Part A

Industry profile

Company profile

Mission and Quality statement

Mission Statement

We constitute a large, global group based in . We associate with world leaders in order to adopt technologies and processes that will enable a leadership position in a large spectrum of activities.

We are focused on assuming leadership in all our target markets.

We seek to be the most preferred employer wherever we operate.

We recognize that our organization is built around people who are our most valuable asset.

We will always be the partner of choice for customers, suppliers and other creators of innovative concepts.

We will continually increase the long-term value of our Group for the benefit of our shareholders.

We will operate as a decentralized organization and allow each business to develop within our stated values.

We will be a major contributor to our National Economy and take full advantage of our strong resource base.

We commit ourselves to the ongoing mission of achieving Scientific Excellence. Quality leadership is vital to the long-term success of the UB Group in an increasingly competitive marketplace.

Building quality into our workplace, products and service is essential to a successful future for our customers, employees, supplier¶s communities and shareholders.

The UB Group will work to provide products and services that always meet or exceed expectations

Management will commit resources and create an environment in which each employee can contribute skills, talents and ideas to a never-ending process of improvement and innovation in all aspects of our business.

Quality statement

Quality leadership is vital to the long-term success of the UB Group in an increasingly competitive marketplace.

Building quality into our workplace, products and service is essential to a successful future for our customers, employees, supplier͛s communities and shareholders.

The UB Group will work to provide products and services that always meet or exceed expectations

Management will commit resources and create an environment in which each employee can contribute skills, talents and ideas to a never-ending process of improvement and innovation in all aspects of our business.

Growth of the company

THE UB GROUP - History Success

It was the late 19th century. was delivered in bullock carts in casks called ͞hogsheads͞. Consumers were mostly defense personnel. Over hundred years have passed. Beer from United Breweries is now delivered all over the world, catering to the needs of consumers across generations and continents. From modest, local beginnings, the UB Group has transformed into a global conglomerate.

The early days

The Castle Brewery which dates back to 1857 (the year of the Indian mutiny) was set up for the European planters scattered over the Nilgiris. So was the Nilgiris Brewery Company. The British Brewing Corporation set up in Madras (1902) catered to the elite of the port town of Madras while the Brewery Company had been supplying beer for the troops stationed at and Bangalore since 1885.

United Breweries Limited (UBL) was founded on March 15, 1915, in Madras by Thomas Leishman, a Scotsman, also its first Managing Director. UBL manufactured and sold only bulk beer for troops of both the world wars. It was a classic case of role reversal ʹ India being introduced to this ͚exotic͛ brew and in turn becoming its major exporter.

Consolidating growth

The Company͛s brewing tradition has a legacy of nearly 130 eventful years. Along its journey through the global Alcoholic Beverages landscape, UBL has consistently influenced business paradigms, beer- drinking habits and conventional mindsets. One man played a pivotal role in the Group͛s growth ʹ who was elected to the Board of Directors of UBL in 1947 at the age of 22 and a year later became its Chairman. Bangalore has been at the core of UBL͛s existence. The Registered Office of UBL was shifted to Bangalore in June 1952, into the spacious 22-acre factory of the Bangalore Brewery Company. The Bangalore Brewery buildings, dating as far back as 1885, have since given way to newer construction. The only relic that still stands is the present godown adjacent to the UB Towers building, which earlier housed the bottling cellars, pasteurizing and packing departments. The five acres of land across the road donated to the Jesuit Society now forms the campus of St Joseph͛s Indian High School.

Exploring Opportunities

In 1951, United Breweries Limited added liquor to its product cabinet when McDowells became its first subsidiary. Under the dynamic guidance of Vittal Mallya, the Company became the first to manufacture Indian substitutes of foreign liquor. This gave rise to a new term ʹ IMFL (Indian Made Foreign Liquor). McDowell has since then been the undisputed market leader and one of the largest and fastest moving consumer goods companies in the country. Vittal Mallya was not a man to rest on his laurels. He continued to pursue opportunities in the Alcoholic Beverages business and at the same time diversified into Polymers and Batteries in addition to Pharmaceuticals and Foods that the Company had been making till then.

The Life and Times of Vittal Mallya

All those who knew Vittal Mallya remember him for his simplicity. And his excellent acumen of accounting, a trait which helped the Dhaka-born Mallya invest heavily in shares of the United Breweries in the late 40s with an eye on its eventual acquisition. Old-timers fondly recall how he remembered his son's losing one paise while playing and registered the amount against his account. Youngest of the three children of an army doctor [Lt Col Ganapathi Mallya], Mallya capped an outstanding academic career with two of India's most prestigious educational institutions (Doon School and Presidency College) and traveled abroad for over two years to gain first-hand, practical knowledge that he believed to be more valuable than formal education. Mallya initially operated out of Calcutta and married much later after he had become the chairman of United Breweries. He migrated to Bangalore with his wife, Lalitha Ramaiah and son, Vijay in 1958.

Despite ill-health that followed a massive heart attack at a relatively young age of 39, Mallya slowly and steadily built the UB Empire and diversified into a host of allied businesses.

His exemplary business acumen was evident when he defied all odds to acquire a host of breweries during the heady days of prohibition of the Janata Party regime of Morarji Desai. In the 80s, Mallya started handing over the mantle of control - primarily beer and spirits - of the large UB Empire to his son, Vijay, whom he had sent to the United States and England to train with some of the best global corporations. At the same time, he encouraged his son to expand the business beyond the shores of India and subsequently opened offices in New York and London. Till his death in 1983, Mallya remained the idol of millions who adored him for his tenacity in understanding people both rich and poor. The current UB headquarters is located on Vittal Mallya Road in Bangalore, fondly named after one of its illustrious leaders.

The UB Group is one of India͛s largest conglomerates with annual sales of over US$ 4 billion and a market capitalization of approximately US$ 12 billion. The Group has diverse interests in brewing, distilling, real estate, engineering, fertilizers, biotechnology, information technology and aviation. It is also the largest Indian manufacturer of beverage alcohol (beer and spirits). Dr. is the Chairman of the Group.

