THE UB GROUP

Corporate History and Structure

The UB Group

The UB Group was established in 1947 when the late Mr. Vittal Mallya
(Dr. Vijay Mallya’sfather) acquired United Breweries Limited.

In the period 1950 to 1960, United Breweries expanded rapidly and made
numerous acquisitions.It entered the spirits business by acquiring
McDowell in 1951, and launched its flagship brand,Kingfisher Lager Beer,
in 1955. Mr. Vittal Mallya started creating a global conglomerate by moving
into agricultural-based products and medicines by acquiring Kissan
Products and forming a long-term relationship with Hoechst AG of
Germany to promote a company today known as Aventis Pharma.In the
mid-1970s, when liquor prohibition seemed a possibility in India, the late
Mr. Vittal Mallya acquired breweries and distilleries across the country. The
significant amount of financial risk taken by Mr. Vittal Mallya in acquiring
these breweries and distilleries enabled United Breweries to attain a market
leadership position at the end of the prohibition threat.

The UB Group has continued making acquisitions and also diversified

into aviation, fertilizers, engineering, infrastructure, media (through the
“NDTV Good Times” channel) and international trading.

The UB Group Today

The UB Group has a presence in several countries across Europe, North
America, the Caribbean,
the Middle East and Asia, with diverse interests in brewing, distilling,
aviation, property development,engineering, fertilizers and information
technology. It is also the largest Indian manufacturer of liquorproducts
(beer and spirits), which accounts for a substantial portion of the UB
Group’s turnover,according to Euromonitor. Under the leadership of Dr.
Vijay Mallya, USL has become the world’s third largest manufacturer of
spirits and UBL has 53% of the market share in India.

USL, the flagship spirits company of the UB Group, is among the largest
manufacturers of IMFL in India and grew to its size through a series of
acquisitions. See “Our Investments — Business Operations of our Core
Investments — USL” on page [●] of this Preliminary Placement Document.

As of September 30, 2007, USL controls about 60% of the domestic market
in first-line brands, and is the 3rd largest player in the world by sales
volume. USL owns nearly 150 brands, 15 of which are “millionaire brands”.
The following brands of USL are among the “Top 100 Spirits Brands
Worldwide” list, put forth by Impact International: Bagpiper, McDowell’s No.
1 Whisky, Celebration Rum, McDowell’s No. 1 Brandy, Director’s Special,
Old Tavern and Hayward’s Whisky.

UBL, the flagship brewing company of the UB Group, is among the largest
brewing companies in India. Its brands are currently widely available both
within and outside of India.

UBL owns several breweries across India. In April 2002, S&N entered into a
Shareholders’ Agreement with certain members of the Promoter Group with
respect to creation of UBL. We intend for the UBL-S&N relationship to give
the Kingfisher beer brand a boost in overseas markets through Scottish &
Newcastle’s wide distribution network. Scottish & Newcastle will also
introduce its brandsin the Indian market 179

We have recently pioneered the construction of UB City, one of the largest

mixed-use developments of real estate in the heart of Bangalore, and which
is intended to be the new headquarters of all of the companies in the UB
Group. The construction of UB City is almost completed.

The UB Group also owns interests in MCF, makers of the “Mangala” brand
of fertilizer that is popular among farmers in South India.
The UB Group owns interests in UB Engineering, which specializes in the
installation of industrial plants. Its turnkey division has worked on projects
in India and overseas in the areas of power, fertilizers, oil and gas, fire
fighting, effluent treatment plants, agrotech and other sectors, from
concept to commissioning, on-site fabrication, installation, overhauling
and maintenance.

In May 2005, the UB Group launched KFA in India. Within 29 months of its
launch, KFA expanded its fleet to 22 new Airbus A320 aircraft and 12 new
ATR 72-500 Aircrafts which offer around 1,400 flights weekly across India.
KFA is planning a possible corporate restructuring with DAL, which would
provide it with access to the low-cost carrier market.

In May 2007, the UB Group purchased a 26% interest in DAL, which was
increased by 20% to 46% in October 2007. DAL runs Deccan, a low-cost
scheduled carrier, as well as Deccan Aviation, a chartered aircraft service.

Today, the UB Group is one of India’s largest corporates with a turnover in

excess of Rs.77,800 million for fiscal 2007.

The UB Group’s International Presence

Mendocino Brewing Company Inc., located in California, is a pioneer in the
American Craft Brewing, or “micro-brewing,” trend. It has two breweries,
one north of San Francisco, California and the other at Saratoga Springs,
New York. Red Tail Ale and Blue Heron Pale Ale are two of Mendocino’s
popular brands.

