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CHAPTER- 1
1.1: INTRODUCTION

The word 'business' is actually derived from the idea of 'busy-ness'. This idea
accurately describes most organizations: they are busy organizing resources,
producing, selling, managing people and keeping track of finances. The
people running the business have to organize people, money, materials and
machines to produce a good or service to sell or give to their customers.

Organisations: Since the dawn of time, civilized man has designed and built
facilities in which to present great ideas. The Concept Organization manages
ideas with the same monumental approach.

Few things touch our daily life as much as Organisations do. We depend on
organisations for education, food, clothing, shelter, health, wealth,
recreation, travel, and much more
1
. But what are they, have they come with
us? Yes, organisations are as old as the human race itself. Archaeologists
have discovered massive temples dating back to 3500 BC that were
constructed through the organized actions of many people. The fact that
impressive monuments were built suggest that not only did complex
organisations exit, but that the people in them worked cohesively for
common causes. They are groups of people who work independently
towards some purpose. Organisations are not physical structure; rather they
are people who work together to achieve a set of goals. People who work in
organisations have structured patterns of interactions, meaning that they
expect each other to complete certain tasks in an organisation. But why do
they exist? It is for a simple but healthy reason that they play five different
important roles. (shown through a chart below under the sub heading
objectives of organisation.

1
Organizational Behaviour, K. Ashwathappa, , P No. 2, 7
th
edn., 2008, Himalaya Publishing House
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Thus, an organization is a social arrangement which pursues collective
goals, which controls its own performance, and which has a boundary
separating it from its environment. The word itself is derived from the
Greek word (organon) meaning tool. The term is used in both
daily and scientific English in multiple ways.

In the social sciences, organizations are studied by researchers from several
disciplines, the most common of which are sociology, economics, political
science, psychology, management, and organizational communication. The
broad area is commonly referred to as organizational studies, organizational
behavior or organization analysis. Therefore, a number of different theories
and perspectives exist, some of which are compatible, and others that are
competing.
Organization process-related: an entity is being (re-)organized
(organization as task or action).
Organization functional: organization as a function of how entities like
businesses or state authorities are used (organization as a permanent
structure).
Organization institutional: an entity is an organization (organization as
an actual purposeful structure within a social context)
2

Management is interested in organization mainly from an instrumental
point of view. For a company organization is a means to an end to achieve
its goals.

1.2: Definitions:
Organization is a process of dividing effort of working group of making such
joint efforts more productive. Effective and fruitful organisation allocates
duties to the managerial staff.
Organization is the form of every human association for the purpose of
attaining common objective -- J D Mooney

2
http//www.en.wikipedia.org/wiki/organisation-%28disambiguation%29/
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Organization is the group of people who are cooperating under the
direction of leadership for the accomplishment of a common end.
- Ralph C. Davis

Organization is concerned with the arrangement of work with the division
of activities and the allocation of the duties authority and responsibility
- J.C. Denyer

1.2.1: Characteristics of organization:
It is a group of individuals, which may be small or large;
It refers to structure of duties and responsibilities;
The group in the organization works under the direction of executive
leadership;
It consists of directing authority, which controls the collective efforts of
the group.

1.2.2: Objective of the organization:
To serve society;
To establish healthy relation between labour and capital;
To administer economy in production organization and systems.

1.3: Reasons why organisations exist
The effectiveness of the organisation depends upon the quality of good
produced, services rendered, at lower costs without compromising on
profit-making. And the effectiveness also requires that the organization seek
to satisfy their diverse stakeholders
3
, and also the consumer satisfaction.


3
Organisational Behaviour, K. Ashwathappa, , P No. 6, 7
th
edn., 2008, Himalaya Publishing House
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1.4: Objectives of the study

To relate the theoretical aspects with working of the organisation
To look closely the various departments and there functioning;
To have a convergence between theoretical and practical practices.
To study the policies, procedures and programs of the company;










Increased specialization and
division of labour
Use large-scale technology
Manage the external environment
Economize on transaction costs
Which increases
the value that
an organization
can create
Organisation
allows people
jointly to :
Exert power and control
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CHAPTER 2
INDUSTRY PROFILE
2.1: History of Beer Industry in India
Beer began to be exported to India in days of the early 1700s- during the
British Empire. The demand for beer in the hot climate of many parts of
India by the British administrators and the troops was so great that it led to
creation of a new style of beer by George Hodgson in his London brewery
India Pale Ale also known as IPA.
As of today no brewer in India makes India Pale Ale. All Indian Beers are
either:
Lagers (4.3% alcohol)
Strong lagers (15 % alcohol)
4


2.2: Market Overview
Indian beer market is valued at INR 35 bn with volume sales of 172 mn cases
for FY 2008-09 and at the current trend the market is expected to grow at
an annual rate of 17.2% till 2011. Foreign brewers are eyeing the Indian
beer market which is largely untapped and has huge growth potential
5
.

International beer companies have a good enough reason to tap markets
like India. That their main markets, North America and Europe, are either
flat or in a state of decline is no secret. Carlsberg, for instance, said it could
look at closing select European breweries due to a slump in demand.
In contrast, beer is flying off the shelves in India. A recent report by global
beverage consultants Canadian states that consumption of beer in BRIC
countries (Brazil Russia, India and China) increased by almost 50 percent
during 2002-2007.In India, beer sales grew at nearly 90 per cent, compared
to a less than 60 per cent growth for other alcoholic drinks. Industry sources

4
http://en.wikipedia.org/wiki/Beer_in_India
5
http://www.mindbranch.com/Beer-India-Forecasts-R587-51/

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estimate that the Indian beer market is expected to nearly double to 23.3
million hectolitres by 2012 from 12.5 million hectolitres at present.

But the market is difficult to break into. More than 80 per cent of the
market is controlled by the two players, UB and SAB Miller. While UB with
brands like Kingfisher, Zingaro and Kalyani Black has a 48 per cent market
share, SAB's bouquet of acquired brandsHaywards , Royal Challenge,
Knock Out and Foster's deliver a combined market share of 37 percent.In
the last 9 years beer consumption has been growing rapidly at a CAGR of
7%.Looking from the industry perspective, the Indian beer industry has been
witnessing steady growth of 10% per year over the last ten years. With the
average age of the population on the decrease and income levels on the
increase, the popularity of beer in the country continues to rise.
6


2.3: Drivers & Challenges
2.3.1: Drivers
A. Young population
Nearly 28% of Indian population live in urban areas which come close to the
population of USA. Urbanization is happening at a very fast pace and about
40% of the total population is expected to live in urban areas by 2020. Also
people in India are relatively younger when compared with global average.
About 50% of the Indian population would be under 30 years even in 2015.

B. Low per capita consumption
Indian per capita beer consumption is very low compared to global average.
In the total alcohol market in India, beer contributes only 4% of revenue.
The low penetration in beer consumption provides a substantial and
sustainable growth in demand for beer in future
7
.

6
http://www.scribd.com/doc/26542793/Beer-Market
7
http://www.scribd.com/doc/3483476/Beer-Industry in India, P No 2

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Graph No: 2.4, Average beer consumption across the world

Source; http://www.scribd.com/doc/34838476/Beer-Industry-in -India PNo 15, Exibit 1
C. Rising income levels
India is one of the most attractive consumer markets in the world with
about one-sixth of the global population. The rising income level has a direct
positive impact on beer sales in India. Also, urban consumers who are more
exposed to the western culture socialize with beer. The growing income
levels particularly in the urban earning class are a potential market for beer
manufacturers in India.

D. Dynamism in Beer market
Many foreign beer manufacturers have entered or plan to enter the Indian
beer market with their product line. The market is set to flourish with 15
new breweries and 10 international brands in the next 3 years. With the
global markets experiencing low or stagnating growth and focus shifting to
India, the Indian industry is expected to witness fast growth in the coming
years.
8




8
UBL Annual Report 2009; SKOL Breweries Annual Report 2008

80
74
25
22.1
1.2
0
10
20
30
40
50
60
70
80
90
US Europe China Global Average India
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Table No:2.5, MAJOR BRANDS VENTURING INTO INDIA
International
players
Brands
Asia Pacific
Breweries
Tiger,Cannon-
10000,Barons
Anheuser-Busch
InBev
Budweiser, Stella Artois,
Becks, Hoegaarden,
Leffe
Carlsberg Calsberg, Tuborg,
Palone
Source; http://www.scribd.com/doc/3483476/Beer-Industry in India, P No 15, Exibit 2

2.6: Challenges
A. Bottling shortage
What often happens is people have more bottles at home than they drink
on a weekly basis because they tend to buy regularly and bring them back
irregularly. SABMiller, which manages Shaw Wallace Breweries Ltd, has
warned that the country could face a beer shortage in the approaching
summer, the peak consumption season. The shortage in bottles took their
toll on profitability of the companies. Richard Rushton, managing Director of
SWBL submitted that bottle prices had seriously affected the companys
profitability, especially considering that regulations in a number of states
prevent companies from passing on cost increases to. Indian brewers have
injected about 250 million new returnable glass bottles into the beer market
during the last nine months to beat down prices of recycled bottles
9
.






9
http://wapedia.mobi/en/Indian_beer
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B. Government Tax and regulation
Advertisements barrier
Building brands, particularly for alcoholic beverages, is easier said than
done. In the mid-1990s, the Indian government banned advertising of
alcoholic beverages. By then, existing brands such as Kingfisher, Foster's and
Haywards had already built their brand without any surrogate branding
efforts. In contrast, the new entrants will have to rely only on surrogate
advertising. For instance, Cobra is now advertised on television as sparkling
water with the tag line "so smooth, anything goes down well"
10
.

Price Restrictions
Price restrictions in many large markets remain a biggest challenge for the
industry. The Government decides the End Consumer Price (ECP), leaving
the manufactures with no say in determining the price of the beer. In a free
market economy this has no rationale.

Inadequate Market Infrastructure
The market infrastructure for beer in India is inadequate. For every 21000
persons there is one outlet hampering the availability of beer. In China, for
instance the figure is 300.

Restriction of Movement of Beer
For the movement of beer from one state to another, an export
license and an import license is required. Export fee is imposed in the
state where beer is manufactured and import fees on the State where it is
sold. In some states only beer manufactured in that state can be sold. Few
states like Tamilnadu have strict rules of selling only beer manufactured
within the state.


10
http://www.rediff.com/money/2007/dec/04bspec.htm
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2.7: Competition
Currently more than 80% of the market is controlled by two major players
United Breweries Limited (48%)and SABMiller India (35%).Strong beer is
predicted to grow faster as it is perceived to offer value for money
alternative to spirits. With InBev acquiring Anheuser-Busch, it has potential
to emerge as the third major player in the Indian beer market. The future of
beer market in India looks positive with the entry of many international
players. Beer sales will increase along with increasing number of brands and
sub-categories in India. Existing players like UBL and SABMiller are planning
to expand their range of products. New players like AB InBev, Carlsberg are
bringing their internationally renowned brands to India.
11

Graph No: 2.8, Market Share in India


Source: http://www.scribd.com/doc/3483476/Beer-Industry in India, P No 6






11
http://www.scribd.com/doc/3483476/Beer-Industry in India, P No 15

UB Group
49%
SABMiller
38%
Millenium
Alchobev
9%
Mohan
Meaking
4%
MARKET SHARE IN INDIA
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2.9: Top players
United Breweries
United Breweries crossed milestone of 100 million cases. It enjoys a 57 per
cent share in the estimated 200million cases domestic beer market. Their
total volumes of sales increased by 20% while the revenues increased by
18%. The company also saw huge rise in its net profits- by 51%.UB Group
today controls 60% of the total manufacturing capacity for Beer in India. The
company, which sold over 100 million cases of beer in 2009-10, expects a
sales growth of 30-35 per cent in the current fiscal.For FY 2008-09-The
Company reported a net turnover of INR 17475.7 mn and profit after tax of
INR 624.9mn

A. Brands:
Kingfisher (Premium, Strong, Strong fresh, Draught, Ultra, Blue, Red,
Bohemia), Zingaro, UB Export,Londer Pilsner Premium strong, Kalyani Black
Label strong, Bullet, Marco Polo, Guru Strong, London strong
12
.