Dr. Mallya, was elected by shareholders as Chairman of UB in 1983, at the age of 28. He previously assisted his father, the former Chairman, who passed away in the same year. Prior to being entrusted with the responsibilities of a classical Indian corporate conglomerate, Dr. Mallya worked for the American Hoechst Corporation (now Sanofi-Aventis) in the USA and with Jenson & Nicholson in the U.K. Since 1980, he assisted his father, the then Chairman of The UB Group, in managing the important Brewing and Spirits Divisions and in re-launching the Brand of Beer. In 1983, the sales volume of the UB Spirits division was approximately 2.85 million cases and UB͛s beer business trailed behind that of Golden Eagle from Mohan Meakins.

Also included in the Group were activities such as pharmaceuticals, agrochemicals, paints, petrochemicals and plastics, the manufacture of electro-mechanical batteries, the manufacture of food products and carbonated beverages, a fast-food pizza chain and several medium and small scale industrial units.

Upon assuming the position of Chairman in October 1983, Dr. Mallya initiated the process of defining a corporate structure with performance accountability, inducting professional management and consolidating the unwieldy empire into individual operating divisions.

In 1988, Dr. Mallya became a non-resident Indian to pursue global opportunities and to transform the UB Group into India͛s first multinational company. While, in the initial stages, overseas representative offices had been commissioned, the real break came in 1988 when Dr. Mallya, in a leveraged buyout, acquired the global Berger Paints Group with operating companies across four continents.

The exit strategy for this investment was profitably executed when Dr. Mallya successfully directed five Initial Public Offerings on the London, Singapore (Main Boards), Nairobi, Jamaica and Abidjan Stock Exchanges. The paints business was divested for significant value in 1996.

Dr. Mallya also founded a software company in the USA in 1993 which was subsequently listed on the NASDAQ in 1996 and which provides a considerable window of opportunity to the vast US market. He also initiated several ventures for the promotion and globalization of UB brands and, in particular, Kingfisher and McDowell.

In 1990, following the Government of India͛s liberalised economic policies, Dr. Mallya decided that the UB Group would only retain interests in businesses that were globally competitive and which did not depend upon fiscal tariff protection. He also decided to focus on areas of core competence and transformed the vastly diversified UB conglomerate into a handful of key operating businesses. On entering the new millennium, the UB Group is considerably more focused and has dramatically increased value for its shareholders through its various operating businesses. Sales of the UB Spirits Division have crossed 90 million cases (9 litres each) during the fiscal year 2008-09. In addition, this Division is one of only three in the world to own nineteen millionaire brands and at least five brands rated by Drinks International, UK to be amongst the ten fastest growing brands in the world in their respective categories. The market share of the Spirits Division in India is currently 60% and exports to the Middle East, Africa and Asian countries are growing rapidly.

In 2007, Limited, the flagship of The UB Group, acquired a hundred percent of premium scotch distillers Whyte & Mackay and Liquidity Inc, a United States-based maker of specialty . The Delaware-based Liquidity Inc produces speciality brands like Pinky and Marakesh.

The UB Group͛s Brewing Division has also assumed undisputed market leadership with a national market share in excess of 48%. Through a process of aggressive acquisition and market penetration, The UB Group today controls 60% of the total manufacturing capacity for beer in India. The flagship brand, Kingfisher, is now sold in over 50 countries worldwide having received many accolades for its quality.

Kingfisher, one of the flagship brands of The UB Group, has partnered with NDTV, India͛s leading broadcast group in a first-of-its-kind media alliance for the promotion of NDTV Good Times.

The UB Group͛s is today the undisputed market leader in India͛s aviation market. In the short span since it was launched, Kingfisher Airlines has redefined the whole experience of flying and has raised the bar by unleashing a host of product and service innovations. It has received numerous awards since its inception.

Kingfisher Airlines offers Full Service and an unparalleled experience to the Indian air traveller. In-flight entertainment has been taken to a new level with the introduction of Live TV to compliment the latest and finest Audio and Video on Demand system that is available.

With the merger of Air Deccan and Kingfisher Airlines, the airline covers all segments of air travel from low fares to premium fares and offers the maximum number of flights offered by any single airline network in India.

Dr. Mallya is the Chairman of public companies both in India as well as in the USA. He has been the Chairman of Aventis Pharma India (previously Hoechst) as well as the Chairman of Bayer Crop Science in India (previously Agrevo) for over 20 years, in addition to his Chairmanship of several other corporations.

Dr. Mallya is the first Indian ever to become the owner of a Formula One Team. The Netherlands-based Mol Family and Dr. Mallya have formed a consortium that is now the joint owner of Formula One, which is also India͛s first-ever Formula One Team and represents India͛s first, truly global sports foray.

He is a keen sportsman and is an ardent aviator and yachtsman of distinction. He not only participates in various sporting events but also supports various sporting activities worldwide, particularly for the under privileged.

Dr. Mallya has received several professional awards both in India and overseas. He was conferred a Doctorate of Philosophy in Business Administration, by the Southern California University, Irvine. He has also been nominated as a Global Leader for Tomorrow by the World Economic Forum. He was conferred France͛s highest civilian honour ʹ ͞ Officier de la legion d͟ Honneur͟ for his exceptional career as businessman heading a multinational with diversified interests.

Dr. Mallya has always believed that Corporations have a responsibility to society and mankind. To this end, he has contributed generously to various Charities and Foundations in several countries in addition to establishing The Mallya Hospital, The Mallya-Aditi School and the Vittal Mallya Scientific Research Foundation in Bangalore, India.

McDowell - Spanning Centuries of change ± Now United Spirits Limited The name McDowell evokes the celebrated Scottish tradition of distilling quality spirits. In the late nineteenth century, Angus McDowell set out from the scenic Northern lands of Gaelic Britannica to realize his dream. He wanted the best products (including and spirits) of his homeland to reach thousands of expatriate Britons in various corners of the Empire. It was thus that the McDowell Company came into being. It had its origins in a warehouse near Fort St. George in Chennai, which in those days was a major trading centre of the British empire. In 1898, McDowell was incorporated as a Company with Messrs A.M. Hooper, G.D. Coleman and G.A.

