Having achieved landmark sales of over 100 million cases last year with
 prospects of double digit growth, I am sure you will join me in
 celebrating the achievements of our Company. Not only does the 100
 million benchmark reiterate our position as the worlds No. 2 player,
 but the differential growth rates that we expect in India vis-à-vis the
 current world leader, gives me good reason to believe that we shall
 shortly seize global leadership.
 
 Needless to say these achievements have been made possible by a
 relentless focus on quality, control of costs and efficient management
 of an extremely complex machine.  To give you an idea of the scale of
 your companys operations, USL sources nearly 100 brands in an average
 four pack sizes each in 28 differentiated markets from 80 manufacturing
 facilities. Given the variations of taxes and other regulations from
 State to State, even a minor misstep can result in huge costs. The fact
 that we have been able to consistently defend and indeed improve our
 profitability from year to year is proof of the ceaseless vigilance
 exercised by the Company and its management.
 
 Ultimately, the success of any company depends on its customers and the
 strong, sustained demand for our Companys products from consumers
 across the length and breadth of the country is proof enough of our
 delivery on this very important promise.
 
 We are a young country and, alongwith an increased propensity to
 consume, comes also the insistence on globally comparable products and
 services. The Indian consumer has evolved in a multiplicity of ways and
 any company that does not cater to these ever more sophisticated
 requirements is doomed to failure. I am proud to say that USL has not
 only met consumer expectations but has consistently tried to anticipate
 future needs. This is demonstrated by our consistent out performance in
 the market place.
 
 Innovation has always been a priority in our Company and the recent
 past has seen new initiatives such as tetra packs and others, which
 while offering greater assurance and convenience to the consumer, is
 also more cost effective. New products launched in the market including
 the Black Dog 18- Year Old, a number of W&M products as well as wines
 have all been well received by the consumers and will form a firm
 foundation for future growth.
 
 Scotch Whisky continues to be in short supply globally with rising
 demand in large emerging markets such as China and
 
 India. This is likely to result in unprecedented growth for this
 aspirational category. This bodes well for our significant investment
 in W&M. After a strategic review recently, we have decided to refocus
 W&Ms business away from the sale of bulk scotch, into branded mature
 offerings. While this could result in reduced revenues and profits for
 W&M in the very near term, I believe this is an important step to
 ensure a sustainably profitable scotch business, in the future.
 
 Recognizing the latent though still small demand for wines within
 India, USL has set up a state-of-the-art winery in Baramati with a
 capacity to bottle four million bottles per year. All the evidence
 points to this segment growing at a scorching pace, which can only be
 accelerated by USLs distribution strengths. I have no doubt that over
 the next several years, wines will develop to be an important category
 for us.
 
 Various corporate actions including the amalgamation of Shaw Wallace &
 Company and its various associates into USL have been given effect to
 during the year. The Company has also made other strategic acquisitions
 such as Tern Distilleries, which will provide vital primary
 distillation capacity. The merger of Balaji Distilleries, a long time
 associate in the state of Tamil Nadu, with your Company is awaiting
 necessary approvals. All of these moves will give the company greater
 stability and sustainability in the future.
 
 Our Company will continue to invest in the backend of the business so
 as to achieve flexibility of raw material (multi substrate
 distillation), increase use of Bio Mass in lieu of hydrocarbons, as
 also to cater to additional capacity needed to keep up with the demand,
 which is growing in double digits.
 
 As the acknowledged leader in the country, we make every effort to
 ensure a sustainable framework in which the industry can thrive in the
 future. We promote responsible consumption while continuing to educate
 Governments on the need to free the industry from the chains of
 irrational legislation and hidden costs of doing business. As one of
 the major contributors to the exchequer of the States, we continue to
 be in the forefront of fulfilling social responsibilities.
 
 I am thankful to all stake holders who have contributed to a landmark
 year and I look forward to a continued team effort as our Company rises
 to even greater heights.
 
 Dr. Vijay Mallya 
 Chairman