B. Business Strategy:
UBL has a manufacturing network of 22 breweries across India. The
company enjoys a market share of 48% in the industry and plans to expand
its share further. Kingfisher Strong is the single largest selling beer brand in
India, while Kingfisher Premium continued to outperform in its category.UBL
plans to set-up two new green field breweries at Mallepally in Andhra
Pradesh and Nanjangud in Karnataka in order to support the revenue
growth. UB Group firm United Breweries Ltd is planning to locally produce
Dutch beer brand ''Heineken'' by next fiscal besides launching a refurbished
''Tiger'' brand in India this year
13
.


12
www.kingfisherworld.com
13
http://economictimes.indiatimes.com/news/news-by-industry/cons-products/liquor/New-Article/articleshow/6159400.cms

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SABMiller
SABMiller India is a subsidiary of SABMiller PLC registered in India as SKOL
Breweries Limited. For FY 2007-08 the company reported a net turnover of
INR 10860 mn and profit after tax of INR 344 mn.

A. Brands:
Haywards 5000, Haywards 2000, Haywards Black, Fosters, Indus Pride,
Peroni, Royal Challenge, Knock Out .

B. Note on Fosters:
Foster's Lager is a uniquely international beer, brewed with the finest sun-
dried malted barley, the purest water, and Foster's own specially bred 'Pride
of Ringwood' hops imported directly from Australia to give the beer an
authentic flavour. Its crisp, clean flavour won it immediate international
acclaim when it was first brewed in Melbourne in 1888. Today, more than
one hundred years later, it is still recognized as one of the world's best
beers.

C. Business Strategy:
SABMiller has 10 breweries located strategically across India to serve the
beer market sufficiently. The company has a market share of 35% and
stands in the second position. The company has invested about INR 1250
mn in the past two years for upgrading the breweries to global standards.
SABMiller has leveraged its global expertise in packaging, pricing, occasion
and product gaps which were improved based on consumer insights .Also it
plans to bring the iconic Dutch premium beer Grolsch to India. SABMiller Plc
has acquired the brand for USD 1.2 bn in 2007
14
.



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Other players
InBev India
A. Brands:
Tennents Super, Becks, Stella Artois, Hoegaarden, Leffe Anheuser-Busch
(AB) was acquired by In Bev in 2008 and formed AB In Bev India; currently
operates using trading name In Bev India. In Bev operates in India through a
49:51 joint venture with soft drink bottler RKJ Group. AB started operations
in India through a 50:50 joint venture with Crown Beers International
initially but later AB purchased the remaining ownership from Crown Beer
India Ltd. Business Strategy: InBev India has a production capacity of 1.9 mn
cases a year through two contract brewering arrangements in Regent
Breweries in Madhya Pradesh & Dasappa and Sons Bangalore. InBev plans
to introduce Tennents brand in North India either by finding a contract
brewer or by setting up a brewery. AB InBev India launches Budweiser beer
in North India in August 2009. It has received a good response in the
Southern states and Maharashtra. The company expects to cross 2.9 mn
cases in sales of Budweiser beer by December 2009
15
.

Carlsberg
It entered Indian market in 2006 & operates here through a joint venture
named South Asia Breweries and positioned itself as a premium mild beer.
With the launch of its flagship brand, the company is trying to create a
premium, all-malt beer category. In 2009 Carlsberg was the 4th largest
brewery group in the world. Its products are sold in more than 150 markets.
In 2008 the Group sold more than 120 million hectolitres of beer, nearly 100
million bottles of beer a day. Their major consumers are in Southern India.
Howsoever, it consciously chose the north, east and west regions of the
country to set up its breweries Strategy adopted by Carlsberg is to
concentrate on to the untapped market of north and west India in the initial

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stage of the production. Moreover, since it has positioned itself as a
premium product, it is only catering to the urban cities of India.

2.10: Latest Developments IN BEER INDUSTERY
A deal struck in December last year between UB Group and Heineken, the
Dutch brewer had agreed to produce and market its world-renowned beer,
''Heineken'', only through UBL. Moreover, ''Heineken'' had also agreed to
transfer the Indian operations of its Singapore-based subsidiary, Asia Pacific
Breweries (APB), which owns the ''Tiger'' beer brand, to UBL. The company
said it will launch the new brand in phases and expects to make a pan-India
presence by next fiscal
16
.
Year 2009 was highly dynamic in terms of new brand launches, with United
Breweries Ltd and Carlsberg India Pvt Ltd expanding their domestic
premium lager portfolios by launching Kingfisher Ultra and Tuborg,
respectively.
Brands such as Tennents, Kingfisher Blue and Indus Pride, which were
launched in late 2008, became available in outlets nationwide in early 2009.
Niche products, such as dark beer, also saw greater availability, with the
launch of ales from the Little Devils and Coopers portfolios in 2009.
VB victoria bitter was launched at a function on 20 January 2010 in a lead-
up to the Australia Day celebrations in New Delhi. VB The Beer Australias
favourite beer.
2009 total volume growth was two percentage points lower than the total
volume CAGR recorded over the review period. Although 2009 volume
growth was higher than that in 2008, growth rates did not bounce back to
the highs seen in 2006 and 2007. While the long summer in 2009 buoyed
the beer market in North and West India, sales growth in the key southern
states, such as Karnataka, Andhra Pradesh and Tamil Nadu, was adversely
affected due to taxation-related price rises in Karnataka and the withdrawal

16
http://www.euromonitor.com/Beer_in_India
Page | 15

of United Breweries Ltds and SABMiller India Ltds brands from Andhra
Pradesh in first half of 2009.
Both domestic and multinational players were very aggressive with brand
launches and promotional activities in 2009, and the category benefited
from consumers trading down from imported premium lagers to domestic
premium lagers. Moreover, brands such as Tiger, Carlsberg and Budweiser,
which were available as imports in several cities in 2008, saw a sharp rise in
availability and accessibility as domestically produced SKUs of these brands
were rolled out nationwide in 2009.
The average unit price of beer rose only marginally in 2009, by about 1%.
Overall prices remained stable in most of the states in India. Nonetheless,
fluctuations in taxation policy did drive up prices in some states, including
Karnataka and Delhi-NCR.
Imported premium lager grew by 12% in 2009, which was significantly lower
growth than the review period CAGR of 18%. Imported premium lager
growth was adversely affected by the dual effect of a rise in import taxes in
key markets, such as Maharashtra and Karnataka, and the economic
uncertainty in the first half of 2009, which resulted in depressed on-trade
sales. With major international brands, such as Carlsberg and Budweiser,
being priced on a par with domestic brands, such as Kingfisher, consumers
had access to several aspirational international brands within domestic
premium lager, thus growth in imported premium lager sales slowed down.
10.81% of volume sales of beer are derived from off-trade sales, as beer
consumption is most common during social and family gatherings at home.
Moreover, beer is priced on a par with spirits in on-trade outlets, and many
consumers prefer consuming spirits with mixers, which provide a quicker
high.
Glass bottles of 330ml and 650ml are the dominant type of beer packaging
available in India. However, canned beer continued to see strong volume
growth in 2009. Canned beer volume sales grew by more than 20% in India
in 2009.
Page | 16

The domestic production of beer is on the rise, with official statistics
reporting an 11% increase in domestic beer production in 2008, which is in
line with the 12% growth in volume sales of domestic lager in 2008. In
October 2009, Carlsberg India Pvt Ltd started work on its new green field
brewery in Medak (Andhra Pradesh), which is expected to have a
production capacity of 4 million litres per month and start operations in late
2010.
In May 2009, Can-Pack India Pvt Ltd started its operations in India, with the
aim of supplying 65% of its one billion can annual output to the beer
industry, and gained contracts with most of the major beer players.
Exports of beer out of India declined marginally in 2007, while imports rose
by 39% in volume terms. This reflected the robust growth in sales of
imported premium lager in India.
Imported beer accounted for less than 1% of beer volume sales in 2009.
Imported beer is only available in niche premium on-trade outlets, where it
is sold at significantly higher prices than domestically-produced beer, due to
high import duties. In addition to more widespread distribution and lower
price points, domestic brands also have the benefit of higher brand recall,
due to high-profile marketing activities.
Apparent consumption levels grew by 24% in 2007 over the previous year,
to reach 390 million litres. This is less than one third of the reported market
size of 1,193 million litres in the year. This discrepancy between the
calculated apparent consumption and total market size is chiefly due to
problems associated with data collection by government bodies. Companies
often underreport actual production figures. In addition, many units will be
sold via both official and unofficial channels, such as with the illegal imports
of beer into prohibition states.
Effect of IPL- The IPL 2010 held in April provided a major boost to the sales
of beer. UBL signed a contract with IPL that all the beers used in IPL parties
would be supplied by UB groups. In a total of 54IPL parties, which amounted
Page | 17

to 270 hours of partying, approximately 1.3 lakhs beer bottles were
consumed.
Effect of Soccer World cup 2010- As per the Pub owners the traditional
combination of beer and soccer, coupled with the soaring heat, could mean
a sale of upto 700 litres of beer for some pubs every day, till the end of the
world cup. We saw an average consumption of 500 litres of beer every day
during the IPL; we expect that to double now. Soccer brings a lot of expats
and corporates, and for them the game is in complete without beer,
observed a pub owner. According to South African Breweries (SAB) 100,000
hectolitres (1 hectolitre = 100 litre) of beer will be sold during the five-week
World Cup
17
.



















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CHAPTER-3
PART I
COMPANY PROFILE

3.1: HISTORY OF UB AND RECENT DEVELOPMENTS
For the UB GROUP, brewing was where it all begun and the history of the Group is
synonymous with the history of beer in India. The UB Group (United Breweries)
Group is a multi-faceted conglomerate with business interests in Beverage Alcohol,
Pharmaceuticals, Media, International Trading, Aviation, Fertilizer, Research &
Development, and Infrastructure Development. The UB Group was founded by a
Scottish gentleman Thomas Leishman in 1915. The company used to manufacture
beer at that time and took its initial lessons in manufacturing beer from South
Indian based British breweries. In August 1947, Vittal Mallya became the
company's first Indian director. A year later he became the Chairman of the Group.
United Breweries came into limelight by manufacturing bulk beer for the British
troops, which was transported in huge barrels. In 1950s and 60s, the group
expanded rapidly and made several acquisitions. McDowell was added as one of
the Group subsidiaries.

This helped UB Group to venture into wines and spirits business. Kingfisher, the
Group's most visible and profitable brand, made its entry in the sixties. Thereafter,
the Group moved into agro-based industries and medicines when it acquired Kissan
Products and formed a long-term relationship with Hoechst AG of Germany to
promote Aventis Pharma.

After Vittal Mallya's death in 1983, his son Vijay Mallya assumed the mantle of the
group. Vijay Mallya inducted professional management and consolidating the
Group into individual operating divisions. In 1988, UB Group acquired the global
Berger Paints Group with operating companies across four continents. The paints
business was divested for significant value in 1996. After India adopted economic
liberalization in 1991, the UB Group decided to retain interests in only those
businesses that were globally competitive and did not depend upon fiscal tariff
protection. Today, UB Group is the third largest manufacturer of Spirits products in
Page | 19

the world. In 2005, the Group entered aviation sector with the launch of Kingfisher
Airlines Limited. Within a short time the airlines has captured an impressive market
share and has established a niche identity for itself. Today, the UB Group stands as
a giant conglomerate operating world-wide. Vijay Mallya is the Group Chairman.

There businesses are in the fields of:
Brewing
Distilling
Life Sciences
Fertilizers
Engineering
Exports
Information Technology
Resorts
Airlines
BREWERIES DIVISION
Breweries Division: The second largest division of the Group, United
Breweries and its associate Companies command a turnover of Rs.13701 million
and a market share of approximately 50% of the total beer market. The market
capitalization of United Breweries Limited has crossed the 1 Bn USD mark. With 24
breweries operating to supply the ever increasing demand for United Breweries
range of beers, has made the company into Indias largest beer manufacturer.
UB beers are acclaimed as the best in India which obvious from the fact that three
of Indias five largest selling Beer Brands belong to the Group.