Ruppell as its principal shareholders. Its initial capital, comprising 4,000 Preference Shares of Rs. 100 each and 4,000 Ordinary Shares of Rs. 100 each, was Rs. 8,00,000.

The vision of the new owners, built upon the legacy of Angus McDowell, resulted in the Company becoming one of the first to trade in Indian Made Foreign Liquor (IMFL). Soon after, McDowell set up its own distilleries. Beginning with the Cherthalla Distillery in 1959, it went on to establish the Distillery in 1969, the Distillery in 1971 and the Hathidah Distillery at the end of 1973. The Company also acquired a distillery at Nasik in 1994. From being one of India͛s first importers of fine and spirits, McDowell & Co. has taken quantum leaps through its brands. Five ͚Millionaire͛ brands top their categories as industry winners. Two of these have also gone on to achieve international standing by ranking among the top 10 spirits brands in the world in their specific categories. McDowell & Co has, over the years, added lustre to its image ʹ nay exceeded ʹ all expectations of its huge and loyal clientele. Needless to add, it is all set to scale new heights of excellence. McDowell essentially imported consumer items including wines and spirits & cigars and tea to cater to the English population in India. In 1951, McDowell & Co. Ltd. was acquired by Vittal Mallya, founder of The UB Group, and became a subsidiary of United Breweries Limited.

UBL History

It all began with 5 breweries in South India. The oldest of which, Castle Breweries, dated back to 1857. United Breweries, as these breweries were named in 1915 has come a very long way.

Soon afterwards, the sight of bullock carts carrying huge barrels or 'Hogsheads' containing beer became a household sight. These carts wheeled their way to the customers, including British troops, living in and around Madras, Bangalore and the Nilgiris. Almost immediately, the brew from UB became a favourite, especially with the British troops. So began the history of Beer in India. And the history of Beer Division of United Breweries!

The company was bought by late Mr. Vittal Mallya in 1947, and since then has never looked back. Today each one of the beer outlets in India sells one brand or the other from United Breweries.

Timelines

March 15th, 1915 - Mr. Thomas Leishman purchased 5 breweries to form United Breweries Ltd. with its registered office at 17 Armenian Street, Chennai

THE UB LOGO ± Evolutiion

The emblem of the UB Group- the winged horse of Greek mythology-has evolved as a very strong brand identity and has become synonymous with United Breweries. The origin of the logo is unknown but as far back as 1944, the flying horse with a cask of beer on its back and between its wings became part of the UB lore with the UBL's diversification and changed image, the cask is gone.

Then, the highflying Pegasus symbolizing the Group's forays into hitherto unexplored avenues, its wings flapping tirelessly and assuredly, in its journey towards a beckoning future. The colours of gold and the UB blue denoted exclusivity and dynamism.

Rationale behind the latest UB Group logo

Reflecting the ever renewing force behind the UB Group, the new UB Group identity, the well know UB Pegasus, has been redesigned to emphatically reflect the spirit of an organization which is becoming younger, Global, Energetic and ever ready to take a leap forward.

The Pegasus has been completely redrawn and relationship with the letterform UB made more unique and emphatic. The letterform UB itself has been redesigned so that the U and B are interlinked making it more distinctive. The Pegasus leaps forward, ever in motion and the new Blue will help it stand out in crowded visual spaces. The new identity will go a long way to add value to each of the Group companies and the UB Group as a whole.

United Spirits Limited (USL):

United Spirits Limited (USL), the flagship alcobev Company of the UB Group, achieved global leadership of the alcoholic spirits industry by volume, selling over 113 million cases in FY 11 - a 13% leap over the previous year. The Company's tally of "millionaire" brands (ie brands that record annual sales in excess of a million cases) rose to 21. This includes its premium grain based McDowells No 1 Platinum, which achieved this distinction in the first year of its launch. USL has become India's largest FMCG Company with retail value of sales exceeding Rs. 34,000 crores.

The Global No. 1 slot achieved by the Company is an outcome of visionary leadership and meticulous execution spanning a gigantic network of manufacturing units, sales locations, brands and pack sizes. Innovation continues to be the norm at USL, and every effort is made to create unique lifestyle experiences for consumers. As the nation captures the demographic dividend of a youthful population, USL too is in the forefront of the race for value.

During the year, the Company has expanded its global reach by entering a number of new markets. New brands have been launched and more are in the pipeline to ensure that USL's product offering always remains fresh and contemporary, meeting the aspirations of an evolving customer base.

This focus on the front end of the business has not come at the cost of the manufacturing and supply chain which are so essential to produce and move the enormous quantities of product. Significant investments have been made into primary distillation, both through acquisition as well as by expansions and greenfield facilities. These new facilities are all multi substrate distilleries and thus provide the Company with enhanced strategic ownership of key inputs as also a natural hedge to cyclical trends in input prices of raw materials such as molasses and grain. By capturing the distillation margin, the Company will also be able to structurally enhance future profitability. Other investments are planned in the future to, not only enhance share of distillation but also in the packaging area. These will ensure sustainable double digit growth.

United Breweries Limited (UBL):

United Breweries Limited (UBL) had an outstanding year, achieving majority market share for the first time in a highly competitive beer market, where every bottle is a high pitched battle with all the world's leading brewers. It is testimony to the quality of the Kingfisher brand offering and the skills of the management team, that the Company has been able to increase share in such an environment.

While Kingfisher Strong continues to rule the roost as the nation's largest selling beer, the launch of the super premium Kingfisher Ultra has met with unprecedented success in each of the markets that it has been launched.

Ultra is priced at a premium to major international brands and features innovations such as an embossed bottle with a flip top crown. These never seen before in India features, have made the brand the favourite of the aspirant consumer.

Kingfisher Airlines Limited (KFA):

Kingfisher Airlines Limited (KFA) is the nation's largest domestic carrier, having served over 12 million passengers across 59 domestic and 8 international destinations, on about 366 daily flights, last year.

The Airline has set new standards of service and customer satisfaction as manifested in the numerous awards, both national and global, that KFA has won in its six years since inception.

The industry continued to benefit from strong growth in passenger traffic on the back of an improving economic environment. Capacity creation has lagged demand growth and this helped to stabilise yields.

