The UB Group PRESENTATION ON Mc DOWELL COMPANY

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The UB Group PRESENTATION ON Mc. DOWELL & COMPANY UNITED BREWERIES LTD 27 th

The UB Group PRESENTATION ON Mc. DOWELL & COMPANY UNITED BREWERIES LTD 27 th October 2005

India’s leading group The UB Group. Andrinks introduction ØBeer : Ø 48% market nationally

India’s leading group The UB Group. Andrinks introduction ØBeer : Ø 48% market nationally • The UB Group, is theshare market leader in both Spirits & Ø Sold in over 52 countries Beer business the country Ø India’s 1 st global consumer brand - Kingfisher • The Group has a turnover of Rs 3700 crores ØSpirits : • The core Beverage Alcohol business account for 80% of Ø 54% market share in the domestic market the group nd largest player in the world Ø 2 turnover • Other interests include Fertilizer, Engineering , Life Ø Both businesses poised for spectacular growth Ø Infrastructure Compelling demographics Science, development & Media Ø Rapid rise in disposable income • The Group is professionally managed and is headed by Ø Changing lifestyle & spending pattern Dr Vijay Mallya, the Group Chairman Ø Slow but sure dismantling of regulatory controls UB Group (India)

The Market for Beverage Alcohol Regulatory environment : • The Indian market is highly

The Market for Beverage Alcohol Regulatory environment : • The Indian market is highly regulated, highly restricted and highly taxed. • Licensing requirement exists for Raw material procurement, Stocking of raw material, Production, Inter-state movement, Retailing and Distribution. • Controls also exist on Brand entry, Advertising, Distribution & Pricing. These regulatory hurdles constitute an entry barrier to the industry UB Group (India)

The Indian Market Re-distribution structure – • Government market (65%) –State government is the

The Indian Market Re-distribution structure – • Government market (65%) –State government is the sole distributor • Auction market (16%) – State government auctions geographical territories which has led to monopolies / cartels • Free market (19%) – Through trade licenses • Bargaining power in the distribution network is commanded by players with premium brands, large volume base and product range The UB Group enjoys a unique advantage as the Leader in both Spirits and Beer Segments UB Group (India)

The Indian Market Spirits Market • India is a 112 million cases market, growing

The Indian Market Spirits Market • India is a 112 million cases market, growing at around 9 -10% p. a • Armed Forces – another 12. 5 million cases • Whisky dominates – 62% • Low Spirits consumption – Per capita < 2. 1 liters p. a • Changing lifestyle, exposure to global trends fueling growth • MNC’s entered 10 years ago, but yet to emerge strongly • Industry has seen some shakeout consequent to marginalization of smaller players UB Group (India) UB has aggressively consolidated its leadership position by - Acquiring brands (Gilbeys Whisky) & Companies (SWC) - Investing heavily in brand building

Acquisition of Shaw Wallace • Shaw Wallace was the 2 nd largest player in

Acquisition of Shaw Wallace • Shaw Wallace was the 2 nd largest player in spirits in India (MS - 15%). • UB Group acquired ~ 55% stake for a consideration of Rs. 13, 000 mio in July 2005 • Stakes increased to 75% through open offer. • Valuation underpinned by growth prospects and synergies arising from combined MS. • Vision to bring all Spirits business together and create “United Spirits” • Combined business would be amongst top 50 private sector companies in India. UB Group (India) Combined brand portfolio gives leadership in ALL flavors, geographies and price points

Restructuring Mechanics Phase I • Investment division of Mc. D to be demerged into

Restructuring Mechanics Phase I • Investment division of Mc. D to be demerged into New. Co – All non-spirits investments to be demerged – Demerged entity to have mirror shareholding as Mc. D • Merge all operating spirits companies into Mc. D –Swap ratios decided basis KPMG & Haribhakti valuations • SWC itself may be merged few months later upon resolution of tax / other litigations - However Mc. D will directly hold 75% of SWC even in the interim stage Phase II • Merger of SWC & its upstream overseas holding companies into Mc. D – Mc. D’s holding in SWC to be transferred to a Trust – SWC’s holding in Mc. D to be cancelled UB Group (India)

Restructuring Process – Status Report • Merger schemes of Phase I filed with Stock

Restructuring Process – Status Report • Merger schemes of Phase I filed with Stock Exchanges • Time frame for completion of mergers • April – May 2006 • Appointed date April 1, 2005 • Following entities being merged • Mc. Dowell & Company Limited (Listed) • Herbertsons Limited (Listed) • Triumph Distillers & Vintners Private Limited • United Distillers India Limited • Baramati Grape Industries Limited • Phipson Distillery Limited • United Spirits Limited • Asian Opportunities & Investments Limited • Mc. Dowell International Brands Limited • Zelinka Limited • Shaw Wallace Distilleries Limited together with its subsidiaries • Non-spirits Investments being divested into Mc. Dowell India Spirits Limited, a wholly-owned subsidiary UB Group (India)

