Presentation on UB Group

February 2008
Table of Contents

• UB Group Overview

• India Opportunity

• United Breweries Holdings Limited (“UBHL”)

• United Spirits Limited (“USL”)

• United Breweries Limited (“UBL”)

• Kingfisher Aviation Limited

• Other Investments

2
UB Group Mantras

• India’s leading branded consumer group

• Dominate Domestic Market

– Accelerated organic growth
– Acquisitions

• Be Globally Significant

• Set standards of governance and transparency

3
Leadership across categories

• Spirits

Volumes – 3rd Largest in the world

Market Share – Largest in India with 55% share in value terms

5 brands in top 50 world wide spirits brands*

FY 2007 sales – 66 million cases

• Breweries

Largest in India with 45% market share

India’s 1st global consumer brand
• Kingfisher

Sold in over 52 countries

• Aviation

Leading operator in Indian skies –market-share about 30% within 29
months of launch

81 aircrafts, 568 daily flights connecting 68 cities

Dominant player within 2 yrs of operation

•Impact international edition – Feb 06

4
UB Group – Evolving Strategic Focus

Paints
Others Petrochemical
7%
7% 6%
Engineering
18%
Spirits
29%
FY 1990

Beer Pharma
8% 25%
Airlines
35%

Spirits
40%

FY 2007

Engineering
2%
Beer Fertilizers
10% 13%

5
 Leadership built on great brands

# No 1 Non Scotch # No 1 Premium # Largest Umbrella # Leading operator

Whiskey in the Scotch in India alcobev brand in the in Indian Skies
world world

# 6th largest Rum # Fastest growing # No 1 in the world # No 1 Beer in India

in the world whiskey in the world

6
Market Capitalization

Market Price & Capitalisation of Key UB Group Companies

In USD

United United United Breweries Bombay Stock

Market Price Spirits Ltd Breweries Ltd (Holdings) Ltd Exchange SENSEX
July' 2005# 7.9 1.2 5.6 7,635

Jan-06 13.2 2.2 7.6 9,920

Jan-07 23.1 5.3 10.8 14,091

Jan-08 43.2 7.8 22.6 17,649

Investor return over 2 years

(Growth %) 444.8 528.9 303.9 131.2

Current Market Cap ( $ Billion) 4.3 1.7 1.5

INR 39.40 = 1 US$

While India’s benchmark index had a growth of 131%, UB Group

companies, have been clear OUTPERFORMERS and have provided
handsome
# July 05 was the month of acquisition of Shawreturns
Wallace to its shareholders

7
 Group Holding Structure
Promoter 50.35%
UB (Holdings) Ltd.
Group

55.0%

Real Estate Investments

(UB City) Pegasus License

Spirits Beer Aviation Others

36.9% 100% 12.6% 10.2%
United Spirits 78.9% Aventis
W&M
PharmaLtd.
Ltd
75% United
Breweries Ltd. 24.5%
Kingfisher Mangalore
Shaw Wallace Ltd Airlines Ltd. Chemicals &
50%
Fertilizers

Millennium 49.77% 30.8%

36.2% Alcobev UB
McDowell Deccan Aviation
Engineering
Holdings Ltd. Limited
Company UBHL & Other Group Total Group
KFR Cos. Holding Holding

USL 36.9% - 36.9%

UBL 12.62% 24.87% 37.49%

KFA 78.88% 15.10% 93. 98%

Deccan 49. 77% 0.04% 49. 81%

UB Engineering 30.82% 3.91 34.73%

MCF 24.51% 5.94% 30.45%

McDowell H L 36.24% 0.41% 36.65%

Aventis 10.22% - 10.22%

8
UB Group Management team

• Dr Vijay Mallya, Group Chairman

• Mr. S R Gupte, Executive Vice Chairman
• Mr. A K Ravi Nedungadi, President & CFO
• Mr. V K Rekhi, President - Spirits
• Mr. Kalyan Ganguly, President - Breweries
• Mr. S D Lalla, President - Spirits
• Mr. Deepak Anand, Managing Director (Mangalore Chemicals
& Fertilizers Limited)

Dynamic & Professional Management

9
India Opportunity

10
India Opportunity

1411
India GDP US$ Bn
BRIC Estimates
929

604
469

2000 2005 2010 2015

Positives Concerns
• Strong Service Sector • Regulatory Scenario
• Steady inflation • Oil Prices
• Strong growth rate • Labor reforms
• Young population • Agriculture Volatility

