Prime Urban Development India Ltd

To the Members

Your Directors are presenting their Seventy Fifth Annual Report and the AuditedAccounts for the year ended 31 st March 2012.

FINANCIAL RESULTS AT A GLANCE

DIVIDEND

Your Directors do not recommend a Dividend for the year ended 31 st March 2012 toconserve funds. REVIEW OF

OPERATIONS

Your company has two reportable segments, the Realty and Textiles. Realty Segment

Tirupur has been a forerunner in contributing to the nation's economy. Apart fromremaining a driving force for exports business, it has a District Headquarters forsustainable economic growth which is apparent that various developments underinfrastructure like water schemes, six lanes highway tracks approaching airport andunderground sewage system are under progress. The city has a huge potential to contributeto the growth of realty sector.

You are aware that the prestigious multi-storied apartment project "PrimeEnclave" has uplifted the Tirupur's living concept and the life style of the city istaking a new dimension with this kind of living conditions. The construction of Emeraldand Opal Apartments has started.

The construction is in progress for the signature land mark project "THEONYX" consisting of villas spread over 4.865 acres, amidst stunning lush landscapeswith pebbled pathways and unique car free environment. Every villa has a private elevatorand private pool in addition to the common swimming pool and a ultra modem club house.

Textile Segment

The economic recession in international' markets has had a severe impact on the Indiantextile segment. Your company continued to carry on its yarn trading exports.

CONSOLIDATED FINANCIAL STATEMENTS

Audited Consolidated Financial Statements for the year ended March 31.2012 form part ofthe Annual Report.

SUBSIDIARY COMPANIES

The Reports and Audited Accounts of the subsidiary companies along with the statementpursuant to Section 212 of the Companies Act, 1956, are not forming part of the AnnualReport. The Ministry of Corporate Affairs, Government of India, New Delhi vide itscircular No.2 of 2011 dated 8th February 2011 granted general exemption under section212(8) of the Companies Act, 1956 from attaching the Balance Sheet and statement of Profitand Loss and other documents of its subsidiaries and hence the same have not been attachedfor the Financial Year 2011 -12.

The annual accounts of the subsidiaries will be made available at the Registered officeof the company for inspection by any member of the company.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION ANDANALYSIS REPORT

Your Company has adopted appropriate standards for good Corporate Governance. All themandatory provisions of Corporate Governance as prescribed under the amended ListingAgreements of the Stock Exchanges, with which the Company is listed, are complied with.Report on Corporate Governance with Management Discussion and Analysis as required underthe Listing Agreements with the Stock Exchanges forms part of the Annual Report.

In terms of sub-clause (v) of Clause 49 of Listing Agreement, certificate of the CEO,inter alia, confirming the correctness of the financial statements, adequacy of theinternal control measures and reporting of matters to the Audit Committee in terms of thesaid Clause is also annexed as part of the said Report. A. certificate from the auditorsto this effect is annexed as part of the Corporate Governance Report.

ENVIRONMENT AND POLLUTION CONTROL

Your Company has been complying with the State Environment and Pollution Controlstatutes and has instituted adequate measures towards environmental protection.

FIXED DEPOSITS

There are no unpaid deposits. The aggregate amount of deposits as at the year ended 31st March 2012 is Rs. 10,665 thousands.

LISTING PARTICULARS

The Equity Shares of the Company are listed on the Bombay Stock Exchange Ltd., Mumbai.The company has paid the listing fees to Bombay Stock Exchange up to 2012-13. Thecompany's application for delisting Its equity shares from Coimbatore Stock Exchange ispending approval from the Coimbatore Stock Exchange Ltd.

DISCLOSURE OF PARTICULARS

As required by the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988, the relevant information and data is given in Annexure A and B.

DEPOSITORY SYSTEM

As the members are aware, your company's shares are tradable compulsorily in electronicform and your company has established connectivity with both the depositories i.e.National Securities Depository Limited (NSDL) and Central Depository Services (India)Limited (CDSL). In view of the numerous advantages offered by the Depository system,members are requested to avail of the facility of dematerialization of the Company'sshares on either of the Depositories as aforesaid.

TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND

in terms of Section 205C of the Companies Act 1956, an amount of Rs. 108 thousandsbeing unclaimed dividend 2003-04 was transferred during the year to the InvestorsEducation and P'otection Fund established by the Central Government.

COMPLIANCE CERTIFICATE:

In accordance with Section 383Aof the Companies Act ,1956 and Companies (ComplianceCertificate) Rules 2002, the Company has Obtained a certificate from Practicing CompanySecratary and a copy of such certificate is annexed to this Report.