BACKGROUND AND INCEPTION OF THE COMPANY
KBDL was established on Jan 21
st
1986 by acquiring a sick unit and an IMFL unit
located in 9
th
mile peenya industrial estate. It had a share capital of Rs 15cr divided
into 15,00,000 equity shares. Its registered Head Office was located at 9
th
mile
Tumkur Road by additional funds it started reputed brands like MC Dowell, DSP in
the country. The company set up a most modern brewery in south Asia at 20
th
mile,
Tumkur Road, Bangalore unit 1994 the concern was restricted to hot drinks only. In
Page | 20

1994 when UB group took bottling unit on lease for Kingfisher beer the capacity of
the plant was 3,00,000-3,50,000 cases/month. Now its panning to produce one
million bottles/month.

UB group has taken over K.B.D.L pant in Jan 2007 from Mr. Adikeshaw and after
amalgamation in April 2007, brewery section name is retained as Karnataka
breweries and Distilleries Pvt. limited whereas IMFL section is called KBD sugars
and Distilleries Pvt. limited.

This acquisition of KBDL funded from the cash raised through the strategic alliance
with Scottish and Newcastle Plc., UK and Citibank also approved unanimously was
the special resolution on the issuance of 3,779,522 equity shares of Rs 10 each to
Scottish and Newcastle India Ltd (SNIL), constituting 17.5% of the post issue equity
share capital. In addition, the company was also authorized to issue Warrants
convertible into a maximum of 5,109,198 equity shares at Rs 575/share within a
period a 18 months from the date of issue. Pursuant to SNIL agreeing to subscribe
to these equity shares, SNIL would make an open offer to public to acquire up to
20% of the total post issue paid up equity share capital.

3.2: United Breweries Limited (UBL)
Upon demerger of the beer business from the erstwhile United Breweries Limited,
the newly constituted UBL has become the main brewing company of the UB
Group. The latter has now been renamed as United Breweries (Holdings) Limited.
UBL has been associated with brewing for over five decades and commands a
domestic market share in excess of 50%. Its leading brands readily bring cheer all
over India and abroad - that include Kingfisher, UB Export, London Pilsner,
Premium Ice and Kalyani Black Label.

The Kingfisher towers over every beer brand not only in India but on foreign
shores too. While Kingfisher Premium has raced to sales of 18.8 million cases,
Kingfisher Strong became the fastest growing brand. Its sales crossed the 10 million
cases mark within 5 years of introduction. The brand has also comfortably
outpaced the industry average growth- notching up 29 % growth as against 3% for
the industry.
Page | 21


To build upon its leadership position, UBL has broken new grounds with a multi-
faceted strategic alliance with Scottish & Newcastle Plc. (S&N). While allowing UBL
to market S&N's international brands in India, it will also leverage S&N's global
network while further globalizing the Kingfisher brand. Commands a domestic
market share of over 75%
Kingfisher to bring in "international good times" with S & N's brands. And
Kingfisher will also bring cheer abroad.

3.3 ALLIANCE WITH HEINEKEN N.V.
Heineken Group (Heineken), holds 37.5% equity shares in United
Breweries Ltd.The alliance will offer consumers the best portfolio of national
and international brands in India, including Kingfisher, the number one
Indian brand, and Heineken, the largest global beer brand
18
.

Graph No:3.4, SHAREHOLDIN PATTREN

Source, Annual Reports of Ub Ltd 2011-2012


18
http://unitedbreweries.com/ubl_glance.aspx
4.59%
3.10%
74.82%
17.49%
Individuals
Others
promoters and group
FIIs
Page | 22

3.5 Key events Year Major Events
- 1999 Incorporation of our Company under the name UB
Infrastructure Projects Limited.
- 2001 Change of name from UB Infrastructure Projects Limited to UB
Beer Limited.
- 2002 Demerger of the brewery business of erstwhile United
Breweries Limited into our Company.
- 2002 Change of name from UB Beer Limited to its present name
United Breweries Limited.
- 2004 Issue of 2,13,84,724 Redeemable Optionally Convertible
Preference Shares (ROCPS) of Rs.100/- each at par to the equity
shareholders on rights basis in the ration of 6 ROCPS for every 5
equity shares Issue of 2,46,90,000 Cumulative Redeemable
Preference Shares to Scottish & Newcastle India Limited and
redemption of ROCPS
19
.
- 2005 Strategic alliance with Scottish & Newcastle Plc. and acquisition
of 37.5% equity stake of our Company by Scottish & Newcastle India
Limited.
- 2006 Demerger of brewery business of Associated Breweries and
Distilleries Limited and merger of Mangalore Breweries & Distilleries
Limited into our Company.
- 2006 Subdivision of equity shares having face value of Rs.10 each
into 10 equity shares of face value Re.1 each.
- 2007 Merger of Karnataka Breweries and Distilleries Private Limited,
London Pilsner Breweries Private Limited and London Draft Pubs
Private Limited into our Company.
- 2008 Entry of Heineken in UB by taking over on S& N.



19
Annual Reports of UB Ltd 2010-2011
Page | 23

3.6 Details of awards, recognitions won by Our Company ear
Award/Certification Issued by
2002 Gold Award to Kingfisher Premium Lager Beer under International Section-
Packaged Beer, Class- Lager issued by Australian International Beer Awards
2002 Bronze Award to Kingfisher Strong Premium Beer under
International Section- Packaged Beer, Class- Lager issued by Australian International Beer
2002 Bronze Award to Kingfisher Premium Lager under International Section Lager
issued by New Zealand Hop Marketing Board
2003 Bronze Award to Kingfisher Strong under International Section- Packaged Beer,
Class- Lager issued by Australian International Awards
2003 Bronze Award to Kingfisher Premium Lager under International Section-
Packaged Beer, Class- Lager issued by Australian International Awards
20

2007 Environment Award for Pallakad Unit of our Company State of Kerala United
Breweries Limited Year Award/Certification Issued by
2007 Recognized in Top 25 Companies in the ICSI National Award for excellence in
Corporate Governance ICSI.
2008 Recognized in Top 25 Companies in the ICSI National Award for excellence in
Corporate Governance ICSI

3.7: NATURE OF BUSINESS CARRIED OUT
3.7.1 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.

20
http://unitedbreweries.com/awards.aspx
Page | 24

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.
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.

3.7.2 BUSINESS CARRIED OUT AT KBDL:
KBDL is a ISO 9001 2000 and ISO 14000 certified company. They are one of the
leading producers of UB groups flag ship brands of beer. It is one of the largest
plant in India which has further capacity for expansion up to 10.1 Lakhs
cases/month. The Groups principal activity is the production and sale of beer.





Page | 25

PHILOSOPHY
United Breweries Ltd. believes in the Japanese 5s Philosophy. They are

SEIRI SORTING



SEITON SYSTEMATIZING
SEISO CLEANING
SEIKETSU STANDARDISING
SITSHUKE SELF DISCIPLINE


3.8 COMPANY MISSION AND VISION
Vision
To create one force i.e, to build an integrated, committed, competent team
of work force to perform and there by retain the leadership position in the
business by meeting the consumer expectations
Mission
We constitute a large, global group based in India. We associate with world
leaders in order to adopt technologies and processes that will enable a
leadership position in a large spectrum of activities.
We are focused on assuming leadership in all our target markets.
We seek to be the most preferred employer wherever we operate.
We recognize that our organization is built around people who are our most
valuable asset.
We will always be the partner of choice for customers, suppliers and other
creators of innovative concepts.
Page | 26

We will continually increase the long-term value of our Group for the
benefit of our shareholders.
We will operate as a decentralized organization and allow each business to
develop within our stated values.
We will be a major contributor to our National Economy and take full
advantage of our strong resource base
21
.
3.9, Production - Plants around India
source; http://unitedbreweries.com/manufactuting_network.aspx

21
http://unitedbreweries.com/mission.aspx
Page | 27

3.10: Product Portfolio and Marketing Strategy
Our Companys core business is the manufacturing, marketing and distribution of
beer. The flagship brand, Kingfisher, is the largest beer brand in India as measured
by Euromonitor International. Sales of beers in the Kingfisher family represented
45 million cases for fiscal 2007 or 35% of the total cases in the Indian beer market;
and represented approximately 83%
and 76.3% of our total sales volume for the fiscal year 2007 and for the nine
months ended December 31, 2007, respectively.

PRODUCT PROFILES

1. Kingfisher premium



Kingfisher is one of the oldest, most widely recognized and
respected brands in India. Ever since its inception, the
brand has not only succeeded in guarding its numero uno
status, but has also been able to evolve into one of the
most contemporary and aspirational youth icons of today.
It is the only brand in the category to successfully straddle
the mild and the strong beer category of the country,
together selling in excess of 68 mn cases.


2 .Kingfisher Strong Premium



Kingfisher Strong Premium Beer comes from the house of
United Breweries Limited. The brand was launched in 1999
to cater to the growing Strong Beer segment in the
country. It has been the fastest growing beer brand in the
country and has been instrumental in taking the volumes
and profitability on the upsurge for the Kingfisher family &
UB. Today Kingfisher Strong is Indias largest selling
Page | 28

3. Kingfisher Strong


Kingfisher Strong, Indias largest selling beer, brings to you
Kingfisher Strong FRESH Same Taste. Same Dum. Now
even more Fresh! Kingfisher Strong Fresh is the first ever
strong draught beer available in the Indian market. It gives
you the crisp taste of freshly brewed beer conveniently
packed in a 500ml can. The can design connotes freshness
& strength. The bright red & yellow colors stand out in the
clutter of brands at the retail outlet.


4. Kingfisher Draught



For the first time in India, and being one of its kind,
Kingfisher launched Draught in a Can in a convenient 500
ml can. This completely unique concept, was specifically
developed for people who think there is nothing better
than beer on tap. It is no surprise that the crisp taste of the
freshest thing in a can is loved by the Kingfisher Draught
fans. The convenient 500 ml size makes it easier to guzzle
on the go.


5. Kingfisher ULTRA


As a market leader, Kingfisher has dominated the segment
for years and continues to provide its consumers with the
best of products. Keeping this in mind, United Breweries
launched Kingfisher ULTRA in Q3 of 2009, a premium
extension of its larger than life brand Kingfisher. Kingfisher
ULTRA is a super premium beer launched in this newly
emerging and potentially promising segment. Kingfisher
ULTRA is a beer that is distinctive in taste and comes in a
unique new packaging that the consumer can actually
touch to feel the difference.

Page | 29


6. . Kingfisher BLUE


Kingfisher for decades has been the brand that has
captured the consumers imagination and has now added
another premium beer to its portfolio. The promise of
Kingfisher of bringing in the good times to life resonates
with this latest brand KINGFISHER BLUE. With a truly
distinct and absolutely refreshing taste, Blue is brewed to
thrill.


7. Kingfisher Red



Kingfisher Red, a Premium Gravity beer, is specially
brewed to give you a distinctive taste with an oaky
woody flavor, which tastes great when chilled and
even better when not chilled. It is an artistically
crafted beer inspired by the traditional brewing
practices of medieval European monks. The monks
followed a typical process for making their beer &
then matured it in oak barrels.


8. Kingfisher Bohemia


A taste nurtured in Cape Floral Kingdom, South Africa,
one of the worlds oldest, most eco-friendly wine
growing regions, Kingfisher Bohemia is enriched by a
500-million year old soil and the unique climate
typical of that area. The resulting flavour is fruity,
delectable and goes well with any food or occasion.
Kingfisher Bohemia is the result of a partnership
between Kingfisher and The Company of Wine People
(COWP), a key player in the South African wine
industry, both locally and abroad.

Page | 30


9. Zingaro Super Strong


Zingaro Super Strong was launched in the year 2000, when
the Indian Beer Industry was experiencing a major salience
shift from Lager to Strong. Zingaro was then owned by
MABL, which was formed to be the growth engine for the
UB Group. While UB Group focused on making Kingfisher
Strong a national brand, MABL launched Zingaro as a
flanker to take on regional brands.


10. London Pilsner Premium
Strong


London Pilsner Premium Strong is the 'strong' avatar of
Maharashtra's home grown brand London Pilsner. For
decades, the people of Maharashtra have loved &
respected this brand as one of their own.



11. UB Export


UB Export is Karnatakas home grown brand and for
decades now people of Karnataka have loved and
respected this brand as one of their own. UB after being
appreciated in its earlier look has now been revamped and
is now in a Hosa avatar.