11
India Opportunity

• India - currently 4th largest economy globally in PP terms

• Robust economic growth rate expected to continue
• India entering the Demographic Window (working age group) soon, whereas, Europe,
US and China are either well into it or past it
• 1.5 mn new graduates every year; Buoyed growth in IT & ITES and service sector
• Rapid urbanization – middle class already exceeds 300 million; Working population to
raise by 30% by 2013
• Disposable income to increase at an average of 8.5% p.a. up to 2015
• Change in lifestyle, higher disposable income, shift in expenditure pattern
• Spending on non basic discretionary items and personal consumption to grow at 9 -
10 % p.a.
• Huge spending on food, drink, entertainment and travel
• Early entry - 70 % prestige & 50% premium customers b/w 21 -24 yrs
• Out of population of 1.2 bn, only about 500 Mn are currently of legal drinking age. A
sharp increase of about 100 mn in the addressable market size is expected by end of
the decade.

12
India Opportunity

2003 2013
181 mn House Holds 213 mn House Holds
3 11 Rich

46 124 Aspires

131 96 Strivers

The shape of demand in India is going to change from a Pyramid to a Diamond

• Alco-beverage industry Impact

• Fastest growing segments- Premium Vodka 50%, Premium Whisky 30%, Super
Premium Whisky 50%, Premium Scotch 75%. 3 yrs back these segments were
sluggish
• Prestige segment growth at >20% compared to <10% in regular segment
• Direct entry in prestige & above categories – new phenomena

Source: NCAER

13
United Breweries
(Holding) Limited

14
 UBHL – Holding Company of the UB Group

• Single window to invest in the growing Indian consumer

story

• Owns controlling stakes in market leaders

• Each of the principal investments is dominant market

leader in its space

• Each investee company is in a fast growing segment

catering to current and emerging consumer trends

• Promoters interest are aligned with UBHL. Single point

entry for the promoters

• Transparent shareholding structure, ultimate economic

benefit of the holding in each of the investments flows to
UBHL

15
 Evolution - UBHL

• UBHL has become the market leader in each core business it has ventured into

Announced merger of KFA with

Deccan,; Acquired further 3%
Rs stake in Deccan Aviation to
12 0 0 increase the holding to 50%

# 1 Spirits in Acquired further 20%

India stake in Deccan Aviation
2005: Market gave through open offer
2001: thumps up as Margins
900 doubled to 18%
Bought
Hebert son because of synergies # 1 Airline in
India
2005: Consolidated
Beer business under
2001: Bought # 1 Beer in
600 Gilbert Green India
UBL and liquor business
2007: Acquired 26% in
under USL
Label Deccan Aviation-

2000: Brought Kept acquiring smaller players in

in Scottish beer and liquor industry. BUILT 2004: Bought
300 New Castle BRANDS LIKE KINGFISHER, Shaw Wallace
BAGBIPER, BLACK DOG …

Close Price

16
 UBHL - Valuations

Equity Stake of Book Value (INR Mcap (INR Value of Stake (INR
Assets
UBHL mio) mio) mio)
Quoted Investments
United Spirits 36.9% 1,123 197,109 72,792
United Breweries 12.6% 629 71,294 8,983
Aventis Pharma 10.2% 4,270 26,784 2,737
Deccan Aviation 49.8% 11,109 37,525 18,676
Mangalore Chemical 24.5% 335 5,333 1,307
UB Engineering 30.8% 104 4,511 1,390
Mcdowell Holdings Limited 36.2% 149 4,444 1,610
Unquoted Investments
KFA# 78.9% 3,978 - 15,917
Real Estate 55.0% - - 5,000

Total 21,761 347,000 128,413

Debt 12,582
Net Invetment Value 115,831

# [Grant Thornton Valuation]

Valuation as of 31th January 2008 (1 USD = INR 39.4)

Cash & Cash equivalents as of Dec 31 2007 is 1901.9 Mio

17
 UBHL – Pre and post QIP/Warrants Debt Position
Receipts of Issue
Receipts
QIP 6,000

Warrants Issue 7,200

Total receipts 13,200

Debt Position
Pre Issue Post Issue
Term Loan 13,210 6,550

Short Term Loan 3,190 -

Working capital Loan 73 73

Other Debts 7 7

Total loan liabilities 16,480 6,630

INR in mio

18
United Spirits Limited

19
USL Overview
• World’s No.3 distiller
• 15 Millionaire brands
• McDowell’s No. 1 Brandy – world’s largest selling brandy
• McDowell’s No. 1 Whisky – world’s fastest growing whisky
• Bagpiper Whisky - largest selling whisky in world
• Pan-Indian presence - largest manufacturing/distribution set up
• Leadership across flavors, geographies and price points
• Export unit targeting Indian communities living abroad

