The UB Group

PRESENTATION ON McDOWELL & COMPANY UNITED BREWERIES LTD

27th October 2005

Indias leading introduction The UB Group- Andrinks group

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

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

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 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 MNCs entered 10 years ago, but yet to emerge strongly Industry has seen some shakeout consequent to

marginalization of smaller players

UB has aggressively consolidated its leadership position by - Acquiring brands (Gilbeys Whisky) & Companies (SWC) - Investing heavily in brand building

UB Group (India)

Acquisition of Shaw Wallace

Shaw Wallace was the 2nd 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. Combined brand portfolio gives leadership in ALL flavors, geographies and price points

UB Group (India)

Restructuring Mechanics
Phase I Investment division of McD to be demerged into NewCo

All non-spirits investments to be demerged

Demerged entity to have mirror shareholding as McD Merge all operating spirits companies into McD Swap ratios decided basis KPMG & Haribhakti valuations SWC itself may be merged few months later upon resolution of tax / other litigations - However McD will directly hold 75% of SWC even in the interim stage Phase II Merger of SWC & its upstream overseas holding companies into McD

McDs holding in SWC to be transferred to a Trust

SWCs holding in McD to be cancelled

UB Group (India)

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 McDowell & 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 McDowell International Brands Limited Zelinka Limited Shaw Wallace Distilleries Limited together with its subsidiaries Non-spirits Investments being divested into McDowell India Spirits Limited, a wholly-owned subsidiary
UB Group (India)

Mergersupdate
Filing of schemes with Stock exchanges completed Schemes to be filed with courts 1st week of December05 Court convened meetings- Mid January Final hearing by Courts End March 06 Filing of orders with RoC and listing by end April 06
UB Group (India)

Sales Performance HYI -- FY06

Company Line Main line TOTAL Million cases % Grwth

HY-I FY04

HY-I FY05

McDowell

9.39 12.39

11.16 13.51

19% 9%

Company

Line Main line TOTAL

Million cases HY-I FY04 HY-I FY05

% Grwth

UNITED SPIRITS

18.83 27.13

23.33 30.17

24% 11%

UB Group (India)

Resultant Structure McD Results Sep05

UBHL & Associates

Net sales

YoY 17%
y%

X% 2005 630.57

Rs Crores 2004 541.2

Public

Cost of goods Sold Trust staff cost Advt & Sp Other overheads EBITDA

82%

400.26 (Spirits) 63% 337.32 MCD 41.68 7% z% 41.57 36.72 6% 38.84 79.43 13% 83.58 72.49 11% 39.90 36.74
UBHL & Associates

62% 8% 7% 15% 7%

Interest /Finance cost

15.4 7.86

Depreciation 70%

7.49 28.26
42.47%

Profit before Tax

4%

16.65 6.73
57.53%

3%
Public

Tax 61%

12.26 16.00

MCD (Investments)*

Profit after Tax

UB Group (India)

3%

9.92

2%

* Includes non-spirits investments Aventis, Mangalore Chemicals, UBHL, UBL etc

United Spirits Sep 05

Rs Crores Net sales Cost of goods Sold EBITDA Interest/Finance cost Depreciation PBT USL 957.22 477.22 122.16 75.39 12.21 34.56 51% 13%

4%

UB Group (India)

Brand Performance HYI -- FY06

Brand FY05 FY06 % Grwth

Bagpiper Whisky
McDowells No.1 Whisky McDowells No.1 Brandy McDowells Celebration Rum McDowells Signature Whisky Old Cask Rum Gilbeys Green Label Whisky Blue Riband Gin Series Gold Riband Whisky

3.49
2.56 2.32 2.03 1.48 0.82 1.15 0.56 0.46

5.45
3.02 2.80 2.18 2.04 0.82 1.11 0.56 1.04

56%
18% 21% 7% 38% 1% (4%) 1% 127%

Antiquity Rare Whisky

Royal Challenge Whisky Directors Special Black Whisky Directors Special Whisky White Mischief Vodka
UB Group (India)

