United Spirits Ltd.

Chairman''s insight

Dear Shareholders,

As the leading beverage alcohol company with an outstanding portfolio of brands, I am pleased with the progress we made in growing our business and our brands this year. After a challenging FY18, our improved performance in FY19 is a validation of the strategy executed by the Company and its management. Furthermore, it is a testimony to the robust growth platforms and good governance practices we have established. I am especially delighted that we have achieved this despite the complex regulatory challenges, a norm for our industry.

The recently concluded general elections, that brought the ruling party back to power with an overwhelming mandate, promises stability and accelerated economic reforms for the world''s fastest growing economy.

This augurs well for our long-term business prospects, as we believe strong economic fundamentals along with higher purchasing power will collectively drive consumption growth. However, frequent and non-harmonised policy changes faced by India''s beverage alcohol industry along with limitations on pricing freedom, remains challenging.

While we will continue to work with states to enable a stable policy framework, one that is fair to all stakeholders, we look to the new government at the Centre to progress policies aimed at enhancing ease of doing business for our sector. After all, making Indian manufacturing industry more competitive is an important part of the ''Make in India''initiative.

One direct way the Central Government can help the beverage alcohol industry is by reducing basic customs duties on Scotch, that are currently very high. Importing Scotch is a necessity to manufacture and blend premium whiskies.

CELEBRATING LIFE, EVERY DAY, EVERYWHERE

Our purpose - Celebrating Life, Every Day, Everywhere - is the credo that keeps us engaged with our consumers, customers, partners as well as the community and society in which we operate. We are passionate about the role our brands play in celebrating life.

We remain committed to serving the Indian consumer''s growing appetite for premium products across all categories and are pleased that scotch is growing in popularity. We strive to bring people together, enriching lives in myriad ways and in doing so, our effort is also to continue to build economic value for state governments across the country, by contributing to revenues.

We are committed to doing business the right way and are actively helping shape perceptions for the sector with a strong compliance focus. The CGR2 rating by ICRA reflects our rigorous adherence to strong corporate governance and financial management practices.

Furthermore, as a responsible Company, we made significant investments in various social development and livelihood programmes, including in our flagship Diageo Road to Safety initiative.

During the past few years, we were able to attract and develop top notch talent, enhance inclusion and diversity, and build a high-performance culture. It is a matter of pride to see Indian talent exported to the Diageo world across functions and geographies.

On behalf of the Board of Directors, I thank the Central Government, the diverse State Governments for their help and support, our trading partners for their valued contribution, the leadership team and every member of the Diageo India family for their hard work and commitment to delivering another good year. Last but not the least, on behalf of the Board, I thank all our valued shareholders for their continued support and confidence in the Company.

We remain committed to creating meaningful experiences for our consumers and building enduring value for our entire stakeholder fraternity.

Yours sincerely,

Mahendra Kumar Sharma,

Chairman