33 years
years ago
ago Now
Now
• Multiple legal entities • One legal entity
• Primarily volume focus • Primarily top-line and profitability focus
• Growth driven by market • Growth driven by increased “premium-ness”
share across segments of the portfolio
• “Spirits” player • Integrated player across spirits and wines
• Focus on India • Global ambitions – pragmatically calibrated
• Focus on annual • In addition to annual performance,
performance accountability for 3 year strategic plan
• EBDITA 8.50% • EBDITA 22%

20
 USL Acquisitions and resultant market share

• UB group consolidated its spirits business by bringing the business of McDowell &
Co, Herbertsons, Shaw Wallace & Triumph Distillers into USL fold
• Key Acquisitions:
– June 2005 – UB Group acquired majority stake in Shaw Wallace & Co
– July 2005 – USL acquired Bouvet Ladubay a leading manufacturer of sparkling wine in
France
– May 2007 – USL acquired 100% stake in Whyte & Mackay worlds fourth largest Scotch
Whisky company. This will give USL access to the key overseas markets and access to
“scotch” inventory

Radico Radico
USL Khaitan Khaitan
SWC
8% 8%
31% USL 12%
39% USL
44%

Others USL
Others SWC 33% 59%
58% 11%
Others
Others
44%
53%

Market Scenario – Market Scenario – Market Scenario top line Market Scenario top line
2005 (Before 2007 (Post brands – 2005 (Before brands – 2007 (After
Acquisition) Acquisition) Acquisition) Acquisition)

21
W&M Acquisition
• Acquired by USL in May 2007
• Fourth largest Scotch whisky company in the world, with over 150 years of heritage
and strong brands
• Acquisition provides a strong platform:
– to exploit rapidly growing India opportunity for Scotch, especially at the premium end
– W&M brand pedigree to drive market share in high growth emerging markets
• Provides a sustainable source for bulk scotch which is used for blending in USL’s
IMFL offerings
• W&M is a valuable asset in a ‘Scotch-short’ market environment - expected to last for
at least a decade
• Indian whisky (manufactured and consumed predominantly in India) constitutes 19%
of total global whisky volumes with increasing demand for the premium segment

22
USL – Trend of Sales vs. Revenue
70 66.4
YoY growth in volume, revenues Volume/Sales growth after
60 acquisition
Particulars Volume Revenue 50 38,790
40.1
growth growth 40
21,250
30
20 14.8
Before 14% 20%
10
acquisition
(1997-05) 0 4,030
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
After 30% 36%
acquisition USL Sales (mio cases) USL Sales (INR mio)
(2005-07)

6000
• Compounded annual growth 4910
rates of sales revenue growing 5000
at a faster rate than the CAGR Post acquisition
4000 EBITDA growth
of sales volume.
3000 2580

• USL moving up the value chain 2000 1460

by reducing market share in the 920
1000
“cheap liquor” market.
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

1US$ = 39.40 INR USL EBITDA (INR mio)

23
Snapshot of Financials
INR in Mio

Dec 2007* FY 2007 FY 2006

Net Income 24,259 27,909 20,968
Cost of Goods Sold 12,131 14,454 10,769
Staff Costs 1,677 1,808 1,665
Advtg & Sales Promotion 2,185 3,124 2,561
Other Overheads 3,129 3,557 3,385
E BIDTA 5,137 4,966 2,587
Other Income
Interest / Finance cost 948 1,068 1,666
Depreciation 232 309 409
Exceptional Income 2,627
Profit before Tax 3,958 6,216 512
Income Tax 1,398 1,276 92
Profit after Tax 2,560 4,940 420

