ORGANISATION STUDY UNITED SIPIRTS

ORGANISATION STUDY UNITED SIPIRTS

INDUSTRY PROFILE

INDUSTRY PROFILE

The global spirits industry was worth almost $263 billion in 2010, having recorded yearly growth of over 2.5% between 2006 and 2010. Whisky represents the leading market segment, generating almost $70 billion in sales in 2010 and accounting for almost 27% of the overall market in terms of value. Market growth is expected to accelerate to exceed a yearly growth rate of 3% between 2010 and 2015 to hit $306 billion.The global spirits industry refers to the manufacturing of spirits, with companies involved in distilling and blending liquors, blending and mixing liquors with other ingredients, and distilling potable liquors. Spirits manufacturers use ingredients such as grains to distill into alcoholic spirit beverages, which they then package and sell to various types of outfits like restaurants, clubs, bars, retail stores, liquor wholesalers, hotels and casinos.Key Segments

The world gin market reached a volume of almost 47 million cases in 2010, with the industry expanding by 2% that year. The US leads the market with near 38% market share. Spain is the second biggest player in the global gin market with almost 12% market share, followed by the UK with just over 9% of the overall market. These three established markets are witnessing a change in that long-standing standard gins are nearing market saturation, leaving room for newer super-premium gins.

The vodka industry recorded strong global growth prior to the economic recession, which negatively impacted the market. Strong growth between 2004 and 2008 saw the market grow in volume by 30 million cases in four years. Though vodka sales plummeted in 2009, the market recovered in 2010, with a particularly strong rebound in Russia.

Russias super-premium vodka market segment stands at around 250,000 cases. The US leads the premium white spirits market, with many craft distillers entering the market. These are typically small-sized producers. Brazils vodka market has witnessed a degree of substitution from cachaa into vodka, with cachaa producers also beginning to produce vodka. Over recent years, Indias vodka market has seen some large rum and whisky producers, including UB Group, lend increasing importance to vodka production.

Regional Market Share

The NAFTA nations spirit market exceeded $57 billion in 2010. Mexico recorded the fastest growth at a yearly rate of 5% between 2006 and 2010. In terms of value, the US leads the NAFTA countries, generating more than $47 billion in 2010, and it is expected to remain in the top position to reach almost $55.5 billion by 2015.

The five leading emerging nations (Brazil, China, India, Mexico and South Africa) generated almost $51 billion through spirit sales in 2010. The industry recorded yearly growth of 9% from 2006 to 2010 within these five countries. The market is expected to record yearly growth of over 7% between 2010 and 2015 to exceed $72.5 billion in 2015.

India leads the emerging markets, having generated over $19 billion in 2010. It is expected to remain the number one country in terms of the spirits market, generating almost $34 billion by 2015. Whisky represents the leading segment in Indias alcoholic beverage market, but white spirits have been recording the fastest rate of growth. Market expansion in India is largely due to cultural trends, with a growing number of consumers frequenting lounges and bars. The countrys younger population is also stimulating market growth, opting for lighter spirits such as vodka, gin and rum.

Market OutlookDue to the economic recession, the global spirits market has witnessed some changes over recent years. For example, off-premise consumption rose as on-premise consumption fell during the recession, with consumers favoring this cheaper drinking option.

Global growth moving forward will be fuelled by demand from emerging nations such as Brazil, Russia, India and China (BRIC). In addition, rising levels of disposable income are driving global consumption of spirits. Consumer trends towards premium products are also boosting the market in terms of value, with consumers ready to pay more for higher quality brands.

COMPANY PROFILE

COMPANY PROFILE

United Spirits Limited (USL) is the largest Alcobev Company in India selling 123.7 million cases for the fiscal ending March 31st, 2013. One of the leading global players with a portfolio of more than 140 brands, of which several are global iconic brands across flavors. The company has twenty-one brands in its portfolio that sell more than a million cases each year, of which five brands each sell more than 10 million cases annually, Additionally it also has nine brands that sell over half a million cases each year. USL brands in the prestige and above segment including McDowell's No.1, Royal Challenge, Signature Antiquity and Black Dog constitute a quarter of the company's total annual volume.

The company enjoys a strong 59% market share for its first line brands in India. United Spirits' brands have won the most prestigious awards for flavors, ranging from Mondial to International Wine and Spirit Competition (IWSC) to International Taste & Quality Institute (ITQI); 184 awards & certificates.United Spirits has pioneered several innovations that have pushed the paradigm in the industry. This includes the first diet versions of whisky and vodka in India, first pre-mixed gin, the first Tetrapack in the spirits industry in India and the first single malt manufactured in Asia.USL has a global footprint with exports to over 37 countries. The company has established a strong presence in African and Far Eastern Markets, under its Emerging Markets initiatives. It has a sizeable presence in India with distilleries and sales offices all across the country, and a committed team of over 7500 people dedicated to the fulfillment of the company's mission. It has established manufacturing and bottling plants in every State in India. USL's robust distribution network covers the entire country to deliver its products to customers located anywhere in India.

Whyte & Mackay, Bouvet Ladubay, Four Seasons Wines Limited and Royal Challengers Sports Private Limited, are 100% subsidiaries of USL.

BACKGROUND AND INCEPTIONUnited Spirits Limited's (USL) history arcs through the space-time-continuum, leaping backwards to the British Raj of the 19th Century, trotting through the license Raj of an Independent and Socialist India - through the 50s, 60s, 70s and 80s, coming into its own at the cusp of the new millennium and now in the Info Age, the clear Numero Uno in the world alcohol beverages market.

