UB Group Presentation - June 2011

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³UB Group Overview´

June 2011

Presentation By Mr. Ravi Nedungadi,President & Group CFO





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UB Group

United Spirits Ltd.

No. 1 Spirits Company in India

Largest spirits company in the world and in India with a market share of 59% in first line brands

Key brands are Dalmore, Jura, Whyte & Mackay, Black Dog, Antiquity,Signature, Royal Challenge, McDowell's No.1, Celebration Rum,Romanov and White Mischief

Undisputed leader of the Indian beer industry with 56% market share

Key brands are Kingfisher Blue, Kingfisher Strong, Kingfisher Premium,Kingfisher Ultra, Kingfisher Draught, London Pilsner, UB Premium Ice,Kalyani Black Label Premium and Kalyani Black Label

United Breweries Ltd.

No. 1 Beer Company in India

Largest carrier in India with 20% market share in May 2011

µBest Airline in India and Central Asia¶, µBest Economy Class Seats¶ andµStaff Service Excellence Award for airlines in India and Central Asia¶ inWorld Airline Awards (May, 2010)

India's only 5 Star airline, rated by Skytrax and 6th airline in the world for

3rd consecutive year (May, 2010)

Kingfisher Airlines Ltd.

India¶s Leading Airline

Diversified presence across businesses including equity investment inMangalore Chemicals & Fertilizers Ltd. and UB Engineering Ltd.,investment in Vittal Mallya Scientific Research Foundation and

franchisee for IPL team ³Royal Challengers´

Diversified Business

Interests



4

923 1,266

1,617

0

1000

2000

2009 2010 2011

United Spirits: Overview

Business Overview

Largest spirits company in India ±21 µMillionaire¶ brands(those that sell more than 1 MM cases p.a.) with a marketshare of 59% in first line brands

USL sold 112 MM cases during FY 2011 to become thelargest spirits marketer in the world. Growing at robust doubledigit rates

Several of USL¶s brands occupy leading market positions inIndia and globally

í McDowell No. 1 Platinum Whisky ended fiscal 2011 as a³Millionaire ³ brand in the first year of its launch

í McDowell No. 1 family is the largest spirits brand in theworld with sales of over 40.8 MM cases in FY 2011 across3 flavors (Whisky, Brandy and Rum)

í McDowell¶s No. 1 Brandy continues to be the largestselling brandy in the world

í McDowell¶s No. 1 Celebration Rum is the 3rd largest rumwith sales over 14.5 MM cases in FY 2011

Bagpiper Whisky is world¶s largest selling whisky brand with

sales of over 16 MM cases during FY 2011

Financial Snapshot ± Q4 ( INR Crs)

Revenue

160 196 233

0

200

400

2009 2010 2011

EBITDA

56 57

78

0

50

100

2009 2010 2011

PAT



Macro Consumer Forces, and Trends (1/2)

Population Evolution

Rapid Induction of new young consumer in various alco-bev

categories.

They are seeking complexity in addition to variety

Rise in mixed gender social drinking groups

Urbanization

Possible increase in consumption levels with changing lifestyle

With rising affluence and exposure to luxury lifestyles, consumers

will seeking out premium products and brand experiences even in

these cities.

Premium spirits represent the democratization of Luxury

Experiences

Greater Disposable

Incomes

Up trading : Pattern of up gradation in buying habits across

segments

Fastest growing segments-:

Premium Vodka 26-30%, Premium Whisky 21% ,

Super premium Whisky 22% , Premium Scotch 27%.



Macro Consumer Forces, and Trends (2/2)

Strong brand

consciousness

Need to make brands aspirational & knowledgeable to attract new entrants

Brand positioning & platforms

Contemporary positioning required - Wider options available for platforms Sharper differentiation based on consumer need spaces

Consumer needs and preferences are evolving and changing rapidly

The beverages available in 1980-90 have expanded into new segments

and choices that are available today.

Rising Affluence will cause new consumption categories that go muchbeyond traditional needs and desires resulting in the emergence of new

categories consumption.

