concise financial report - looking good

A Few Verry Interesting Tidbits From The 2003 Concise Financial Report

The Indian market is looking very promising. Scooters and motorbikes are on the agenda.

I hold lots.

1)"On-engine and vehicle production and proofing

programs were also carried out to validate customers'

engines and vehicles over extensive durability test cycles

using robotically controlled mileage accumulation

dynamometers and automatic engine test facilities."


2)Orbital was also engaged during the year to modify a

production outboard engine to enable it to operate on JP5 fuel.

Traditional problems with the use of such heavy fuels

include poor cold starts and difficulties in engine calibration."



3)While continuing to develop its OCP technology for

motorcycle, marine and recreation, and automotive

applications, Orbital has sought to increase its

revenue by widening the scope of its engineering

services and testing.

Orbital provides engineering solutions for all types of

powertrains at its development centre in Western

Australia.

Customers in all fields of engineering are offered cost

effective solutions utilising a wide range of skills and

resources such as:

engine design and modelling (2D and 3D)

numerical analysis

computational fluid dynamics

combustion and fuel system development

calibration and control strategy development

rapid turnaround prototyping

engine management systems development

The Company utilises fully equipped engine emissions

and performance dynamometers, engine durability

cells, engine and vehicle environmental cells, vehicle

emissions chassis dynamometers and mileage

accumulation dynamometers.

Orbital's capabilities and expertise in these areas have

been recognised in various programs that the

Company has undertaken in the 2003 financial year,

including the following examples.

An extensive program was commissioned in late 2002

by the Australian Government agency, Environment

Australia, to assess the impact of running a range of

vehicles on petrol containing 20% ethanol. The

purpose of the program was to determine the impact

on motor vehicles of this level of ethanol in petrol

3)"Motorcycle

Orbital's business development efforts in the motorcycle

area have been concentrated on growing OCP

technology market share for European applications and

pursuing new business in Asia.

During the 2003 financial year Orbital continued to

work proactively with its European customers and

Synerject to assist with the launch of new customer

models and to win new business. Activities included

marketing OCP technology for use on higher engine

capacity platforms and increasing the penetration on

50cc applications.

Peugeot's "Jetforce" scooter was released for sale for the

European 2003 summer market, bringing to seven the

number of motorcycle models on the market

incorporating Orbital's direct injection technology.

Orbital continues to offer engineering services to both

regional motorcycle manufacturers and Tier 1

component suppliers to assist them in establishing local

component supply infrastructure for Orbital's technology

in major Asian markets.

Business development activities in Asia focused on India

and Taiwan where forthcoming emissions standards will

be implemented and where there is an interest in

exploiting the benefits of 2-stroke engines and extending

the life of existing investment in 2-stroke engine

production lines.

In February 2003, Orbital entered into a Technical

Cooperation Agreement with UCAL Fuel Systems Ltd, a

manufacturer of carburettors and fuel injection system

components for the Indian motorcycle and automotive

Under the agreement, UCAL has been granted

the right to manufacture and supply components of

Orbital's OCP direct injection fuel system to the 2-stroke

motorcycle market in India.

The agreement with UCAL is an important initial step for

the adoption of Orbital technology by domestic Asian

motorcycle manufacturers. UCAL and Orbital are

working with leading Indian manufacturers to progress

the adoption of the technology.

Throughout the year, the range of products offered to

motorcycle customers was expanded to include OCP

direct injection 4-stroke products developed by Orbital's

Automotive group and high value Engine Management

Systems engineering consultancy services.

OCP direct injection for 4-stroke technology has the

potential to deliver fuel economy improvements of

approximately 10% to 15% over existing 4-stroke

carburetted engines, depending on the application and

the baseline engine, whilst complying with increasingly

stringent emissions standards. Initial interest in this

product has been strong, particularly for developing

countries, with high gasoline prices and low average

wages.

Pocket Dash™, Orbital's diagnostic unit designed and

manufactured to support the motorcycle air assist direct

injection products, achieved further sales to dealers in

Europe, together with the provision of upgrade kits

which further enhance the functionality of existing

Pocket Dash™ units in the field. Potential interest in this

low cost diagnostic system is now being received from

India and other countries that may require the

implementation of Engine Management Systems in the

near future in order to comply with the forthcoming

local emission requirements.




4)The worldwide emphasis on reduced vehicle fuel

consumption together with the increasing availability of


low sulphur fuels continue to be major drivers to the

automotive producers' desire to reap the full potential of

direct gasoline fuel injection.

First generation, high pressure systems, have failed to

deliver significant on-road fuel economy benefits.

Manufacturers are now investing in improved cylinder

designs that locate the injector in the centre of the

combustion chamber and which, when combined with

low sulphur fuel, deliver much improved fuel economy.

This desire to adopt the next generation of direct

injection (DI) technologies has created a renewed

interest by original equipment manufacturers in

considering Orbital's low pressure air assisted DI technology for

production applications.

A recently completed extensive development and application program by

Orbital for a European customer has confirmed that the Orbital direct

injection technology when applied to optimised designs of 4-stroke

engines continues to deliver benefits ahead of competing

technologies.

This customer program involved designing a new 2-valve, 4-cylinder

variant of an existing production engine featuring the close

integration of Orbital's direct fuel injection technology in the

preferred configuration of a centralised injector. In

addition to the design and analysis of the new cylinder

head and ancillary systems, Orbital was responsible for

all engine test and development activities including

engine dynamometer development of emissions and full

load performance, verification of operation and vehicle

chassis dynamometer calibration of emissions,

drivability and catalyst system development. The

resulting demonstrator vehicle delivered a fuel economy

improvement over the standard production vehicle of

approximately 17% using the European drive cycle

together with emissions below Euro 4 levels.

Orbital continues to work with a number of automotive

customers on programs which, if successful, could lead

to future serial production.

markets.