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  • The UB Group

    PRESENTATION ONMcDOWELL & COMPANYUNITED BREWERIES LTD

    27th October 2005

  • UB Group (India) 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

    The UB Group- An introductionBeer : 48% market share nationally Sold in over 52 countries Indias 1st global consumer brand - KingfisherSpirits : 54% market share in the domestic market 2nd largest player in the world Both businesses poised for spectacular growth Compelling demographics Rapid rise in disposable income Changing lifestyle & spending pattern Slow but sure dismantling of regulatory controls

    Indias leading drinks groupUB Group (India)

  • The Market for Beverage AlcoholThese regulatory hurdles constitute an entry barrier to the industry

    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.

    UB Group (India)

  • The Indian MarketThe UB Group enjoys a unique advantage as theLeader in both Spirits and Beer SegmentsRe-distribution structure Government market (65%) State government is the sole distributorAuction market (16%) State government auctions geographical territories which has led to monopolies / cartelsFree market (19%) Through trade licensesBargaining power in the distribution network is commanded by players with premium brands, large volume base and product range

    UB Group (India)

  • The Indian Market Spirits Market -India is a 112 million cases market, growing at around 9-10% p.aArmed Forces another 12.5 million casesWhisky dominates 62%Low Spirits consumption Per capita < 2.1 liters p.aChanging lifestyle, exposure to global trends fueling growthMNCs entered 10 years ago, but yet to emerge stronglyIndustry 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 WallaceShaw 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 2005Stakes 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

  • 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 McDSwap 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

    Restructuring Mechanics UB Group (India)

  • 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 LimitedMcDowell International Brands LimitedZelinka Limited Shaw Wallace Distilleries Limited together with its subsidiaries Non-spirits Investments being divested into McDowell India Spirits Limited, a wholly-owned subsidiary

    Restructuring Process Status ReportUB Group (India)

  • UB Group (India)MergersupdateFiling of schemes with Stock exchanges completedSchemes to be filed with courts 1st week of December05Court convened meetings- Mid JanuaryFinal hearing by Courts End March 06Filing of orders with RoC and listing by end April 06

  • Sales Performance HYI -- FY06UB Group (India)

    CompanyLineMillion cases% GrwthHY-I FY04HY-I FY05McDowellMain line9.3911.1619%TOTAL12.3913.519%

    CompanyLineMillion cases% GrwthHY-I FY04HY-I FY05UNITED SPIRITSMain line18.8323.3324%TOTAL27.1330.1711%

  • Resultant StructureMCD (Spirits)UBHL & AssociatesPublicX%z%Trusty%MCD(Investments)*UBHL & AssociatesPublic42.47%57.53%* Includes non-spirits investments Aventis, Mangalore Chemicals, UBHL, UBL etcUB Group (India)