Luxury orientedconsumption habits

Upper class on fast track

Rich & consuming classes of population grew by 100% & 16%

respectively in 5 yrs

Top of the consumption pyramid is exploding- Very rich class growing

fastest at 45%

Over 140,000 HH to have income> 1 crore in 2010 - 7 times from

2001



Furthermore the relatively higher growths of the Premium segments is

expected to lead to increased premiumization in the market Consumers are trading-up to premium products due to rapidly changing demographics

In the past, super-premium and Scotch segments had not achieved a critical mass because of lack of

distribution and infrastructural support in India

Latent demand for super-premium brands can be captured through comprehensive distribution of these

brands in India

(Source: India Industry data, USL estimates )

Indian Alcobev Market Profile by Value

2005-06

Indian AlcobevMarket Profile by Value

2011-12

Scotch &

Premium

(14%)

Prestige

(19%)

Medium &

Cheap

(14%)

Regular (53%)

Scotch &

Premium

(22%)

Prestige

(25%)

Medium &

Cheap

(8%)

Regular (45%)



Key Flavor-wise Performance

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Growth %

Q4 FY 11

Growth %

FY 11

Scotch Whisky 21% 37%Brandy 20% 21%

Rum 11% 11%

Whisky 11% 10%

White Spirits 7% 8%



United Spirits: Q4 Update

9

Volume

Volume growth at 12%

Volumes at 28.76 Mio cases Q4 FY 11 comparedto 25.65 Mio cases in Q4 FY10

Sales

Revenue growth at 28 %.

Sales value grew at Rs. 1,617.3 Crs. in Q4 FY11 Vs. Rs. 1,266.3 Crs. in Q4 FY10, anincrease of 28%

Adjusted for the impact of the Balaji merger ,Effective Revenue growth USL would be 19%on a volume growth of 12% , reflecting thecontinuing success of the premiumisation focusof the company

EBITDA of Rs. 233.2 Crs. represents a 19%increase over the comparable period of the previousfiscal

The incorporation of the large turnover of BalajiDistilleries at Rs. 112Crs in this quarter ( Nil in the

comparable period) has impacted the reportedEBITDA margin by 100 bps points

Despite cost increases, the EBITDA margin to netsales has been maintained at the FY10 rate of 16%

Profitability

Cost trends

Spirits Costs during the quarter were down1.5% over the corresponding quarter ,

however they were up 5% over Q3 FY 2011 These cost are expected to come down

going forward



USL : FY 2011 Financials

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( In INR Crs.) FY 2011 FY 2010 Growth

Net Sales / Income 6,422.8 4,979.5 29%

COGS 3,596.4 2,753.0

Gross Margin 2,826.4 2,226.5

Staff Cost 356.6 290.4

Advert. & Sales Promotion 665. 3 473.5

Other Overheads 766.8 638.0

EBITDA 1,037.7 824.5 26%

Exch. Diff Gain /( Loss) / Other Income (20.2) (2.6)

Interest 403.1 309.6

Depriciation 45.1 38.6

PBT before exceptional item 569.4 473.7

Exceptional items 36.8 70.0

PBT 606.2 543.7 12%

Tax 203.1 167.7

PAT 403.1 376.0 7%



USL ± Debt Position (Consolidated)

Rs. Crs

( In INR Crs.) Mar-11 Mar-10

Secured Loans

Capex Loans 527 107

Term Loans 1,545 1,790

Working Capital 907 785

Sub- Total 2,979 2,681Unsecured Loans 1,061 636

Sub -Total 4,040 3,317

W & M Acquisition Loan - W/o recourse 2,300 2,189

Total Debt 6,340 5,506

Total Gross debt ( consolidated) 6,340 5,506

Cash & Bank Balance 637 769Total Net Debt 5,703 4,738

Note :Value of 8.4 mio treasury stock amounts to about Rs. 819.6 Crs.



ENA CostM

ovement

12



Initiatives to counter cost push

Wet goods

í About 30% of USL¶s EN A consumption is grain based.

í Investment into multi substrate primary distillation will buffer USL from the cynicalprice variance of Molasses

í USL sells 5.6 times higher than its nearest competitor , thereby giving it significantprice advantage due to economies of scale.



Initiatives to counter cost push Glass

í Glass prices are directly linked with energy prices. Glass producers are seeking price increases due to the

increase in crude prices.