UBSN Limited, based in Faversham, Kent (United Kingdom), is a wholly-

owned subsidiary of Mendocino Brewing Co. Inc. UBSN Limited has an
exclusive licensing arrangement with UBL for brewing and of distributing
Kingfisher in Europe and Canada. UBSN Limited predominantly sells
Kingfisher in the United Kingdom, where it has a large share of the market
for ethnic Indian restaurants and food and beverage outlets.
Business Interests of UB Group
Beverage Alcohol:
The UB Group is 3rd largest spirits marketer in the world, with overall sales of 60
million cases. The company offers 140 brands at varying price points. Some of
the famous brands of the UB Group are: Bagpiper Whisky, McDowell's No.1
Whisky, Director's Special Whisky, McDowell's No.1 Brandy and McDowell's
Celebration Rum.

Pharmaceuticals:
The group's company Aventis Pharma Limited is the second largest
pharmaceutical multinational in India. It develops and markets branded
prescription drugs and vaccines.

Media:
The UB Group also has a shareholding in Asian Age Holdings Ltd, the company
that owns and manages daily newspaper, The Asian Age.

International Trading:
The Group's company UB Global Limited is a recognized export house engaged
in the export of Beer, Spirits, Leather Footwear and Processed Foods. The
Company also exports Pharmaceutical Products and customized perfumeries.

Fertilizer:
Mangalore Chemicals & Fertilizers Limited is under UB Group's management. It
has a manufacturing capacity of 2,17, 800 MT of Ammonia and 3,80,000 MT of
Urea.

Research & Development:

Vittal Mallya Scientific Research Foundation (VMSRF) was established in 1987
with the objective of developing newer and novel technologies that will have
substantial application in industry and health care. The foundation is it is
recognized by the Departments of Scientific & Industrial Research (DSIR), Dept.
of Biotechnology (DBT), Council for Scientific and Industrial Research (CSIR)
and the Ministry of Finance, Govt. of India.

Aviation:
UB Group entered aviation sector in 2005 with the
launch of Kingfisher Airlines Limited. Kingfisher Airlines
has captured an impressive market share and has
established a niche identity for itself. The airlines
recently acquired 25% stake in Deccan Airlines.

BOARD OF DIRECTORS AND SENIOR MANAGMENT

As per the prescribed for corporate governance by SEBI, our compony was
required to implement the corporate governance code in the financial year 2001-
2002.howeaver ,as a proactive step,our company introduced several initiatives
on corporate governace well before our company was enjoined to do so under
the said guidelines.

MANAGEMENT

UBHL is managed by board of directors, and management team consisting of

head of finance , internal audit, taxation, infrastructure declopment, and trading
and human resourses.

BOARD OF DIRECTORS

We currently have directors on our Board

The following table seat the detai of our board of directors as of the date of this
prilimnary place ment document.

NAME DESIGNATION AGE

1. DR. VIJAY MALIYA CHIRMAN: 51

2. MR. N . SHRIVASAN DIRECTOR: 76
3. MR.SHRIKANT G. RUPAREL DIRECTOR: 66
 4. MR.P.A.MURLY DIRECTOR: 49
5. MR.A HARISH BHAT DIRECTOR: 53
6. MR.SIDHARTH V.MALAYA DIRECTOR: 20
7. PIYUSH G. MANKAND DIRECTOR: 62
8. B.S.PATIL DIRECTOR: 63
9. R.N.PATIL MANAGING DIRECTOR: 51

BEER and SPIRITS Industry

Board committee
Audit committee
Mr.N. Srivinasan chairman
Mr.shrikant g ruparel member
Mr.A.hrish bhat member
Mr.B.S. patil, member

REMUNARETION/COMPENTION COMMITTEE

Mr. shrikant g ruparel chairman

Mr. N. Srinivasan member

Shareholders/investors grievance committee

Mr shrikant g ruparel chairman

Mr.N.Shrinivasan member
Mr.R.N. pillai member

OTHER BOARD COMMITTEES

Genetal committee of directors

Mr.N srinivasan chairman

Mr.P A Murali member
Mr.A Harish bhut member

INDIAN SUBSIDIARIES
 • KFA Limited
• KFR
• Kingfisher Aviation Training Limited
• UB Electronic Instruments limited
• UB Infrastructure Projects Limited
• UB International Treding Limited
• Kingfisher Training Academy Limited
• City Properties maintenance company Banglore Limited

FOREIGN SUBSIDIARY COMPANY

• Rigby International Corp.