    McD Results Sep05

    Sheet1

    Rs Crores

    Rs CroresUBGSWCTotal

    YoY20052004

    Net sales17%630.57541.2Capex term Loans000

    Cost of goods Sold400.2663%337.3262%Acquisition Loans0

    staff cost41.687%41.578%

    Advt & Sp36.726%38.847%Working capital0

    Other overheads79.4313%83.5815%

    E B I T D A82%72.4911%39.907%Fixed Deposits0

    Interest /Finance cost36.7415.4Unsecured Loans0

    000

    Depreciation7.497.86

    Profit before Tax70%28.264%16.653%

    Cash flow

    Tax12.266.73

    Rs Crores

    Profit after Tax61%16.003%9.922%Profit before Tax28.25

    Add:Depreciation7.48

    Rs Crores35.73

    McDUSLLess:Taxes paid8.46

    Term Loans57.23110.4627.27

    Term Loans375.99

    Acquisition LoansHL157.83157.83Working capital45.90

    SWC471.421232.65449.16

    Application

    Working Capital loans230.37376.66Fixed assets9.08

    InvestmentsSWC370.05

    Fixed Deposits47.9260.29Net Current assets48.09

    Loan Repayments21.94

    Unsecured Loans76.0876.8449.16

    Total1040.852014.69

    Rs CroresDeficit0

    McDowellU S LVolume in Lacs cases

    Net sales630.57940.9Prev YearBudgetActualsAch %GTH %

    2005-062004-05EBDITA72.4911%120.6113%I Line91.28107.14106.81100%17%

    Direct Sales76.6773.833.85%P B T28.264%33.194%II Line17.468.257.9296%-55%

    Royalty52.2343.9918.73%Franchise12.5014.5715.53107%24%

    Service Sales18.6719.21-2.81%Total121.24129.96130.26100%7%

    Volume in Lacs cases

    Prev YearBudgetActualsAch %GTH %

    0.8617594255

    North16.7115.3714.494%-14%

    East14.0714.6415.29103%9%

    west10.3311.5912.02104%16%

    Prev YearBudgetActualsAch %GTH %South69.1176.6678.16102%13%

    McD No 1 Whisky25.6329.0230.23104%18%C S D11.0311.5010.3890%-6%

    McD No 1 Brandy23.227.4227.97102%21%Total121.25129.76130.25100%7%

    Celebration Rum20.2922.1321.7898%7%

    Signature1.481.982.04103%38%

    Quaterly

    Rs Crores

    YoY20052004

    Net sales14%304.21266.88

    Cost of goods Sold188.6162%166.5362%

    staff cost19.696%21.118%

    Advt & Sp19.516%16.336%

    Other overheads39.6613%43.2916%

    E B I T D A87%36.7412%19.627%

    Interest /Finance21.818.06

    Depreciation3.823.68

    Profit before Tax41%11.114%7.893%

    Tax5.493.45

    Profit after Tax27%5.622%4.442%

    S.N.Prasad:net of other ncome5.07 cr

    S.N.Prasad:net of other income for the quaterter

    Sheet2

    Sheet3

  • UB Group (India)United Spirits Sep 05

    Sheet1

    Rs Crores

    Rs CroresUBGSWCTotal

    YoY20052004

    Net sales17%630.57541.2Capex term Loans000

    Cost of goods Sold400.2663%337.3262%Acquisition Loans0

    staff cost41.687%41.578%

    Advt & Sp36.726%38.847%Working capital0

    Other overheads79.4313%83.5815%

    E B I T D A82%72.4911%39.907%Fixed Deposits0

    Interest /Finance cost36.7415.4Unsecured Loans0

    000

    Depreciation7.497.86

    Profit before Tax70%28.264%16.653%

    Cash flow

    Tax12.266.73

    Rs Crores

    Profit after Tax61%16.003%9.922%Profit before Tax28.25

    Add:Depreciation7.48

    Rs Crores35.73

    McDUSLLess:Taxes paid8.46

    Term Loans57.23110.4627.27

    Term Loans375.99

    Acquisition LoansHL157.83157.83Working capital45.90

    SWC471.421232.65449.16

    Application

    Working Capital loans230.37376.66Fixed assets9.08

    InvestmentsSWC370.05

    Fixed Deposits47.9260.29Net Current assets48.09

    Loan Repayments21.94

    Unsecured Loans76.0876.8449.16

    Total1040.852014.69

    Rs CroresDeficit0

    U S LVolume in Lacs cases

    Net sales957.22Prev YearBudgetActualsAch %GTH %

    2005-062004-05Cost of goods Sold477.2251%I Line91.28107.14106.81100%17%

    Staff Cost80.378%

    Direct Sales76.6773.833.85%Advertisement & Sp107.5811%II Line17.468.257.9296%-55%

    Other overheads169.8918%

    Royalty52.2343.9918.73%EBITDA122.1613%Franchise12.5014.5715.53107%24%

    Interest/Finance cost75.39

    Service Sales18.6719.21-2.81%Depreciation12.21Total121.24129.96130.26100%7%

    P B T34.564%

    Prev YearBudgetActualsAch %GTH %Volume in Lacs cases

    Prev YearBudgetActualsAch %GTH %

    McD No 1 Whisky25.6329.0230.23104%18%0.8617594255

    North16.7115.3714.494%-14%

    McD No 1 Brandy23.227.4227.97102%21%

    East14.0714.6415.29103%9%

    Celebration Rum20.2922.1321.7898%7%

    west10.3311.5912.02104%16%

    Signature1.481.982.04103%38%

    South69.1176.6678.16102%13%

    C S D11.0311.5010