í Short term: USL has strategically focused on alternate packaging formats e.g. recycled bottles, PET

containers and Tetra packs.

All of which generate benefits ranging from 25-45% from current costs.

There is still significant headroom in packing mix change i.e to increase the utilization of recycled bottles

in mass segments

í Long term: Additionally, In collaboration with UBL, USL plans to invest in 1-2 glass manufacturing facilities

which will help it to capture margins currently retained by manufacturers, lower cost and save taxes

Use of the latest technology will help to lightweight the bottles which will help realize further savings.

í Plans to set up a logistics enterprise along with UBL for collection of market bottles

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Whyte & Mackay: Status update

Scotch inventory is valued at GBP 430 Mio with a inventory of 104 Mio liters as of December 2010

Key awards won/landmark events:

o Won the µGlobal Distiller of the Year¶ recognition in 2009 at the International Wine & Spirits competition.

o

Whyte & Mackay 30-year old was named ³Best Whisky in the World 2009

o Shackleton expedition: Recovered 3 bottles of ours which were buried for over 100 years under the Arctic

ice

Branded contribution has gone up by 3% in value terms due to very strong performance from Malts (Dalmore andIsle of Jura)

We are creating a specific cell to address Emerging markets jointly with USL

Revenue for FY 2011 was GBP 140.9 Mio , EBITDA GBP 30.2 Mio and PBT GBP13.3 Mio



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464573

840

0

500

1000

2009 2010 2011

United Breweries: Overview

Business Overview

With 56% market share, UBL is the undisputed leader of theIndian beer industry, with over 5 decades of marketleadership

Sold more than125 MM cases during FY 2011

Kingfisher is the ubiquitous Indian beer, available asKingfisher Premium, Strong, Blue, Red and Ultra

UBL is uniquely positioned with manufacturing facilities in allkey markets

í Ensuring freshness of beer

í Leveraging India¶s interstate tariff difference to economicadvantage

UBL ± Heineken Deal

Heineken holds 37.5% stake in UBL and has a shareholder¶sagreement with UBL based on which Heineken will be activein India solely through UBL. We are working towards creatinga unified structure, and realize synergies

Heineken will be produced in India by UBL. UBL will nowhave an access to Heineken¶s distribution and manufacturingfacilities in the international markets, which UBL is currentlycatering through exports

Financial Snapshot- Q4 ( INR Crs.)

Revenue

103 88125

0

100

200

2009 2010 2011

EBITDA

33 26

40

0

50

2009 2010 2011

PAT



Beer consumption is very low in India

1.5 litres 20 litresPer Capita Beer

Consumption at

comparable GDP

Per Capita Beer

Consumption at

comparable GDP

22%

<0 .5 %

7 8 %

8 7%

8 %

5 %

Beer Spirits Wine

India EmergingMarkets

AFFORDABILITY

í Highest duty in the world

í Duty not set according to alcoholcontent

í Expensive alcoholic beverage

AVAILABILITY

í 65,000 licensed outlets across thecountry

í 1 per 18,000 people

í In China: 1 per 300 people

Excessive State regulation andintervention

í Route to market

í Economics, need to have a brewery ineach state

í Pricing

Driver of growth is Strong beer

í Specific to Indian market

Ban on advertising alcohol

í Difficult to build new brands

Key Reasons



Indian Beer market is at the start of the growth curve

Lowest consumption among BRIC countries GDP growth will drive consumption

P C C

i n L

i t e

r s

Per Capita Beer Consumption

P C C

i n

L i t e r s

Per Capita Consumption vs. GDP Growth



In the Twelve months ended March 31, 2011 UBL volumes have grown by 23%.

UBL has achieved a all time high market share of 56% in these 12 months

The company has for the first time achieved market leadership in the State of Andhra Pradesh and

extended its positions in Orissa and Uttar Pradesh Strong beer growth 27%. Mild beer growth of 16% vs.9% mild beer industry growth rate

The mergers of ABDL, MAPL and EMPEE into UBL has been completed.

