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1 2121 RADICO KHAITAN LTDYour Directors are pleased to present their 28th Annual Reporttogether with the audited statement of accounts of theCompany for the year ended 31st March, RESULTS:(Rs. in Million)2011-20122010-2011 Sales (including sales from arrangementswith other Distilleries / Bottling units)30, , Profit (before depreciation and tax)1, , before after period brought forward from last available for , to General Dividend and tax carried forward REVIEW:During the year, your Company continued to consolidate andstrengthen its position as one of the leading players in thespirits industry in India.

2 Our premium brands, Magic Momentsand Morpheus maintained their growth momentum with strongyear over year growth rates of and , Company s flagship brand, 8PM also recorded aremarkable volume of million cases with a growth rate year over year. Old Admiral brandy crossed the 3 millioncases mark during the year representing a correspondinggrowth of However, Contessa rum, the leading rumfor the Canteen Stores Department ( CSD ), recorded amarginal volume decline due the recent destocking policy ofthe CSD. Overall, IMFL volumes growth was driven bymainline brands which grew by FY2012 export salesregistered a growth of compared to the previous yearand accounted for of Net Sales.

3 The Company s exportsare growing in line with expectations and act as a naturalhedge for its foreign currency production upto the end of March 2012 in the currentsugar season was million tons, an increase of 13%compared to previous year. This growth was primarily drivenby an increase in the area under sugarcane production lakh acres in 2011-2012, as compared to lakh acresin 2010-2011. The total production for the current sugarseason is expected to be million tons. Higher sugarproduction during the 2011-2012 season is likely to result inincreased molasses PROJECTS:During the year under review, your Company made importantcapital investments to increase capacities at its owned included the setting-up of additional molasses storagecapacities, self bottle printing machines, a new bottling hallDirectors Reportand tetra pack machines.

4 The Company also made a strategicinvestment by acquiring select brands from the Yezdi of these involved a total capital expenditure of Rs. 840million. These strategic initiatives will enable the Company tobe optimally positioned to capitalize on the growing demandin the spirits STRATEGY & GROWTH:According to Euromonitor International, the Indian alcoholicdrinks industry volume is forecasted to grow at a 2012-2016 CAGR of 10%. This was higher than the growth ratesregistered across the rest of the Asia Pacific products remained the growth driver in 2011.

5 Risingdisposable incomes coupled with increasing socialacceptance of drinking in India are key reasons for thisdemand Company s continued focus on premiumization is clearlyreflected in the increasing share of premium brands in theoverall sales volumes. Premium brand revenues increasedfrom 28% of total IMFL sales in FY2011 to 31% in Company s new launches After Dark whisky andMorpheus brandy continue to grow at a fast pace and arereceiving favourable feedback from both the end consumersas well as trade channels. In FY2012, both of these brandswere registered with the Canteen Stores Department (CSD)and delivered encouraging sales volumes.

6 This will furtherstrengthen Radico Khaitan s presence in the Moments vodka crossed the 2 million cases markduring the year and continued to show strong volume brand is well positioned to capitalize on the growth invodka consumption and popularity as the youth in Indiacontinue to shift from brown spirits to white spirits, particularlyvodka. The flagship, 8PM whisky brand is performing in linewith our strategy and is expected to achieve desired growthin the current the year, your Company acquired Royal Lancer andEfkays whisky brands from Mysore based Yezdi Group andalso took on long term lease their entire bottling these brands are selling more than million casesprimarily in Karnataka and Andhra Pradesh.

7 These volumesare expected to be strengthened by Radico Khaitan sdistribution network. This is a strategic acquisition and isexpected to reinforce the Company s presence in Karnataka,Andhra Pradesh and other South Indian states. Radico Khaitanis also planning to install tetra pack machines at YezdiDistilleries, Mysore, which will increase the bottling capacityfurther to meet production requirements in the state Directors are confident that the Company has the mosteffective strategies in place to capitalize on market growth,capture market share and consolidate its leadership STRUCTURE:On July 25, 2011, the Company redeemed all of its remaining$50 million, Foreign Currency Convertible Bonds2222 RADICO KHAITAN LTD( FCCB ) that were issued in July and August 2006.

8 The totalredemption of $ million (inclusive of a redemptionpremium of $ million) was funded using proceeds froma new 7-year maturity External Commercial Borrowing ( ECB )with a moratorium period of 2 years. The repayment for theECBs will start in STOCK OPTION SCHEME:Radico Khaitan views the grant of employee stock options asa mechanism to provide the employees with an opportunityto share in the growth of the Company and to reinforce longterm commitment. In this context, the Company implementedthe Employees ESOP Scheme in Compensation Committee, at its meetings held , and allotted 16,000, 73,750and 55,925 equity shares, respectively to the eligibleemployees, as per the Employees Stock Option Scheme particulars of the options as required by SEBI (employeestock option scheme and employee purchase scheme)guidelines, 1999 are appended as Annexure A and formspart of this :Your Directors are pleased to recommend a dividend of 40%on the paid-up capital of the Company.

9 This equates toRs. per equity share of each (face value) to beappropriated from the profits of FY2012 subject to the approvalof the shareholders at the upcoming Annual General increased dividend is to demonstrate our commitmentto enhancing value to our :More than of the shares of the Company have nowbeen dematerialized. Your Directors would request all themembers who have not yet converted their holdings intodematerialized form, to do so thereby facilitating tradingof their shares. As per SEBI guidelines it is now mandatorythat the shares of a company are in dematerialized form DEPOSITS:During the year under review, your Company has neitherinvited nor accepted any fixed deposits from the COMPANIES:During the year under review, the Company has no subsidiarycompany.

10 However, in the meeting held on yourBoard of Directors have approved the setting up of a WhollyOwned Subsidiary (WOS) in Mauritius for investment TO INVESTORS EDUCATION &PROTECTION FUND:Pursuant to Section 205A of the Companies Act, 1956, asamended by the Companies (Amendment) Act, 1999,unclaimed dividend for the financial year ended 31stDecember, 1996, 31st December 1997, 31st December1998, 31st December 1999, 31st December 2000, 31stMarch 2002, 31st March 2003 and 31st March 2004 havebeen transferred to the Investors Education and ProtectionFund established by Central Government under Sub Section(1) of Section 205 (C)