Page | 31


12. UB Export Strong



UB Export Strong, a 'strong' avatar of Karnataka's much
loved and iconic beer brand UB Export was launched across
Karnataka in June/July 2009. Owing to changes in the
excise policy of Karnataka, the prices of beer went up, thus
making beer expensive for the masses and resulting in a
decline in the beer industry volumes. Being market leaders,
United Breweries Ltd. took upon itself the task of reviving
the beer industry in Karnataka and launched UB Export
Strong at an affordable price at Rs.58 for the 650ml bottle
and Rs.28 for the 330ml bottle.


13. Kalyani Black Label Strong


Kalyani Black Label Strong, an 'iconic' brand has a long
history which begins with its origin in West Bengal. Kalyani
Black Strong today is an established brand and has its foot
prints across East and certain markets in the South.KBLS
combines the unique taste and quality of Kalyani Black
Label in a strong beer and is positioned on the similar
platform as the mother brand.


14. Bullet


Bullet has been a favorite of people of Rajasthan ever since
its launch, decades ago. Bullet with its name and
positioning has always had a rustic and son of the soil
appeal, making the brand endearing to its target
audience.Bullet comes with the stamp of a high quality
product from a trusted company and at a very attractive
price. Its recent bold strategy of consumer friendly pricing
has made the brand an undisputed leader in Rajasthan.

Source; http://unitedbreweries.com/ubl_brand.aspx


Page | 32

15. Heineken

Heineken has been launched in bespoke world class
packaging, with imported green embossed bottlesand clear
plastic labels, a first for any beer brand in India. The new
Heineken bottles feature a unique curved embossment on
the neck and back, with a distinctive embossed logo mark
which acts as a stamp of quality and authenticity. The visual
identity includes the iconic brand elements like the
racetrack label, the Heineken type face with the smiling es
and the red star - the worlds most recognized beer symbol.
Available in pack sizes of 650 ml and 330 ml sizes, Heineken
is priced at Rs. 150/- and Rs. 80/- respectively, in Delhi.

3.11: Customers
Our Companys principal target customer base for beers are individuals of legal
drinking age in India, those who are 21 years and above. We believe that the
reasons for the increase in sales of beer products were caused by a shift in patterns
of spending, away from saving and investment and toward consumption and
spending on lifestyle and products and services, such as eating out and
entertainment.

A. Distribution Network
Based on the involvement of the government in the distribution and pricing of beer
in each state the market can be broadly classified into three types:
1. Government Market
In a government market, the respective state government is the wholesale
distributor of beer and acquires beer directly from manufacturers based on an
annual tender system, via its own agencies. Thus, the government controls the
price at which beer is procured from the manufacturer. The beer could then be
retailed through private vends (e.g., Karnataka, Rajasthan, Tamil Nadir, Andhra
Pradesh) or a combination of Government and private vends (e.g., Kerala, Delhi)

2. Auction Market
Page | 33

In auction markets, the state is bifurcated into smaller areas. The government, at
regular intervals (typically annually), auctions the right to distribute and retail beer
and liquor in these areas during a specified period, to private parties. This auction
is based on the minimum guaranteed tariff payment to the government over the
specified period. Wholesale operations and retail outlets are owned/ operated only
by those parties that win the auction for that particular area. These private parties
that win the auction negotiate with beer manufacturers to acquire beer at
competitive prices.
3.Open Market
In this market, there is little or no government intervention in the pricing and
distribution of beer. The manufacturers sell beer to the wholesaler/distributor who
in turn sells it to the retail outlets. Pricing is free and is determined by market
forces. The government issues wholesale/ retail licenses for a fee. However, in
certain markets, new licenses are not freely available.

4.Exports
Our Companys products are exported indirectly through UB Global, an export
division of UBHL. Our Company currently does not have any export obligations;
however its tie-up with S&N, which has a long established track record of
distribution of third party brands, will be employed for the international
distribution of KINGFISHER. Our Company has entered into a Licensing and
Distribution Agreement on May 24, 2004 with Independent Liquor (NZ) Limited. In
terms of the said agreement, the licensee has an
exclusive license to manufacture and package the products Kingfisher Premium
and Kingfisher Strong and to market, distribute and sell the product within the
territory of Australia and New Zealand for a period of five years.

5.Imports
Major imported components include raw materials and spares, details of the same
presented below (on CIF Basis):



Page | 34

3.11.a Raw materials
Major raw material is barley malt. Barley being an agricultural product, procured by
the supplier of malt in season and they ensure supplies all through the year. The
major suppliers are Barmalt (India) Private Limited, the Malt Company (India)
Limited, Maltex Malsters Limited, Rahul Malt and Malsters & Blenders Private
Limited












Source; http://economictimes.indiatimes.com/united-breweries-ltd/profitandlose/companyid-1367.cms








Raw Materials ------------------- in Rs. Cr. -------------
------
Mar 2012
Product Name Unit Quantity Value
Malt Metric
Tonnes


97,388 213.79
Brewing Materials Metric
Tonnes


66,454 151.17
Other Materials Not
Reported


NA 31.27

Total


396.23
Page | 35

3.12: FINISHED PRODUCTS OF THE COMPANY

Finished Products ---------------------- in Rs. Cr. --------------------
-
Mar
2011
Product Name Unit Installed
Capacity
Production
Quantity
Sales
Quantity
Sales
Value
Beer Hectolitres 12,115,500 7,787,868.00 7,811,961.00 4,263.95
Technical Knowhow - NA NA NA 136.36
& Franchises

Goods Traded - NA NA 179,910.00 136.15
Malt - NA NA 11,279.00 20.67
Total

4557.13
Source; Source; http://economictimes.indiatimes.com/united-breweries-ltd/profitandlose/companyid-1367.cms

3.13 Environmental Aspects
Our Company adheres to its commitment towards protecting the environment and
renewing scarce resources wherever possible. Our Company adheres to corporate
Environment, Health and Safety (EHS) policies to promote accident free work at
our manufacturing locations and avoid damage to surroundings. We provide
healthy, safe and environmental friendly atmosphere at our manufacturing
locations with due regards to save human life and to avoid property damage. We
have, therefore, committed to protect and safeguard our employees, equipments
and environment against possible ill effects arising from our business operations.

Effluent Treatment Facilities
The brewery waste water (effluent) discharged from various sections contains a
large number of organic components and nutrient salts, which leads to
consumption of dissolved oxygen and the eutrophication of the water. The effluent
water is characterized by its BOD (Biological Oxygen Demand), COD (Chemical
Oxygen Demand) & TSS (Total Suspended Solid) levels. Extensive waste water
treatment process has been designed & operated to ensure the stringent
Page | 36

requirements of pollution control boards. Biological waste water treatment is the
core process of the brewery effluent treatment.

Business Strategy
Our strategic objective is to continue to improve and consolidate our position in
the brewery market and we aim to achieve this by implementing the following
strategies:
To continue to grow ahead of the domestic brewery market and increase our
market share from the present 39% in the Indian beer market to over 50% in the
next 3 years. Setting up of green field breweries and brewery acquisitions are part
of our overall growth strategy.
To focus on increasing captive capacity at owned manufacturing facilities and
reduce the dependence on the contract brewing arrangements.
To continue investment behind brands particularly, the Kingfisher brand and to
introduce new brands over the next 24 months to cater to the emerging market
segment.

















Page | 37

3.14 Management Organisation Structure












Page | 38













































BOARD OF
DIRECTORS
MANAGING
DIRECTOR
PRESIDENT
Centralized
Marketing
Dept
ASSISTANT VICE
- PRESIDENT
GENERAL MANAGER (TECH) OR
HEAD BREWER
MANUFACTURING
QUALITY
ENGINEERING
COMMERCIAL
FINANCE & ACCOUNTS
PERSONNEL &
ADMINISTRATION
STORES
CHAIRMAN
Page | 39

3.15: FINANCIAL INFORMATION
Working Capital-Our Company has working capital facilities of Rs. 300,000 Lakhs
with a consortium of banks consisting of the following banks:
Citibank
Standard Chartered Bank
Federal Bank
State Bank of Travancore
State Bank Of India
Axis Bank
Yes Bank
3.16: Performance Chart


Source;http://beta.bseindia.com/bseplus/StockReach/StockQuote/Equity/United%20Breweries%20Ltd/UNITEDBR
EW/532478/BreweriesDistilleries











Page | 40

3.17: OWNERSHIP PATTREN


Source;http://beta.bseindia.com/bseplus/StockReach/StockQuote/Equity/United%20Breweries%20Ltd/UNITEDBREW/532478/Br
eweriesDistilleries
3.18 KEY EVENTS
UBL came with a 1:9 right issue at Rs. 177 per share and raised Rs. 4.2 bn. The Company
plans to set up five green field breweries in three years to increase its capacity up to 165 mn
cases.
United Breweries Limited acquired 51% stake in Maltex Maltsters Ltd, which will help it
further in reducing cost and securing the supply of malt.
UB Group had filed a suit in the Bombay High Court against Heineken and Carlsberg AS for
the termination of special rights and privileges, which it had acquired after a global buyout
of Scottish and Newcastle Plc (S&N).

3.19 KEY RISK
High raw material costs
Competition from major global players and consolidation in the industry
Government regulations



Page | 41

PART II
3.20: DEVELOPMENTAL PLANS OF UB LTD.
Investment Plans of UB Group :
UB Group is investing Rs. 1,000 crore in three years to hike its brewing
capacity by about 20%
The UB Group has a capital expenditure plan of Rs. 488 crore for the
current financial year.
This part of a capacity expansion programme, which commenced in April
2006 and involves a total expenditure of around Rs. 1000 crore over three
years
The expansion would be partly funded by the recently concluded rights
issue of Rs. 425 crore and the remaining through a combination of
internal accruals and debt
The UB Group has a brewing capacity of 60.25 lakh hector litres per annum
in the next two years
UB is setting up a facility in AndraPradesh. This will have an annual
production capacity 60 lakh cases per annum to begin with and 120 lakh
cases eventually.
The company also plans to have a Greenfield plant in Karnataka with a
capacity of 30 lakh cases a year.

3.21: Competitors Information:
South African Breweries Limited (5
th
largest in world)- knock-out,
Continental and Three lions.
Shaw Wallace Royal Challenge premium lager, Lal Toofan, Hi-Five,
Haywards 2000 premium Larger and Haywards 5000 super Strong.
Australian Fosters Beer.
Other Local Brands in the country Golden eagle, carling Black label, maharaja
premium lager etc.
Page | 42

3.22: Current market Position in India and Karnataka, World:

INDIA : 52 (Approximately)
KARNATAKA : 73% (Approximately)
WORLD : 6 Bottles are sold/ Second
22


3.23 LOCATION OR INFRAUSTUCTURAL FACILITIES:

Head office (Marketing & Finance Department) in Bangalore
Plant is located near Highway (National Highway 4)
Layout, total area measurement 42 acres.
Well maintained temple, Garden & plantation.
High speed intranet facility called Navision (Microsoft).
Free transport facility for employees
Canteen facility for the workers
Company is paying Rs. 500 a month for food facilities to employees
& executives.
First aid facility, medical council.
R & D facility.
State of arts automated plant.
Capacity of plant 9.6 lakh cases/month.
Automated bottling and packaging facility.
Large ware house facility.
Utilities Boilers-16T/hr, refrigeration unit-600TR, etc.






22
Annual Reports UB ltd 2011-2012
Page | 43

3.24 ORGANISATIONAL STRUCTURE OF UB LTD, NELAMANGALA,
BANGALORE.















DVP- MFG.
AVP -MFG
Process Production Commercial HR & ADMN Quality Finance
Maintenance
& Utilities
EVP - MFG
Page | 44

CHAPTER 4
DEPARTMENTAL STUDY
4.1: COMMERCIAL DEPARTMENT
One of the main departments in the UB beer manufacturing is the Commercial
department. It plays major role in procurements; storage and distribution of raw,
semi finished and finished goods.
The structure of commercial department is been represented through an
organizational chart below:

STRUCTURE OF COMMERCIAL DEPARTMENT


Reports and records maintained by the commercial and administration
department:
Daily bottle report
Daily essential material stock report, basic raw materials & packaging
materials.
Daily Inventory Status




MANAGER
COMMERCIAL
PURCHASE
EXECUTIVE
PURCHASE
OFFICER
PURCHASE
STORES
EXEECUTIVE
STORES
SUPERVISIOR
WAREHOUSE
EXECUTIVE
WAREHOUSE
SALES
EXECUTIVE
SALES
Page | 45

FUNCTIONS OF COMMERCIAL DEPARTMENT
Commercial department helps in collecting the information of the vendors. The
department has the authority to issue orders for the purchases of all the materials
and services and oversight of purchasing. The mission of purchase department is to
provide business support and customer service. It is the department that handles
raw materials used in production beer.
Based on the requirements for production, a production plan id made for the
production of different brands once in 3 months and again plan is worked out on
monthly basis.

