Chairman Speech

Financials 

Net Profit for the year 2008-09 stood at Rs 5,222 Lacs as against Rs 16,157 Lacs in the year 2007-08. The total turnover including other income for the year ended March 31, 2009 stood at Rs 69,802 Lacs, as compared to Rs.86,844 Lacs for 2007-08. An amount of Rs 5000 lacs has been transferred to the General Reserves.

Dividend 

Maintaining the consistency, your Directors have recommended for shareholders' approval a dividend of Rs. 0.50 paisa (i.e. 10%) per Equity Shares having the face value of Rs. 5/- each, fully paid up.

Economic Outlook 

As you are aware, the past year has been a turbulent one in the international economy, several advanced countries having slipped into recession. The sequence of crises began with the mounting losses on sub-prime mortgage derivatives which led to serious difficulties in a host of large financial institutions The Global economic scenario and tumultuous developments have had a negative impact on India especially on trade and capital inflow. However, the sub prime crisis has not directly affected India since most of the banks and the housing finance companies here are conservative and work on sound financially regulated discipline. Moreover, the structured finance and securitization market in India is still in nascent stage and addition to that, Indian borrowers are cautious and averse to taking high risks. The RBI has taken a series of measures to deal with the problems of liquidity, interest rates and other policies. Stimulus packages were also announced by the Government. Though India's GDP slipped to 6.7% in 2008-09 from 9% in the preceding fiscal year, it is nonetheless better than USA, European countries and other Asian countries which are in the grip of recession and economic meltdown. In recent days, there have been hints of encouraging 'green shoots' of revival in the Indian economy as well as in other countries. In Indian context, as per RBI report on Macroeconomic & Monetary Development, released recently, there is a turnaround in business sentiment as per industrial outlook survey conducted by the Central Bank.

The Real estate scenario 

The Indian real estate sector plays a significant role in the Country's economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). The real estate sector is also responsible for the development of over 250 industries such as cement, steel, paints etc. The Indian real estate industry is currently estimated to be USD 48 billion, with a CAGR of 30 per cent. Total economic value estimated to be USD 40 billion-USD 45 billion accounting for four to five per cent of the GDP.

The double impact of the costs as well as the declining demands and the fall in the liquidity in mid-September 2008, precipitated a sharp downturn in this sector. There followed a period in the second half of the year when demand had already moderated, but costs remained high. The slow down has affected the commercial sector but demand in the residential sector has not come down appreciably as many prospective buyers are adopting wait and watch approach. In fact, in recent times, notably as demand for affordable housings, buyers are coming back to the market. Moreover, demand and construction activities in rural areas are on a strong footing. The Government is now working on a real estate regulation bill to regulate and facilitate growth and promotion of a healthy, transparent, efficient and competitive real estate sector. This is a welcome move.

Increasing competitiveness 

Significantly, your Company although affected by the overall down turn, has managed to remain competitive. To start with, it is becoming cost effective in various areas more so in the construction areas by better technical innovations and import from cheaper sources overseas. Other improvements have been rationalizing its employee strength and cost, further professionalizing its management team and improving its systems and procedures. Continuing unabated with its construction activities and retaining its delivery schedules have always been the priority of the Company giving it a competitive edge. In fact it has delivered and given possession of about 2669 nos. of houses and plots during the year & till now which is better than many others in this business.

Land Bank 

Your Company along with its associates / JVs have approximately 8573.24 acres of high quality land bank (including planned area).The land saleable area comes to about 213.191 mn sq feet and Gross Saleable including construction area comes to about 331.32 mn sq feet .The Company is always on a lookout for qualitative land aggregation.

Projects in hand 

Presently your Company is undertaking projects predominantly in four Northern States. The Company is executing in various Phases, 9 Projects in Uttar Pradesh, 15 Projects in Haryana, 8 Projects in Rajasthan and 18 Projects in Punjab.

Infusion of funds 

You will aware that IPRO Funds Ltd., Mauritius, a reputed registered Foreign Institutional Investor {FII} has given its intention to subscribe up to 1,26,11,233 Nos. of Equity Shares of your Company. This shows the continuing confidence of foreign investors in the Indian real estate sector and more particularly in your Company. We, the Promoters have also agreed to subscribe up to 1,65,12,838 Warrants of the Company. This also indicates our confidence in the future your Company. Issue of both the shares and the warrants will be made by way of preferential allotment and the total amount to be raised as a long term funding process will be to the tune of about Rs.203 crore. Plans are also being made to increase funding using various routes to increase appreciably the Company's financial and business strength.

