Excerpts from the exclusive interview with Percy Singanporia:

Q: Could you start off by telling us, for this particular quarter, how much have you booked on account of the Glaceau sale and how much has gone into your bottom line?

A: The profit on sale of Glaceau is Rs 1,605 crore and what has come through in terms of our total gross consolidated profit is Rs 1674 crore. So most of it has flown right down to it. If you look at our published accounts, there are a lot of movements in the exceptional lines both in the last year preceding quarter and this year comparatively. What is striking about our performance is the operating profits have been ahead of the same period last quarter, both for the consolidated results by a significant factor and in the domestic standalone accounts again by a significant factor.

In addition to that, what has driven this performance has really been exceptional brand growth in the Indian context, where we have recorded double-digit growth of almost 14% in terms of volume and 15-16% in terms of value growth for our branded portfolio.

Across the globe, market shares for the Tetley brand in key markets have enhanced and show MAT. We are happy to report that the MAT numbers for India now show that we have a lead volume share as at December.

Q: If I was to strip off this Rs 1,605 crore that you have booked on account of Glaceau stake sale, can you give me what the core number for profit after tax or net profit just on operational activities for the quarter and what is this Q3 FY07 restatement that you are talking about to be published tomorrow?

A: It’s just the results that I was talking about. The fact is during last year, the same quarter; we had booked profits on exceptionals for sale of shares, which we had used to finance the Glaceau acquisition.

Q: So you have adjusted for that in this quarter?

A: No, not adjusted. But when you look at the comparative quarter to quarter numbers in the standalone accounts, when you come down to the PAT numbers, the net impact shows. However when you look at the operational profits of the standalone accounts, not only are we significantly ahead, but the Tetley dividend has come in putting Rs 39.37 crores into our income.

Therefore even if you remove that Rs 39.37 crore, the net operational profit on the standalone is just ahead of last year same period even as topline growth has been substantial in double digits.

Q: Are you going to be using these Rs 1600 crore or have you already used it to exercise or repay part of your debt payment that has already gone in?

A: I think we have done the easy stuff first. The cost of Glaceau transaction financing, which was resting outside as high cost has been liquidated as soon as the money came in. We are also looking at certain options of certain areas of debt across our operations. So we have stable debt within our operations and the earnings stream that is coming through our net is allowing us to dividend out.

Q: What was your debt position before you have used some of this profit to pay off and what is your debt position currently at?

A: The exact debt position across different operations varies. But we have actually paid down close to USD 325 million worth of debt, which was taken at the initial stages when we financed the acquisition. So, that part is taken through. So the rest of it remains with us and is invested for growth or for other options that we may consider.

Q: On the operational front, you spoke about market share, can you tell us what specific numbers of market share you can share with us on any of your brands and Tetley specifically as well for starters and of course what sort of volume growth you have see for the Tetley brand itself in the UK?

A: The Tetley brand has grown market share in GB and the MAT numbers are a few decimal points right now. But they lead market share and they continue to lead market share both in terms of volume.

In value, the market share has again gone up by a few decimal points. In India, we are now clocking our MAT market shares by volume at 19.4, which gives us lead market share by volume. If you look at the delta movement in value shares, we have narrowed the gap with our key competitor who still leads value share in India.

Q: One word on your advertising spend, since you spoke about value-term growth as well, what has your advertising spend been for the quarter and consequently are you looking to effect any further price increases as well in 2008 to maintain margins?

A: Well I think what you should look at is, despite the highest spend on advertising and despite the fact that we have grown our volumes in the Indian business itself, our value growth has been higher and our overall topline growth has been 22%. The brands have just gone up by 16%. So the rest of our business has also progressed.

When you look at our margin contribution, what we have done is the additional headroom that we built up helped us service the additional interest charges that we are currently carrying to service the debt that we have taken for the Glaceau transaction which we will work out over a period of time hopefully when the North Indian plantation transaction which is now in court, gets through.

Q: The Mount Everest Mineral water, that you have gone ahead and acquired are you looking at significant new launches either from that stable or from some of your other portfolios that you have which could include organic as well as inorganic moves.

A: You are saying it all because quite honestly, none of us have to rest on what we have achieved so far to date. This is just a starting point of what next and what next is always going to be far more aggressive than whatever you have seen from us so far to date. But it would be speculative to really comment on any specific programme unless we first come to market on it. Be a little patient and we will talk about it