Procurement function:
The organization has two different committees for efficient functioning of the
department.
1. C.P.C- Central Procurement Committee: where the purchase manager reports
to the head of supply chain and in return reports Director Finance or Executive
finance.
2. U.P.C- Unit Procurement Committee: this is the committee where the
executives report to the Purchase Manager and in turn Purchase Manager reports
to the Head of manufacturing.

Procurement policy
In order to procure quality raw materials, goods and services at least cost we
require the support of our supplier partners.
It is important therefore to negotiate and transact our procurement relationships
in an open, transparent and fair manner to ensure that we become a customer of
first choice to all our potential suppliers.
Our policies and procedures for procurement must also, not only are robust, but
workable and capable of delivering continuous improvement in our procurement
activities.Above all it is paramount that our integrity as individuals as well as a
business cannot be drawn into question by any of our stakeholders.
Consequently to ensure that these objectives are achieved we have drafted the
attached procurement policy for immediate implementation.

Page | 46

The Policy Framework
The Policy Framework outlined in the subsequent chapters has been
conceived keeping in view the specific nature and objective of United
Breweries Limited (UBL), its dimensions and growth potential. United
breweries limited materials management function has objectives of more
specific character. These include:
Cost reduction
Control of Financial commitments
Control of negotiations
To provide information and assistance in the specialized Materials
Management field to top management and other operating groups.

Adherence to the profit objective as a goal and motivation requires prudence in
judging the best value for the money spent. A logical balance exists between the
price and value in use. A production operation about to halt for lack of material or
supplies emphasizes the close relationship existing between cost and value.
Purchasing has the important objective of supporting the operating systems of the
company. Responsibility fully delegated to the purchasing function includes:
Identification and Selection of vendors
Obtaining prices
Negotiation and finalization of contracts
Settlement of disputes arising out of contracts
Vendor relations
Follow-up on delivery schedules

Objective of this policy manual:
To define responsibility and authority to ensure authenticity and effectiveness.
Appraise other functions the Purchasing departments objectives.
Help to promote consistent and fair relations with vendors old and new. Facilitate
uniform action by all the purchasing personnel in dealing with personnel both
within and outside the company.
Standardize purchasing procedure.
Facilitate audit of the function.
Page | 47

CODE OF ETHICS
The Company attaches the greatest importance to ethics and integrity in
dealing with suppliers by not only the purchase officers/managers but by all
employees of the Company who deal with the suppliers.Purchasing people
must be above the suspicion of unethical behavior at all times and under all
circumstances.

Ethics have a prominent place in the conduct of purchasing. Problems of
ethics are ever present in commercial transactions and must be handled in a
sound and generally acceptable manner if the Company and individual
involved are to prosper and command respect in the trade.To do this
requires strict adherence to a sound code of ethics.
The Company expects all such employees to strictly observe the following
code of ethics.
1. To consider, first the interest of his Company in all transactions and carry
out and believe in its established policies.
2. To buy without prejudice, seeking to obtain the maximum ultimate value for
each rupee of expenditure.
3. To strive consistently for knowledge of the materials and processes of
manufacture.
4. To subscribe and work for honesty and truth in buying, selling and all
commercial transactions.
5. To accord and prompt courteous reception, so far as conditions will permit
to all who call on legitimate business missions.
6. To avoid any willful negligence, act of misrepresentation, wrongful doing or
attach any motive to his/her actions which would either mislead the
management and / or misconstrue any event leading to financial damage or
loss to Companys image.
7. To counsel and assist fellow purchasing agents in the performance of their
duties whenever occasion permits.
Page | 48

8. Non-compliance to this code of ethics by any employee would be
considered as misconduct and may invite severe disciplinary action.

ORGANIZATION OF THE MATERIALS MANAGEMENT FUNCTION
The head of Materials function has various responsibilities which include:
To develop strategies and define policies from time to time with respect to:
Purchasing
Inventory Control
Vendor Development
Disposal Management
Co-ordinate purchasing procedure throughout the Company Standardization of
documents.
Act as Companys spokesman on all matters pertaining to purchasing.
Institute reports necessary to permit analysis of department performance.
Formulate and administer training programs for the development of personnel
suitable for promotion within the company.
Disseminate to other departments information designed to promote efficient
operation of the functions.
Negotiation and approval of contracts in the best interest of the company.
Consolidate purchase of like or common items to obtain maximum economical
benefits.
Purchases shall be made from qualified manufacturers whose reputation, financial
position and prime structures are adequate considerations as logical sources of
supply.
Arrange for the disposal of surplus materials; obsolete stocks.
Co-operate with units to maintain inventories at a satisfactory level.
Study markets to analyze prices paid for materials, equipments and services how to
obtain saving through improved specifications.
Strive to achieve standardization of materials throughout the company.
Prepare Annual Operating budgets.
Conduct periodic Audit of unit purchase function and vendors to verify adherence
to norms, accuracy of records and physical stock.

Page | 49

Objectives
Integrated team working for common objectives
Improving profitability by reducing cost of materials
Better inventory control to reduce the carrying cost
Efficient management of materials in terms of slow moving and non-moving /
obsolete items to reduce write offs.

Teamwork through:
Communication Responsible/Responsive
Objectivity Customer orientation
Information Interaction with users/quality value
analysis/market intelligence skill.

Policies:

The general policy of the Organization is to procure materials, equipments,
supplies and services when required at the lowest economic cost.
For all items, the Company should have minimum three approved vendors
and approval and evaluation from purchase committee for approved vendors,
with the exception of monopoly items where three vendors may not be
available.
Sourcing: Procurement of materials should be done in the following order of
preference:
Manufacturers
Authorized dealers and
Traders
Purchase from traders is to be discouraged and made only in exceptional
cases and stores items only.
Share of business should normally be given more to the most competitive
vendor (after considering any set off benefit available under Sales Tax Laws)
provided quality and other parameters are comparable.
Proprietary packaging materials developed specifically for UBL be procured
through long term contract, valid for a period of minimum one yea
Page | 50

Selection of vendors:
The company has its own procedure for selection of vendors based on certain
criteria:-
Whether the manufacturing process is approved by standard organizations or not;
Whether the company is registered with the Registrar and related information
about the supplying company;
The quality of goods and services provided by the vendors;
Based on the delivery schedule for the goods and other materials;
Based on the support to the company after procurement;
The UB also has its own agricultural activity in producing barley raw materials
required for the manufacturing of beer.
The UB also has the talented activity of collecting raw materials of good quality
during the season;
It has the standard norms for purchasing raw materials which is prescribed the UB
Group;


















Page | 51

4.1.a, SELECTION PROCEDURE OF NEW VENDOR
MATERIAL PLANNING






Get the details of the items to be procured
from respective departments
Ask supplier for the quotations
Evaluation of the new suppliers quotation.
Inspection of the new suppliers facility
Negotiation with the new supplier for the
required Quality Delivery Procedure & Price
Decision of the supplier & up gradation of
suppliers list
Prepare the purchase orders & send to suppliers
Follow the supplier for the material. delivery
Inspect the materials received and give feed
back to the supplier about the material
Rate the supplier depending upon the delivery
time, quality & price of the goods at proper
intervals
Page | 52

Category of materials
Raw Materials
Packing Materials
Capital Assets- Plant, Machinery & Land
Consumables
Stationary items

Procurement planning:
The most important planning tool for manufacturing is the sales projections
provided by the Sales and Marketing on a monthly basis. Material
Requirement Plan will be prepared by each respective unit and will be based
on the Quarterly rolling projection plan. The volume to be manufactured in
respect of each brand and size is decided in conjunction with the planned
quantities of end products, production dates and lead times and the
production capacity available at each unit. Stock of Malt and Hops to be
maintained depends on the availability of materials, storage capacity, fund
availability and cost effectiveness of each item. The cost effectiveness is to
be calculated based on the prevailing price and trend analysis.

Material Requirement Planning [MRP] should be prepared based on the
following:
Rolling quarterly Production Plan derived from Sales and Dispatch Plan.
Stock in hand and
Desired stock level as may be prescribed by the Inventory policy.








Page | 53

PURCHASE GUIDELINES
Suppliers evaluation
In depth knowledge should be acquired about suppliers in the following areas:
Capacities
Quality
Lead Time
Financial Standing
Pricing Policy
Delivery Reliability
Ability to innovate
Location / Logistic
Openness to share information and allow plant inspection
4.1.b PURCHASE PROCESS



Production planning
Purchase
Schedule
Procurement
Daily Schedule
Stores
Issue to Production
Daily Collections
Page | 54

INVENTORY MANAGEMENT & STORAGE
It is no exaggeration in stating that inventories can either make or break a
Company. A successful business enterprise can continually deprive itself of
substantial amount of profits as a result of poor or improper inventory
controls.Stock control needs to produce for each item answers to the questions:
(i) What quantities will be required ?
(ii) When should we order for more ?
(iii) What quantity should we order ?
For efficient Management of Inventory the following information should be
accurately stored:
Stock items code / description
Recorder level
Reorder quantity
Quantity in stock
Record of quantity issued or sold to date
Goods received to date
Quantity on order
List of approved Vendors
Prices of all the items bought
Lead time required for procurement

Stock Accounting
Accurate Stock Accounting is of paramount importance in effective Management of
Inventory. The edifice of successful inventory management is thus dictated by the
accuracy of stock administrations and storage conditions.
Stock Administrations task is to:
Book and report receipt and issuance of goods
Arranging quality control
Checking warehousing costs
Storage:
The objective is the storage of goods without loss of quality during storage period;
in standard storage units making optimum use of location and space. At the same
time the stored goods must be readily accessible and must be rapidly located.
Page | 55


Basic Requirements:
Delivery and dispatch of goods must not cause obstructions in terms of space and
time
Goods must be stored in well arranged readily accessible and checkable manner
Storage in this way means brief waiting and prevents loss of stock due to over filled
shelves
The goods should be stored in groups eg. Cartons, labels
The principle of First in First out (FIFO) should be chosen
The goods should not be moved in the warehouse several times

TRANSPORTATION

As the cost of transportation is so closely related to the cost of goods
purchased it seems logical that we should concern ourselves with the
degree of control that is exercised over them. The issue of
transportation is complex and ever changing.
The following aspects should be clearly identified and considered.
Ensure full truck loads or optimum size for shipment
Draw material from the closest point of availability to reduce the cost of
transport and transit time.
Establish the responsibility for payment of freight charges.
Select the best mode of transport.
Spell out responsibility for filing claims in the event of loss, damage or delays
Select the type of service to be used based on the period of time available for
transport between the expected shipping date and the required delivery date.

DISPOSAL MANAGEMENT

The Material Department is also responsible for the disposal of scrap and
waste. Proper disposal procedure can result in most profitable activities.
Proper disposal does not mean just selling by proper classifications to a
dealer. When a unit is considering disposal of material, the person-in-
Page | 56

charge of Material Department should normally consider the following
procedures in the order listed:
Use within own Company
Return to the supplier
Sale to outside Company
Sale to dealers or brokers

Raw Materials Procured:
1. Malt
2. Broken rice
3. Hops
4. Maize Flakes
5. Sugar

Packaging Materials Procured:
- Cartons
- Labels & Foils
- Crowns
- Containers /Bottles













Page | 57

4.2: FINANCE DEPARTMENT
STUCTURE OF ACCOUNTS DEPARTMENT


Finance is the life blood of any organization. Basic requirement for an organization
for existence and survival is found or finance. Financial Management is concerned
with the management decisions that results in the acquisition & financing long
term and short term. It deals with the acquisition of specific assets the selection of
specific liability as well as size and growth of an enterprise.
The function and activities carried out by this department include finance
management and maintaining books of accounts, records and other supporting
documents.

