7/29/2019 37335807-13418703-The-Ub-Group

1/14

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 Mallyasfather) acquired United Breweries Limited.

In the period 1950 to 1960, United Breweries expanded rapidly and made

numerous acquisitions.It entered the spirits business by acquiringMcDowell in 1951, and launched its flagship brand,Kingfisher LagerBeer, in 1955. Mr. Vittal Mallya started creating a global conglomerateby moving into agricultural-based products and medicines by acquiringKissan Products and forming a long-term relationship with Hoechst AGof Germany to promote a company today known as Aventis Pharma.Inthe mid-1970s, when liquor prohibition seemed a possibility in India,the late Mr. Vittal Mallya acquired breweries and distilleries across thecountry. The significant amount of financial risk taken by Mr. VittalMallya in acquiring these breweries and distilleries enabled UnitedBreweries to attain a market leadership position at the end of the

prohibition threat.

The UB Group has continued making acquisitions and also diversifiedinto aviation, fertilizers, engineering, infrastructure, media (through theNDTV Good Times channel) and international trading.

The UB Group Today

The UB Group has a presence in several countries across Europe, NorthAmerica, the Caribbean,

7/29/2019 37335807-13418703-The-Ub-Group

2/14

the Middle East and Asia, with diverse interests in brewing, distilling,aviation, property development,engineering, fertilizers and informationtechnology. It is also the largest Indian manufacturer of liquorproducts(beer and spirits), which accounts for a substantial portion of the UBGroups turnover,according to Euromonitor. Under the leadership of Dr.Vijay Mallya, USL has become the worlds third largest manufacturer ofspirits and UBL has 53% of the market share in India.

USL, the flagship spirits company of the UB Group, is among the largestmanufacturers of IMFL in India and grew to its size through a series ofacquisitions. See Our Investments Business Operations of our CoreInvestments USL on page [] of this Preliminary PlacementDocument.

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 salesvolume. USL owns nearly 150 brands, 15 of which are millionairebrands. The following brands of USL are among the Top 100 SpiritsBrands Worldwide list, put forth by Impact International: Bagpiper,McDowells No. 1 Whisky, Celebration Rum, McDowells No. 1 Brandy,Directors Special, Old Tavern and Haywards Whisky.

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

UBL owns several breweries across India. In April 2002, S&N entered into aShareholders Agreement with certain members of the Promoter Groupwith respect to creation of UBL. We intend for the UBL-S&Nrelationship to give the Kingfisher beer brand a boost in overseasmarkets through Scottish & Newcastles wide distribution network.Scottish & Newcastle will also introduce its brandsin the Indian market179

We have recently pioneered the construction of UB City, one of the largestmixed-use developments of real estate in the heart of Bangalore, andwhich 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 brandof fertilizer that is popular among farmers in South India.

7/29/2019 37335807-13418703-The-Ub-Group

3/14

The UB Group owns interests in UB Engineering, which specializes in theinstallation of industrial plants. Its turnkey division has worked onprojects in India and overseas in the areas of power, fertilizers, oil andgas, 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 itslaunch, KFA expanded its fleet to 22 new Airbus A320 aircraft and 12new ATR 72-500 Aircrafts which offer around 1,400 flights weeklyacross India. KFA is planning a possible corporate restructuring withDAL, 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 wasincreased by 20% to 46% in October 2007. DAL runs Deccan, a low-cost

scheduled carrier, as well as Deccan Aviation, a chartered aircraftservice.

Today, the UB Group is one of Indias largest corporates with a turnover inexcess of Rs.77,800 million for fiscal 2007.

The UB Groups International Presence

Mendocino Brewing Company Inc., located in California, is a pioneer in theAmerican Craft Brewing, or micro-brewing, trend. It has twobreweries, one north of San Francisco, California and the other at

Saratoga Springs, New York. Red Tail Ale and Blue Heron Pale Ale aretwo of Mendocinos popular brands.

UBSN Limited, based in Faversham, Kent (United Kingdom), is a wholly-owned subsidiary of Mendocino Brewing Co. Inc. UBSN Limited has anexclusive licensing arrangement with UBL for brewing and ofdistributing Kingfisher in Europe and Canada. UBSN Limitedpredominantly sells Kingfisher in the United Kingdom, where it has alarge share of the market for ethnic Indian restaurants and food andbeverage outlets.