Several initiatives covering both revenue enhancement and cost management have begun to take effect.

KFA recorded its first year of EBITDA profits despite the challenges occasioned by grounding of part of the fleet on account of issues with the engines (resolved before the end of the year, in cooperation with the engine manufacturer) and upward trend in fuel costs.

The grounding of 14 Airbus aircraft progressively through the year resulted in a loss of 10% of the domestic capacity. However, through increased aircraft usage and sharply improved productivity, domestic passenger traffic increased by 2.6%. Ten of the 14 grounded planes were re-inducted into service before the end of the year and the rest have also been commissioned since then.

The Kingfisher product is working well in the international markets that the Company serves and several new routes have been launched during the year.

Recognising the unparalleled network and service standards, KFA has become the only Indian airline to be invited to a global alliance. Becoming a member - elect of ONEWorld, the premier global alliance comprising leading names like BA, AA etc is a feather in KFA's cap and will help accelerate the Company's global footprint.

Following on the improved operating performance, the Company negotiated a debt recast with its lenders under which, a part of the bank loans have been converted into Equity and Preference capital, the repayment of the balance loans extended to a nine year term and interest rates reduced. As a part of the whole package, our Company also converted loans extended to KFA into equity. Certain business associates who had advanced funds to KFA have also accepted Optionally Convertible Debentures in lieu of their loans.

Mangalore Chemicals & Fertilizers Limited (MCF):

The financial year 2010-2011 was yet another year of growth and improved performance for Chemicals & Fertilizers Limited (MCF). The Company registered the highest ever turnover and Profit Before Tax, recording an increase of 21% and 33% respectively over the previous year. MCF also achieved a record sale of 1 Million metric tonnes of fertilizers for the second year in a row.

A state-of-the-art Sulphonated Naphthalene Formaldehyde (SNF) plant with an annual production capacity of 21,450 MTs of liquid SNF was commissioned in August 2010. SNF is predominantly used in the construction chemical industry for manufacture of super plasticizers. The demand for the product is expected to grow and the Company can ramp up the production capacity to meet the market needs.

Under its Integrated Nutrient Management (INM) program, the Company has been advocating adoption of a comprehensive approach for achieving improvement in soil fertility and productivity. Under this initiative the Company has been constantly engaged in educating farmers and channel partners on INM techniques that includes soil health management, water management, plant nutrition and plant protection.

As diversification and growth strategy, MCF introduced Plant Protection (PP) Chemicals of reputed pesticide manufactures through its channel partner network during July 2010 and registered a turnover of Rs. 12 crores during the first 9 months of operations. Going forward, the Company plans to also introduce its own brand of PP products for a few select molecules.

MCF continued to engage in various community development activities. During the year 2 specific schemes viz. "Mangala Akshara Mithra" for providing basic infrastructure to rural schools and "Project Eye care" for preventing/ eradicating eye ailments in rural areas were launched which were highly appreciated.

UB Engineering Limited (UB ENGG):

With Government of India's continued focus on infrastructure and power as reflected in increased budgetary outlays, there is tremendous growth potential for the Company.

Despite intense competition in the domestic Transmission and Distribution business, the Company ended the year with a healthy order book of nearly Rs. 1200 crores as compared to Rs. 850 crores in the previous year recording an increase of 39.91%.

Considering the potential for pre-fabricated steel structures, the Company is in the process of setting up a fabrication unit at Chhattisgarh.

UB Infrastructure Limited, a wholly owned subsidiary of the Company is now poised to undertake projects for construction of roads, highways, bridges etc. This entity has already been awarded two road contracts.

The Company is also exploring avenues for overseas business ventures and has now established a Joint Venture Company UB OSTAN (India) Private Limited for manufacture of injection moulds, injection moulding components etc.

UB GLOBAL:

UB Global attained the highest ever profits despite severe economic volatility in its key European markets. This was the result of rationalising customers, prudent foreign exchange management and a conscious climb in the value chain. Trading in wines from South Africa, widened the revenue stream.

On a consistent basis, UB Global has been picking up the best export performance award from APEDA in the Alcoholic Beverages category. For the year, it was honored with the 'Golden Trophy'. Also, this year, the Federation of Chambers of Commerce & Industry conferred on UB Global, the "Star Exporter Award" in Merchant Exporter category.

HE COLLECTION ʹ UB CITY

The super luxury high end Mall ʹ The Collection at UB CITY in Bangalore has transformed the luxury retail landscape in India, and increasingly affluent Indian consumers shop here for a dazzling array of exclusive products. Till the advent of this prestigious Mall, patrons of high-end fashion had not been offered the right setting and ambience in India. The Collection in UB CITY ʹ the first of its kind in India, conceived and developed by the UB Group is spread over 1,25,000 square feet of sheer luxury, designed on the lines of a Venetian palazzo. It comprises more than 40 retail outlets, most of which are international high-end luxury brands as well as nine food and beverages outlets. White Italian marble decorates almost every surface of the mall, while the long corridors are dotted with recognizable designer names on either side.

The brand that symbolizes luxury globally, Louis Vuitton, was the first to open their doors to consumers in Bangalore. Others, like Ermenegildo Zegna, Salvatore Ferragamo, Canali, Etro, Jimmy Choo, Bottega Veneta, Kimaya, B & O, Corneliani, Paul Smith and Diesel occupy space at The Collection. Lifestyle brands such as Good Earth, Daum, Lladro and Rosenthal find numerous clients looking for sophisticated products to adorn their homes. Horologie is represented by names like Mont Blanc, Omega, Rolex and Tag Heuer. Estee Lauder, known for their premium quality cosmetics and skin care products has an exclusive store at this mall. Music concerts, art exhibitions, and many charitable events are hosted at its elegant and exclusive space.

KINGFISHER TOWERS ʹ RESIDENCES AT UB CITY

Finally, Bangalore can boast of upscale residences that will vie with some of the premium addresses in the world. The UB Group's proposed super luxury residential project will come up soon on Vittal Mallya Road within the vicinity of the lush green .

