelopment and predominantly operates in domestic market.
Accordingly, disclosure requirements under Accounting Standard (AS) 17
segment reporting, is not applicable.

Forward Looking Statements:

- Certain statements in the Management Discussions and Analysis describing
the Company's objectives, projections, estimates, expectations or
predictions may be forward-looking statements within the meaning of
applicable Securities laws and regulations. Actual results could defer from
those expressed or implied.

- Important operations include material availability and prices, cyclical
demands and pricing in the Company's principal markets, change in
Government regulations, tax regime, economic developments within India and
other incidental factors.

- Our revenues and expenses are difficult to predict and can vary
significantly from period to period, which could cause share prices to
decline.

- Our projects are subject to risks from natural disasters like earthquakes
and floods.

- When used in this report, the words anticipate', believe', estimate',
expect', intend', will' and other similar expressions as they relate to
the Company and/or its businesses are intended to identify such forward-
looking statements.

- The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
and Outgo:

Your Company consumes power to the extent required in its construction
processes besides the utilization of power in administrative functions.
Your Company is committed to the cause of energy conservation and takes
effective steps to conserve energy wherever applicable and possible.

Conservation of Energy:

1. Energy conservation measures taken N.A.

2. Additional investment and proposals, N.A.
if any, being implemented for reduction
of consumption

3. Impact of the measure at (1) and (2) N.A.
above for reduction of energy consumption
and consequent impact on the cost of
production of goods

4. Total energy consumption and energy N.A.
consumption per unit of production are
as under:

Year Ended Year Ended
31/03/2010 31/03/2009

A. Power and Fuel Consumption:

1. Electricity:

a) Purchase:

Unit 698,306 291,922
Total Amount (Rs.) 8,713,970 3,965,325
Rate / Unit (Rs.) 12.48 12.72

b) Own generation
(Through D.G. Set)
Unit
Diesel Oil Consumed (Ltr.)
Total Amount (Rs.) N.A. N.A.
Avg. Per Ltr. (Rs.)

2. Furnace Oil:

Quantity (Ltr.)
Total Amount (Rs.) N.A. N.A.
Avg. Per Ltr. (Rs.)

B. Consumption Per Mtr.
of Production

Production (Mtrs.) N.A. N.A.
Electricity (Rs.)
Diesel Oil (Rs.)
Furnace Oil (Rs.)

Technology Absorption:

The Company does not need any technology for its existing business. The
Company has not undertaken any Research & Development Activity during the
financial year under review.

Foreign Exchange Earnings and Outgo:

Foreign Exchange Outgo : Rs. 130.65

Millions Foreign Exchange Earned : Nil

For & on behalf of the Board

Ravi Kiran Aggarwal
Chairman

Place : Mumbai

Dated : 10th May, 2010.