The schemes of MBIL , UMBL , UB Nizam , UB Ajanta and Chennai Breweries are progressing asplanned

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United Breweries: FY 2011 Update



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United Breweries: Financials & Debt

in INR C rs Mar-11 Mar-10

Net Debt 667 671

Debt profile

in INR C rs FY2011 FY2010 Growth

Revenues 2,779 1973 41%

EBITDA 431 295 46%PBT 263 151 74%

PAT 168 97 73%

Financials:



Unifying our operations :Merging all subsidiaries into UBL

Simple Corporate Structurecollapsing multiple legal entities to getunified ownership in one single entity

Optimised cash flows reduction inoverall effective tax rate

Realize SynergiesOperational efficiencies in runningcombined operations

Enhanced financial strength with15m new shares issue

Consolidation of all installed capacitywithin UBL

Note: Ownership pattern depicted representsvoting equity ownership



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Kingfisher Airlines Limited



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Kingfisher Airlines: Overview

Business Overview

Started airline operations in May 2005,

merged with Deccan Aviation w.e.f. April

2008. Operates 364 flights a day

Started international operations inSeptember 2008 by connecting Bangalore to

London

Network spread across 59 Indian cities and

13 foreign cities with a fleet size of 66 aircraft

Carried 12 Mio passengers in FY2011

Market Share (May 2011)

Financial Snapshot ( INR Crs)

Jet Airways

18.5%

Kingfisher

20 .0%

Go Air

6.6%

Spicejet

14.2%JetLite

7.6%

IndiGo

19.9%

Air India (D)

13 .2%

52716496

(690)

140

(1,000)

500

2,00 0

3,500

5,00 0

6,500

FY20 10 FY 20 11

Revenue EBITDA



India is one of the fastest growing aviation markets in the world

Source: DGCA, Research & analyst reports; Airbus Website, Boeing Website; CAPA reports

* Based on average GDP growth of 8% & 2.0x multiplier and based on average GDP growth of 8% &

1.6x multiplier

Indian Aviation traffic has grown at a CAGR of ~ 20% over the last 6 years (2.3 times GDP growth)

Various leading agencies have forecasted growth to continue over the next 15-20 years

Airbus & Boeing predict that India will be the highest growth market in the world over the next 20 years, ahead of

China

Centre forAsia Pacific Aviation (CAPA) expects domestic traffic to expand at 14.8% CAGR through 2020

CAPA Forecast



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Massive government infrastructure investment to support growth

2010

(92 Airports )

2004

(45Airports)

2015

(125+ airports)

New domestic airports added New domestic airports proposed

The Vision 2020 statement announced by the Ministry of Civil Aviation, Government of India, envisages creating

infrastructure to handle 280 million passengers by 2020

26 new airports added in the last three years; AAI has 35 new non metro airports under development expected to be added

over the next five years

Over the next five years, investments in aviation infrastructure are expected to be over USD 9 billion

It is expected that this will further support the spread of traffic outside the top 6 cities, which today account for ~90% of

revenueSource: AAI



Accelerating demand coupled with modest supply is expected to keep thedomestic aviation industry on a profitable trajectory

Source: DGCA , ACAS March 2009, Research reports

The traffic growth through FY2014/15 is forecasted at 16.7% per annum The capacity growth through FY2014/15 is forecasted at 13.5% per annum

No new airline licenses have been granted for several years at a national level



Route Network

With 59 domestic destinations tooffer, KFA has the widest reach inIndia

Flying to all major business &leisure destinations in the countrycovering > 95% of theaddressable passenger base

13 unique destinations in India notserviced by any other airline

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Domestic Operating Environment

The industry exhibited strong demand growth; passenger traffic increased by over 18% in FY 11(over FY10)

Capacity in the industry grew by 11% for the same period and continued to lag behind demand

The demand growth coupled with capacity lag has led to increase in industry load factors to 78% (6percentage points over last year )

Yields have remained stable over the year and premium traffic has continued to grow. DomesticPassenger RASK is up by 8% Q4 FY11 over Q4 FY10 despite some aggressive pricing bycompetitors

Crude oil price has been on upward trend increasing from USD 85/bbl to more than USD 110/bblover the last fiscal year