Objectives:
Avoiding capital blocking
Maintaining adequate funds
Minimizing risk
Profit maximization
Searching efficient sources of funds
Roles of Finance Manager :
Annual Budgeting
Monthly budgeting
Managing Management Information System
Statutory audits
Internal audits
Planning and Managing funds
Directing and controlling fund
MANAGER
FINANACE
EXECUTIVE
MIS
OFFICER
PAYABLES
CASHIER
OFFICER
TAXATION
Page | 58

Responsibilities and Duties
Arranging and disbursement of funds; inter group, inter unit, head office, suppliers,
governmental and statutory payments etc.,
Cash management
Working capital management
Maintenance of books of accounts and records
Internal and external audit
Compliance with income tax, sales tax, excise duty and other statutory provisions
and procedures
Final reports presentation

REPORTS AND RECORDS MAINTAINED
Brewery monthly report, a summary of all the activities of a month in the unit.
Cash flow statement; daily, fortnightly, monthly and yearly statutory reports and
return such as income tax, sales tax, TDS, TCS etc.,.


















Page | 59

4.3: GENERAL ENGINEERING AND MAINTENANCE DEPARTMENT
This department is in charge of taking care of the machineries and equipments in
the unit.

Duties and Responsibilities:
Planning and carrying out preventive, predictive and breakdown of the plant.
Spare parts management and tooling management
Analyze the down time and review maintenance schedules and checklist
Control of inspection, measuring and test equipments installed on process
equipments
Documenting, evaluating and reviewing maintenance objectives

The department takes care of the following service units:
- Boiling House
- Power generator
- Pump House
- Water Treatment Plant
- Capital expenditure works of the unit is controlled and
maintained by this division

Reports and Records Maintained:
Generator log book
Boiler log book
Pump House log book
History of every machines and equipments in the unit








Page | 60

4.3.a STRUCTURE OF MAINTENANCE DEPARTMENT













SR. MANAGER/
PLANT
ENGINEER
MECHANICAL
OPERATIORS
FOREMANS FITTER WELDER
ELECTRICAL
OPERATORS
DG OPERATOR FOREMAN ELECTRICIAN
WAREHOUSE
EXECUTIVE
WAREHOUSE
Page | 61

4.4: PRODUCTION DEPARTMENT

Production department plays a vital role in the entire organisation. It acts as the
main centre of whole organization by converting the raw materials it to finished
products. This department is responsible in carrying out the production activity
evenly and in most efficient manner.

The main function of this department is ensuring that the best quality of beer is
manufactured. Permit generation plan is issued by the Head office, Bangalore on
the basis of which the brands like kingfisher, ice beer and others are manufactured

Two important tasks of production department:
1. Production of beer
2. Packaging of beer

Objectives:
+ To follow up the daily production schedule as per the plan
+ To maintain the ethical standards and safety of employees
+ To maintain production cost as low as possible
+ To upgrade technical efficiency of production
+ To maintain integrated relationship with all other department
+ To maintain the quality of the product








Duties and Responsibilities:
Production Scheduling
Page | 62

Reviewing, approving and maintaining effectiveness of the procedures on Process
Control.
Planning and controlling production continually monitoring the process capability
of all the processes and take corrective action wherever necessary to achieve the
required and higher levels of capability
Identification of production during different stages of manufacture.
Maintaining inspection and test status during manufacturing or processing of
product.
Visually identifying nonconforming or suspect material or product and bins or areas
containing them.
Quality and process control: it involves the control of the whole manufacturing
starting from raw material to the bottling of beer.
Reducing wastage: wastage is minimized by effective utilization of chillness and
proper temperature.
Quality Analysis: On an hourly basis samples are analyzed and ensured that the
beer is produced according to the norms and standards.

Reports and records maintained:
- Brew House log book
- Shift wise tank report
- Wort collection log book
- Yeast pitching log book
- Yeast analysis report
- Filter log book
- CO2 plant Tank log book
Raw materials used:
Malt
Barley
Rise flakes
Broken rice
Maize Flakes
Sugar
Hops
Page | 63

For packaging:
Cartons
Labels & Foils
Crowns
Containers /Bottles

4.4.a ORGANISATION STRUCTURE OF PROCESS / PACKAGING












HEAD BREWER
BREWING/PROCESS
SHIFT BREWER OPERATORS
HELPERS
PACKAGING
SHIFT EXECUTIVE
OPERATORS
HELPERS
Page | 64

4.4.b ORGANISATION STRUCTURE OF QUALITY CONTROL DEPARTMENT



















MANAGER
QUALITY
EXECUTIVE-
QUALITY
OFFICER
QUALITY
CHEMIST
LAB
ASSISTANT
Page | 65

4.5: MARKETING DEPARTMENT
Marketing is the comprehensive term which includes all resources and a set of
activities necessary to direct and facilitate the flow of goods from producer to
customer in the process of distribution. It is to satisfy customers demands. It is the
creation and delivery standard of living to society. The company first determines
customer wants and figures out how to make the delivery of product to satisfy
those wants. Human efforts, finance and management are tools for marketing. UB
Ltd has the centralized marketing department where all the activities concerned
with the advertisement, marketing, research, PGP instruction in given and
controlled from the Head office located in Bangalore.

The main AIMS OF MARKETING are:
Target market
Customer needs
Integrated marketing
Profitability.

OBJECTIVES of marketing are:
- To study customer need and wants in well defined market segments
- To satisfy customer wants as the business exists only due to existence of customer
demands
- Increase of sales and revenue
- To distribute the products in time
- To maximize product variety and customer choice
- To take care of sales and dispatching products properly
- Overcoming customer complaints
- To look after the central excise matters pertaining to the sales pertaining to the
sales of departments
- To develop winning offers for each market segments
- To measure company image and customer satisfaction on a continuous basis
- They urge all company departments to be customer friendly


Page | 66

Product planning:
The product planning is the most tangible & important single component of
marketing. The product policy, product planning & strategy are corner stones of
marketing program.
Product planning is the strategy for marketing its product.
As different brands of the company are well established and accepted all over on
the basis of quality, hence product planning is of less importance.
Since UBL is having different product range its main aim in product planning
involves maintaining quality and satisfy the demand according to the market
needs.

Market segmentation:
Market segment is the meaningful buyer group having similar requirement.
Segmentation is customer oriented marketing strategy. Market segmentation is to
achieve maximum market response from limited marketing resourcesMarket
segmentation also gives format recognition to facts that the requirements of
customers are different in quality and quantity. So it helps in formulating specific
segment of the market so that supply will have best co-relation with demand. Each
market segment can be selected as market target to be reached. The requirement
of each segment can access to have better penetration in the market.

Pricing policy:
The pricing policy provides general frame work within which managerial decisions
are made on pricing the products. These are guidelines to carryout pricing strategy.
Pricing policy may change or adopt themselves with the changing objectives &
changing environment of the market.
There are several factors like demand and supply, competition, price of
competitors are also considered before pricing the decisions:
- Sales volume
- Profit margin
- Rate of return
- Trade margin
- New product development
Page | 67

UB Ltd has adopted appropriate pricing policy. Prices are revised on the basis of
raw material cost, change in supply and demand, and change in government
policies.

CHANNELS OF DISTRIBUTION
The channels of distribution is a set of interdependent institution participating in
marketing activities involved in movement of goods from primary producers to
ultimate customers. According to the Government policies any alcoholic drinks
cannot be directly distributed. The companies first sell all the produced quantity of
beer to the respective State Governments and later based on the requirements by
local bars and wine shops beer is distributed from excise bonded ware house.

As said, distribution is the crucial part of marketing process of the whole business
concern. It aims at making available products to the end consumers. Karnataka
Beer Market is fully controlled by the Karnataka State Beverages Corporation ltd. (K
S B C L) a government of Karnataka undertaking, which takes the responsibility and
authority of distributing the beer.
The UB Ltd./KBDL unit manufactures beer on the basis of the permit granted by the
KSBCL & supplies the beer produced according to their requirement. The other
aspects of marketing such as advertising, brand promotion etc., are taken care of
by Bangalore Head Office of the United Breweries Limited.

Promotion of products:
Beer receipts (food served with beer used as an ingredient in preparing food)
The company is stepping up with its profile with product placements in movies.
UB also sponsors and organizes a number of events in the fields of football, horse
race, fashion shows, music contests etc., to increase awareness of its brands.
Online facility for promoting and facilitating the sale of product. Logging on to
www.kingfishernetshop.com gives detailed information of UBs brands and
product.
King of good times at the marathon (42 kms, 26000 participation, 70,000 ltrs of
water in Mumbai city)
Kingfisher was the official sponsor of Habba Food Court.
U.B has arranged promo prowl in the bars to promote Jaguar beer.
Page | 68

Kingfisher raids Goa beaches during the New year celebrations.
Kingfisher line has been extended to trendy and stylish footwear collection.
The small 330ml pack of Kingfisher Strong was launched in MP
UB Export-LNS pint Display Contest in the bars

Advertising:
Advertising is the very important marketing functions, the central theme, motive,
or idea of advertising which tells the potential customer what the advertised
product or service offers and why it should be purchased. It aims at communicating
to the customer about the availability of the products.
The following are the various modes of advertising media used:
Sales promotions
Place advertising
a) Billboards
b) Public places

Labeling:
Labeling is one of the major roles of marketing department. This tells about
products briefly & other information about the same.
Two types of labels are used on bottles:
a) Neck Label
b) Body Label
c) Back Label

Packaging:
Packaging is very important to make sure the product safety till it reaches the
customer. Packaging of the products will be handled by packaging sections. Form
packaging, cartons are used with the brand names printed on it

4.5.a DEPARTMENTAL HIERARCHY

MARKETING
MANAGER
BRANCH SALES
MANGERS
ASSISTANT
SALES
MANAGERS
MARKETING
EXECUTIVES
Page | 69

4.6 HUMAN RESUORCE DPARTMENT
[Personnel & Administration]

Personal department
Duties and responsibilities:
Daily review of attendance
Salary and wages
Statutory returns such as PF, ESI and TDS.
Recruitment of workers.
Performance appraisal.
Training and workers development programs.
Safety and security in the organization
Motivation and empowerment of employees.
Daily visit to factory shop floor to ensure the adherence of
safety and security.
Maintaining competency requirements for each category of job.
Communicate and liaison with external agencies as per
Company requirements.

REPORT AND RECPORDS MAINTAINED
- Training registrar.
- Training schedule.
- Feed back report.
- Employee education, skill and experience.
- Attendance/absenteeism report.
- Salaries and wages report.
- Overtime analysis.
- PF, ESI, return registrar.
- Loan and ret



Page | 70

ROLE OF HR IN QUALITY SYSTEM PROCEDURE FOR HUMAN RESOURCE AND
TRAINING : :
+ Ensure the recruitments are conducted whenever need arises
+ Identifying training needs
+ Ensure that training activities are carried out as per the plan.
+ Maintaining records related to training
+ Analyze effectiveness of training.

4.6.a RECRUITMENT
Identifying And Planning The Human Resource Needs
Input: Systems changes leading to requirement of manpower




















Start
Manpower
requiremen
ttttt
Requirement
from Department
Head
Job
specification &
responsibilities
Internal -
Breweries
Division
Yes No
Transfer
Personal
contacts
Data bank Consultants Advertiseme
nt
Collecting Bio-
datas

Screening
Bio-datas
Sending
call letters
Before
conducting
interviews/
Obtain
employment form
Short-listing Giving offer and
getting
acceptance of
offer
Joining
Report
Issuing
appointme
nt letters
Induction
program
On the job
training
End
Page | 71

1. The Human resource needs are identified & planned based on the Competency,
System changes and requirements for continuous improvement of quality
performance of the organization in all its activities.
2. The manpower requirements shall be identified by the respective Department
heads.
3. The manpower requirements also shall be identified through Management review
Meetings conducted by the MR.
Output: Identified Manpower requirement

RECRUITMENT
Input: Manpower requirement
1. HR In charge shall collect the applications from the following Sources
a) Advertisements
b) Consultants.
c) Employee reference
2. Based on the Application forms received, HR In charge shall organize the Interview
and communicate accordingly to the applicant.
3. HR In charge shall arrange for the interview of all the candidates by DVP/CE
4. Based on the selected candidate list given by the DVP/CE HR in charge shall
communicate the selected employee through offer letter
5. HR in charge prepare a personal file of the employee, which shall contain the
details like Qualification, Experience, Interview comments, etc., after receiving the
acknowledgement from the employee.
Out Put: Employment offer letter and Personal file.