Angus Mcdowell :

United Spirits Ltd. traces its origins to McDowell and Company, established as a trading firm in 1826, by a Scottish freebooter named Angus McDowell. He set up a warehouse near Fort St. George, Madras (now Chennai), which was a major trading centre of the British Empire. McDowell became the preferred purveyor of imported liquors and cigars for Indian Maharajas and British commandants. McDowell's business revolved around importing consumer items including wines, spirits, cigars and tea to cater to the English population in India. History has it, that McDowell's rapidly became the preferred purveyors of fine imported liquors and cigars that gratified the palates of Maharajahs and British Commandants alike. McDowell & Company Limited was incorporated as a company in 1898, with an initial capital of 8,00,000 (US$13,000) as 4,000 Preference shares and 4,000 Ordinary shares of 100(US$1.60) each. The company's principal shareholders were A.M. Hooper, G.D. Coleman and G.A. Ruppell.

Vittal Mallya era:Vittal Mallya acquires McDowell's, initiating a new era in the history of the company.The Vittal Mallya-run United Breweries Group acquired McDowell and Company in 1951.[4] In 1959, Mallya established the company's first distillery at Cherthala, Kerala on the banks of the Vembanad lake. McDowell's began bottling Bisquit Brandy and Dorville French Brandy, from imported concentrates, becoming the first company to manufacture Indian substitutes of foreign liquor, giving rise to the term Indian Made Foreign Liquor (IMFL).

The company commissioned India's first ever distillation plant to produce extra neutral alcohol (ENA), with French collaboration, at Cherthala in 1961. The plant began bottling Beehive French Brandy for Herbertsons Limited of the Anglo Thai Group, the same year. The Cherthala distillery launched Golden Grape Brandy, its first product, created in-house, in 1962. The distillery also began processing grapes from Kodaikanal's vineyards, to manufacture brandies, while also bottling imported Cinzano Vermouth Red, Dry and Bianco. McDowell's launched its own McDowell's No.1 Brandy in 196364, following the termination of the import contract for No.1 Bisquit Brandy. The brand created the template for the many "No. 1" brands that the company would launch later.

Mallya acquired Carew & Co with distilleries in Rosa (Uttar Pradesh), Asansol (West Bengal) and Darsana (then East Bengal, now Bangladesh) in 1963-64. The Rosa plant was known for manufacturing India's only 10-year-old rum, Carew's Rum. Carew's other popular brands included Blue Riband Gin, Booth's Gin, Carew's Dry Gin, Carew's Imperial Whisky, Carew's Fine Brandy and Doctor's Brandy. Mallya also acquired Phipson & Co., Calcutta during the same period, giving McDowell a national presence in the spirits business.

The company launched McDowell's No.1 whisky in 1968, which went on to become USL's flagship brand. McDowell's commissioned new distilleries in Hyderabad in 1968, Ponda(Goa) in 1971 and in Hathidah (Bihar) in 1973. Mallya acquired Herbertsons Limited in 1973. His son, Vijay Mallya, was inducted as Director in McDowell & Co., the same year. Herbertsons launched Bagpiper whisky the following year. Between 1977 and 1980, Vittal Mallya acquired distilleries in Udaipur, Alwar, Mirganj, Serampore, and also set up a plant in Pondicherry.

Vittal Mallya died in 1983, and his son Vijay Mallya took over as Chairman of the UB Group and McDowell's in October that year. McDowell's shifted its headquarters from Madras to Bangalore, Karnataka in 1987. The company established a technical centre for product and process development research in Bangalore in 1989.McDowell's No.1 Rum was launched in Celebration (Dark) and Caribbean (White) variants in 1990. McDowell's acquired the spirits business and brand portfolio of Forbes Campbell & Company Limited, along with its manufacturing facility at Nasik. McDowell's formed United Distillers India Limited, India's first joint venture in the alcoholic beverages industry, with United Distillers p.l.c of the United Kingdom in 1991-92, and began bottling Black Dog 12 YO Deluxe Scotch, Black and White, VAT 69 and White Horse at the company's Nashik unit. McDowell's Signature whisky was launched in 1994. In 1995, Carew Phipson Limited, Consolidated Distilleries Ltd and a few other companies were merged into McDowell's.

The company was incorporated in as McDowell Sprits Ltd in 1999. The name was changed to McDowell & Company Ltd on 1 April 2000. McDowell Alcobev became a wholly owned subsidiary of McDowell & Company in 2002. The company also formed alliances with American, Australian and French companies for bulk wine import. In the same year, Phipson Distilley and McDowell International Brands Ltd became wholly owned subsidiaries, and the company acquired an 85% equity stake in Truimph Distilleries & Vinters Pvt Ltd, which subsequently became a subsidiary company. McDowell & Company acquired the Indian and Middle East businesses of Gilbeys from UDV through Triumph Distillers & Vintners in December 2002. McDowell launched Derby Special Whisky in the Andhra Pradesh market in 2003. Old Cask rum was launched in the Karnataka market in 2004.

On 21 March 2005, McDowell & Company signed a deal with Jumbo World Holdings Limited (JWHL) in Dubai to acquire Shaw Wallace. The nearly 13 billion (US$210 million) deal the UB Group up to 54.54% stake in Shaw Wallace. The board of Shaw Wallace approved the merger of the company with USL and fixed the appointed date of the merger as 1 April 2008 subject to approvals. USL retained Shaw Wallace's frontline whiskies such as Royal Challenge, Director's Special, Antiquity, Haywards and the white spirits brand, White Mischief. In 2006, McDowell & Co Limited, Herbertsons Limited, Triumph Distillers and Vintners Private Limited, Baramati Grape Industries India Limited, Shaw Wallace Distilleries Limited and four other companies are merged to form United Spirits Limited. Bouvet Ladubay, subsidiary of France-based Taittinger was acquired, the same year.

The UB Group purchased Whyte & Mackay in May 2007 for 595 million in cash. Following the takeover Whyte & Mackay, along with its other brands, were introduced in India, Dubai, Taiwan and New York. USL also acquired Liquidity Inc., makers of Pinky vodka, in 2007. USL launched Black Dog 18 YO and Four Seasons Barrique Reserve in 2009-10, and McDowell's No 1 Platinum, 100% grain based whisky, in 2011.

