Allied Blenders & Distillers Ltd

Dear Shareholders,

At the very outset, I would like to express my sincere gratitude to all our stakeholders whose continued support and strong association over the years has helped us in becoming the 3^rd largest spirits company in India. Their unwavering trust and partnership have been instrumental in our journey, and we look forward to achieving even greater milestones together.

The financial year FY24 has been marked with external headwinds, including an inflationary environment, subdued consumer demand in the mass premium category and short term disruptions in a key market impacting the overall sector. Despite these challenges, your company has delivered a resilient performance, underscoring our steadfast focus, dynamism and commitment to innovation, sustainability and profitability.

Not just the financial year FY24, we have emerged stronger and maintained leadership in the mass premium category in the dynamic macro-economic environment in the past, including the introduction of GST regime, COVID-19 pandemic and ever evolving state level regulations among others. Your company has successfully navigated varied challenges over the past several years and come a long way. I believe the outlook looks only onwards and upwards from hereon.

As India aims to become a manufacturing hub of the world, we endeavour to create Brands from India, for the World.

Our track record of successful launches over the years has helped us in cementing our position in the market. This year was another such year of leading with innovation. Our whisky brand ICONiQ White has been a runaway success, achieving millionaire status and becoming the fourth in our portfolio to achieve this milestone. We also made a strategic entry into the luxury market with the launch of Zoya. The brand pays homage to the art of fine spirits, showcasing opulence and artisanal excellence.

These successes have been driven by our ability to create blends in-line with consumer preferences and the strong pan India distribution network in place along with robust branding initiatives. As a testament to our efforts, several awards and recognitions continued to pour in last year. ICONiQ White has been recognised as the fastest-growing spirits brand globally, and Zoya has also been well-received by consumers. Our flagship brand, Officer's Choice Whisky, maintains its spot amongst the top-selling whisky brands globally.

While we have always endeavoured for sustainability however, recently, it has become one of the core pillars of our operations. Our sustainability efforts are centred on achieving zero harm, zero waste, and zero discharge. We are committed to reducing fossil fuel consumption, increasing aseptic packaging, implementing solar energy in our manufacturing operations, and minimising water usage in distilling and IMFL bottling operations. Last year, we achieved a 25 per cent reduction in specific water usage in our Rangapur distillery through process improvements and targeted investments. We also invested in an alternate biomass fuel handling system to increase the use of renewable energy sources at the distillery.

We are committed to creating a social impact while growing as a profitable business. It is our utmost priority to ensure the welfare of every person working with us and to make a positive environmental footprint. As part of our social initiatives, we will continue to train our workers on quality and knowledge management and ensure inclusive participation.

Our focus will be on achieving operational excellence and building a sustainable growth momentum by focusing on improving the market share of our millionaire brands, premiumisation, backward integration, robust compliance and corporate governance. The current market environment is particularly exciting, with a growing demand for premium products. The premiumisation trend is prevalent across the value chain, from product launches to shelf space in outlets to customer engagement. Rising disposable incomes, growing urbanisation, social media influence, favourable demographics, and accessibility are the factors driving this trend. As we expand our capabilities, backward integration will be integral to our strategy.

We continuously evaluate strategic options to identify assets that align with our objectives. Manufacturing is the backbone of our existence and we stay open to adopting the latest cutting-edge technologies to make our units more efficient. Furthermore, we look forward to becoming brand partners with global firms in times to come and drive growth. Compliance and corporate governance are indispensable for sustained growth in this industry, which has witnessed increasingly stringent regulations over the years. We have grown to be a leader while complying with the rules and regulations.

The reconstitution of our board including myself taking up non-executive role to segregate ownership and professional management, onboarding of professionals for independent board oversight, strengthening senior leadership team having industry and multi sector experience, and other compliance measures would further strengthen the overall governance framework. From exports perspective, while we are one of the leading exporters of Indian Made Foreign Liquor (IMFL) to 14 countries, there exists significant opportunities for further growth.

I would like us to be known as a leading ‘Indian Multinational' in the alcohol beverage sector, delivering world-class brands which are ‘Made in India' and creating employment opportunities that benefit our society and the Indian economy. With our recent listing in July, 2024 on the Indian stock exchanges, we have entered the next phase of transformation journey of profitable growth. With our strengthened balance sheet and clear growth roadmap positioning us to capitalize on our strengths, address consumer demand, and leverage significant tailwinds, we remain committed to enhancing shareholder value creation.