• Nited Breweries of America., Delaware.
• Inversiones Mirabel, SIA
• McinoBrewing Co.inc. USA
• United Breweries International (UK) Limited
• UBSN Limited
• Relata Brewing Company, LLC
• UB Overseas Limited
• Rubic Technologies Inc, USA
• UBHL (BHI) Limited

IMPACT OF EXTERNAL ENVIRONMENT

As point out earlier, every company has to work within a framework of

certain environment forces , and there is a continuous interaction between the
org and its environment. The interaction suggest a relationship between two. This
relationship can be analysed in three ways. First, the org can be thought of as
an input output system. It takes various input-human,capital,technical-from the
environment. This inputs are transforned to produce output – goods , services,
profit-which are given back to environmet. Thus,the org merely performs the
function of input-output mediator.in this process , what kind of input should be
taken or output given will be determine by the env. In its interaction with the
internal factor of the org. second, the org can be taken as the center focus for
realizing the contribution of UNITEDBEVERAGE GROUP, both within and
outside the org. when this group contribute to the well being of the org. they must
have legitimate share in org output. This group may be employees , consumer ,
supplier, shareholder, govt , and the society in general. Thus the org functioning
will be affect by the expectation of this group and the org has to take this factor
into account. Third, the org can be treated as operating in environment
presenting opportunity and threats to it.

OPERATION OF STRATEGIES IN WADIA GROUP

 CORPORATE LEVEL
Issues involving : resource mobilization, iffective use of resoursis , merger&
acquisition, proper management of investment and earnings.

BUSINESS LEVEL
Strategic business unit : air lines, research, training, electronics &
engineering, infrastructure managment.

FUNCTIONAL LEVEL
Issue involving: technical, marketing, finance, H.R., research, corporate
affairs, legal & secretarial.

MERGER AND JOINT VENTURE

UB Engineering Limited is the group's engineering business arm. It undertakes
EPC Projects, Infrastructure, On-site fabrication of structures, Installation, Testing
and Commissioning of Electrical and Mechanical Equipments, Piping etc. for
large Industrial projects such as Power, Refineries, Steel, Cement, Fertilizer,
Petrochemical and Desalination Projects. The company was initially established
as Western India Erectors in 1963 and came under the UB Group in 1988.

The group entrance to the IT sector had also been marked by the formation
of UBICS, Inc. The company provides IT consulting, services and professional IT
products to business companies.

In August 2007, the group made a first-of-its-kind media alliance for the
promotion of NDTV Good Times, a lifestyle television channel run by NDTV.

One of the world leaders in the food industry,there are some of the laurels it
possesses:

• Worldwide in beverage products

• Worldwide spred in bottaled water
• Worldwide infrastructure
 KINGFISHER

PROFILE
The beginnings of what is today The UB Group are 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.
Millennium Alcobev Pvt Ltd., (MABL), is the Joint Venture Company in which UB along with
its subsidiary and Scottish & Newcastle of the UK have equal stake of 50%.

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

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.

MARKET SHARE
The year saw our brands consolidating their leadership in the market. Against an industry growth
of 14% we have recorded growth of 18% thereby increasing the combined market share of UB
Group to over 50%.

The largest selling Beer in India

Commanding a 29% market share in the country

One out of every 4 bottles of beer sold every second in India

Available in 52 countries across the globe

The first among Indian brands to launch its own range of designer wear

Kingfisher, the bird is known for its keen instinct, and perfect aim. It zeros on its
target with unfaltering focus. It is a very vibrantly coloured bird. All of its colours
represent energy, youthfulness, enthusiasm, freedom with a touch of formality
and discipline. No wonder, that this bird with an eye for right focus and an aim
for succeeding in its attempt became the mascot for The Kingfisher brand of
Beer from the stables of UB group.
Since the launch, Kingfisher Beer has become one of the largest selling beer brands in the world.

"It's flying" and the mood is upbeat - both within the Company and among consumers.

The new look designed by the UK based packaging specialists, Claessens, is representative of
the brand in full flight, in a supportive environment. It reflects the energy, youthfullness and
freedom that are characteristic of the brand's target consumer and reiterates its contemporary
positioning.