28 Source: DGCA data



Kingfisher has consistently increased load factors since Q2FY09 & maintained a steady ³effective market share´ «

29 Source: DGCA . Note: Market share/capacity share calculated on a RPKM/ASKM basis



«Despite a significant reduction in capacity

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Aircraft utilization has been enhanced by > 10% to offset capacity loss due to groundedaircraft

Current utilization of the Airbus A320 family stands at 11.6 hrs/day & of the ATR family stands at

10.9 hrs/day

Source: DGCA



Which has led to a significant improvement in the operating

performance

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International Operating Environment

The total international traffic to and from India has shown aCAGR of 13% between FY¶06- FY¶11

Indian carriers currently account for ~35% of international routes ASKMs from India.

Other industry players have grown the international business andmargins significantly- 9W revenue increased by 5 times andEBITDAR margin by 15 percentage points between FY¶07 andFY¶11

oneworld has set the growth path for KFA into key internationalmarkets with enhanced connectivity and traffic sources fromworlds largest airlines ± British Airways, Qantas, Cathay Pacific American Airlines etc

KFA has already exceeded fair share of the local O&D marketsin 11 out of 14 routes it operates vs. its capacity share

32 Market Size based on PAX-IS plus data for Apr 10-Mar 11. PPDEW = Pax per day each way Source : DGCA, PAXIS, 9W investor presentation



The growing acceptance of the KF product has led toa significant growth in business «

33 Source: DGCA, Jet Airways published financials , Jet Airways Pax Revenue = RPKM * RRPKM



«and an improving operating performance

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Kingfisher has further planned multi-pronged initiatives for cost-cutting,revenue enhancement & capital re-structuring

Key Revenue Enhancement

InitiativesKey Cost Reduction Initiatives Capital Restructuring

One World Alliance

Membership with oneworld Alliance todrive inbound domestic passenger

growth

Kingfisher Express

DTD Cargo Express service to tapunder penetrated air-cargo delivery

service

Co-branded Credit Cards Re-negotiate King Club Amex co-

brand card contract; introduce King

Club ICICI co-brand card

Rationalizing Distribution Channels

Reduction of S&D costs by reviewing distribution channels,negotiating GDS contracts

Renegotiating Vendor Agreements

Additional airport & fuel discount* Additional discounts from airports*

E&M costs to reduce with new vendor

Renewal of operating leases at a discount to existing rates

Control Discretionary Spend

Reduce rentals, costs of transportation, local conveyance andcommunication

Optimize space (warehouses, offices, call centres)

Operational Efficiency

Reduce fuel consumption for Airbus & ATR operations

Target E&M spend reduction (in-house C-checks, controlled

redelivery)

Debt Re-schedulement

Debt recast program of Kingfisher Airlines earlier

approved by RBI has now beencompleted

Key Highlights of program

Conversion of debt to equity

Lower interest rate

Moratorium on repayment

Equity Infusion

Received shareholders¶

approval to raise additional

capital through equity based

securities Promoter fund infusion

* - Subject to capital raising



KFA Debt : Post Debt Recast

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Particulars

(in Rs. Crs)

Debt beforerecast

Conversion of debt Additional Loan Debt postrecastto CCPS to NCRPS to OCDS to WCTL FITL RTL

Working Capital 590.5 (297.40) 293.1

Term Loan 4,263.49 (750.10) (553.10) 297.40 248.42 768.30 4,274.40

PDP Loan 166.44 166.44

Promoter loan 656.30 (648.00) 8.30

Inter corporatedeposit (ICD)

1,137.32 (709.32) 428.00

sub total 6,814.0 (1,398.10) (553.10) (709.32) - 248.42 768.30 5170.2

Other short termloan

75.20 75.20

Hire Purchase 86.15 86.15

Finance lease 675.73 675.73

Grand total 7,651.12 (1,398.10) (553.10) (709.32) - 248.42 768.30 6,007.30

As of 31st March 2011, Promoter & Bank debt which were converted to Compulsorily Convertible Preference Shares,pursuant to the Debt Recast were further converted into equity at INR 64.48 which was higher than the prevailing

market price of INR 39.90

W orking Capital represents sanctioned fund based limits



Overall company performance highlights: FY 2011

Total revenue of Rs. 6,496 Cr (+23% over FY10)

Operating revenue growth of +25% over FY10

EBITDA profit of Rs. 140 Cr vs. loss of Rs. 690 Cr in FY10 (An improvement of Rs.