On 27 May 2013, Diageo acquired a 10% stake in United Spirits at a cost of 20927196000 (US$340 million), through a preferential allotment of new shares in USL. It also acquired 0.44% (58,668 shares) in the tender offer for a 85,778,082. On 4 July 2013, Diageo acquired an additional 14.98% stake in the company for 31.35 billion(US$510 million) through its subsidiary Relay BV. Diageo acquired 21.77 million shares at a cost of 1440 (US$24) per share in an off-market-deal from United Spirits' promoters, raising its total holding in the company to 25.02 per cent. Following the acquisition, Diageo holds 36.3 million shares in USL, acquired at an aggregate cost of 52358.5 million (US$860 million), making it the largest shareholder.

Under pressure from Diageo, some substantial changes to the management structure of the firm have begun to take place.Vision, Mission & Values:

To be the most admired global leader in the spirits industry by creating unique high-quality brands for consumers, driven by highly motivated employees and supported by best-in-class processes and continued innovations. United Spirits is and will continue to be responsible towards its stakeholders and the society.

Awards:

Excellence Award

Certificate of excellence in productivity Quality, Innovation & Management Presented by Institute of Economic Studies IES on 17th Nov 2008 at New Delhi

Superior Taste Award

Awarded to Mcdowells Oak Matured Single Malt Whisky, United Spirits Limited in 2008 by International Taste & Quality Institute At Brussels

Award for Packaging Excellence.

Asia star 2006 for reserve whisky glass Bottles with super cup

Awarded by Asian Packing Federation

Company Details:

United Spirits Limited

TypePublic company

TradedasBSE:532432NSE:MCDOWELL-N

IndustryAlcoholic beverages

PredecessorsMcDowell and Company

FoundedFort St. George,Madras,Madras Presidency,British India(1826)

FoundersAngus McDowell

HeadquartersUB Tower, No. 24, Vittal Mallya Road,Bangalore,Karnataka,India

Area servedWorldwide

Key people Vijay Mallya(Chairman)

SR Gupte (Vice Chairman)

Ashok Capoor (President and MD

ParentUnited Breweries Group

BOARD OF DIRECTORS

SL. NONAMEDESIGNATION

1

Dr. Vijay MallyaChairman

2Mr. Ashok Capoor President Strategy

3Mr. Paul Steven WalshDirector

4Mr. G.N. BajpaiDirector

5Mr. Arunkumar GandhiDirector

6Mrs. Renu Sud KarnadDirector

7Mr.D. SivanandhanDirector

8Sudhakar RaoDirector

9Vikram Singh MehtaDirector

10Gilbert GhostineDirector

11Ravi RajagopalDirector

12P A MuraliExecutive Director & CFO

Product Profile:

USL manufactures Scotch whisky, Indian whisky, brandy, rum, vodka, gin and wine.

Indian whiskyScotch whiskyBrandyRumVodkaWine

AntiquityBlack Dog

McDowell's VSOP

McDowell's No.1 CelebrationRomanovBouvet Ladubay

BagpiperThe DalmorePinkyFour Seasons

Directors SpecialJuraVladivar

DSP BlackWhyte & MackayWhite Mischief

McDowell's No.1 Reserve

McDowell's No.1 Platinum

McDowell's Single Malt

Royal Challenge

Signature

Organisational Structure:

PORTERS FIVE FORCES MODEL

United Spirits

PORTERS FIVE FORCES MODEL

Competitors:

The competitors like Seagrams, Fosters, Johnnie Walker offer stiff competition to Kingfisher. In rivalry competitors try to grab each others market share by introducing price wars, advertising battles and new product introductions. Currently United breweries are the market leader in beer segment which places it ahead of its competitors. This is because of its investment in the Research and Development sector in liquor industry which enables it to introduce new brands rapidly. It has been present in India for many decades which give it an advantage of strong brand loyalty and also a strong brand image.

Threat of new entrants:

There are many other emerging brands which are coming up in India. As the lifestyle in urban areas is increasing the per capita liquor consumption is also increasing. These trends are inviting lot of new foreign companies who willing to expand in the growing Indian market. Several foreign brands have made brand associations and are marketing their brands aggressively through various point-of-sale promotions throughout their distribution networks.

Buyers:

As the liquor consumption in India increases the customers also see their power increasing. In alcohol industry the brand loyalty is not there. So when more and more brands enter the market the customer goes for the cheapest brand in the same volume and alcohol limit bracket.

Substitutes:

In India the primary segments are beer and whiskey. So there is a threat from other substitutes like Vodka, Wine and Rum. If the competitors decide to make these segments more popular then there is a threat for the dominant market share of UB group in the liquor segment.

Suppliers:

The UB group is dependent upon barley producer for their beer production. Any change in barley prices affects the price of beer.

FUNCTIONAL DEPARTMENTSFUNCTIONAL DEPARTMENTS

Every organization is made up of different departments. Each department contributes to the running of the business. All departments are interdependent and interrelated to each other for their functioning. One department cannot operate in the absence of the other. The performance of the company depends on the interdepartmental functioning rather than the department wise functioning. The various departments in United Spirits Limited are:-

Finance Department

Marketing Department

Purchase Department

Production Department

Stores Department

Maintenance Department

Dispatch Department

Human Resource Department

MARKETING DEPARTMENT

It mainly acts as the back-bone of any Spirit manufacturing company as all necessary information passes on to various departments from here.

In USL there is a lot of scope for marketing. The supply chain for alcoholic beverages is divided into three tiers. The first consists of producers: wineries, breweries, distilleries, multinational brand owners, and importers that represent products within the country.

