The financial year, 2008-09 has been a period of excellent results and profitability for our company. We recorded several impressive milestones during the year, notable among them being
· Volume growth of 12% against a market growth of about 6%
· Consequent expansion of market share by 200 bp to 51%.
· Relative revenues were up by over 17% and
· The resultant EBITDA margin improved by almost 200 bp.

India is a young country and over half of our billion strong population is below the legal drinking age. We are currently in the open window of a demographic dividend, and over a relatively short period of five years that began recently, it is expected that nearly 100 million (i.e. 10 crore) youngsters will reach legal drinking age. This obviously provides a major expansion of our addressable market size. Market research studies conducted across the country indicate that a majority of first time consumers prefer to start with beer as their beverage of choice.

It has also been seen that attitudes towards the consumption of beverage alcohol has also undergone a considerable shift in recent decades. Young people all over India, both urban and rural, associate beer as a lifestyle statement and are very conscious of the need for responsible consumption in the company of friends.

Our company's investments over nearly fifty years in giving life to a colourful, energetic, and aspirational imagery to Kingfisher means that our flagship brand is associated with success and fun in the minds of consumers. As India's economy stands out in sharp contrast to the most of the world which is reeling under the impact of a global meltdown, the Indian consumer is able to proudly hold up his choice of a global Indian brand in the form of Kingfisher. He can bask in the success of an iconic Indian product as a reflection of his own success in the world.

We continue to emphasise the product and brand promise through continuous investments in quality, imagery and packaging. The emphatic success of Kingfisher Strong which grew by over 23% during the year to be the dominant leader in this fast growing segment is testimony to our success. The year also saw the hugely successful launch of Kingfisher Blue, a beer with a difference, and targeted directly at the numerous international brands that have recently been launched by the many international brewers who have set up shop in the country over the last few years. In every market that Kingfisher Blue was launched, the brand has quickly seized leadership in the target segment. More super premium offerings are on the cards.

The launch of the Kingfisher Bohemia range of wines has been a resounding success and is very popular with consumers despite regressive taxation measures that have raised end consumer prices in major markets like Karnataka and Maharashtra. Our company will continue to invest in this area for the future.

Given the promise of a rapidly growing market, it is only natural that all the major international brewing companies have sought to enter India. To the credit of United Breweries, our brands have more than held their own in the face of the competition. The year gone by has seen our company grow at almost twice the rate of the market and in the process, gain a 2% increase in market share to over 50%.
We would have performed even better than this already stellar performance, were it not for the continuing difficulties that the industry faces with state governments that over tax and over regulate the industry. Incessant efforts to seek a transparent pricing formula that move with the government's own published inflation data or any other formula has not met with success in major markets like Andhra Pradesh and Tamil Nadu. Consequently, the company as well as a major competitor decided to suspend supplies to the state of Andhra Pradesh in the summer and has also sought relief from the Hon High Court. The matter is pending disposition by the court.
Given the strong growth anticipated in the industry for several years to come, the company has embarked on a phased plan of capacity enhancement through both expansions at existing breweries as well as Greenfield projects particularly in the large markets of Karnataka and Andhra Pradesh. These projects envisage scalable facilities which can continue to grow with the pace of the market and serve our company's needs for several years. The capital expenditure is financed partly by the proceeds of the Rights Issue of Equity Shares that we successfully carried out the previous year and by borrowed funds.

The company's balance sheet is strong and debt is carefully caliberated so as to remain within prudent norms at all times. Each of the expansion projects have a short pay back period and the incremental cash flows from the enhanced capacities are sufficient to not only service but also to repay the loans taken for the purpose.

Friends, we have every reason to be optimistic about the future of our company provided only that the regulatory environment does not turn unexpectedly vicious. With a young and upwardly mobile demographic, I am confident that governments cannot continue with the present stance of impeding growth on the one hand, while trying to squeeze ever increasing revenues from the industry.

In closing, I would like to place on record my appreciation for the efforts of all our managers, staff and workers without whose diligent efforts, we would not have been able to achieve our outstanding results. Our board has consistently guided us with wisdom. Particular thanks are due to our suppliers and customers, both of whom have consistently backed our efforts. Our bankers have provided us with funding when needed at competitive rates. Last, but in no way, the least, a heartfelt thank you to all of you, my dear fellow share holders.