Dear Shareholders:
 
 This year, I am happy to report on another year of substantial
 activity, strong progress and a year in which we have achieved most of
 our immediate strategic goals. With Phoenix Marketcity - Pune launched,
 the Group''s portfolio is steadily growing on a pan India basis; our
 gearing is at a healthy level for this point of our development cycle;
 ownership enhancing investments have been made and the development
 programme of our Marketcities continues to fold out as planned. For
 FY2011 the Group recorded a net profit after tax and minority interest
 of Rs. 842 million, up 36% from last year.  With consolidated earnings at
 Rs. 5.81 per share for FY2011, your directors are recommending a final
 dividend of Rs. 1.80 per share, up 50% from last year.
 
 With a topline increase of 71% to reach Rs. 2.10 billion in income from
 operations, we expect consistent growth in every urban market in which
 we operate in India. Following Pune, we are on course to complete three
 other Marketcity projects at Bangalore, Kurla (Mumbai) and Chennai –
 positioning the Group to experience growth in multiples. Concurrently,
 we are getting ready to launch our large- scale residential and
 commercial projects in Bangalore, Chennai and Mumbai respectively, due
 for completion over the next 3-4 years.
 
 Economic Conditions and General Outlook
 
 In last year''s annual report I expressed faith in the huge potential
 for growth of organised retail in this country and that we aim to be
 the single largest developer and manager of large format malls in
 India. This year we find ourselves in the midst of an endemic turmoil
 within the global economy, which is the result of a huge hangover from
 excessive public borrowing by the USA, Spain, Italy, Greece amongst
 other countries. We are also in a phase where it is speculated that
 high interest rates will continue to prevail in India for at least the
 next year or so, until inflation is tamed at the cost of slower growth.
 
 Despite these dampeners, I continue to maintain my optimism on the
 strength of India''s short and long-term consumption story. The Indian
 economy remains reasonably robust and is to a certain extent insulated
 from the current global contagion. Consumption in India is at an all
 time high and with the possibility of a more liberalized FDI regime
 allowing new retail brands to enter India, we expect the business of
 retailing infrastructure to remain strong and healthy. As a barometer,
 there has been no let up in the footfalls and spending at High Street
 Phoenix and Palladium – our marquee assets in Mumbai. The highly
 positive response we are getting from the citizens of Pune and
 participating retailers, post the recent launch of our first Marketcity
 concept there, is testimony to our conviction that India is craving for
 world class malls with a shopping and entertainment experience that is
 nothing short of the best available anywhere else in the world. Our
 decision to place big investments into our retail business is turning
 out to be a good one, putting us in the right space at the right time
 to achieve the market leader status.
 
 Imagine. Conceive. Realize.
 
 The cornerstone of our success so far revolves around three core
 capabilities.  They are - the future that we are able to Imagine, our
 ability to adapt to market conditions when we Conceive a project, and
 finally our project and business management capabilities that allow us
 to Realize our ideas.
 
 When we set out to build the grand Marketcity concept, we needed to
 take a call on large-scale assets that had to have a 30 years lifespan
 - not just for 5 or 10 years. For such big assets, we have made the
 short-term count as much as the long term. With over 80% occupancy and
 stabilized cash flows anticipated within 12 months of initial
 operations, we''ve shown that we can execute our business plans well.
 This has positioned us uniquely as leaders in the niche large format
 retail marketplace with very limited competition. The main reason
 behind this is that we don''t see our projects as a real estate play
 alone. Instead, we are actually investing in the retailer''s business
 also by linking a reasonable portion of our license fees to the
 revenues generated by the retail outlets in our malls. That means that
 we''ve had to understand how retail works; what kind of products are in
 demand and establish working relationships with all the best retailers
 not just by licensing space to them, but by actually understanding
 their business.
 
 As we launch one project after another, the learning curve of the
 management team has been quite sharp. Today we have built solid
 bandwidth and processes to develop large projects, giving us the
 confidence to dream even bigger. Going beyond just mall operations, our
 investors should take comfort in the fact that we now have a new track
 record under our belt - that of building super-scale projects and
 executing complex business plans. With four Marketcities on stream for
 sequential delivery within a short span of time, I expect the
 marketplace to attach low risk discounters when gauging our
 capabilities for future projects. But we do not intend to rest on our
 laurels.  Conceiving our dreams has a lot to do with great ideas and
 project management – but most importantly, it''s also about risk
 management. Even though we''ve proven ourselves already, we now plan to
 institutionalize risk management. In this endeavour, we have recently
 mandated a reputed international firm the task of assisting us to
 formalize this within the organisation.
 
 Going Forward
 
 We have a lot of faith in our business model and, as a long-term
 strategy, we intend to continue to increase our stake in the large
 assets we are developing. During the year, we have increased our stake
 in two projects: Phoenix Marketcity Pune and Bangalore. While we
 increased our stake in Pune by 8% through the purchase of shares from
 another shareholder, our stake in Bangalore increased by 18% through a
 combination of subscribing to a rights issue and purchase of shares
 from other shareholders. These acquisitions are part of a long-term
 strategy of consolidating our stakes in our various projects at an
 attractive price, thereby creating long- term value for PML
 shareholders.
 
 This year''s performance is a sample of what''s to come – steady and
 healthy cash generating business model driven by ownership and
 management of strong and iconic assets. This formula of unlocking
 maximum value of land parcels is now working for us very well. The time
 for realizing the fruits of our labour has begun. We believe that our
 idea of holding an asset with its appreciation in our books, supported
 with strong recurring income, is the best way to unlock the maximum
 value from land. We are now on a journey to become one of the largest
 retail led asset companies in India. We are now planning new growth
 tracks beyond the Marketcity phases. We''ve already begun to imagine it.
 
 Board Matters
 
 I would like to take this opportunity to extend a warm welcome to
 Pradumna Kanodia to PML''s Board of Directors.  Already serving as the
 Group CFO, we now look forward to his contribution both at the board
 and operational levels. I also extend my heartiest congratulations to
 Shishir Shrivastava for his appointment as the Group CEO & Joint
 Managing Director of the Company. I am sure the entire Group will
 benefit from his acumen, steadfastness and solid experience. I look
 forward to working alongside both these capable and experienced
 individuals.  While I remain an active and involved Joint Managing
 Director, staying close to the business and contributing to strategy
 and all major decision-making for the Group, I will share this
 responsibility with Shishir. Graduating from a single mall to fast
 becoming one of India''s largest retail led property companies in just a
 span of 5 years, this change will allow me to focus more on the bigger
 picture for charting the Group''s next phase of growth going forward.
 
 I also wish to thank the remaining board members and all Phoenixians
 for their full support and commitment towards fulfilling our dreams -
 and all our customers, lenders and investors for placing their trust
 and faith in our capabilities.
 
 
 Atul Ruia
 
 Jt. Managing Director