Page | 72

4.6.b Induction Program











1. Welcome the new employee
Welcome the new employee in the organisation
2. Introduction of the Company
Brief history of the group, key personnel organisation Chart
3. On the job information
To define duties and responsibility
4. Relevant information viz. various facilities
Leave, Medical, LTA facilities, transportation and
Canteen facilities/entitlement
5. Filling in forms
To get forms filled like joining letter/form/provident
Fund form etc.
6. Meet Colleagues/Superiors
He/she is introduced to colleagues and superiors
In the department
7. Answer all queries
All queries are answered in details at the end of the day
8. Follow up
The induction is followed at the end of the to find out whether he/she is
comfortable.


Start
Welcome new employee
Meet colleagues and superiors
On the job information
Relevant information regarding various facilities
Introduction of company
Filling in forms etc.
Answer all queries
Follow up at the end of the
day
End
Page | 73

4.7 Mc KINSEYS 7S FRAMEWORK














The 7-S-Model is better known as McKinsey 7-S. This is because the two persons
who developed this model, Tom Peters and Robert Waterman, have been
consultants at McKinsey & Co at that time.

MCKINSEYS 7S FRAMEWORK
McKinseys 7S Model states that there are 7 basic dimensions, which represent
the core of managerial activities. These are the Levers which the executives use
to influence complex and large organizations. Obviously, there was a concern effort
on the part of the originators of the model to coin the managerial variables with
cords beginning with the letter S so as to increase the communication power of
the model. Strategy, structure and systems can be considered the hardware of
success while style; staff and shared values can be seen as the software
Companies in which these soft elements are present are usually more successful at
the implementation of the strategy.




Structure
Strategy

Systems

Skill

Style

Shared
Values

Staff
Page | 74














Strategy: the direction and scope of the company over the long term.
Structure: the basic organization of the company, its departments,
reporting lines, areas of expertise and responsibility (and how they inter-
relate).
Systems: formal and informal procedures that govern everyday activity,
covering everything from management information systems, through to
the systems at the point of contact with the customer.
Skills: the capabilities and competencies that exist within the company.
What it does best.
Shared values: the values and beliefs of the company. Ultimately they
guide employees towards 'valued' behavior.
Staff: the company's people resources and how they are developed,
trained and motivated.
Style: the leadership approach of top management and the company's
overall operating approach.
Page | 75

4.7.i: STRATEGY:

Strategy is the choice of direction and action of the company adopt to achieve its
objectives in a competitive situation.
UBLs strategic objective is to continue to improve and consolidate its position in
the brewery market and aim to achieve this by implementing the following
strategies:
To continue to grow ahead of the domestic brewery market and increase market
share from the present 39% in the Indian beer market to over 50% in the next 3
years.
Setting up of green field breweries and brewery acquisitions are part of our overall
growth strategy.
To focus on increasing captive capacity at owned manufacturing facilities and
reduce the dependence on the contract brewing arrangements.
To continue investment behind brands particularly, the Kingfisher brand and to
introduce new brands over the next 24 months to cater to the emerging market
segment.










Page | 76

4.7.ii: SHARED VALUES:

Amongst the various reasons that have transformed U.B from a small beer
manufacturer to a 4
th
largest liquor manufacturing group in the world, is its
locus on earning the customers trust and the respect of the share holders.
From customers to employees, U.B has always concentrated upon
developing meaningful relationships with them.

U.B nurtures a culture of openness and transparency in all its endeavors,
over and above its technological and infrastructural strengths, U.B has
expanded its clientele in India and abroad. By consistently enhancing and
delivering higher value to the share holders, it has earned the respect of the
investor community. By understanding the needs of its clients more
accurately, U.B has tried to partner their growth. In the process the clients
have gained, stakeholders have gained and also the employees and other
associates. In U.Bs parlance it is known as win-win situation, where
everybody gets higher value for its money and, more importantly,
satisfaction.

A burgeoning clientele, an expanding product portfolio and ever widening
reach across the world all bear testimony to U.Bs untiring efforts in
transforming associations into enduring relationships. Building a brighter
future, step by step, with determination made of steel and vision of
extraordinary clarity.
The core or Fundamental values that are widely shared in the organization
& serve as guiding principles that are important. These values have great
meaning because they focus attention &
provide a broader sense of purpose.
The company culture is informal. It encourages & let individuals pursue
creative & innovative approaches to their work. The top & middle
Page | 77

management tend to be totally accessible encourage debate & discuss
towards the problem.
Each individual in the organization is motivated so that each feel the
responsibility of the working & tries to put in efforts for the innovative
ideas.
The company mainly focuses on the quality, placing the right quality at the
right time in the right place. They emphasize on the people
They try to lead the market with their new cost effective strategies & brand
itself acts as a huge reputation in the market.


4.7.iii: STRUCTURE:

Organizational structure refers to formal hierarchical relationship & positional
arrangement it deals with how members communicate with others, how
information flows, what roles he performs, Rules & procedures existing to guide
the activities of members as part of organization. The company has vertical
organizational structure. Where the whole team is headed by Chairmen under him
Board ofs Directors and MD.

The communication flows from top to bottom easily and it helps to achieve the
goals of the company. The company has a centralized marketing department which
takes care of the marketing research and activities of the company and meets the
expected demand. Latter the hierarchy is divided into various functional areas like
engineering, manufacturing, quality, commercial, finance and accounts, personal
and administration, and stores.






Page | 78

4.7.iv: SKILLS
Skills refer to the fact that employees have the skills needed to carry out the
companys strategy. The management has successfully implemented Knowledge
Management System called Sampark in order to withstand the fierce
competition & also to improve the skills of the employees. It consists of the
following features:
They can share views.
Keep track of the events & announcements
Web Links Intranet
Participation in Surveys
Discussion Forum
Access information on regarding the business
SKILL MATRIX



Level Description Criteria Symbol
0 Cannot do Insufficient knowledge or experience to
perform to standard

1 Knows all
elements of
task
Has fully reviewed instructions
Reference materials and is familiar with tools
of the job

2 Can do the
basics
Has received instruction from a level 4
instructor
Has performed task currently before a level 4
instructor


3 Can do fully Qualified by level 4 instructor


4 Can teach
others how
to do
Has taught or audited another persons work
within 90 days
Page | 79

4.7.v: STYLE:

Style refers to the employees shared and common way of thinking and
behaving written norms of behavior and thought. The company makes us
truly global and allows us to build unique relationship between customers.
The style of operation is a mixture of both top down and bottom up. Now if we
take the top down approach what happens is at the end of every financial year the
managing director along with the vice presidents meet and discusses the different
plans and various strategies for coming financial year.

Strategic initiative generally comes from the top management. The top
management decide on the strategy to come up with. These strategies are
intimated to the people lower down. But when it comes to marketing initiatives, it
is generally bottom up.They come up with certain plans and these plans are
provided to the various lower level departments. These lower levels or the bottom
level is provided with the complete freedom to design the various processes to
achieve the various plans.
There are instances where middle level or lower level department will come up
with some ideas or strategies and will work on it, when the concept takes a
reasonable shape it is taken to the top level management for approval. If the top
management is convinced with the concept then it will ask them to go ahead with
it.Hence we can say the decision making involves a mix of the top down as well as
bottom up approach.

To conclude the style of functioning it can be said that the company follows the
participative kind of leadership style. The top level sets out various plans, but it is
only with the consultation with various lower level departments who are actually in
charge of the particular tasks. The suggestions, ideas, opinions provided by the
subordinates are taken into consideration while setting out the plans. There is
always constant communication down and up and the managers completely trust
the subordinates and have confidence in them with respect to various matters.
Suppose the company has to make certain marketing strategies then the middle
level employees comes up with some strategies. Once it has taken shape, it is taken
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to the vice president of marketing for approval. If the strategy is approved by the
top management,then they are given a go ahead

4.7.vi: STAFF

Staff means that the company has hired able people, trained them well and
assigned them to the right jobs. Employees are the functional unit of the
organization. Their selection, training, placement, induction everything is
important for the organization staff deals with the process by which employees are
recruited, deployed and develop their current position, future up-gradation etc.,
Selection, training, reward, recognition, retention, motivation and assignment to
appropriate work are the key issues.


STAFF TRAINING
The organization recognizes that the effectiveness of its professional staff is largely
dependent upon sound staff training. As part of this staff training, the organization
encourages staff to participate in classes, seminars, and trainings that will enhance
the knowledge and performance of its staff. Staff will be reimbursed for such
training when funds are available with prior approval by the Executive Director and
in conjunction with an individual's work plan. Trainings that are required by the
organization will be paid by organization. Paid time off for training purposes must
have prior approval by the employee's supervisor.










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4.7.vii: SYSTEMS:

Formal structured system of measuring & evaluating employees job related
behaviors & outcomes

Environmental Management Systems

Supplier Quality Management system

General Purchase Order Execution system

Just-in-time (JIT) Purchasing System

Vendor managed inventory system (VMI)

Knowledge Management System

Annual tender system

E- Bitting System

Inventory control system



Performance management system
Step 1: Communication Workshop:
Communication workshop is conducted in months of May or June every year. It is
compulsory for all employees, right from operational level to strategic level. This
workshop is conducted for two days.
KRA setting and How to conduct appraisal are the topics which are covered on first
and second day respectively. It is useful to both appraisers as well as appraisees. It
helps appraisers for KRA setting and review meetings. It helps appraisees as they
get to know the whole procedure of KRA setting and the review which is useful for
them during review discussions.



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Step 2: KRA setting:
Measurable goals for every individual, linked with the business goals are set before
the beginning of the financial year. Each individual has 3 to 5 KRAs. Each KRA set
has a weightage and the total of weightages is 100%.
All the targets i.e. KRAs are set after discussion between superior i.e. appraiser and
subordinate i.e. appraisee. Performance with respect of KRAs forms a basis for the
calculation of Performance payout amount for an individual.
There is a particular format in which KRAs are set . Level of Performance (LOP) and
Measure of Performance (MOP) are decided at the time of setting KRAs.

Step 3: Mid Term Review:
Mid term reviews are conducted in the month of October. Mid term reviews
are done with a view to know how much goals the appraisee has achieved. If the
appraisee has failed to achieve the targeted level then the superior can have a
discussion with the appraisee regarding this and the reason for not achieving the
desired level of performance is found out.

Step 4: Performance Appraisal (Review):
Performance appraisal or reviews are done in the month of May. Appraisees are
reviewed on the basis of achievement of KRAs, assessment of significant tasks
other than KRAs, if any, leadership competencies and strengths of the appraisee.
Employee & Superior together fill up the appraisal form based on which the
assessment is carried out.
Performance appraisal is a one to one discussion between the appraiser & the
appraisee about
* Performance based on goals set & results achieved
* Training and the developmental needs for the employee.
At the end of the appraisal process employees comment on the process of
appraisal feedback is recorded, to validate transparency & fairness of the appraisal
process.




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Step 5: Feedback and Counseling:
Superior gives the feedback to the subordinate immediately after the final
performance appraisal. Following points explain the very purpose of Performance
Dialogue:
The appraiser and the appraisee together review overall performance of an
individual against agreed targets.
Helps in identifying Areas for Improvement.
Provides development opportunities for the growth of people.
Agree / Generate Data for actions relating to Increments, Promotions, etc.
The next step that the Corporate HR department takes after collecting all
performance appraisals is checking whether all the performance appraisals are
normally distributed. If they are normally distributed, then Corporate HR
department contacts the relevant departments and then after discussion, final
letters are sent to the employees on 1st August every year.



