Focus on Tier II cities 

Your Company has been the pioneer in moving to smaller cities or better known as Tier 2 & 3 cities. Others have subsequently followed but the first mover's advantage has proved to be a correct vision for the Company. In fact such a foray in these cities has continued to pay off in terms of better business and cash flows. In its continued attempt to provide the residents of these cities with world-class real estate solutions your Company has undertaken / is under the process of launching projects in various States like Rajasthan, Haryana, U.P., Punjab, NCR regions. It is also in the process of developing Integrated Townships in cities like Greater Noida, Meerut, Karnal, Yamuna Nagar, Kurukshetra, Agra, Ghaziabad, Lucknow, Bhatinda, Mohali and several cities of Rajasthan and Punjab.

Real Estates Business 

Your Company is one of the few companies which have successfully developed mega residential cum commercial projects involving more than 1000 acres. It is working on various projects involving Integrated Townships, Group Housing, Shopping Malls, IT Parks, SEZs, Industrial Estates, and Offices etc. Pertinently residential segment has been one of the areas which continue to maximize the revenue streams of your Company followed by office/ retail etc. The Company has projects in almost all major cities of Northern India including at Gurgaon, Sonepat, Panipat, Karnal, Yamuna Nagar, Kurukshetra, Ghaziabad, Lucknow, Meerut, Agra, Jaipur, Jodhpur, Ajmer, Amritsar, Mohali, Jalandhar, Ludhiana, Bhatinda etc and is planning to launch more projects in Tier-II cities of Northern India.

Affordable Housings 

Your Company has received overwhelming response to its recently launched affordable independent houses and apartments in the States of Rajasthan and Uttar Pradesh. About 11,635 units have been launched & planned in near future. Similarly in case of Punjab and Haryana the number is about 8,851 units. It is also targeting Mid Income Segment by launching housing solutions in the range of 800 to 1100 sq ft per unit. Your Company believes that in times to come, prices of affordable houses will firm up and will also be instrumental in improving its cash inflows being a fast selling inventory.

Hi-Tech Townships 

Your Company is developing two Hi-Tech Cities in U.P. under Hi-Tech policy - 2003 of Government of U.P. First such project is being developed in Lucknow spread on approximately 1765 acres of land and second is at Dadri, adjoining Greater Noida spread over an area of 2504 acres under the brand "MEGAPOLIS".

In case of Lucknow, the execution of agreements for the First Phase of 1765 acres has now been completed and the development work is in progress. U.P. Govt. has accordingly further allowed 1765 acres more and the area of this township will now be 3530 acres. Your Company is proposing to hand over possession of about 200 developed plots and some of the dwelling units located in the first phase of 640 acres to the end users by the year end.

In case of Dadri, the Project is strategically located next to fast growing business centers of Noida and Greater Noida and well connected with Delhi and other vital commercial centers through expressways and highways and the work at site on the Project has already started. We are happy that HDFC Asset Management Company Limited- PMC is a partner in this Project.

These Hi-Tech townships propose to offer residential plots, group housings, independent villas, shop cum office complex, shopping malls, office space, non polluting industries, schools, educational institutes, medical centers, professional educational zones, entertainment parks, tourist parks, golf course, clubs, hotels and also offer fully equipped health and recreational centers.

Golf City 

Lucknow Project, better known as Sushant Golf City, with synergy of architectural aesthetics and extensive lush green carpet has, right in the middle, about 400 acres of 18 holes International Championship Standard Golf course. This has been designed by renowned global landscape experts. At the fringes are sports academy/ club and dotted around with schools, healthcare facilities, parks, malls, restaurants, commercial complex, luxury villas/ bungalows etc.

UEM 

Your Company has set up a Joint Venture with UEM Group, for the purpose of achieving excellence in construction work for the Projects of the Company, most notably in Lucknow. UEM is Malaysia's leading conglomerate in the building of infrastructure. As the preferred nation-building partner of Malaysia, the Group is a wholly owned subsidiary of Khazanah Nasional Berhad, one of that Government's investment arms. The Group is working in India for the last one decade and has successfully completed many highway projects of National Highway Authority of India. The JV is expected to help the construction commitments of the Company in terms of quality and timeliness.