•Standalone for 9 months

1US$ = 39.40 INR

24
Sustained EBITDA Growth

J une'0 4 2 0 2 .6 J une'0 5 3 56 .9 76 %

Sep '0 4 19 6 .3 Sep '0 5 3 6 7.4 8 7%

Dec'0 4 2 4 5.0 Dec'0 5 511.9 10 9 %
M ar'0 5 2 53 .0 M ar'0 6 4 9 2 .7 9 5%

J une'0 5 3 56 .9 J une'0 6 774 .7 117%

Sep t'0 5 1,2 2 1.7 Sep t'0 6 2 ,3 9 4 .1 96%

Dec'0 5 2 ,0 4 7.4 Dec'0 6 3 ,8 10 .8 86%

M ar'0 6 2 ,58 7.5 M ar'0 7 4 ,9 13 .8 90%

J un'0 6 1,0 4 4 .9 J un'0 7 1,74 2 .3 6 7%

Sep t'0 6 2 ,3 9 4 .1 Sep t '0 7 3 ,3 3 3 .5 39%

Dec'0 6 3 ,9 79 .4 Dec'0 7 5,6 16 .3 4 1%

McD USL

25
 USL Debt Position – December 2007

Term Loans 6,059

Whyte & Mackay acquisition Loan-
- With recourse to USL 24,450*
- Without recourse 25,480
Working Capital Loans 5,290
Fixed Deposits 513

Unsecured Loans (incl FCCB's)

USL 844
Shaw wallace 955
63,591
Less: Cash & Cash Equivalent 3,723
Net Debt 59,868

* Value of treasury stock is Rs. 23,715 mio

1US$ = 39.40 INR 26

New initiatives

• India’s largest winery is being built at Baramati - to be operational by

October’08. Cost of the project – Rs.230 million, over a three year
period.

• Brand ZINZI to be launched in Q1 calendar year 2008 in Mumbai, will

be launched in other cities during 2008.

• Bouvet Ladubay brands launched in Mumbai between the price

points Rs1500/- and Rs 2200/-. product launch in Delhi and
Bangalore in Q3 FY 2008.

• Four Seasons range of premium brands to be launched from

March’08

• Dalmore, single malt whisky, launched during November 2007 in

Mumbai, Bangalore and Pune.

27
United Breweries Limited

28
 Alcohol Consumption trends

<0.5% Wine 5%

Beer is under

Emerging Markets
Spirits/
78% Liquor 8%
represented
in India
India

21.5% Beer 87%

83

Major milestone of
23 24
1 Liter Consumption
1
12 achieved
India Indonesia China World USA
in India but….
Avg

29
Industry Growth

30%

25%

20%

15%

10%

5%

5 Year
CAGR 2006 2007
2005

Future Strong with double digit growth expected

30
UBL – Trend of Market Share

• UBL is the largest beer company in India and controls ~60% of all manufacturing
capacity
• Market share
– UBL has been the market leader with close competition and marginal leadership during
1997–2002 largely due to multiplicity of players and fragmented markets
– 2002 onwards, UBL embarked on strategy of inorganic growth through aggressive
acquisitions. This helped increase overall sales & increased market share
– Early 2005, UBL entered into a JV with Scottish & New Castle Group

UBL Shaw Others

37% wallace UBL 23%
Others 40%
25% UBL
46%
46%

Mokan Others
Meakin 35%
SAB
17%
31%
Market Scenario – 1997 Market Scenario – 2002
(Before Acquisition) (Year of Acquisition) Market Scenario – 2007

31
 UBL –Trend of Sales: Volume Vs Revenue

• UBL has been growing faster than UBL - Performance

market 24
5000

Premium: Strong:
Industry Growth 8.0% Industry Growth 23.4%
UBL 8%* UBL 14.9%
16.7
268 567 2310

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

UBL Sales (mio cases) UBL Sales (INR mio)

18.6m 23.0m
17.7m 18.7m
Acquired Breweries - Performance
18
26
26.8 5670
2002 2003 2004 2005 2006 2007

Dec 06 07 brands Sales Dec

Dec Acq. 06 Dec 07
(Lakh cases)
Acq. brands Sales (Rs.in crs)

• YoY (6 years) in sales volume and

revenue growth in acquired breweries 1.8
(Post acquisition) – 100% pa & 124% 260

pa respectively 2002 2003 2004 2005 2006 2007

Acq. brands Sales (mio cases)

Note: Year ending 31st March
Acq. brands Sales (INR mio)