Mergers…update • Filing of schemes with Stock exchanges completed • Schemes to be filed

Mergers…update • Filing of schemes with Stock exchanges completed • Schemes to be filed with courts – 1 st week of December’ 05 • Court convened meetings- Mid January • Final hearing by Courts –End March ’ 06 • Filing of orders with Ro. C and listing by end April ‘ 06 UB Group (India)

Sales Performance HY–I -- FY’ 06 Company Mc. Dowell Company ‘UNITED SPIRITS’ UB Group

Sales Performance HY–I -- FY’ 06 Company Mc. Dowell Company ‘UNITED SPIRITS’ UB Group (India) Line Main line TOTAL Million cases HY-I FY’ 04 HY-I FY’ 05 % Grwth 9. 39 11. 16 19% 12. 39 13. 51 9% Million cases HY-I FY’ 04 HY-I FY’ 05 % Grwth Main line 18. 83 23. 33 24% TOTAL 27. 13 30. 17 11% Line

Resultant Structure Mc. D Results Sep’ 05 UBHL & Associates X% Trust y% MCD

Resultant Structure Mc. D Results Sep’ 05 UBHL & Associates X% Trust y% MCD (Spirits) Public z% UBHL & Associates 42. 47% MCD (Investments)* UB Group (India) 57. 53% * Includes non-spirits investments Aventis, Mangalore Chemicals, UBHL, UBL etc Public

United Spirits Sep ‘ 05 UB Group (India)

United Spirits Sep ‘ 05 UB Group (India)

Brand Performance HY–I -- FY’ 06 Brand FY’ 05 FY’ 06 % Grwth Bagpiper

Brand Performance HY–I -- FY’ 06 Brand FY’ 05 FY’ 06 % Grwth Bagpiper Whisky 3. 49 5. 45 56% Mc. Dowell’s No. 1 Whisky 2. 56 3. 02 18% Mc. Dowell’s No. 1 Brandy 2. 32 2. 80 21% Mc. Dowell’s Celebration Rum 2. 03 2. 18 7% Mc. Dowell’s Signature Whisky 1. 48 2. 04 38% Old Cask Rum 0. 82 1% Gilbey’s Green Label Whisky 1. 15 1. 11 (4%) Blue Riband Gin Series 0. 56 1% Gold Riband Whisky 0. 46 1. 04 127% Antiquity Rare Whisky 0. 04 0. 06 53% Royal Challenge Whisky 0. 44 0. 46 6% Director’s Special Black Whisky 2. 27 3. 49 54% Director’s Special Whisky 1. 93 2. 38 18% White Mischief Vodka 2. 78 4. 20 51% UB Group (India)

Raw Material Price Trends • Spirit prices have been rising since early 2004 •

Raw Material Price Trends • Spirit prices have been rising since early 2004 • Failed sugarcane crop • Increased dosage of alcohol in motor spirit • Spirit prices softening – but quantum step-up from earlier levels • Furnace Oil prices spiralling UB Group (India)

Trends - Realization & Costs • Cost push offset by • Increase in NSR

Trends - Realization & Costs • Cost push offset by • Increase in NSR • Decrease in market spends • Strategic buying of raw material including stock build-up • Increase in NSR / Decrease in Spends • UB has been in the forefront of the industry initiatives to drive prices up and spends down • Have spearheaded industry meetings with State Govts to obtain price increases e. g. TN, Kerala, Delhi, Rajasthan • Mc. Dowell’s NSR increase Rs 29 / case • Decrease in COG • Stocks built up pre-April 2004 cushioning impact of the rise in prices • Imported molasses • Strategic timing of purchases to effect price reductions • Result: • HY-I costs of FY’ 04 are still lower than HY-I of FY’ 05 by Rs. 19/case • Fuel cost impact accounts for Rs. 5/case UB Group (India)

Trends - Realizations & Costs (contd. ) • Brand building exercise continues • Packaging

Trends - Realizations & Costs (contd. ) • Brand building exercise continues • Packaging Innovations introduced; Others on the anvil • Reduces costs; beats counterfeiting • Tetra packs • Pouch Packs to replace mono-cartons • Other Tamper-proof and tamper-evident packaging • Synergies • Detailed exercise undertaken with help of Accenture to identify potential areas • Procurement • Market spends • Terms of Trade • Removal of clashing interests e. g. Competing Brands, Duplicate Mfg Sources • Duplicate Services / Infrastructure • Costs of Business e. g. levies UB Group (India)

Synergies – Costs & Revenues • Total synergies estimated in excess of Rs 100

Synergies – Costs & Revenues • Total synergies estimated in excess of Rs 100 cr on a sustainable basis (Rs 0. 50/bottle) • Major synergies from areas other than consumer price increases • Majority of revenue synergies not quantified UB Group (India)