DIRECTORS

in accordance with the Articles of Association of the Company, Mr.N.K.Bafna retires byrotation as a Director at the ensuing Annual General Meeting and is eligible forre-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance of Section 217(2AA) of the Companies Act, 1956, your Directors wish toconfirm that -

i In the preparation of the annual accounts, the applicable Accounting Standards havebeen followed.

ii The Accounting Policies adopted are consistently followed and the judgments andestimates made are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and the Loss of the Company forthe year.

iii The Directors have taken proper and sufficient care as warranted for themaintenance of adequate accounting records in accordance with the provisions of this Actin safeguarding the assets of the Company and for preventing/detecting any incidence offrauds and other irregularities.

iv The Annual Accounts have been prepared on a going concern basis.

AUDITORS

The Statutory Auditors of the Company, Messrs M.S.Jagannathan & Visvanathan,Chartered Accountants, retire as Auditors of the Company at the conclusion of the ensuingAnnual General Meeting and have confirmed their eligibility and willingness to accept theoffice of the Auditors, if reappointed.

PARTICULARS OF EMPLOYEES

None of the employees of the company was in receipt of remuneration in excess of thelimits prescribed under section 217(2)(A) of the Companies Act, 1956 read with Companies(Particulars of Employees) Rules 1975 as amended.

ACKNOWLEDGEMENTS

Your Directors record with a deep sense of gratitude to the working capital bankers forthe excellent support and cooperation rendered by them to the company. Your Directors arethankful to its valuable customers, esteemed stakeholders and business associates fortheir continued support and the confidence reposed in the Company and its Management.

OVERVIEW

Prime Urban Development India Limited is a Government Recognized Star Export House. Ithas two business segments viz., Realty and Textiles.

BUSINESS ANALYSIS

The Realty Division of the company has been developing various residential/commercialprojects on its lands owned by the Company. With the realty business being the coreactivity of the company, the Division is expected to achieve new heights. The Company hasbeen imparting high level of professionalism in all its construction activities.

1. "Prime Enclave Vistas" the multi- storied prestigious residential complexis almost occupied and the construction of luxury apartment has commenced during the year.The construction of a commercial mall adjacent to the residential complex is yet to betaken up. The above projects are in a partnership firm in which the company holds a stakeof 50%.

2. The construction of independent luxury villas which is a signature project "THEONYX" in Tirupur has been commenced during the year. The project is designed withinternational standard for the luxury life style of living. There is an evinced goodresponse from the prospective buyers.

TOWARDS ENHANCEMENT OF STAKEHOLDER VALUE

Matching the Company's distinctive capabilities with the Realty Division is consideredwhere profitable growth and increased shareholders' value are likely to occur. YourCompany has also planned to widely position its Realty Division through strategicpartnerships for joint development of other properties. This will cater to a strong demandforeseen for dwelling units and leisure needs.

Highlights Year ended 31st March

Internal Control

The Company has a proper and adequate internal control system to ensure that all assetsare safeguarded and protected against loss from unauthorized use or disposition and thosetransactions are authorized, recorded and reported correctly. The Internal Control issupplemented by an extensive program of internal audit cell, review by management anddocumented policies, guidelines and procedures. The Internal Control is designed to ensurethat the financial and other records are reliable for preparing financial statements andother data, and for maintaining accountability of assets. The Board of Directors providesgovernance, guidance, and oversight. Through the Audit Committee, it discusses theinternal control structure with management based on input from the internal audit cell andprovides oversight as necessary.

The interna! audit cell function adequately provides -

1. objective assurance to the Board as to the effectiveness of the company's riskmanagement and internal control framework;

2. assistance to the Board and the management to issues connected with the design,implementation, and operation of systems of internal control; and,

3. assistance to the Board through periodic reporting to support their review ofeffectiveness of internal control.

ANNEXURE B

Information pursuant to companies (disclosure of particulars in report of board ofdirectors) rules, 1988, forming part of the report of the directors

1. CONSERVATION OF ENERGY

(a) Measures taken : Nil

(b) Impact of the above measures: Does not arise

(c) Energy consumption : Not applicable

2. TECHNOLOGY ABSORPTION

(a) Processes for value addition : Nil

(b) Benefits : Nil

(c) Imported technology/imports in last five years: None

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Activity relating to Exports

Exports of value-added cotton yarns continue to be part of the business plans of theCompany.

B. Plans and Initiatives taken to increase exports: Export of cotton yarns under theOutsourced Yarns Division is Continued.

(Rs in thousands)