* 9 months
32
 Snapshot of Financials
INR in mio

• KF Strong and KF Dec 2007* FY 2007 FY 2006

premium outgrow Total Revenue 9,761 10,749 7,058

the industry Cost of goods sold 4,954 5,310 3,040

Staff costs 561 642 450
Marketing and Selling expenses 2,340 2,508 1,569
• New greenfield Other overheads 511 674 627
breweries EBITDA 1,394 1,615 1,372
commissioned and Other Income
in operation Interest 283 280 239

Depreciation 425 385 209

• Capacity Non recurring Expenditure (305)
investment for PBT 686 950 619
2008-09 on track
Income tax (257) (299) (425)

PAT 429 651 194

•Standalone for 9 months

1US$ = 39.40 INR

33
UBL – Debt Position December 2007
INR in mio
Term Loans * 2,610

Unsecured Loans 505

Working Capital Loans 1,031

Total Liabilities 4,146

Less: Cash & Cash Equivalent 192

Net Debt 3,954

Debt / Equity^ 1.27

Debt / EBITDA^ 1.76

Blended Cost of Debt (%) 9.50%

^ Annualized

* Term Loans includes INR 863 mio utilized for acquisition of subsidiary and INR
1,225 mio for Capex

34
New Initiatives
• Marketing
– Launch “KF Ultra” in Super Premium Category
– Launch “Buzz” to widen consumer base
– Innovation in Packaging :
• Contemporary Dressing, New Design Bottles, New Range of SKU’s
– Innovation in 3600 Brand presence :
• Launch of the NDTV Good Times channel
• Experiential Marketing

• Manufacturing
– First 25,000 BPH line in India at UB Rajasthan
– 36,000 BPH line being installed at UB Bombay
– New Products being developed in-house at CTC
– Innovative Brewing Technology Development in process

• Capital Raising
– To fund capex planned to meet robust growth expectations, a rights issue of about Rs. 4,250
million underway.

35
Kingfisher Airlines Limited

36
Air travel potential in India

• Domestic Traffic (pax) : 20 M in 05 – 25 M in 06 – 35 M in 07

• Growth potential for domestic air travel linked to the surge of the Indian middle class
– Bracket of population evolving as a young, consumerist and urban generation bound to make
an ever-greater use of air transport

• Significant tourism growth perspectives

– 4 M foreign annual visitors
– Tourism Ministry targets 10 M tourists by 2010
– World Tourism Organisation forecasts 25 M tourists by 2015

• Forecasted Growth in the number of passengers (IATA)

– Domestic : 20.4% p.a. in average from 2007 to 2010
– International : 7.3% p.a. in average during the same period

• Wealth is no longer confined to metro cities but widely dispersed in under served
secondary cities. Huge potential to start new routes and attract business from higher-
income groups.

37
Evolving market place

• India fleet of 320 aircraft compared to China 1,120 planes for a similar population size

• 20 M Indians travel by train in one day, against 35 M by air in one year

• Market liberalization initiatives : lower taxation (Air Travel tax, Airline Turbine Fuel
tax, landing fees…), gradual open skies, signature of expanded bilateral agreements,
incentives for privatization & investments in airlines

• Airport infrastructures are improving. Private sector building new airports in South
India which is the KFA/Deccan focus area

• Indian airlines only carry 32% of international passengers to & from India

• Mumbai/ Delhi and other major airports being decongested

38
UB Group and Aviation

• UB Group, having achieved dominance in its core beverage business, was

looking to leverage its unique strengths in

– Understanding the needs of the evolving Indian consumer

– Creating premium products at true value
– Operating in a highly regulated environment
– Leveraging brand equity

• Aviation offers extra ordinary growth potential

• Success based on three core strengths

– Ability to tightly manage costs
– Ability to manage scale up
– Ability to deliver a unique experience while remaining competitive

• With the acquisition of Air Deccan, UB now caters to the entire spectrum of air
travelers

39
Management Advisory Board

• Kingfisher’s Advisory Board has the who’s who of the international

aviation industry –

– Sir Ralph Robins - Former Chairman of Rolls-Royce

– Sir Colin Terry - Former Chief Engineer and Head of

Logistics – Royal Air Force

– Mr. Stewart John, OBE - Former Head of Engineering

Cathay Pacific Airways

– Mr. H Lr Karel H Ledeboer - Former CEO of KLM Royal Du

Airlines and COO – Swiss Airlines

– Mr. David Turnbull - Former Chairman of Swire Pacific Ltd

and Cathay Pacific Airways

• Kingfisher will be greatly benefited from the immense knowledge

of this team of Advisory Board members

40
Milestones

• KFA + Deccan Aviation Limited (DAL) achieved a market share of about 30%
within 27 months of operations as compared to Jet Airways (Jet + Jet lite)
market share of about 30% - 14 years after launch
• KFA + DAL second largest domestic airline group with a fleet of 75 aircrafts.
Quickly ramped up the same in 27 months as compared to Jet’s fleet size of 76
aircrafts for domestic operations (as of July 2007)
• Over 5600 flights operated within 27 months of launch
• Flown
– 1 million guests in 10 months
– 2 million guests in 15 months
– 3 million guests in 19 months
– 4 million guests in 22 months