0.04
0.44 2.27 1.93 2.78

0.06
0.46 3.49 2.38 4.20

53%
6% 54% 18% 51%

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
7,000 40.00

6,000

35.00

30.00 5,000 25.00 4,000

Rs. / MT

20.00 3,000 15.00 2,000 10.00

1,000

5.00

'94-95 '95-96 '96-97 '97-98 '98-99 '99-00 '00-01 '01-02 '02-03 '03-04 '04-05 APR MAY JUNE JULY AUG 05 05 05 05 05 ENA Rs/BL

0.00

UB Group (India)

MOLASSES Rs/MT

RECTIFIED SPIRIT Rs/BL

Rs. / BL

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

McDowells 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 FY04 are still lower than HY-I of FY05 by Rs.19/case Fuel cost impact accounts for Rs.5/case
UB Group (India)

Trends - Realizations & Costs

Brand building exercise continues Packaging Innovations introduced; Others on the anvil

(contd.)

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 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 FY06 United Spirits

Sales Volumes > 61 million cases Bagpiper Indias Largest Alcobev brand > 11 million cases McDowells 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 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

United Breweries Limited

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 UB Group (India) Group (India)

The Key Highlights UB Group- An introduction

PBDIT (UBL) for the half year Rs. 64.3 crores, and increase of Rs.40.5 market leader in year The UB Group, is the crores versus lastboth Spirits &
Beer business in the country

PBDIT (Combined business) Rs. 78.1crores, and The Groupof Rs.68 crores of Rs 3700 crores increase has a turnover versus last year
The core Beverage Alcohol business account for 80% of

Volume growth of 22% in UBL & in the combined the 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

Dr Interim dividend Group Chairman UBL Vijay Mallya, the of 15% paid by

UBL - Winner of Super brands award

UB UB Group (India) Group (India)

TheSummaryAn introduction UB Group- P & L

Unaudited Audited The UB In rupees crore the market leader in both Spirits & Group, is

Profitability Statement United Breweries Limited

Half year ended 30.9.2005 30.9.2004

Year ended 31.3.2005

Beer business in the country

The Group has a turnover of Rs 3700 crores the group turnover

69.03 40.64 64.31 10.39 5.68 48.24 (13.18) (17.17) 17.90 78.14 26.61 16.14 35.39

107.09 104.94 209.12 The core Beverage Alcohol business account for 80% of 52.47 34.36 23.80 14.61 4.39 4.80 (1.20) 3.60 110.17 78.01 56.61 20.82 10.57 25.22

Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media

The Group is professionally managed and is headed by (11.18)

Dr Vijay Mallya, the Group Chairman

UB UB Group (India) Group (India)

Income Net Sales/Income from operations Other Income Total Income Expenditure Cost of Production Advertisement & Sales Promotion Other operating Cost PBIDT Finance charges Depreciation Profit Before Non recurring items &Taxation Non Recurring items Provision for Taxation Profit after tax COMBINED BEER BUSINESS PBIDT Finance Charges Depreciation Profit Before Taxation

272.00 9.08 281.07

211.93 3.64 215.57

453.91 453.91

14.04

10.12 25.45 15.57 (30.90)

Key Drivers ofAn introduction The UB Group- Performance

Volume growth Beer business in the country Implementation of price3700 crores in key The Group has a turnover of Rs increase states Beverage Alcohol business account for 80% of The core the group turnover cost of sales driven by bottle Reduction in Other interests include Fertilizer, Engineering , Life cost Science, Infrastructure development & Media Synergized operationmanaged and UBL &by The Group is professionally between is headed MAL Dr Vijay Mallya, the Group Chairman
UB UB Group (India) Group (India)

The UB Group, is the market leader in both Spirits &

The UB Group- An introduction Market Share Movements

2003-04

The UB Group, is the market leader in both Spirits &

Others, 17

Beer business in the country

UBL, 46 SAB MM

M M, 6

UBL

The Group has a turnover of Rs 3700 crores

Others SAB, 31
Others, 16

2004-05

The core Beverage Alcohol business account for 80% of the group turnover
Apr to Sept 05
M M, 5 UBL, 48 UBL SAB MM Others

Other interests include Fertilizer, Engineering , Life

SAB, 31

Science, Infrastructure development & Media

Others, 17 The Group is professionally managed and is headed by UBL M M, 6

Dr Vijay Mallya, the GroupM Chairman M

SAB, 28 Others

UBL, 49

SAB

UB UB Group (India) Group (India)