The second tier consists of wholesale distributors, which must establish separate operations in each state where they sell. The third tier are retailers, including liquor stores, grocery and convenience stores, and restaurants, pubs, and other establishments that serve alcohol for on-premise consumption.

Marketing Department Hierarchy

The main functions of marketing department is to form a pricing strategy that is competitive and profitable and Estatimating the demand in the market in future and transferring that estimation to the production and manufacturing department. Once the marketing department gets the estimations it handovers the order to production department. The marketing departments are responsible for the formation of contract of documentation between the distributors and the company.

In the four Ps of marketing mix, the USL mainly focus on the price, product and place.

Alcohol needs time to ferment blend and distilled, hence the estimation for the future demand plays critical role.

Hence the marketing department has to analyse the trends in the market and estimate the demand that would arrive in the future and conveys it to the manufacturing department. The production is less but the fermentation and maturity time of alcohol depends on various brands, and hence for demand to fulfilled the estimation has to be perfect ad their should not be any scarcity in markets, for this the marketing and the demand analysis team works very hard and pin point analysis is conveyed.

The second thing is market current demand the ready alcohol is bottled according to the demand that is conveyed and accordingly the bottled cases are dispatched.

Marketing team is facing a great challenge in advertisement also.

In Indian markets alcoholic beverages has ban on its advertisement so by some other way these brands need to be marketed. As we see the adds drinking water, music disks, and other merchandised are advertised to let the people know about these brands.

PURCHASE DEPARTMENT

Purchase is the first step in any manufacturing concern once they get the orders. It deals with the suppliers. In USL, the purchasing function is looked after by a separate department called purchase department.

In this department tendering is done and contracting is done by this department with its suppliers and according to that the supply is carried out by the suppliers. The purchase of many things is required for the alcohol.Supplies of neutral spirit molasses malt and barley and all the raw material required for the alcohol is directly done by farmers.

USL does its own farming for this as well as it has a years long tie-ups with some crop producers who only produce for them. Each distillation plant has its own purchase department which is monitored by the main purchase department situated in the headquarters in Bangalore. The local purchase department are concerned with the local purchasing of the crown caps and box cartons etc.....

The main department deals with the supply of neutral spirit and other materials contracting with the vendors is done at the main department and then transferred to the local departments. Approval of purchase manager is necessary for the purchase order to be given.

FOLLOW UP OF PURCHASE ORDERS

Purchase Section will be responsible to ensure that Purchase Orders are regularly followed up and materials ordered are supplied by parties concerned within the stipulated delivery period.

PASSING AND PAYMENT OF BILLS

Since prompt payment of the amount due to the suppliers builds the credit worthiness of the company in the market, all concerned viz. the Purchase, Stores, Accounts Department and the Indentor shall ensure that the payment of all bills are arranged as expeditiously as possible.

Key purchasing responsibilities:

(1) Determine when to order;

(2) control inventory levels;

(3) establish quality standards;

(4) Determine specifications;

(5) Obtain competitive bids;

(6) Investigate vendors;

(7) Arrange financial terms;

(8) Oversee delivery;

(9) Negotiate refunds;

(10) Handle adjustments;

(11) Arrange for storage.

An Overview of the Purchasing Function

PREPURCHASE ACTIVITIES

Plan for purchase of required materials

Determine specification of product qualities needed

Determine appropriate inventory levels

Determine appropriate order sizes

Prepare ordering documents

FORMAL PURCHASING

Contact vendors

Establish formal competitive bid process

Solicit competitive bids

Evaluate bids

Award contract to vendor

Receive shipment

Issue products to production department

Monitor future contract performance

Evaluate and follow up

INFORMAL PURCHASINGContact vendorsObtain price quotes

Select vendor

Place order

Receive shipment

Issue products to

production departments

PRODUCTION DEPARTMENTProduction is the functional area responsible for turning inputs into finished outputs through a series of production processes.The Production Manager is responsible for making sure that raw materials are provided and made into finished goods effectively. He must make sure that work is carried out smoothly, and must supervise procedures for making work more efficient and more enjoyable.

The production floor will receive the details like, The batch for which the machine has to be installed.

CHART FOR PRODUCTION

The production and planning department will set standards and targets for each section of the production process. The quantity and quality of products coming off a production line will be closely monitored.

The purchasing department will be responsible for providing the materials, components and equipment required to keep the production process running smoothly. A vital aspect of this role is ensuring stocks arrive on time and to the right quality.

The stores department will be responsible for stocking all the necessary raw materials required to service the manufacturing process.

The works department will be concerned with the manufacture of products. This will include the maintenance of the production line and other necessary repairs. The works department may also have responsibility for quality control and inspection.

The main role of production is to turn inputs (raw materials) into outputs (finished goods). Outputs refer to a finished product and inputs are the materials that are needed to manufacture certain goods.

But the challenge faced in this industry is that the production process is lengthy due to the fermentation and blending and maturity time required for the alcohol to get the perfect taste aroma and alcohol content.

The production department's main duty is to ensure the goods being produced meet the customer's quality expectations. Each step measures the raw material to make sure it is within the tolerances recommended before it goes to the next step. This measurement is either done digitally or by the machine or production operator.

A production department can only manufacture or assemble so many products in a certain amount of time. It is the duty of the production department to maintain a production schedule so other departments know what is being produced and how long it takes to produce that quantity.Responsibilities of Production Department

Interprets company policies to workers and enforces safety regulations.

Interprets specifications, job orders, cases to be filled for all the different brands on all different lines to workers, and assigns duties.

Establishes or adjusts work procedures to Estimation of worker hour requirements for completion of job assignment.

Meet production schedules.

Recommends measures to improve production methods, equipment performance, and quality of and excellence in the blend.

Suggests changes in working conditions and use of equipment to increase efficiency of department or work crew.

Analyses and resolves work problems, or assists workers in solving work problems.