Outlook FY’ 06 United Spirits • Sales Volumes > 61 million cases • Bagpiper

Outlook FY’ 06 United Spirits • Sales Volumes > 61 million cases • Bagpiper – India’s Largest Alcobev brand > 11 million cases • Mc. Dowell’s No. 1 family - ~ 17 million cases • EBITDA Rs. 275 crores • Realization of synergies would have commenced in full swing UB Group (India)

The UB Group- An introduction • The UB Group, is the market leader in

The UB Group- An introduction • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of United Breweries Limited the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

The Key UB Group. An introduction Highlights • PBDIT (UBL) for the half year

The Key UB Group. An introduction Highlights • PBDIT (UBL) for the half year Rs. 64. 3 crores, and increase of Rs. 40. 5 year. Spirits & • The UB Group, is the crores marketversus leaderlast in both Beer business in the country • PBDIT (Combined business) Rs. 78. 1 crores, and • The Groupof has a turnover Rs 3700 increase Rs. 68 crores of versus last crores year • The core Beverage Alcohol business account for 80% of • the. Volume growth of 22% in UBL & in the combined group turnover business and continues to outperform the industry • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • Price increases achieved in a number of key states • The Group is professionally managed and is headed by Vijay Mallya, the Group • Dr Interim dividend of 15%Chairman paid by UBL • UBL - Winner of Super brands award UB Group (India)

The. Summary UB Group- An P introduction &L • The UB Group, is the

The. Summary UB Group- An P introduction &L • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

Key of. An Performance The. Drivers UB Groupintroduction The UB Group, is the market

Key of. An Performance The. Drivers UB Groupintroduction The UB Group, is the market leader in both Spirits & • • Volume growth Beer business in the country • • Implementation of price increase The Group has a turnover of Rs 3700 crores in key • states The core Beverage Alcohol business account for 80% of group turnover • the Reduction in cost of sales driven by bottle • cost Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • • Synergized operation between UBL & MAL The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

The UB Share Group- Movements An introduction Market • The UB Group, is the

The UB Share Group- Movements An introduction Market • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

The UB Group. An introduction Volume Performance • The UB Group, is the market

The UB Group. An introduction Volume Performance • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

The UB Group. An introduction Analysis by Pack Type • The UB Group, is

The UB Group. An introduction Analysis by Pack Type • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

Average Cost of sales The Realization UB Group- Anand introduction Realization drivers: • Andhra

Average Cost of sales The Realization UB Group- Anand introduction Realization drivers: • Andhra – Price&revision after 7 • The UB Group, is the market leader in both Spirits years Beer business in the country • Kerala – Price revision after 4 years • The Group has a turnover of Rs 3700 crores • Delhi – Matched Kerala prices • The core Beverage Alcohol business account for – 80% of market to • Rajasthan Auction the group turnover • Other interests include Fertilizer, Govt. distribution, policy changes • Price increases in 2004 -05 to offset bottle cost maintained Engineering , Life Cost Drivers: Science, Infrastructure development & Media • Rationalization in bottle prices • The Group is professionally managed and is headedof by • Optimization Power & inputs Dr Vijay Mallya, the Group Chairman UB Group (India) costs • Synergy of operation – economies of Scale

The UBof. Groupintroduction Cost Sales. Analysis • The UB Group, is the market leader

The UBof. Groupintroduction Cost Sales. Analysis • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)

The UB Group. An introduction Integration of UBL and MABL The UB Group, is

The UB Group. An introduction Integration of UBL and MABL The UB Group, is the market leader in both Spirits & • • Rationalisation of brand portfolio by state Beer business in the country • • Changes to sourcing to achieve least The Group has a turnover ofof Rsbeer 3700 crores supply • cost The core Beverage Alcohol business account for 80% of group turnover • the Closure of Mumbai based MABL head office • Other interests include Fertilizer, Engineering , Life • Science, Synergies taken in the areas of: Infrastructure development & Media Raw material procurement • –The Group is professionally managed and is headed by Dr– Vijay Mallya, the Chairman Marketing and. Group promotional – Headcount UB Group (India) costs

The. Trading UB Group-Outlook An introduction • Strong volume performance expected to continue •

The. Trading UB Group-Outlook An introduction • Strong volume performance expected to continue • The UB Group, is the market leader in both Spirits & – Strong beer segment to continue lead Beer business in the country • Hardening of raw material costs • The Group has a turnover of Rs 3700 crores – Barley • • Other Costs in line Alcohol with thebusiness growth account in volume The core Beverage for 80% of • the Substantial capital expenditure – over Rs. 400 crore group turnover approved by the board to be incurred over a period of • Other interests include Fertilizer, Engineering , Life seven years to meet the growing demand Science, Infrastructure development & Media • Proposal to discuss merger of various subsidiaries, in • place The Group is professionally managed and profits. is headed by – Substantial improvement in cash Dr Vijay Mallya, the Group Chairman UB Group (India)

The UB Group- An introduction • The UB Group, is the market leader in

The UB Group- An introduction • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores THANK YOU account for 80% of • The core Beverage Alcohol business the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India)