7/29/2019 37335807-13418703-The-Ub-Group

4/14

7/29/2019 37335807-13418703-The-Ub-Group

5/14

Research & Development:

Vittal Mallya Scientific Research Foundation (VMSRF) was established in 1987

with the objective of developing newer and novel technologies that will havesubstantial application in industry and health care. The foundation is it isrecognized 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 thelaunch of Kingfisher Airlines Limited. Kingfisher

Airlines has captured an impressive market shareand has established a niche identity for itself. Theairlines recently acquired 25% stake in DeccanAirlines.

BOARD OF DIRECTORS AND SENIOR MANAGMENT

As per the prescribed for corporate governance by SEBI, our compony wasrequired to implement the corporate governance code in the financial year 2001-

2002.howeaver ,as a proactive step,our company introduced several initiativeson corporate governace well before our company was enjoined to do so underthe said guidelines.

MANAGEMENT

UBHL is managed by board of directors, and management team consisting ofhead of finance , internal audit, taxation, infrastructure declopment, and tradingand human resourses.

BOARD OF DIRECTORS

We currently have directors on our Board

7/29/2019 37335807-13418703-The-Ub-Group

6/14

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

NAME DESIGNATION AGE

1. DR. VIJAY MALIYA CHIRMAN: 512. MR. N . SHRIVASAN DIRECTOR: 76

3. MR.SHRIKANT G. RUPAREL DIRECTOR: 664. MR.P.A.MURLY DIRECTOR: 49

5. MR.A HARISH BHAT DIRECTOR: 536. MR.SIDHARTH V.MALAYA DIRECTOR: 20

7. PIYUSH G. MANKAND DIRECTOR: 628. B.S.PATIL DIRECTOR: 639. R.N.PATIL MANAGING DIRECTOR: 51

BEER and SPIRITS Industry

Board committee

Audit committeeMr.N. Srivinasan chairmanMr.shrikant g ruparel memberMr.A.hrish bhat memberMr.B.S. patil, member

REMUNARETION/COMPENTION COMMITTEE

Mr. shrikant g ruparel chairmanMr. N. Srinivasan member

Shareholders/investors grievance committee

Mr shrikant g ruparel chairmanMr.N.Shrinivasan memberMr.R.N. pillai member

OTHER BOARD COMMITTEES

7/29/2019 37335807-13418703-The-Ub-Group

7/14

Genetal committee of directors

Mr.N srinivasan chairmanMr.P A Murali memberMr.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 ofcertain environment forces , and there is a continuous interaction between theorg and its environment. The interaction suggest a relationship between two. Thisrelationship can be analysed in three ways. First, the org can be thought of asan 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 thefunction of input-output mediator.in this process , what kind of input should betaken or output given will be determine by the env. In its interaction with theinternal factor of the org. second, the org can be taken as the center focus forrealizing the contribution of UNITEDBEVERAGE GROUP, both within andoutside the org. when this group contribute to the well being of the org. they musthave legitimate share in org output. This group may be employees , consumer ,

7/29/2019 37335807-13418703-The-Ub-Group

8/14

supplier, shareholder, govt , and the society in general. Thus the org functioningwill be affect by the expectation of this group and the org has to take this factorinto account. Third, the org can be treated as operating in environmentpresenting opportunity and threats to it.

OPERATION OF STRATEGIES IN WADIA GROUP

CORPORATE LEVELIssues involving : resource mobilization, iffective use of resoursis , merger&

acquisition, proper management of investment and earnings.

BUSINESS LEVELStrategic business unit : air lines, research, training, electronics &

engineering, infrastructure managment.

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

MERGER AND JOINT VENTURE

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

Thegroup entrance to the IT sector had also been marked by the formationof UBICS, Inc. The company provides IT consulting, services andprofessional IT products to business companies.