830 Cr over FY10)

EBITDA margin improved from -13.1% to +2.2%

EBITDAR margin improved from +7.7% to +17.3%

Total RASK improved to Rs. 4.02 from Rs. 3.56 in FY10 (+13%)

Pax RASK growth of +9% over FY10 (Rs. 3.48 from Rs. 3.18)

CASK (EBITDA) reduced to Rs. 3.93 from Rs. 4.03 in FY10 (-2%) Ex-fuel EBITDA CASK reduced by 10% over FY10 (Rs 2.52 from Rs 2.81)



Company P&L ± FY 2011

Rs Crores FY 2011 FY 2010 Variance (%)

INCOME

Operating Revenue 6,360 5,090 25%

Non Operating Revenues 136 181 -25%

Total Revenues 6,496 5,271 23%

EXPENDITURE

Employee Remuneration & Benefits 676 689 -2%

Aircraft Fuel Expenses 2,274 1,803 26%

Other Operating Expenses 2,421 2,376 2%

EBITDAR 1,124 404 179%

Aircraft Lease Rentals 98 4 1,094 -10%

Total Operating expenditure 6,355 5,961 7%

EBITDA 140 (690)

Depreciation 241 217 11%

Interest and finance charges 1,313 1,103 19%

Total Expenditure 7,909 7,281 9%

Loss before exceptional items and Tax (1,414) (2,010) 30%

Exceptional Items 91 358 -74%

Foreign exchange translation difference 16 50 -68%

Provision for taxation (493) (771) 36%

PROFIT / (LOSS) AFTER TAXATION (1,027) (1,647) 38%



CompanyBalance Sheet : FY 2011

Rs. Crores FY 2011 FY 2010

Shareholders¶ Funds:

Capital 1,050.88 362.91Reserves and Surplus 1,346.40 87.70

Loan Funds 7,057.08 7,922.60

Total 9,454.36 8,373.21

Fixed Assets 2,245.23 2,535.12

Investments 0.05 0.05

Foreign Currency Monetary Item Translation

Difference Account27.98

Deferred Tax Asset 2,927.78 2,434.37

Current Assets, Loans and Advances 2,973.83 2,457.12

Less: Current Liabilities and Provisions 4,166.85 3,548.13

Initial cost on Leased Aircrafts 125.84 145.64

Profit and Loss Account 5,348.47 4,321.08

Total 9,454.36 8,373.21



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Single window to invest in the growing Indian consumer story

Owns controlling stakes in UB Groups¶ market leading companies: USL, UBL, KFA

Each of the principal investments is dominant leader in its space

Each investee company is in a fast growing segment catering to current and emerging

consumer trends

Apart from the above key investments, other group investments into engineering,

fertilizers are also through UBHL

Transparent shareholding structure and ultimate economic benefit of holding in each of

the investments flows to UBHL

United Breweries (Holdings) Limited



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Diversified Business Interests

Mangalore

Chemicals &

Fertilizers Ltd.

VittalMallya

Scientific Research

Foundation

UB Engineering Ltd.

Only manufacturer of chemical fertilizers in Karnataka

Produces a wide range of products that include urea, di-ammoniumphosphate, granulated fertilizers, micronutrients and soil conditioners

FY 2011

± Total Income Rs. 2508 Crs

± PAT Rs. 77 Crs

Is a non-profit organization named after Dr.Vijay Mallya¶s father, Mr. VittalMallya

Is into research in areas of biotechnology and organic chemistry

Into EPC, O&M and Erection services for large industrial projects such aspower, refineries, steel, cement, etc

FY 2011

± Total Income Rs. 613 Crs

± PAT Rs. 26 Crs

The Bangalore-based franchisee ± one of eight ± in the Indian Premier LeagueT20 cricket tournament ± possibly the world¶s largest commercially run sports

event

Royal Challengers



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Thank You

Documents

UB Group Presentation - June 2011