The UB Performance VolumeGroup- An introduction

The UB Group, is the market leader in both Spirits &

Beer business in the country

Volume Performance

100 91 The Group has a turnover of Rs 3700 crores 90 The80 core Beverage Alcohol business account for 80% of the group turnover 70 57 Industry 60 Other interests include Fertilizer, Engineering , Life 44 50 UB 36 Science, Infrastructure development & Media 40 Combined 27 30 22 22 The Group is professionally managed and is headed by 20 9 11 Dr Vijay Mallya, the Group Chairman 10 0 2004-05 Ytd Sept 05 Qtr Sept 05
UB UB Group (India) Group (India)

Volume - mio cases

The UB by Pack Type AnalysisGroup- An introduction

Pack Salience Sept 04
1% The UB Group, Cansthe market leader in both Spirits & is 1% Beer business in the country Bottle Pint 10% Draught

The Group has a turnover of Rs 3700 crores The core Beverage Alcohol business account for 80% of the group turnover
Pack Salience Sept 05 Other interests include Fertilizer, Engineering , Life
Bottle Quartz 88%

Science, Infrastructure development & Bottle Pint Media

11%

Draught 1%

Cans 2%

The Group is professionally managed and is headed by

Dr Vijay Mallya, the Group Chairman

Bottle Quartz 86%

UB UB Group (India) Group (India)

Average Realization and Cost of sales The UB Group- An introduction

140
Andhra Price revision after 7 The UB Group, is the market leader in both Spirits & 129 years 120 Beer business in the country 115 Kerala Price revision after 4 106 years 100 The Group has a turnover of Rs 3700 crores 100

Sales Realization Cost Index

Realization drivers:

Delhi Matched Kerala prices

80

The core Beverage Alcohol business account for 80% of market to Rajasthan Auction 72 70 Govt. distribution, policy changes 68 the63 group turnover 60 40 Other interests include Fertilizer,
Price increases in 2004-05 to offset bottle cost Engineering , Life maintained

Science, 20
0

Cost Infrastructure development & Media Drivers:

Rationalization in bottle prices costs

The Group is professionally managed andOptimization of by & inputs is headed Power

M ar -0 4 M ay -0 4 Ju l-0 4 Se p04 No v04 Ja n05 M ar -0 5 M ay -0 5 Ju l-0 5 Se p05

Dr Vijay Mallya, the Group Chairman

SR COS

Synergy of operation economies of Scale

UB UB Group (India) Group (India)

The UB Group- An introduction Cost of Sales Analysis

Cost to Sales - Ytd Sept 05

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 Others the group turnover
59% Bottles 41%

Cost to Sales - Ytd Sept 04

Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media The Group is professionally managed and is headed by
Others 48%

Dr Vijay Mallya, the Group Chairman

Bottles 52%

UB UB Group (India) Group (India)

The UB of UBL and MABL IntegrationGroup- An introduction

Rationalisation of brand portfolio by state Beer business in the country The Group has sourcingof Rsbeer crores Changes to a turnover of 3700 to achieve least cost supply The core Beverage Alcohol business account for 80% of the group turnover Closure of Mumbai based MABL head office Other interests include Fertilizer, Engineering , Life Science, Infrastructurein the areas of: Synergies taken development & Media
Raw material procurement The Group is professionally managed and is headed by The UB Group, is the market leader in both Spirits &

Dr Vijay Mallya, the Group Chairman Marketing and promotional

costs

Headcount
UB UB Group (India) Group (India)

Trading Outlook The UB Group- An introduction

Strong volume performance expected to continue

Hardening of raw material costs

The UB Group, is the market leader in both Spirits & Strong beer segment to continue lead Beer business in the country The Group has a turnover of Rs 3700 crores Barley

Other Costs in lineAlcohol business account for 80% of The core Beverage with the growth in volume the group turnover expenditure over Rs.400 crore Substantial capital 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 placeGroup is professionally managed and profits. by The Substantial improvement in cash is headed
Dr Vijay Mallya, the Group Chairman

UB UB Group (India) Group (India)

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 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 UB Group (India) Group (India)