KINGFISHER TOWERS will, undoubtedly, be the most sought after and exclusive residential project to be sold in Bangalore's real estate history. With over seven lakh square feet of saleable area, it will be as tall as UB Towers with over thirty floors, housing 75 flats, with two basements, rooftop helipad and four floors dedicated to parking over 500 cars ͙ the list of firsts is exhaustive.

This will be an exemplary piece of contemporary architecture which will add to the grandeur of UB CITY.

COMMUNTY SERVICE

As part of UB's commitment to society at large, we have consistently initiated steps to improve the lives of the local communities that we engage with by providing primary education, healthcare, conservation of water and energy and renewal of the water tables.

Area of operation

SPRITE

Beverage alcohol

United Spirits Limited (USL) is the largest spirits company in the world by volume, selling 114 million cases for the fiscal ending March 21, 2011.

Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL, the company has 21 millionaire brands (selling more than a million cases a year) in its portfolio and enjoys a strong 59% market share for its first line brands in India. United Spirits' brands have won the most prestigious awards for flavors, ranging from Mondial to International Wine and Spirit Competition (IWSC) to International Taste & Quality Institute (ITQI); more than 115 awards & certificates.

The Company is known to be an innovator in the industry and has several firsts to its credit like the first pre-mixed , the first Tetrapack in the spirits industry in India, first single malt manufactured in Asia and the first diet versions of whisky and vodka in India.

USL has a global footprint with exports to over 37 countries. It has a sizeable presence in India

with distilleries and sales offices all across the country, and a committed team of over 7500 people dedicated to the fulfillment of the company's mission. It has established manufacturing and bottling plants in every state of India. In addition, to deliver its products to customers located anywhere in India, USL has established a robust distribution network covering the whole country.

United Spirits represents the merged entities of the erstwhile McDowell & Co. Limited, Phipson Distillery Limited, United Spirits Limited, Herbertsons Limited, Triumph Distillers and Vintners Private Limited, Baramati Grape Industries Limited, India Limited, McDowell International Brands Limited and Distilleries Limited. The erstwhile McDowell & Co. Limited was first established as a proprietary business in 1826.

USL acquired Balaji Distilleries Limited in 2008. This acquisition gave the company the strategic advantage to consolidate the Group¶s leadership position in a critical, large and growing State like Tamil Nadu. Currently, the procedural formalities are underway for the acquisition which will take retrospective effect from April 1, 2009.

United Spirits acquired (AP)±based, Tern Distilleries, in 2009, in a bid to augment its primary distillation capacity. This is the third manufacturing unit in the region given that one fifth of USL¶s sales volumes come from AP. The current capacity of Tern is 40 Kilo Litres which will be enhanced to 120 Kilo Litres in 24-36 months, subject to Government approvals.

Particulars Total Number Comments 19 of these are millionaire brands and there are Brands 140 about 151 brand variants SKUs 2992 Distillery-State-Brand-Pack combinations Distilleries / Bottling 30 Owned Manufacturing facilities;49 contract 79 Units manufacturing units Depots 48 Break-bulk points for finished goods distribution Retail Outlets 64000 Inclusive of both on and off premise outlets

*USL Millionaire Brands (Those that sell more than a million cases per annum) Whisky Rum Vodka & Gin ‡ ‡ McDowell¶s No.1 ‡ Celebration Rum ‡ ‡ McDowell¶s No.1 ‡ Honey Bee ‡ Old Cask Rum ‡ ‡ Director¶s Special ‡ John Ex-Shaw ‡ Old Adventurer Rum ‡ Blue Riband ‡ Old Tavern ‡ Haywards ‡ McDowell¶s Green Label ‡ Gold Riband ‡ ‡ DSP Black ‡

About Whyte and Mackay

In 2007, United Spirits acquired the Glasgow-based Whyte and Mackay and ramped up its premium scotch and single malts portfolio significantly. Whyte & Mackay is a leading distiller of owning brands including The Dalmore, Isle of Jura, Glayva, Fettercairn, and the eponymous Whyte & Mackay blended Scotch. The Company also owns several other Scotch Whisky brands such as Mackinlays, John Barr, Cluny and Claymore to name a few. Whyte & Mackay also owns four malt whisky distilleries in Scotland and a state-of- the-art bottling facility in Grangemouth with a capacity of 12 million cases per annum.

At a time when global demand for Scotch Whisky is showing strong growth and prices are increasing rapidly, Whyte & Mackay¶s bulk scotch inventory is not only valuable but provides United Spirits the opportunity to meet their own growing requirements in India. Whyte & Mackay recorded sales of 1.68 million cases of W&M brands and 1.56 million cases of third party owned labels (Tesco¶s, Label 5), for the fiscal ending March 31, 2009

About Bouvet Ladubay (Wines Foray) With the acquisition of Bouvet Ladubay in 2006, the UB Group has made a strategic entry into of the wines category. Bouvet-Ladubay, located in the the Loire valley of the Saumur region in France, has a heritage of over 156 years. Bouvet-Ladubay has won many international awards and has also been associated with Art and Theatre, sponsoring the ͞Festival d͛Anjou͟, the ͞Premiers Plans͟ festival (Debut films festival) in Angers, Arcachon, Biarritz, Brest and Mont Doré and the Company has been present at The Cannes film festival for the past five years.

The company currently has a capacity of 8 million bottles per annum, with further scope for expansion when required. After setting celebrations alight across the world in over 38 countries, these fine sparkling wines are now in India becoming both the reason and the means for an unprecedented celebration.

USL͛s Wine Business in India operates through two companies ʹ United Vintners Limited and Limited. UVL imports wines from all over the world to offer a portfolio of wines of different origin, varietals, styles and price points. The current portfolio comprises a selection of some exquisite ͚New world͛ & ͚Old world͛ wines from New Zealand, Australia, Portugal, South Africa and France.

The company has also commissioned a green field project, coming up in Baramati, which will be India͛s best and biggest winery. 6 different ranges will be produced during the first year of operation and 8 more brands will be added over the next 3 years, including manufacturing of premium wines that will go through French barrels. Plans to manufacture sparkling wines using traditional French method (methode champagnoise) and under the technical guidance of Bouvet-Ladubay are also in the pipeline. The wines are marketed under the brand names - ZINZI & FOUR SEASONS.