Initiates or suggests plans to motivate workers to achieve work goals.

STORES DEPARTMENT

This is the department that is involved in the production cycle. In this department the materials to be issued for production is stored and even the finished goods are stored.

The stores department has to perform different functions of inventory and other related functions. The continuous function of this department can be said to maintain the records of daily stock position in its respective stock register. This statement is mailed everyday to the production department so that it can make the estimate for the following days.

After the order is once placed by the purchase department the goods is sentby the supplier along with a delivery challan. The goods received are then verified with the delivery challan. The purchase order that is placed is available online to be viewed.

The goods are then categorised into the following:

Raw materials

Stationery

Packaging material

Safety equipments

Engineering tools

Method of issue of raw material

In general there are 3 methods used for storing the materials. They are:

1. FIFO METHOD: It means in this method the goods are issued on the first in first out basis.

2. LIFO METHOD: In this method the stock is released as per the last order received.

3. WEIGHTED AVERAGE METHOD: The average price is taken into consider and the stock is released asper received.

FINANCE DEPARTMENT

The Finance Department is divided into various different sections:

Section wise functions of Finance Department:

Sales accountingSales accounts have to deal with the external parties such as Government Bodies, Sales Representatives, & Dealers, Manufacturers, Direct Dealers, Retail Traders etc.

The main function of this section is Sales Collection and completes all the formalities related to sales tax, Excise with the due date concerned. Collects sales data and prepare all the data related to sales with all customers keep in mind. They also look into the sales collection on daily basis, sales target to be met daily, everyday procurement of the orders, price structure of the product and daily dispatch.

The preparation of debit note and credit note prepares discounts chart. The discount given depends on the quantity the customer lifts from the company.

Bill Passing

All the bills that are raised come to this department for the sanction. Even when raw materials are purchased, the supplier sends the bill to the purchase department, which then sends to the finance department.

It is here that all the particulars are checked and approved. Only after the bills have been approved payments will be made. Any department requiring any payment of the bill needs to first send the bill here for approval. The company enjoys E-PAYMENT for CENVAT, EXCISE and also the salaries.

Inventory Accounting Section

This section is concerned with the Valuation of Inventory. The Stores Department prepares a Goods Receipt Voucher. Based on this voucher, cost of inventory is calculated. This goes to say that the quantity is all checked by the stores, but the amount is checked by this department based on the order placed. This section needs to monitor the amount of inventory in the company. This also includes the stores and spares items in the organization. It also prepares the Variance Report based on the purchase order placed and the materials received.

Income Tax & Insurance Section

This section takes care of all tax related issues. They are involved in tax planning and update all the laws with respect to taxation. This becomes very important for the company because many decisions are taken; keeping in mind its tax implication. The budget in this respect has also to be made for the payment and provision of advance tax.. They also manage the insurance part. USL basically has the insurance for the Fixed Assets and also a Group Insurance for the employees. For deciding on insurance the company calls in for quotations from various companies and decides based on the lowest and also considering the reputation. TAX laws are updated as per rules. Tax planning is under this department as part of prior responsibility. Insurance of all the fixed assets are done here. Tax consultants are appointed to follow up with tax laws.

Establishment & Cash Section

This section do all employees related work like prepare pay bill of employee, income tax, pension and gratuity, leave encashment, etc. this section works in union with the HR department. The calculation of the salary for both management and non management cadre is done here. All the deductions like PF, loans etc. are done here.

They also incorporate into the salary the various allowances like.

Housing allowance

Conveyance allowance

Medical allowance

Canteen allowance

Shift allowance

Washing allowance

Professional skill development allowance

Transportation allowance

Main functions of this section are:

Salary

Overtime

Income tax deduction of employees

Statutory government payment like professional tax, LIC

PF, loans and advances to employees

Employee claim

Pension

Retirement dues like leave encashment, gratuity.

Press Release for Investors

HUMAN RESOURCE DEPARTMENT

Introduction

Human resource management is a management function that helps managers recruit, select, train and develops members for an organization obviously; HRM is concerned with the peoples dimensions. We quote those definitions on HRM but before quoting the definition it is useful to point essentials which must find them place in any definition. The more points of HRM are:

Organisation in not mere bricks, mortar machineries or inventors. They are people it is the people who staff and manage organisations.

HRM involves the applications of management functions and principles. The functions and principles are applied to acquisitioning developing maintaining and remarking employees in organisation.

Decision relating to employees must be integrated; decisions on different aspect, of employees must be consistent with the other human resource decisions.

Decisions must influence the effectiveness of an organisation. Effectiveness of an organisation must result in betterment of services to customers.

Quality product supplied at reasonable costs.

HRM functions are not confined to business organisation, too. Such as education, healthcare, moderation and the like.

Thus HRM refers to a set of programmes functions and activities designed and carried out in order to maximize both employees as well as organization effectiveness.

HR DEPARTMENTAL HIERARCHY

MANAGING DIRECTOR

GENERAL MANAGER

DEPUTY MANAGER

PS/TO/PRO/AO/OM/LO

SUPERINTENDENT

SR. TYPIST

PEONS/HELPER

RECRUITMENT, SELECTION AND INDUCTION

Recruitment

Purpose:

To recruit, place and induction manpower required in the company from time to time. Recruitment starts with the stage of process and continuous with selection and ends with the placement of the candidate.

USL mainly adopts two sources of manpower:

Internal

ExternalIn the internal sources, vacancies are filled by transfer and up gradation from other department to the required one.

And in the external sources is more preferable as it can provide wide range of selection for the particular job, USL prefers the following external sources such as:

Advertising employee

Recommendation

Employment exchange

Private concerned institution

Campus visitProcedure:

1. Receive requirement of manpower from different departments in the prescribed form along with justification.

2. Scrutinize the forms with respect to justification and obtain managing directors approval.

3. Issue office orders regarding creation of post.

4. Prepare draft of advertisement for obtaining managing directors approval

5. Send the approval draft or publication through internal memo to corporate communication department. Simultaneously, notify the employment exchange along with covering letter.

