The UB Group PRESENTATION ON McDOWELL & COMPANY UNITED BREWERIES LTD 27 th October 2005

1. The UB Group PRESENTATION ON McDOWELL & COMPANY UNITED BREWERIES LTD 27th October 2005

2. The UB Group- An introduction India’s leading drinks group • Beer : • 48% market share nationally • Sold in over 52 countries • India’s 1st global consumer brand - Kingfisher • Spirits : • 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 • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life Science, Infrastructure development & Media • The Group is professionally managed and is headed by Dr Vijay Mallya, the Group Chairman UB Group (India) UB Group (India)

3. 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)

4. 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)

5. The Indian Market • Spirits Market - • India is a 112 million cases market, growing at around 9-10% p.a • Armed Forces – another 12.5 million cases • Whisky dominates – 62% • Low Spirits consumption – Per capita < 2.1 liters p.a • Changing lifestyle, exposure to global trends fueling growth • MNC’s entered 10 years ago, but yet to emerge strongly • Industry has seen some shakeout consequent to marginalization of smaller players UB has aggressively consolidated its leadership position by - Acquiring brands (Gilbeys Whisky) & Companies (SWC) - Investing heavily in brand building UB Group (India)

6. 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)

7. 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 • McD’s holding in SWC to be transferred to a Trust • SWC’s holding in McD to be cancelled UB Group (India)

8. 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)

9. Mergers…update • Filing of schemes with Stock exchanges completed • Schemes to be filed with courts –1st week of December’05 • 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)

10. Sales Performance HY–I -- FY’06 UB Group (India)

11. Resultant Structure McD Results Sep’05 UBHL & Associates X% MCD (Spirits) Trust y% Public z% UBHL & Associates 42.47% MCD (Investments)* Public 57.53% UB Group (India) * Includes non-spirits investments Aventis, Mangalore Chemicals, UBHL, UBL etc

12. United Spirits Sep ‘05 UB Group (India)

13. Brand Performance HY–I -- FY’06 UB Group (India)

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

15. 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 • McDowell’s NSR increase Rs 29 / case • Decrease in COG • Stocks built up pre-April 2004 cushioning impact of the rise in prices • Imported molasses • Strategic timing of purchases to effect price reductions • Result: • HY-I costs of FY’04 are still lower than HY-I of FY’05 by Rs.19/case • Fuel cost impact accounts for Rs.5/case UB Group (India)

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

17. 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)

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

19. 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 • 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 United Breweries Limited UB Group (India) UB Group (India)

20. The UB Group- An introduction Key Highlights • 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 • PBDIT (UBL) for the half year Rs. 64.3 crores, and increase of Rs.40.5 crores versus last year • PBDIT (Combined business) Rs. 78.1crores, and increase of Rs.68 crores versus last year • Volume growth of 22% in UBL & in the combined business and continues to outperform the industry • Price increases achieved in a number of key states • Interim dividend of 15% paid by UBL • UBL - Winner of Super brands award UB Group (India) UB Group (India)

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

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

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

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

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

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

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

28. The UB Group- An introduction Integration of UBL and MABL • 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 • Rationalisation of brand portfolio by state • Changes to sourcing of beer to achieve least cost supply • Closure of Mumbai based MABL head office • Synergies taken in the areas of: • Raw material procurement • Marketing and promotional costs • Headcount UB Group (India) UB Group (India)

29. The UB Group- An introduction Trading Outlook • 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 • Strong volume performance expected to continue • Strong beer segment to continue lead • Hardening of raw material costs • Barley • Other Costs in line with the growth in volume • Substantial capital expenditure – over Rs.400 crore approved by the board to be incurred over a period of seven years to meet the growing demand • Proposal to discuss merger of various subsidiaries, in place – Substantial improvement in cash profits. UB Group (India) UB Group (India)

30. 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 • 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 THANK YOU UB Group (India) UB Group (India)