For its annual production requirement, the company has already entered into long term contractual agreement with local farmers for 500 acres and will enter into contractual agreements for a further 2000 acres of vineyards. Besides, the company will also share its technical expertise with the local farmers of Baramati and help in viticulture. This project will act as a catalyst to the socio-economic development of the local community by generating approximately 2000 direct and indirect job opportunities for the people of Baramati. Simultaneously, it will also promote wine tourism at its winery & vineyards.

Liquid Gold : The 10 Most Expensive in the World

Grain, water, a wooden barrel and a little time. Whisky is a colorful character with an ever-changing spirit. The subject of literature, culture and folklore throughout the world, finicky booze-hounds have long paid a pretty penny for bottles of the most coveted casks. Pour a finger or two and hit the jump to drink in 10 bottles of whisky that truly break the bank.

10. Ladybank Single Malt: $4,700

Rounding out the top of the list is the Ladybank Distillery in Edinburgh, Scotland. Only 300 bottles of the rare Single Malt Scotch are bottled each year, and to obtain one Ͷ you have to become a member of the club. The price of admission? Ͷ about $4,700 a year.

9. The Macallan 1947 Fine and Rare Collection: $6,800

This sherry cask Speyside scotch was bottled for Italy in 1962 before it was repackaged for Macallan͛s Fine and Rare line of whiskies. The distillery used peat in its kilns because of the scarcity and high price of coal during WWII, the 1947 bottle, so this 15 year old has an earthy quality not present in modern Macallans.

8. Chivas Regal Royal Salute 50 year old: $10,000

A swill special enough to be packaged for the 1953 coronation of Queen Elizabeth II, the Chivas Regal Royal Salute is a 50 year old Scotch with smoky anise and raisin flavors. Only 255 bottles were made, 10 of which were destined for America, where collectors eagerly poured out $10,000 each.

7. The Macallan 1939 40 year old Fine and Rare Collection: $10,125

͞Peaty and powerful,͟ with overtones of sweet toffee and dried fruits, Macallan͛s 1939 is a 40 year old first bottled in 1979. In 2002, it was added to the distillery͛s Fine and Rare line and re-bottled. It can be found today for around $10,125.

6. Glenfarclas 1955 50 year old: $10,878

Wealthy tasters are warned to overlook this richly scented 50 year old Speyside at their own ͞peril.͟ Spicy and silky with a sweet start, this is the oldest batch ever bottled by the Glenfarclas distillery.

5. Dalmore 50 Year Old Decanter: $11,000

Only 60 crystal-cut bottles of this Highland single malt were produced. Filled in 1978, this dark sherry- aged Dalmore has a reputation for being intense and deeply flavored and is considered by many aficionados among the best 50 year olds in the world.

4. Macallan 55 Year old Lalique Crystal Decanter: $12,500

The eye-catching crystal bottle of Macallan͛s 55 year old Lalique was based on a 1910 perfume bottle designed by Rene Lalique . Exotic, with hints of peat smoke, the taste is smooth with lingering citrus overtones.

3. Glenfiddich 1937 Rare Collection: $20,000

Rare doesn͛t describe it. Only one bottle of Glenfiddich͛s 1937 Rare Collection was ever produced, and it just might be the oldest bottle of whisky in the world. It was snatched up at a 2006 auction for a bargain $20,000.

2. Dalmore 62 Single Highland Malt Scotch: $58,000

Only a dozen bottles of Dalmore 62 single malt were corked in 1942. One night in 2005, a man bought a bottle for $58,000, and downed it with five of his buddies.

1. The Macallan 1926 Fine and Rare: $75,000

͞Dry and concentrated͟ Ͷ what else would you expect from one of the most expensive whiskies in the world? Help yourself to a little licorice aftertaste. In 2005, a South Korean businessman paid $70,000 for a bottle of Macallan͛s 1926, the finest and rarest of the Fine and Rare.

WINE

KINGFISHER BOHEMIA

A taste nurtured in Cape Floral Kingdom, South Africa, one of the world¶s oldest, most eco- friendly wine growing regions, Kingfisher Bohemia is enriched by a 500-million year old soil and the unique climate typical of that area. The resulting flavour is fruity, delectable and goes well with any food or occasion.

Kingfisher Bohemia is the result of a partnership between Kingfisher and The Company of Wine People (COWP), a key player in the industry, both locally and abroad.

New Flavours, New Good Times Kingfisher Bohemia can be enjoyed in three fine varieties - red, white and rosé.

Pinotage An uncomplicated, easy drinking Pinotage, filled with ripe berry fruit, ending with a soft sweet finish.

Chenin Blanc Chardonnay This masterfully blended has lovely pineapple and ripe melon flavours on the nose, which follows through to a limy, full middle-palate and finishes in crisp freshness.

Pinotage Rosé Live strawberry and violet aromas combine with the fresh fruity taste to yield a light easy drinking wine.

Bouvet Ladubay

With the acquisition of BOUVET-LADUBAY in July 2006, the UB Group has made a strategic entry into the wines category. BOUVET-LADUBAY based in Saumur in the Loire Valley region in France, has a heritage of over 160 years. BOUVET-LADUBAY has won many International Awards and Recognition for the longstanding quality of its fine Sparkling Wines. ( 360 Medals, 100 Gold Medals until today).

BOUVET-LADUBAY considers Wine as Lifestyle Art the French ͞Art de Vivre͟ & has always been partnering with Arts : Contemporary Art through its Art Center, Theatre through its 19th Century Theatre, Cinema through numerous events during each year Cannes Film Festival for instance for over 15 years.The Company currently produces 5.5 Million bottles per annum and has a 8 Million bottles production capacity through its new Winery BOUVET-LADUBAY Full Metal inaugurated in December 2008 by Dr Vijay Mallya, Mr Ravi Nedungadi and his Excellency Ranjan Mathai, Indian Ambassador to France.

Four seasons

Savour the delight of Four Seasons. Whether it is the sprightliness of a fresh spring morning, the joyous warmth of a glorious summer afternoon, the tingling nip of a crisp autumn twilight or the biting chill of an icy winter night, to everything there is a season. And to every season, there is an experience. An experience captured by Four Season͛s selection of the finest Indian wines.