• KFA connects 31 cities and DAL 66 cities. Combined Coverage 72 cities

• Inducted an average of more than 1 aircraft per month which is amongst the
highest induction rates in the world

41
Market Share – KFA Leading operator
45%

40%

35%

30%

25%

20%

15%

10%

5%

0%
May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- Jun- Sep- Nov-
05 05 05 05 05 05 05 05 06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07
-5%

Kingfisher Jet Sahara Indian Deccan Spice

Go Paramount Indigo Indus

Note: 1. Jet and Sahara Markets shares consolidated from Jan 07

2. KFA and DAL market shares consolidated from May 07

42
Fleet plan

• Current fleet: 24 A320F +1 Corporate jet + 15 ATR (December 2007)

• Fleet Plan of over 150 aircraft
Average Number of Aircraft per Fiscal Year
160
150 ATR A320F WB
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
FY FY FY FY FY FY FY FY FY FY FY FY FY FY
05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
A uA

• Deliveries well spread until FY18/19 and commensurate with expected growth in demand for air
travel

43
International Strategy

• Current Government policy requiring 5 years of domestic operations prior to flying

overseas likely to be reduced.
• Deccan will be completing 5 years of operations by middle of 2008. KFA can fly
international even in the event of the policy remaining unchanged.
• India – US – India nonstop flights present the most unique opportunity and reduced
competition. KFA will concentrate mainly on this opportunity and has ordered specific
aircraft types to undertake this mission.
• KFA will commence nonstop flights with the Airbus A340 -500 between Bangalore
and San Francisco and Bombay and New York in Q2 2008.
• KFA will commence nonstop flights with the Airbus A330 - 200 between Bombay and
London and Bombay and Hong Kong in Q2 2008.

44
Significant Awards

• Winner of the “Best New Airline of Year” Award for 2005 in the Asia-Pacific &
Middle East region from Centre for Asia Pacific Aviation (CAPA)
• Winner of the world-renowned SKYTRAX Award for Service Excellence 2005-
06
• Winner of the PATWA award for Service and Cuisine
• Rated as the 3rd most successful brand launch of 2005 by Business Standard
– India’s leading business daily
• Voted as the most preferred airline in a survey conducted by an independent
research firm with 46% votes compared to 9Ws 23%
• Ranked amongst the Top Ten Buzziest Brands of 2005 by agencyfaqs.com and
The Brand Reporter
• No. 1 in corporate category – even ahead of groups like Tata, Reliance
• Ranked among the top 5 online advertisers by Yahoo India
• Ranked among the most effective advertisers of ’05- ‘06 by NDTV Profit ,a
leading business news channel

45
Performance Indicators – December -07
No of Flights per day - KFA 248
No of Stations Covered - KFA 43
Current Average Ticket Value (USD)
First $ 330
KF Class $ 109
Combined $ 118
Current Average Loads
First 40%
KF Class 68%
Total 66%
Market Share - KFA 14%
Deccan 16%
Combined 29%

Audited FY'06 Audited FY'07 Projected FY'08

Particulars USD Million
Total Revenue 136 396 735
Total Operating Costs 161 437 631
E B ITDA R (25) (41) 104
Lease Rentals 28 69 122
Interest 4 22 27
Cash from Operations (58) (133) (45)
Depreciation 1 12 18
Profit / (Loss) (58) (145) (63)
Synergy Benefits from Air Deccan Acquisition - - 25
Revised Profit / (Loss) (58) - (38)
Revised Cash from Operations (58) (133) (20)

