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Dear Shareholders,

We can all look back with satisfaction at the year that is behind, and look forward with enthusiasm to the years ahead.

It has been an eventful year, which saw the business getting integrated into that of United Spirits Ltd, the third largest spirits company in the world, following the acquisition of 75 per cent shareholding by the UB Group.

By way of consideration for this integration, we have been allotted 10282553 shares of United Spirits Ltd, at a current market value of Rs. 830.47 crore.

This translates into Rs.807.65 per share.

Under the management of the UB group, our brands have flourished with all our key products like Antiquity, Royal Challenge, Director’s Special and White Mischief, all recording improved market shares.

The brands have benefited from being part of the larger stable of United Spirits and its substantial clout with the distribution network. The elimination of competition inter se has also resulted in improved profitability.

Attention to quality has resulted in a number of awards and ecognitions being showered on us:

  • Monde Selection Institute, Brussels.
  • International Taste & Quality Institute,Brussels.
  • Readers’ Digest Trusted Brands Awards.
  • India Star Award for packaging innovation & Excellence.

As you are aware, our company has been tied up with litigation on various fronts. The year has seen resolution of a large number of cases both civil and tax related. Management’s emphasis is to reduce preoccupation with infructuous and time consuming litigation, and focus resources on developing market share and profits.

Friends, all the foregoing have helped the board to declare an Interim Dividend of 10% in February 2006, after a lapse of several years. I am confident that the continued excellent performance will enable our company to regularly payout dividends in future. Of course, the enhanced market value of our shares also adds to the Total Shareholder Return profile.

I have stated previously, my intent to seek complete integration of Shaw Wallace with United Spirits through a merger. With the steady resolution of litigation, I hope to be able to recommend this step in the near term. That will further enhance value to all shareholders.

I must conclude by thanking all who made this success possible–our experienced Board of Directors, our dedicated team of management and staff, our suppliers, customers, financial partners etc. Above all, my special thanks to each of you, dear shareholders.

Dr. Vijay Mallya
Chairman