The UB Group has varied business interests, the core being alcoholic beverage (spirits & ) and aviation. At a time when wine consumption in India is growing at a rapid pace and is fast approaching international levels, the Group͛s Spirits Company ʹ USL has already made a fresh entry into this business.

USL͛s Wine Business in India operates through two companies ʹ United Vintners Limited and Four Seasons Wines Limited. Today, under the guidance of Mr. Abhay Kewadkar, Business Head and Chief Winemaker, the Group plans to take the industry to new heights.

UVL imports wines from all over the world to offer a portfolio of wines of different origin, varietals, styles and price points. This is to ensure a wide choice for the consumer and to initiate interest and awareness in the existing consumer base. The current portfolio comprises a selection of some exquisite ͚New world͛ & ͚Old world͛ wines from New Zealand, Australia, Portugal, South Africa and France.

Four Seasons Wines Limited produces wines from grapes grown around Sahyadri valley in , India and at its state-of-the-art Four Seasons winery near Baramati, around 65 kms from Pune. The company aims to drive interest in wines and wine consumption by offering good quality wines at reasonable price points and packaging options; and, through education and engagement. The wines are marketed under the brand names ZINZI & FOUR SEASONS.

Four Seasons Wines Limited is in the process of planting 300 hundred acres of its own vineyards around the winery. For its annual production requirement, the company has already entered into long term contractual agreement with local farmers for 500 acres and will enter into contractual agreements for a further 2000 acres of vineyards.

Besides, the company will also share its technical expertise with the local farmers of Baramati and help in their viticulture. This project will act as a catalyst in the socio-economic development of the local community by generating approximately 2000 direct and indirect job opportunities to the people of Baramati. Simultaneously, it will also promote wine tourism at its winery & vineyards.

BEER

United Breweries Limited (UBL)

The beginning of what is today The UB Group is rooted in the flagship company, United Breweries Limited, (UBL) also referred to as the Beer Division of the UB Group. Led by Mr. Kalyan Ganguly, President & Managing Director, it has around 48% market share in the country.

United Breweries Limited has an association with brewing, dating back over five decades; starting with 5 breweries in South India in 1915. From bullock cart-loaded barrels or 'hogsheads' of frothing ale, the Beer business has gone on to become the undisputed 'king' in the Indian beer market.

Here innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand and exploiting it to the hilt on the other with concerted emphasis on quality.

UBL today boasts an impressive spread of owned and contract manufacturing facilities throughout the country. Quality and hygiene are the key elements of the United Breweries' manufacturing philosophy. To this end, the Central Scientific Laboratory (CSL), headquartered at Bangalore sets standards for all its breweries. Quality Management Systems laid out along the lines of ISO 9000 are strictly adhered to controlling quality at every stage of production, from raw materials to the end product. Also, besides controlling the production process, the CSL analyses the Company's beer taken off the market shelves all over the country, the competition's beers and beers across the world. These beers are tested as per the standards laid down by the European Brewery Convention on 40 different parameters. By these standards, United Breweries' beers don't just equal, but even surpass, several Dutch and American beers.

Its flagship brand 'Kingfisher', has achieved international recognition consistently and has won many awards in International Beer Festivals. Kingfisher Premium Lager beer is currently available in 52 countries outside India and leads the way amongst Indian beers in the International market. It has been ranked amongst the top 10 fastest growing brands in the UK.

AVIATION

Kingfisher Airlines Limited, is India's largest airline operating more than 400 flights a day and having a wide network of destinations, with regional and long-haul international services. Kingfisher is one of six airlines in the world to have a five-star rating from Skytrax. In May 2009, Kingfisher Airlines carried more than a million passengers, giving it the highest market share among airlines in India.

The airline started operations on 9 May 2005. At the launch of the airline, Dr. Mallya said "we are committed to achieving our ambition of making Kingfisher Airlines India's largest private airline both in capacity and market share by 2010. The airline ushered in a new era of luxury in India's domestic aviation sector with its brand new aircraft with stylish red interiors, and smartly dressed crew and ground staff. Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems on every seat with guests being able to watch live TV in-flight.

Kingfisher took to the international skies, giving its guests a world-class experience. The brand-new fleet incorporates the latest technology and each aircraft is fitted with a personalized in-flight entertainment system and top quality programming content from around the world creating an environment to cherish.

Within a short span of four years, Kingfisher Airlines has received many international and national awards.

‡ NDTV Profit Business Leadership Award for Aviation - Kingfisher Airlines awarded by NDTV.

‡ Brand Leadership Award - in the service and hospitality segment against several acclaimed hotels, leading banks and other airlines.

‡ Economic Times Avaya Award 2006 for Excellence in Customer Responsiveness - The prestigious Award is Presented by the highly acclaimed Business Daily, Economic Times.

ͻ India's No. 1 Airline in customer satisfaction - Business World

ͻ Rated amongst India's most respected companies - Business World.

ͻ Rated amongst India͛s 25 Innovative Companies - Survey conducted by Planman Media.

ͻ The Best Airline and India͛s Favourite Carrier - In a Survey conducted by IMB for .

‡ Best New Domestic Airline for Excellent Services and Cuisine - Pacific Area Travel Writers Association (PATWA) the biggest travel writers¶ organisation, representing members from 70 countries across the globe, that conducts independent annual surveys across various industries related with Travel and Tourism in order to select the best in each category.

‡ Service Excellence for a New Airline - Skytrax, a UK based specialist global air transport advisor.

‡ Ranked Third in the survey on India¶s Most Successful Brand launch of 2005 - under the Brand Derby Survey conducted by India¶s leading business daily - Business Standard. ͻ Buzziest Brands of 2005 - Ranked amongst the Top Ten buzziest brands of 2005 & 2006 across product categories, in the survey conducted by agencyfaqs.com and Brand Reporter.

ͻ Best New Airline of the Year - Centre for Asia Pacific Aviation (CAPA) Award in the Asia - Pacific and Middle East region.

ͻ Rated amongst Top Ten Internet Advertisers - Yahoo India.

ͻ Rated amongst the top ten in the Best Television Commercial Jingles - NDTV.

