Orbit Corporation

Dear Shareholders,
 
 The past one year has been challenging for one and all. It decimated
 those who were not prepared for the turbulence in the economy and
 therefore severely paralysed those had underestimated its true impact
 on the business. We, on the other hand, with the guidance of our
 inherent culture and family values, have always been conservative
 enough, to not get carried away with extravagance of the times and
 throw caution to the wind. This very aspect saw our company not only
 stay afloat but swim steadily on, in the dark times.
 
 The Indian economy was fairly resilient along with other Asian majors
 through the sub-prime crisis that erupted in late 2007. In early 2008,
 the real estate sector started showing signs of increasing consumer
 fatigue with unrelenting rise in property prices. The asset bubble that
 had built up in the real estate capital market started fizzling out
 from early 2008. Demand from all segments - commercial, residential,
 hospitality & retail started dipping at a fast pace.
 
 Real estate developers, at large, were however confident of revival in
 consumer demand and were patiently awaiting their return without
 changing product positioning or pricing.  However, with the sub-prime
 crisis exploding into a global financial crisis after September 2008,
 the contours of the Indian real estate market changed drastically.
 Consumer demand froze across all sectors as businesses slashed their
 capital expenditure plans. Residential demand, which was fairly
 resilient till then, also froze with looming uncertainty over
 employment prospects. The Mumbai property market was also significantly
 impacted by the crisis and property prices collapsed by 25-30% from
 their peak. The impact was a bit greater in the under-construction
 properties.
 
 Most real-estate developers had just finished amassing large land banks
 riding on the capital market boom and several of these had
 over-leveraged their illiquid land banks.  Large real-estate developers
 in the country were also not left unscathed by the crisis and doubts
 were raised by the investor community on the going-concern basis of
 some of these developers. Developers started focusing on immediate
 liquidity over long-term capital appreciation resulting in several new
 trends 
 
 a) Targeting the high-demand and low-margin affordable housing
 segment/mass housing segment;
 
 b) Offering discounts on their projects; attractive schemes to upfront
 instalments;
 
 c) Liquidating land-banks or built-to-hold assets (commercial,
 hospitality etc.) to shore down expensive debt
 
 The Reserve Bank of India relaxed guidelines for restructuring debts
 and brought real estate within its ambit towards the end of 2008.
 Several developers rolled over/restructured their debt liabilities
 which helped in overcoming the severe cash crunch faced by all and
 sundry.
 
 Thus, we can see that the year was peppered with declining demand,
 discrepant supply, crashing prices, crunching liquidity and low
 customer confidence. But we were, as we always have been, ready to take
 up the gauntlet. We concentrated on making improvisations within our
 business process in our bid to control factors that were internal to
 us. We initiated the process of implementing Enterprise Resource
 Planning (ERP) solution to improve our efficiency and harness
 technology for better project management and resource allocation.  We
 effected radical innovative changes in our Project Operations and
 Procurement processes by re-rotation of equipments, ordering optimal
 batch quantities, just-in-time inventory management and strict control
 over wastage.
 
 All through the process, the one thing that has always been, and will
 always be, maintained was the untiring focus on Quality of our
 projects. We are known by the quality of our deliverables and we
 continuously strive to push the frontiers and set the benchmark for the
 industry.
 
 Having talked about Quality, Innovation and Technology, let us come to
 the most important pillar of our business, our success - our People.
 Perhaps the most deep rooted and sustainable leadership trait -
 particularly in times of stress and strain - is the belief in a value
 system. We at Orbit believe that all our employees are family members,
 a part of the larger Orbit family. We take pride in each others
 achievements and celebrate in each others success. This faithful
 relationship is the strength of our Orbit culture. It is this cement
 that has bonded Orbit family members together.
 
 Our family members along with our innumerable shareholders,
 stakeholders, consultants, advisors, associates and collaborators are
 the vibrant pulse of the brand Orbit.  They constitute the essential
 capital of the organization. Orbit salutes their energy, enthusiasm and
 dedication to the dreamer of dreams - our cherished customers.
 
 Our total income decreased by 59.5% from Rs.7,107 million in the fiscal
 year 2008 to Rs.2,879 million in the fiscal year 2009. Our net profit
 decreased from Rs.2,358 million in the fiscal year 2008 to Rs.355
 million in the fiscal year 2009. As a percentage of total income, net
 profit decreased from 33.17% in the fiscal year 2008 to 12.34% in the
 fiscal year 2009.
 
 We firmly believe and assure you that we are equipped to ride on a
 strong sales cycle which will be driven by our calculated strategy of
 building a strong pipeline of highly visible projects. Last few months
 have seen a rise in enquiries and aroused a lot of interest in our
 upcoming projects, which is very heartening.
 
 Going forward, we believe that the real estate industry is already over
 its worst phase and the phase of consolidation has already commenced in
 deeper markets like Mumbai.  Consumer confidence is slowly returning
 with the election of a stable government at the centre,
 more-than-expected GDP growth and softening of interest rates. The
 players who can timely mobilize funds and employ them in faster project
 execution and acquisition of high value-unlocking properties will be
 the ones who will successfully emerge from the current situation,
 stronger, bigger and better equipped to scale up their businesses.
 
 From here on, we intend to take an educated approach - focus on
 pre-sales through faster execution and scaling up by addressing all
 real estate needs of existing customers and widening the target
 customer segment. We will continue our focus on markets with large
 visible supply-demand gap to mitigate risks of absorption.
 
 We express our sincere gratitude to all our stakeholders, for providing
 us with unrelenting and unconditional support and encouragement in our
 good and tough times. We promise to make you proud of our association
 at ORBIT.
 
 Ravi Kiran Aggarwal                         Pujit Aggarwal
 
 Chairman                                     M.D.  & C.E.O.
 Mumbai, 1st August, 2009           Mumbai, 1st August, 2009