46
Kingfisher – Deccan deal highlights

• 49.8% was acquired in Deccan Aviation for about USD 287 million
• Kingfisher-Air Deccan group is the largest domestic airline group with a current fleet
of 81 aircrafts
• Combined network covering 68 cities is a unique and not easily replicated strength.
The reach is larger than Air India, the Govt. owned carrier.
• The combined airline powerhouse will henceforth work closely to exploit the
significant synergies that exist in the areas of operations and maintenance, ground
handling, vastly increased connectivity, feeder services ,distribution penetration, etc
• Both airlines put together offer 568 daily flights connecting 68 cities whilst taking
advantage of unparalleled synergy benefits arising from common fleet and enjoy the
largest market share of 30% in the Indian aviation industry
• The deal has provided an opportunity for both the airlines to review their aircraft
orders and other capex items like simulators, etc – Significant capex savings
• Significant operational synergies are expected are expected from this deal for both
the airlines
• Intent to raise capital to take care of the funding requirements of the airline business

47
KFA Deccan – Synergy opportunities
• The two airlines together provide scale which could be the
basis of creating a more competitive business – potential no.1
in the domestic aviation industry
– Maximum number of departures/day
– Largest network of destinations

• Assets and infrastructure have a strong strategic fit

– Similar aircraft type (Airbus/ATR)
– Significant increase in airport slots

• Potential to realize significant revenue, cost and capital

synergies

48
KFA Deccan – Synergy opportunities

While maintaining respective FSC and LCC focus, two

airlines can:

• Create a network strategy which provides the combine

a competitive advantage

• Re-calibrate capacity deployment to facilitate optimal

utilization of capital

• Use each other’s strength to further the combines sales

and marketing prowess

• Reduce costs to strengthen respective market positions

49
KFA Deccan – Operating structure

Combined functional structure presents best opportunity to facilitate speedy realization of

synergies

Rationale
• Singular responsibility/accountability is necessary to achieve synergies which are present
across all functions
– Separate structure till-date has not been conducive to realization of synergies
– In a merger situation, critical mass of people should be made responsible for both the
businesses

• Unique KF/DN context would ensure

– Appropriate distinctions between KF and DN would remain – Aircraft configuration,
cabin costs, channel focus
– Difference in costs of two brands would remain intact

• Functional structure would be designed to ensure that respective nuances of each airline are
protected as appropriate

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KFA Deccan – Proposed legal structure & next
steps
Single share denomination’ for entire value of two airlines presents best
opportunity to maximize business opportunity and synergy realization

Rationale
• Full synergy realization not possible with separate legal structure
• Allows development of a “flexible” business – source of competitive
advantage
• Covers all customer segments in the market which captures both
profitability and growth opportunity
• Creates scale – potential no.1 in the domestic aviation industry
• Positions business as an attractive alliance partner, if necessary
• Obtain board approval on ‘business direction’
• Align operating management and prepare the combined business for
implementation of synergy opportunities

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Other businesses / investments
UB Engineering
• UBHL holds 34.74% of UB Engineering
• One of the foremost Indian engineering
companies in the field of installation of
industrial plants
• Focus on projects in Power, Fertilizers, Oil
& Gas, Fire Fighting, Effluent Treatment,
Agrotech and other sectors
• Recently awarded ISO 9001:2000
Certification for its operations covering
Installation, Erection, Commissioning,
Testing and Maintenance
• Turnover of over US$ 70 mnin 2006-07
Mangalore Chemicals & Fertilizer
• UB Group took over MCF - a "potentially
sick " unit with accumulated losses in
excess of US14 mn
• Manufacturing capacity including 2,17,800
MT of Ammonia and 3,80,000 MT of Urea -
Brands- Mangala Urea and DAP
• Manufacturing capacity including 2,17,800
MT of Ammonia and 3,80,000 MT of Urea
• Co. achieved a turnover of US$ 150 mn
Real Estate
• Owns ~500,000 sqft of prime property at
Bangalore
• Prorject competed - UB CITY will house
the Group offices under one roof
• It will also house commercial offices,
banks, high-end retail stores, 1 five star
hotel, serviced apartments, restaurants,
food courts, pubs, health clubs, cafes etc
• Current market value of property is ~ US$
125 mn as against a holding cost of US$
40 mn
• Rental income estimated at ~ US$ 5.5
mn p.a
Aventis
• UBHL holds 10.28% of Aventis
• Established in 1987: Vittal Mallya
Scientific Research Foundation (VMSRF)
• Recognized by the Departments of
Scientific & Industrial Research (DSIR),
Dept. of Biotechnology (DBT)
• Several patents to its credit
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