6. Receive applications in prescribed application form classify and screen with respect to basic requirements specified in the advertisement.

7. Give numbers to applications, prepare cover notes and pass to the concerned department for obtaining their comments and recommendations.

8. Verify the recommended/ rejected applications again with norms. Check returned application again with norms. Check returned applications with records. If relaxation is required, obtain managing directors decision by putting up notes.Selection

Selection is the process of verifying the qualifications, experience, skill, knowledge, etc. of an application with the requirements of the post.

After the applications of required number of employees are secured through different method of recruitment, selection process begins. The main objective of selection procedure is to find the right man for the right job. The efficiency and profitability of the concern depends on proper selection of the personnel.Selection requirements

1. It must include area consultant of the concerned department at USL.

2. It must include the outside expert in selection procedure to choose experimental persons for the higher post.

3. For selection of a general post it required 3persons and for high post it needed 4 persons to select a right candidate.

Induction

Induction is a technique by which a new employee is rehabilitated into the changed environment, practices, policies, and purpose of the organization.

Once the recruitment and selection procedure is finished the nearly recruited employee has to undergo an induction. Initially the fresher is assigned his work and once he settles down in his respective department, after2-3 months all the newly recruited persons undergoes an induction process of 25-30 days at the Bangalore Head Office or Head Plant. These fresher are from all over India as USL is connected with all top colleges and universities. The first three days are spent in the safety department thereafter they are introduced to all the departments one by one. During the induction they are also provided with printed materials, booklets, employee manuals, to about the company.Training and developmentIt will be companys endeavor to recognize the value of its human resources for their growth. The company is committed to provide adequate opportunity to employees to enrich their knowledge, skills, and attitudes contributing to steady growth of the company and feeling proud of working for the company. By methodically identifying needs for employees to upgrade their knowledge, sharpen skills and improve attitude for improving performance at their present and future functions and importing such training to employees, after assessing their capabilities and potential.

Training and development need:Standard Performance = Actual Performance.

Training is the art of continued improvement increasing the knowledge and skills of an employee for doing a particular job.

Training is defined as on attempt to improve employee performance, job or one which is related to it. This usually means changes in specific knowledge, skills, attitudes, behaviour, etc.

gives training to their employees and for along term purpose aims at giving proper personality development. The company is committed to provide adequate opportunity to enrich their knowledge, skills and attitude contributes to steady growth to the company and feeling proud of working for the company.

The USL provides such training to employee after assessing their capacity potential. USL provides training to the top executives as well as to the employees. They call professional or experts for imparting training. The company nominate the persons through training need assessment form and training programme is imparted.USL training is for its human resources for improving their abilities.Behavioural training: Discipline is a very important aspect, which reduces the rate of absent; there is no stoppage in working. So behavioural training is important.Technical training: Training converts an unskilled worker to a skilled worker, which strengthens the competencies of the worker, which is beneficial to the company so such training is conducted in USLPurpose:

To identify training needs and depute employees for training programmes.

Procedure:

1. Obtain training requirements of employees from different department through sending circular.

2. Prepare annual calendar for conducting in house or external training programmes based on training needs and calendar received from different agencies institutions.

3. On receipt of Boucher, put up through the proper channel to the concerned department asking for their recommendation.

4. Obtain recommendations and forward to managing director with notes for approval.

5. Obtain managing directors consent and prepare intimation letter to be sent to the organisation.

6. Send copies of the letter to employees, TKO, senior assistant officer.

7. Obtain requisite cheque from finance department and send to organisation with covering letter signed by competent authority.

8. Enter into respective columns of programmed attendance register and file the copy.WAGE AND SALARY ADMINISTRATION:Wage and salary administration refers to the establishment and implementation of sound policy and practices of employees compensation.

USL has devised a fix pay practice depending on the various categories. The main pay structure is made up of basic pay, dearness allowance, house rent allowance and city compensatory allowance. USL gives statutory benefits like PF, gratuity, and etc. In addition to this USL also provides liberal fringe benefits.

It has annual performance based increment system divided in various quarters on the bases of date of joining of an employee.Purpose:

To prepare wage settlement proposal.

Procedure:

1. Obtain details of information required from other organisations.

2. Prepare a standard format for collecting information from other organisation and obtain approval.

3. Obtain information.

4. Make comparative statement showing positions of different organization vis-a-vis this company.

5. Prepare detailed proposal for wage settlement to enable the management to negotiate and decide.

6. Take follow up actions to implement the wage settlement.PROMOTION AND TRANSFER POLICYPromotion

(Here, USL is changed concept of promotion that is they called it as Up gradation that means only moving from lower to higher position plus higher financial reward but without change in power/ authority and same that in case of demotion that is Degradation.)

Purpose:

To prepare a list of eligible candidates in prescribed form for the Departmental promotions committee (DPC).

To arrive at a list of promotes.

Procedure:

1. Prepare and update half yearly seniority list as per the seniority rules.

2. Prepare a statement of eligible candidates as per seniority rules of the company.

3. Place the file before the Departmental promotions committee members along with Rs. Of the last three years in the meeting.

4. Convene meeting in July and January.

5. USL gives up gradation to the management level employees are to be given up gradation after every 5 years and non management employees is to be given up gradation after 6years.