KINGFISHER Airlines Network Map

FERTILIZER

Mangalore Chemicals & Fertilizers Limited

Mangalore Chemicals and Fertilizers Limited (MCF), with a turnover of over Rs.2,470 Crore (FY 2008- 2009), is the only manufacturer of chemical fertilizers in the state of Karnataka. The factory is strategically located at Panambur, 9 km north of Mangalore City, on the banks of the Gurpur River, in front of the New Mangalore Port. The plant is well connected, both by rail and road. The West Coast National Highway (NH-l7) from Kochi to separates MCF from the New Mangalore Port.

The Company is a part of the UB Group with Group shareholding of 30.44%. Dr. Vijay Mallya is Chairman of the Board of Directors. The operations are managed by a team of highly dedicated and experienced professionals.

The New Mangalore Port is an all-weather port capable of handling ships up to 30 feet draft. Naphtha, Fuel Oil, Ammonia and Phosphoric Acid - the main raw material are obtained through the port. The plant site is well linked, both by rail and road.

The Company has capacity to manufacture 2,17,800 MT Ammonia (intermediate product), 3,79,500 MT Urea, 2,55,500 MT Phosphatic Fertilizers (DAP & NP 20:20:00:13), 15,330 MT Ammonium Bi-Carbonate (ABC) and 33,000 MT Sulphuric Acid (SAP) annually.

The design and engineering of the Ammonia/Urea plants was done by Humphreys & Glasgow Limited, London, a leading international firm in the fertilizer field and their associates, Humphreys & Glasgow Consultants Pvt. Ltd., Bombay. (The firm is now merged with Jacobs Engineering, USA). The Phosphatic plant is designed and engineered by Toyo Engineering Corporation, Japan. PDIL and Furnace Fabrica the Indian firms were involved in the construction of ABC and SAP respectively.

The construction work started with the first pile driven on October 15, 1972 by the then Chief Minister, Shri D. Devaraj Urs.

The Ammonia/Urea plants were commissioned in March 15, 1976.

1976 - Ammonia & Urea production commenced

1982 60 tons per hour auxiliary boiler installed - Ammonium Bi-carbonate plant commissioned

1984 - Purge gas recovery unit installed

1985 - Captive power plant commissioned

1986 - Di-ammonium phosphate plant went on stream

1993 - 2.5 Million Gallons reservoir constructed

1999 - Marketing of Granulated Fertilizers

2002 - Installation of Pipe Reactor. 20:20:0 & 16:20:0 complexes produced Marketing of micro nutrient - Zinc Sulphate

2003 - SAP R/3, integrated software system, OPERATION MITE, implemented. MCF receives ISO 14001 Certification

2005 - Receives OHSAS certification

2006 - Installation of 100 TPD Sulphuric Acid plant

2008 Installation of Imported Fertilizers Handling Unit -

ENGINEERING

UB Engineering-Fabricating Dreams & Building Reality

UB Engineering- the UB Group's Engineering Division - is one of the foremost Indian engineering companies in the field of installation of industrial plants. UB Engineering's activities are strongly focused on the Turnkey Division for projects in Power, Fertilizers, Oil & Gas, Fire Fighting, Effluent Treatment, Agrotech and other sectors like - concept to commissioning, on-site fabrication, installation, overhauling and maintenance. The range of its operations and concept to commissioning services combined with excellent track record in industrial construction worldwide has allowed UB Engineering to cut across geographical and political boundaries.

Fully experienced in erecting plants running into millions of dollars in India and abroad, specialised multi-disciplinary teams adapt their skills to engineering and constructing smaller and medium size plants with speed and efficiency.

"UB Engineering Limited was recently awarded ISO 9001:2000 Certification for its operations covering Installation, Erection, Commissioning, Testing and Maintenance of Mechanical Projects. During the financial year 2004-05, the company recorded a turnover of Rs.150 Crore. The company achieved a turnover of Rs.162 Crore during the first 3 quarters of 2005-06 as against the previous year's annual turnover of Rs.150 Crore. The Company has already booked orders worth Rs.257 Crore upto January 2006 during the year 2005-06."

One of the foremost Indian engineering companies in the field of installation of industrial

plants.

Strongly focused on the Turnkey Division for projects in Power, Fertilizers, Oil & Gas, Fire Fighting, Effluent Treatment, Agrotech and other sectors.

Bagged a $21 million contract for installation of electro-mechanical and instrumentation works in Abu Dhabi.

Ownership pattern

Competitors

Name Last Price Market Cap. Sales Net Profit Total Assets (Rs. cr.) Turnover

United Brewerie 444.00 11,708.08 3,013.21 147.29 1,831.10

United Spirits 599.35 7,839.20 6,422.72 403.04 8,712.12

Radico Khaitan 109.95 1,459.08 996.46 72.80 1,142.59

Tilaknagar Ind 35.85 413.65 351.78 34.90 803.94

Globus Spirits 105.40 242.40 - - 256.96

Empee Distiller 69.95 132.97 871.80 20.19 411.61

GM Breweries 69.55 65.09 231.69 21.04 106.22

Pioneer Distill 44.55 59.64 50.60 -29.11 192.78

Ravi Kumar Dist 16.30 39.12 - - 155.22

Infrastructure

Achievement

Future prospect

SWOT Analysis

I. Strength

a) Production capacity b) Premium Quality Product c) Experience Management team d) Well established Consumer market. e) Widely recognized brand. f) Consolidating growth.

II. Weakness

a) Less Manpower b) Inefficient Distributors c) Less Market Visibility d) Diversification. e) Heavy taxation & government control of beer distribution.

III. Opportunities

a) Regional Expansions b) Production Volumes c) Higher Profits d) Increased Market share e) Collaboration with foreign companies. f) R&D since the company has a strong capital.

IV. Threats

a) Competitors High Spends b) International Players c) Government Laws d) Taxes & Tariffs e) Stiff competition by the foreign breweries entering into India. Mc7- Framework

Financial Analysis

Part B

Product design and study

Introduction to study

Project title

Understanding Operation on draught beer

Statement of the problem

Objective of the Study

Scope of the study

Research methodology