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CHAPTER- 5
SWOT ANALYSIS

5.1: STRENGTHS

` Highly qualified and efficient staff management.
` Employees are working from many years in the same company which is one of the
advantages to the company in molding the relationships and experiences.
` Freedom to share their work related problems ad opinions to management.
` Company is following ethical and transparent business practices.
` Good industrial relations.
` Market capitalization.
` It is the FIRST Best Company in the entire beer industry. And 6 bottles of beer is
sold per second in the world.
` ISO certified company known for its quality.
` The LAN connection of intranet and internet facilities throughout the UB Group
helps in quick communication between inter plant & intra plant activities.
` Cost reduction through economies of scale.
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` Automated plant with lesser man power.
` Creative and aggressive advertisement and brand promotion techniques in the
government controlled environment through sports, fashion and ambassadors.
` Creation of Brand Equity and increasing product width.
` Induction of latest brewing and logistic technology as practiced in Europe & USA.
` Implementing new methods of cost reduction techniques.
` Outsourcing few areas like handling E.T.P, Contract Labours in order to concentrate
on the key areas like product quality control & marketing.
` Flavored low alcohol beverage with new variants like the 330ml beer pack has
driven sales growth across the state.
` Strong distribution channels.
` Efficient R&D department.





















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5.2: WEAKNESS

Ignoring the future competitive environmental forecast.
High sales of beer is major only during the seasons.
Beer is the perishable product having shelf life of 6 months.
Decreasing skilled work force due to retirement.
Lower level of resistance towards change.
Lower level of resistance towards change among employees/ workers.
Government controls on advertisements, manufacturing capacities, distribution,
retail and pricing, heavy excise duties and taxes pose a challenge to the
organizations.
Distribution schemes vary from state to state.
Government treats the beer industry in par with the liquor industry. It is
considered equal with the liquor industry legally, politically & socially.
Industry and its production process is subjected to licensing, rules and regulations,
laws and bye-laws.
Stringent rules and regulations to be followed in production, marketing and
logistics.
Strict maintenance of the records.














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5.3: OPPORTUNITIES

Ban on arrack by the government leads to the high sales of beer.
The company can introduce rewards based on seniority, competency, and
performance.
The company may emphasis more on team building and quality circle foe better
performance and results.
The company can consider more of 360 degree appraisal about employee
performance and facilities greater development of employees.
Concentrating on semi-urban and rural markets, which give the industry the bulk of
its revenue.
GDP growth, raising per capita income, changing life styles and removal of market
distortions will fuel the growth of the beer market.
Low bitterness, no after taste, low calories, low alcohol content encourage
consumer to use UBs product in household recipes.
Regularized sales in other states with the formation of Distribution Corporation
similar to Karnataka.
The demographic profile in the country and the low per capita consumption of
beer in comparison to the other countries offers the expectation of substantial and
sustainable growth for beer in the next several years.
The alliance with Scottish and New Castle Plc (S&N) open a new arena to expand
the United Breweries Ltds distribution network.
The beer segment is expected to grow by 17.2% by 2012.
The Indian Spirits market is protected because of high tariffs on foreign liquors.









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5.4: THREATS

Future or potential competition from already established market participants.
Growing competition from foreign companies.
As other leading international brands in this category- Bud light, carls Light, Old
Milwaukee Light or Miller Lite are planning to launch in the Indian sub-continent in
the near future.
SAB Miller is attracting the semi urban consumers falling in the age group of 25-30.
Excise duty and stringent norms has an adverse impact on the growth.
The higher railway freight has pushed up cost of raw materials and inputs such as
sugar and all these add to cost of production.
Increase in the price of essential raw materials for production of alcoholic
beverages due to shortage and inadequate availability, has affected production
adversely.
Inflation is affecting the profit margin of the industry.
















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CHAPTER 6
SUMMARY OF FINDINGS AND SUGGESTIONS

6.1: FINDINGS
Ware House:
; Negligence of the workers:
Negligence of workers is become a treat to preserve and utilize the cartons in the
required manner avoiding unreasonable wastage of the same.
It appears as if they are not been instructed of their work-procedure and the
expected manner of working.
Workers are efficient enough to work, experienced, but not skilled.
They look as if they are completely ignored of the sensitivity of bottle. They realize
the fact only when they listen to the noise of bottle breakage.
The coordination during work among the workers is lacking to the major extent
due to which they have lost the consistency in working,

; Lack good of supervision
The irresponsibility of the workers been taken as granted:
They are not made aware of the instructions of working procedure or working rule.
They require the supervision in each and every step and people to control them.
They are no people to ask them what they are doing and enquire them for
misbehaviors.
Misuse of the beer:
They have the practice of drinking beer inside the warehouse. Even women drink
the beer and are been supported by each other. Some of the torn cases torn by
the workers for steeling of beer bottle are also been shown by the security guard.

Traditional way of working:
It is not the systematic procedure adopted in the work but illiterate skills and blind
styles. They are bothered of loading the truck but not of how to load the truck in
the better careful manner.

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Workers are tearing the cartons with full of there conscious:
It is the negligence of supervisors inside the warehouse who failed in detecting the
activities of the workers. The result of which is the wastage of cartons and misuse
of beer. The security inspite of knowing has failed to inform the authority. They
tear the cartons putting there fingers in to the holes of the carton to steel the
bottles.
Workers standing on the cases leading to the breakage of bottle:
When the workers stand on the cases because of the weight-age and pressure the
bottles inside the cartons especially the below kept cartons are breaking which is
not avoidable unless the other measures are taken. But the workers sitting on the
cartons, standing, walking for relaxing and recreating themselves should be
avoided compulsorily which is causing major breakage of bottles inside the cartons.
In most of the places the wooden stands are not kept ignorantly, the
consequence of which leading to the flow of liquid below the cases and spoiling the
cartons kept packed for delivery.
The unsealed cartons are loaded to the truck ignorantly inspite of the knowledge
:
No doubt that they put the tapes to pack the cartons even while loading the truck
but not by all and all the times. Tapes are not put even when storing inside the
warehouse.
Workers throwing the wet cartons with the broken glasses pieces inside which on
top of the cases leads to the further spoiling of the fresh cartons.
The new bottle packs are also been opened and few bottles are been taken off.


Proper utilization of manpower to be looked into:
Especially the young workers need observation and guidance. Benefit as well as
the loss is more from that work group.
The corners of the warehouse are been misused, it can be considered as the dark
place.
The upstairs portion of the warehouse may be utilized to the optimum. And there
is a need of keeping palettes before storing the cases.


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GODOWN

The gunny bags in which the barley/malt is packed are torn because of which the
wastage of raw material is more and is spoiled too.
Some of the empty bottles were kept hidden inside, chances of breakage is more
and it may get mixed up with raw material which is very difficult to find the micro
glass pieces
Bulk of raw material is been wasted falling on the ground. It is also been
moisturizing. (Its loosing its crispiness and freshness.
There are chances of rats being there in the godown.
Also the place inside the godown may still be utilized to optimum level.
No supervision so there is chances of steeling and misappropriations.


STORES:

The place inside the stores shall be widened, and can be utilized to optimum
extent.
The leakage of rain water from the roof resulting in spoiling the materials kept on
the stores.


BOTTLING HALL [ENGINEERING] :

First and foremost there need to be affixed bottom tray to the conveyers in the
bottling hall, which avoids major leakage of liquid falling and the ground which
inturn avoids the major dust and helps in maintaining cleanliness.
The filling machines do not have the top hood facility, top hood is very essential
to avoid the particles falling on to of the bottles to avoid the unwanted particles
entering inside the beer bottle
It is very much necessary for the safety guards especially near the pasteurizers,
conveyer passing from pasteurizer to labeling machine, and near the labeling
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machine also. In those places quantum of bursting of bottles is very high in
numbers.
The hall requires the air out facility to the greater extent. So we can affix the
exhaust fans for air out purpose.
And some openings may be made to get the good air from outside.
The place of collecting the bottles should be made separate from the bottling
hall. We can avoid dirt coming from outside, wastage of time and helps in
selecting unbroken bottles.
Man power is not utilized properly. We may reduce the man power also. The
Places, where the manual observation is required is ignored. That has to be vitally
taken in to consideration.
We have more workers near the collection of bottles, it resulted in haphazard
working condition, if we separate collection of bottles it helps in improving the
working conditions, avoids accumulation of un-required workers in the same
place. They may be placed in the required places, or may also be removed.


WORKERS ISSUES

They majorly require recreation facilities.
They the sense of unsafety.
It is of their requiremental observation that the maintenance is not been done
properly, especially in watering, bottling and refrigeration departments.
They are very much disappointed with the maintenance of sanitation (toilets), their
place of work (working environment).
They have the problem of mishandling of machines by previous shift workers who
does not inform regarding it with the other before that other handles it.
The proper required tools are not provided to the departments. They have to
borrow them from other departments.
It is of there response that they are facing the internal conflicts. They could not
able to interact with there higher executives.
They are not satisfied with their wages, comparing with the other company
workers.
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OTHER PROBLEM AREAS

Water taps should be repaired or replaced, unnecessary wastage of water.
In most of the places the leakage of rainwater from the roof causing damage to the
materials and also on of reasons for dirtiness on the ground, measures shall be
taken to stop the same.
In some of the places materials (storage tanks, pipes) are getting rusted.
No dust bins anywhere. Lack of cleanliness.
No proper sanitation facilities, especially to the visitors.
Lack of recreation facilities, lack of appreciations.
The dirt of bottling hall is spreading in warehouse premises too.
Some part of warehouse premises is extended in to bottling hall.
We have the unreasonable breakage of bottles and wastage of cartons while
loading the truck.
There is no air outs in the bottling hall, which blocks the breathing air , lack of good
air even to breathe. The hall is blocked or completely closed, there must be some
openings so that we may get good air from outside.
Improper allocation and utilization of manpower.

CONCLUSION
UB Ltd is the well know organization with the brand Kingfisher, famous
for beer especially India. As we can observe the growth of the company and
advantages for its stability in the marketing point of view, the company has
good vision in par with its mission in acquiring the first place in the market.
One of the visions of any manufacturing company will be its increase of
selling its product. The aim of the UBL is also to increase its sales from the
sale of 6 bottles per second to be increased to 12. The company is also
interested in launching the new products in order to cover the whole
market and the company also has the required capability to fight against its
rivalries.
In the company cc cameras has to be fixed to avoid drinking of beer inside the
bottling hall and warehouse.
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6.2: SUGGESTIONS

- Supervisors may be placed in the warehouse and for godown.
To avoid theft of bottles
To bring fear and consciousness among workers.
Workers negligent behaviour may be brought down to major extent.
It is helpful for the Management in getting day to day accurate information.
Opening of new bottling packages may be avoided completely.
Cleanliness can be brought in maintained to greater extent.
Supervisors can see to it that working instructions are strictly followed and the
proper use of dustbins etc., are made of.
The executives will be bit relaxed of supervision and work stress, and also can
get accurate details regarding the working behaviour of workers.
Avoiding the wastage of cartons lowers the cost of ware house department.
Many other advantages may be expected.

- The workers should be strictly instructed with the properly framed working
rules.
That makes them work in the expected qualified manner.
Avoids mishandling of work, wastage of cartons,
Helps in maintaining cleanliness,
Moulds the workers working behaviour,
They can also learn skills
Workers also find interested in learning different working styles

- Measures may be taken to avoid the bottling wastes in to warehouse. If possible the
warehouse may be separated from bottling hall.
- There must be affixed some exhaust fans in the bottling hall. Any other measures
must be taken to avoid the polluted air block inside the hall
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- The doors/ entrances of the warehouse may be widened so that more than one truck
may be loaded at a time in the same place. And it also saves the time, helps for good
supervision, and avoids wastages to the major extent.



6.3 LEARNING EXPERIENCE IN THE ORGANISATION
About working in the organization:
By working in this organization within the period of one and half month, I felt
UNITED BREWERIES LIMITED is considering its employees as an asset of the
companys growth. Hence it is a golden opportunity to interlink what I have
learned in the classroom with practical functions of an organization.
I learnt the various managerial skills, Time management, Decision
making, Coordination, and execution, and communication skills. I
learnt from the employees the co-operation, commitment and
decision in work environment.

About co-operation extended by management & employees:
Yes it was very good on the first day when I reported to the organization, the
management allotted a project guide to help me in the course of organization
study. My project guide gave me a brief description about the UNITED BREWERIES
LIMITED. Then he further explained about the company in brief like number of
departments and their respective heads.