6. Obtain approved list of promotions duly signed by managing Director from Departmental promotions committee.

7. Issues and circulate office order for promotion.The degradation rate at USL found very low. The USL has given degradation in case of poor attendance record or very poor performance record.QualificationPromotion gives

10th Pass

After 8 Years

I.T.I. Pass

After 6 Years

(Non Mgt.) Graduate

After 4 Years

Post Graduate

After 2-3 Years.(Depends and Candidate)

(Mgt.) Graduate

After 4 Years

TIME KEEPING OFFICEThe shift system at USL is as followsType of shiftTimings

General shift8:30am to 5:15pm

1st shift (morning)6:00am to 2:00pm

2nd shift (afternoon)2:00pm to 10:00pm

3rd shift (night)10:00pm to 6:00am

This department looks after the following particulars:

1. Wages and salary administration

2. Attendance

3. Posting of various details for regularizing attendance

4. Salary statement details for payment of salary/ stipend

5. Canteens coupons amount deduction/ canteen allowance payment

6. Leave records

7. Supply of contract labours as & when required by departments

8. To fill up various forms under various labour/ industrial laws

9. Issue of short call notices (matters of disciplinary action)CORPORATE SOCIAL RESPONSIBILITYGO GREEN INITIATIVE

Greenhouse gases, Deforestation, Increasing population and Industrialization, etc. There are various factors contributing to global warming and climate change. But there is one thing that can help overcome the problem, which is a strong commitment to save the Earth.

2013 - RCB Game for Green UpdateSeason 6 of IPL marked an important milestone amongst several cricketing world records by this spirited team. RCB emerged as the only Carbon Positive team amongst all IPL teams. This success comes soon after RCB declared Carbon Neutrality and became the first Carbon Neutral Cricket Team in the world in 2012, without the purchase of any carbon credits. Social media played a pivotal role in mobilizing fan support even stronger than the previous two years. RCB created a hashtag #RCBGoGreen wherein fans were urged to take up a green pledge. Fans could take up something as simple as walking short distances instead of using their bikes or cars, to growing a plant at home. In turn, with each use of our hashtag on Twitter along with the Likes, Shares and Comments received on Facebook, the jersey on our website would turn green. The result was overwhelming. Within a span of just 3 days we received 1313 green pledges on twitter, 831 likes, 231 comments and 696 shares on Facebook.Green ConscienceIn its bid to restore the green and garden city status for Bangalore. RCB launched Greenaissance, a first of its kind campaign, to retain the greenery within the city by engaging Individuals, Institutions, Corporate and Communities. This campaign allowed fans and citizens to participate by either providing a space to plant a tree or by volunteering in tree planting drives, with RCB facilitating the online and on-ground activity. Plantations were held in Government Schools in Kanakpura, Ramanagaram District, in Bangalore, in association with NDTV Coke SMS Campaign. 92 fans volunteered for plantation drives and 20 people pledged their space for making Bangalore greener. Over 240 RCB fans pledged their solar water heater emission reductions to RCB. Over 500 individuals from different corporates in Bangalore and 1000 RCB fans across Karnataka switched over to CFLs Message from Ashok Capoor, President & Managing Director, United Spirits. "United Spirits is a Global Company. As a Market Leader, United Spirits is cognizant of its responsibility for inclusive growth. One of the key tenets of our CSR policy is environment stewardship and reduction of our carbon footprint. We have the largest production network in India with 86 manufacturing and bottling units. Our environmental commitment is most visible here. We have been gradually replacing all Fossil Fuel Boilers to Bio-mass based Boilers for generating steam. We have identified technology and firmed up orders for Multi-fuel Bio-mass based Boilers wherein Spent Grain as well as Spent Wash Distillery Effluent, a byproduct in the production of Malt Spirit, will be disposed effectively. Traditionally, we have generated electricity from Steam Turbines. Now, we have embarked on the process of setting up Bio Gas Engines for utilizing Methane Gas from the Anaerobic Digester for generating captive power for the distilleries and also supplying excess power, if any, to the grid. We have put in place measures to control Green House Gas emissions. Some of the other initiatives are:1. Rain water Harvesting and recycling of water.

2. Replacing of high energy consuming lights with CFLs.

3. Automation and re-sizing of various equipment to reduce power consumption.

4. Energy efficient pumps.

5. We have employed Solar Energy for heating water at a few locations as a test pilot and if proved successful, we will roll it out on a larger scale.

6. Plantation on all unutilized land at our units is another measure in this direction.At the packaging level, we introduced some of our largest selling brands in tetrapacks, which are completely recyclable. Some of our units in Karnataka have even used roofing material created from these recycled tetrapacks. While this delivery mechanism is currently available only in Karnataka and Maharashtra in India, we intend to roll this out in other large Indian States once the Government allows us to set up manufacturing units to step up our green drive.S.W.O.T. ANALYSIS AND MC KINSEYS 7S MODEL

SWOT ANALYSISStrengths:1. Marketshare of48 % in beer segment.2. Market share of 59 % in spirits segment.

3. Strong brand image in India.

4. Global presence of the brand.

5. Known for quality and innovation.

6. Aggressive advertising.

7. Financialbacking fromUBgroup.Weakness:1. Over leveraged position leading to short term cash flowproblems.2. Dominant single brand Kingfisher.3. Expensive brand maintenance.4. Static marketgrowth rate.5. Long developmentcycles.Opportunities:1. Growing beer market.2. Demand for better quality.3. Increase in disposable income.4. Low per capita beer consumption.5. Any deregulation in the excise policies with reference to taxation and duty on beer which could drastically push up the demand for beer.Threats:1. Advertising and market restrictions.2. Entry of foreign liquor brands.3. Cloning of successful brands.4. Growth in substitutes.5. Economic downturn.6. Negative perception of alcohol in India.7. High taxes.STRATEGY The UB group should increase the profitability of their breweries unit in line with the FMCG industry. This can be done by increasing the market share in high price liquor brands in scotch and whisky segments. They should also continue to innovate new liquor brands to strengthen their grip on the market share in normal priced brands. They should be aiming to increase their exports. There is a large market potential in African countries. This will make their brand more global in nature. They have already making inroads into Europe and USA by manufacturing and exporting grain based whisky. They should make their wine segment more popular in India and abroad. Wine is both abundantly consumed in Europe and is also costly. So it offers high return on investment plus it also strengthens the global brand image of the companyMCKINSEYS 7-S FRAMEWORKThe McKinsey 7S Model involves seven interdependent factors which are categorized as either hard or soft elements:Hard ElementsSoft Elements

StrategyShared Values

StructureSkills

SystemStyle

Staff

STARTEGY:Strategy is the plan devised to maintain and build competitive advantage over the competition.