ETOP Analysis:

Environmental sector Impact

Socio economic (+)opportunity (-)threat

(+)continued focuse on infrastructure
devlpoment including power supply for
Industry, transport
(-)technical resource constraints
Technological (+)Higher growth in standerdization and
Product upgration
Government (+)liberlisation for technology import
(-) rules & regulations
Competition (-)increasing difficulty in retaining
specialization and highly qualitified personal
(-)inceasing role of combo plan cunsulnt

Strategic Advance profile:(SAP) For a Breverage Company

CAPABILITY FACTOR COMPETITIVE STRENTH

&WEAKNESS
1) FINANCE High cost of capital;reserve and surplus
position
unsatisfactory
2)MARKETING fierce completion in industries company’s
position secure at present
3)OPERATION plant and machinery in excellent condition
Captive sources for part and component
available
4)PERSONNEL quality of mgt and workers comparable
with
them in competitor companies
5)INFORMATION computerizes mgt information in the
process of
Development traditional function such as
pay
Roll and accounting computerizes
6)GENERAL MGT. high quilty and experience top mgt
generally
adopt a productive stance with regard to
decision making

DISTINCTIVE COMPETANCE OF KINGFISHER

“Kingfishar premium” is amongst the fastest growing brands in

kingfisher's portfolio and is today the market leader with almost 2/3 share of the
market. The brand is synonymous with everyday treats that infuse happiness into
people's daily lives.
After some more times of magnificent success; it wass time to
give new enjoyment to people .so its provide new emage of fun it calld a
“kingfisher premium beer”
Then ub group launce new brand as name is “KALYANI BLACK LABEL
PREMIUM”
. very testy and strong brand for capture second nombur market in india .
It’s launched in india in 1969-70.it’s no-2 larger beer in india.its largest selling
lager beer brand in east india.

It’s not a strong beer. Very little hops, evident in the aftertaste. Yet the bottle containing 650ml of the lovely
brew states 8.7% alcohol--brewed in Pallakad, Kerala

For those who can appreciate light beers, this one beats Kingfisher by a mile.

It is available in Kerala but not a hit with the better hotels, where eyebrows get raised when you mention the
name..The marketing folks need to make it available across the country as in the case of Kingfisher
 VALUE CHAIN ANNALYSIS FOR KINGFISHER

Value Chain Analysis is a useful tool for working out how you can create the
greatest possible value for your customers.

KINGFISHER is a multi product company and focuses itself on manufacturing BEER. It

is started as a big scale manufacturer of beer. Inspite of fierce competition since its
inception from well establish names, it has grown to be 49% of market share in beer.

This beer enjoys a fan following of consumers across legal ages, loyal to the
brand promise of a great taste evident from the visibly abundant ingredients. In terms of
value chain, company’s activities are divided in two group : primary activities &support
activities.

PRIMARY ACTIVITIES:

In cash of kingfisher beer, this includes bringing materials of different type in the
company those material have been divided in to three categories : raw material (mostly
wheat, grapes to be use in manufacturing process), component purchase from outside
requiring further machining at the company’s plant and component and other materials
(like packeting and some minor accessories) which can be assemble without any further
processing. the company saves cost in this part in several ways. First except for few
critical component. It procures component from a number of component manufacturing
companies all those manufacturer are in big scale sector and enjoy cost advantage in form
of lover overhead. Therefore,the supply from those manufacturer is comparatively at
competitive price.
In operation, company save cost through higher productivity which is generated
through enthusiastic and loyal workers. In the cash of outbound logistics, the company
has adopted the approach of just- in- time finished product in which product are
transported with in the week of their manufacturing. in the area of marketing and sales,
the company has reduced the number of intermediaries in its distribution channel by
going through the process of manufacturer to stockist to customer rather than the usual
channel of inserting C&F agent or dealer in between.
For marketing and demand generation, the company’s marketing department
which is very thing maintain regular contain with stockists and occasional visit are also
under taken. The company believe and it is true even in the present competitive
environment, that satisfied customer are the best source of publicity. Thus, the marketing
and sales cost of the company is very insignificant. In the case of service, the company is
not require to do much because beer is not complicated product.
SUPPORT ACTIVITIES:

The company has under taken various support activities in such a way that
either each save the money on this activities directly or they provide sample support to
various primary activities. Firm infrastructure which include general management,
accounting and finance etc. are performed quiet satisfactorily. However, the company
save lot of money in finance area. being of case rich and debt free company, it has not to
bear any interest burden. In the case of human resource mgt the company enjoys far
greater superiority than it industries competitors though its HRM practices can be envy
for many org outside biscuit industries. In the area of technology development the
company has adopt the concept of informalisation rather than structuring various
processing and method. Its R&D activities are always oriented to make biscuit more
functionally useful rather than adding packaging which are reserved for export.
In the procurement there are two centralized procurement systems for human resources
and physical resources. Thus it can be concluded that the companies value chain provides
value to its customers and to itself. This differentiates the company from its competitors.