Power/ Infrastructure Project 

As you are aware your Company has commissioned a 12MW Wind Power Project in Gujarat in the month of September, 2007. Now the Company is exploring various possibilities for harnessing business opportunities for generation of power through mini gas engines / turbines on captive mode in green field projects.

Carbon Credit 

Your Company has been approved by the UNFCCC for obtaining Carbon Credits for its 12MW Wind Power Generation Project at Kutch, Gujarat. It will now be entitled to earn approximately 20,000 Carbon Credit per annum with effect from 12th August, 2009 till 12th August, 2019.

The recognition with the UNFCCC is a long drawn process and it has been obtained by us in the very first attempt only. Carbon Credits earned by the Company till 12th August, 2009 since inception of the project in July, 2007 will also be available to the Company in the form of VER Carbon Credits.

A Special Purpose Vehicle (SPV) has been established for undertaking infrastructure projects for the township projects and which would also utilize the additional capacities to take up projects from the open market.

IT / ITES SEZs/Parks 

Your Company is one of the developers in India to obtain notification for setting up of IT/ITES SEZs in the Country. The Company, with requisite approval, is setting up directly and / or through joint ventures, IT/ITES SEZs in Greater Noida and Gurgaon. IL & FS Investment Managers Limited and HDFC Ventures Trustee Company Limited are the partners in such initiatives. Although there is downturn in the market, it is expected that the upturn is not far away where after, projects will be given the necessary thrust.

Ansal Plaza and Sushant City 

Your Company continues to emphasize and build upon its well acknowledged brand image of "Ansal Plaza" and "Sushant City". It has successfully launched its shopping malls, Ansal Plaza, Greater Noida and Palam Vihar and is in advance stages of launching Ansal Plazas in various locations like Meerut, Agra, Lucknow, Panipat, to name a few. The malls at Kundli, and Jallandhar are almost ready and are expected to be given for fitments before December 2009. Similarly the Company has successfully launched Sushant City projects in various Tier-II cities like Meerut and Sonepat.

Corporate Social Responsibly 

Your Company always acknowledges the right to housing for everyone and offers full support to Governments' Schemes for economically weaker sections. It endeavors to make a constructive contribution to the underprivileged communities by supporting socio-economic initiatives. In addition, environmental issues are always very important. All the projects of your Company are aimed at environmental protection, up gradation, conservation, water harvesting etc. and plantation of trees etc., which are important steps in this direction.

Education/ Schools 

With decades of experience of the Group in the education sector and to tap its potential, a School Leasing Company has been floated to construct and lease schools in association with Leading Education Company like Educomp and GEMS. This Company, known as Knowledge Tree Infrastructure Limited (KTIL) a wholly owned subsidiary, is all set to take advantage of growing education sector.

In continuance to this, construction work for setting up first Millennium School, located within the Ansals, Sushant City at Panipat has been completed and the School started its first session in April 2009. This School will be a part of a countrywide chain of schools leveraging the Millennium Learning System, India's first fully-integrated learning delivery system, developed by professional-education providing Companies.

KTIL has also initiated construction work for setting up a school, located at Palam Vihar, Gurgaon.

Corporate Governance 

Your Company's commitment to good corporate governance for enhancing the shareholders' value remains unchanged. Your Board of Directors fully support and implement good corporate governance practices in all their legal and other aspects and implications.

Acknowledgement 

I, on my behalf and on behalf of all the Directors of your Company, would like to express my sincere appreciation and gratitude to:-

• All the regulatory authorities including SEBI, Stock Exchanges, Ministry of Corporate Affairs, Registrar of Companies and the Depositories.
• All Bankers and Financial Institutions, the Central and State Governments as well as their respective Departments and Development Authorities in India and abroad connected with the business of the Company for their co-operation and continued support.
• The members, depositors, suppliers, contractors and customers for the trust and confidence reposed by them in the Company.

I also deeply appreciate the hard work, competence, loyalty, cooperation and professionalism of the employees of the Company and its subsidiaries, at all levels. The employees continue to remain the Company's most valuable assets and their relentless efforts have enabled the Company to achieve praiseworthy growth during the year under review.