The strategy followed by the USL are:

1. To operate at a level of profitability, this will ensure the long term economic viability of the company favourably with other industries of similar capital intensity and risk which will enable the company to attract adequate to support its growth.

2. To strive to satisfy customer by integrating their needs into the company products and service with efficiency and give best value to them by promoting quality products.

3. To improve the process managing the company affairs through proper planning, timely implementation of plans and regular performance reviews.

USL has adopted a cost plus pricing strategy where the products are priced less when compared to their competitors. The company is also expanding its product portfolio to match rival offerings.SYSTEM:1. They are the main systems that run the organization.2. Management information system-this system contains information of all the employees, all the departments and there working process which helps them in decision making.

3. Quality testing system-this system deals with the quality testing and maintaining the quality of the its brands.

4. Automatic packaging system-products are packed automatically this saves time and energy.STRUCTURE:1. USL use ISO 9001-2008 running except Design. 2. But in this unit no IT department involve it. USL has a horizontal structure and the command flows from top to bottom.STAFF:1. This deals with the total number of employees, the policies adopted by the organization for recruitment and selection.

2. The staff deals with the various personnel policies followed by the organization.3. Recruitment and selection: Due to registration termination retirement and transfers the concerned department head will give the man power requirement along with the job description. The man sourcing is done throw advertisement man power, consultant, and employment exchanges and personnel reference.SKILLS:The actual skills and competencies of the employees working for the company are discussed below. USL mainly focus on following key skills:

1. Employee training program

2. Production planning

3. Marketing and salesThese are the distinctive competencies that are present in the organization. USL is improving the employees skills and techniques through motivating them and giving proper training to them also through providing proper working condition.

STYLE:1. It represents the style of leadership adopted.

2. It has top to bottom style system.

3. The style of the organization is authoritarian. It means management follows authoritative.

SHARED VALUES:The core or fundamental values that are widely shared in the organization serve as guidelines that are important, these values have great meaning because they focus attention and provide broader sense of purpose. The values of USL are1. Customer satisfaction

2. Commitment to total quality

3. Cost and time consciousness.

4. Innovative and creative.

5. Trust and team spirit.

6. Respect for individuality.

7. Integrity.FINDINGS, SUGGESTION AND CONCLUSIONSFINDINGS, SUGGESTION AND CONCLUSIONSFINDINGS:1. Regarding Price, many customers are of the opinion that the price of products are reasonable.

2. The productivity can be enhanced

3. Many customers are very happy with the quality and quantity and the finest blend aroma and taste.

4. All the employees and workers in the company are satisfied with their job.

5. High job security to the employees.

6. Majority of the employee are aware of welfare facilities provided to the company.

7. But after the acquisition of USL by Diageo many systems are changing and policies are changing in the company.

8. Due to this the work pattern is changing, and hence for the senior employees who have been working with this company from years, there is dissatisfaction among them.

9. New reforms and complications in the company policies is proving a challenge for the employees.

10. The wastage of bottles at bottling plant is high.SUGGESTIONS:1. Most of the employees at USL were not satisfied with the promotion strategy adopted. So, USL should work more on HR planning to reduce employee grievances and improve their satisfaction level.

2. In this age of Information Technology, where information plays a crucial role in success of any organization, a full-fledged information system is a need at USL that will connect all the departments. It will increase the working efficiency of the employees at various departments and also help executives in quick decision-making. A separate MIS department can play a pivotal role here.

3. Though, USL is much concerned with employee welfare and worked for it as well. But still, it can work more for the need of employees by providing them better working environment.

4. Career development programs to be pursued more vigorously which would help competition, promotional development to face new challenges.

5. Job rotation, job enlargement, job enrichment need to be done more frequently in USL which would motivated employees.

6. The Most important of all is that TIME MANAGEMENT should be strictly followed in USL.CONCLUSIONS:USL has adopted the growth-oriented strategy to meet the ever-increasing demand of their customers, by reaping the benefits of economies of scale. To support this strategy it has invested a lot in infrastructure development; fully computerized and automated mega plant is established, state-of-art technology is adopted and new innovative projects are in process. USL is a market leader in Alcoholic beverages. It is serious to maintain its leadership by being cost competitive without compromising the quality. So, it has adopted. The purchase and stores department is operating in a systematic and efficient manner, adopting minimum inventory policy. No conflicts and strikes are reported between employee and management for a long time, which proves the effectiveness of management at USL.

The company has more concern towards the employees, labor standards and environment by following the certified standards and put forward its thoughts by promoting environment friendly business to the world by its new products. It had succeeded in balancing its profit making and environmental commitments which are two sides of the business.BIBLIOGRAPHY

BIBLIOGRAPHYA. Website Referred:1. www.unitedspirits.in

2. www.wikipedia.com

3. www.google.com

4. www.moneycontrol.com

B. United spirits Limited:1. Data provided by all departments of united spirits limited.

2. Data provided by the employees of Aurangabad Distillation plant of United Spirits Limited

Retailers

Distributors

Sales Executives

Sales Managers

Marketing Department

Marketing Manager

MANAGING DIRECTOR

PRODUCTION MANAGER

SUPERVISOR

WORKERS

GENERAL MANAGER

Asst. GENERAL MANAGER

FLOOR MANAGER

Stores manager

Stores officer

Assistant stores manager

Chief store keeper

Store helper

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