In August 2007, the group made a first-of-its-kind media alliance for thepromotion 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 itpossesses:

Worldwide in beverage products Worldwide spred in bottaled water

Worldwide infrastructure

http://en.wikipedia.org/wiki/IThttp://en.wikipedia.org/wiki/NDTVhttp://en.wikipedia.org/wiki/IThttp://en.wikipedia.org/wiki/NDTV

7/29/2019 37335807-13418703-The-Ub-Group

9/14

KINGFISHER

PROFILE

The beginnings of what is today The UB Group are rooted in the flagship company, UnitedBreweries 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 withits 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 thebrewing dating back over five decades, starting with 5 breweries in South India in 1915. Frombullock cart-loaded barrels or 'hogheads' of frothing ale, the Beer business has gone on tobecome the undisputed 'king' in the Indian beer market.

Its flagship brand 'Kingfisher', has achieved international recognition consistently, and has wonmany awards in International Beer Festivals. Kingfisher Premium Lager beer is currently availablein 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 growthof 14% we have recorded growth of 18% thereby increasing the combined market share of UBGroup to over 50%.

ThelargestsellingBe

7/29/2019 37335807-13418703-The-Ub-Group

10/14

erinIndia

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 itstarget with unfaltering focus. It is a very vibrantly coloured bird. All of its coloursrepresent energy, youthfulness, enthusiasm, freedom with a touch of formalityand discipline. No wonder, that this bird with an eye for right focus and an aimfor succeeding in its attempt became the mascot for The Kingfisher brand ofBeer 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 ofthe brand in full flight, in a supportive environment. It reflects the energy, youthfullness andfreedom that are characteristic of the brand's target consumer and reiterates its contemporarypositioning.

ETOP Analysis:

Environmental sector Impact

Socio economic (+)opportunity (-)threat(+)continued focuse on infrastructure

devlpoment including power supply forIndustry, transport(-)technical resource constraints

Technological (+)Higher growth in standerdization andProduct upgration

Government (+)liberlisation for technology import

(-) rules & regulationsCompetition (-)increasing difficulty in retainingspecialization and highly qualitified personal(-)inceasing role of combo plan cunsulnt

7/29/2019 37335807-13418703-The-Ub-Group

11/14

Strategic Advance profile:(SAP) For a Breverage Company

CAPABILITY FACTOR COMPETITIVE STRENTH&WEAKNESS

1) FINANCE High cost of capital;reserve and surplusposition

unsatisfactory2)MARKETING fierce completion in industries companys

position secure at present3)OPERATION plant and machinery in excellent condition

Captive sources for part and componentavailable

4)PERSONNEL quality of mgt and workers comparablewith

them in competitor companies5)INFORMATION computerizes mgt information in theprocess of

Development traditional function such aspay

Roll and accounting computerizes6)GENERAL MGT. high quilty and experience top mgtgenerally

adopt a productive stance with regard todecision making

DISTINCTIVE COMPETANCE OF KINGFISHER

7/29/2019 37335807-13418703-The-Ub-Group

12/14

Kingfishar premium is amongst the fastest growing brands inkingfisher's portfolio and is today the market leader with almost 2/3 share of themarket. The brand is synonymous with everyday treats that infuse happiness intopeople's daily lives.

After some more times of magnificent success; it wass time togive 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 LABELPREMIUM. very testy and strong brand for capture second nombur market in india .Its launched in india in 1969-70.its no-2 larger beer in india.its largest sellinglager beer brand in east india.

7/29/2019 37335807-13418703-The-Ub-Group

13/14

Its not a strong beer. Very little hops, evident in the aftertaste. Yet the bottle containing 650ml of the lovelybrew 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 thename..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, companys activities are divided in two group : primary activities &supportactivities.

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 (mostlywheat, grapes to be use in manufacturing process), component purchase from outside

requiring further machining at the companys 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

7/29/2019 37335807-13418703-The-Ub-Group

14/14

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 atcompetitive price.

In operation, company save cost through higher productivity which is generated

through enthusiastic and loyal workers. In the cash of outbound logistics, the companyhas 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 bygoing 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 companys marketing department

which is very thing maintain regular contain with stockists and occasional visit are alsounder 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 isnot 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 tobear 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 variousprocessing 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 resourcesand 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.