AW Thaibav Ann'07 for 4 Color-RE Size.Indd

Contents Investor 03 Information Financial 04 Highlights Message from 20 the Chairman Board of 40 Directors Shareholding 24 Structure Executive 42 Committee Report of the Board 28 of Directors Profile of Directors 44 &Key Management Organization 52 Structure Product 58 Portfolio

Operating and 60 Financial Review

Our people 94 Our Success Credit Rating 96 Announcement

98 Awards Corporate Governance 100 Report

Corporate Social Financial 108 Responsibility Report 118 Statements PR Interested Persons 112 Talk 149 Transactions Report Audit Committee Accounting Manual Policy/ 116 Report 213 SAP System Audit Report of Announcements to 117 Certified Public 215 SGX 2007 Accountant General Corporate 216 Information Annual Report 2007 Thai Beverage Public Company Limited

03 Investor Information

President’s Talk Thai Beverage is listed on the Singapore Exchange (SGX-ST) main board

STI ticker THBEV Reuters tbev.si Bloomberg thbev sp Google Finance SIN:Y92

IPO date 30 May 2006 8,760 HOURS OF IPO offer price S$ 0.28 Fiscal year ends December 31 External Auditor KPMG Phoomchai Audit Ltd. HAPPINESS Dividend Policy Not less than 50% of net profit after deducting all appropriated reserves They say time flies right by you when you're enjoying life. How true that is! Still, the past year's nearly 9,000 hours ThaiBev's stock performance Vol. Price (M shares) (S$) somehow didn't seem enough for the bustling energy with Share price* Thaibev close Volume which we filled every bottle of ThaiBev products. Simply put, 2007 High S$ 0.29 1600 0.3 2007 Low S$ 0.24 our steady growth truly stemmed from our 110% dedication. *data from January 3 to December 31, 2007 Source: www.shareinvestor.com For us at ThaiBev, the mere sight of sparkling bubbles and 1400 a golden smile-shaped reflection no Investor Relations Contact Investor Relations Department doubt convey our brimming happiness 1200 0.25 Thai Beverage Public Company Limited to customers worldwide. With such 14 Vibhavadi Rangsit Road, Chomphon 1000 Chatuchak, Bangkok 10900, THAILAND rippling effects across the globe, this Mr. Richard W. Jones happiness and your collective trust 800 0.2 Tel: +662 127 5035 Fax: +662 272 2280 in us concurrently foster our robust E-mail: [email protected] 600 business.By any standard, 2007 Ms. Namfon Aungsutornrungsi Tel: +662 127 5037 E-mail: [email protected] was a memorable year for all ... 400 0.15 so much so that I wish there were Ms. Ariya Silakorn Tel: +662 127 5036 Mr. Thapana Sirivadhanabhakdi more than 24 hours in a day! 200 E-mail: [email protected] President Corporate website: www.thaibev.com January April June July August September October 0 February March May November December 0.1 IR website: www.thaibev.com/set/investor.html 2007 Annual Report 2007 Thai Beverage Public Company Limited

Financial Highlights ANNUAL REPORT 2007 Thai Beverage Public Company Limited

(Consolidated) (Consolidated) 2007 2006 2005 2007 2006 2005 Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht

Income Statement ( Mil.Baht ) Profitability Ratio Revenue from sales 100,541 97,798 94,903 Gross Profit Margin % 29.51 29.11 31.31 Total revenues 100,839 97,956 95,190 EBITDA Margin % 21.14 21.06 22.40 Cost of sales 70,873 69,325 65,188 EBIT Margin % 16.19 16.31 17.73 Gross profit 29,668 28,473 29,715 Other Profit Margin % 0.30 0.16 0.30 Operating profit 15,979 15,789 16,534 Operating Cash Flows to EBIT 16,277 15,946 16,822 Operating Profit Ratio % 101.02 90.07 169.82 Net profit 10,383 10,055 10,337 Net Profit Margin % 10.33 10.28 10.89 Depreciation and amortisation 4,974 4,652 4,432 Return on Equity % 19.32 23.86 31.58 EBITDA 21,251 20,598 21,254

Balance Sheet ( Mil.Baht ) Efficiency Ratio Current assets 33,129 33,522 36,349 Return on Assets % 12.58 11.64 11.35 Non-current assets 46,398 52,058 50,788 Return on Fixed Assets % 22.41 20.22 21.17 Total assets 79,527 85,580 87,137 Fixed Assets Turnover times 1.22 1.13 1.04 Current liabilities 19,049 26,151 55,228 Non-current liabilities 5,568 6,875 195 Total liabilities 24,617 33,026 55,423 Shareholders’ equity 54,910 52,554 31,714 Total liabilities and shareholders’ equity 79,527 85,580 87,137

Liquidity Ratio Leverage Ratio Current Ratio times 1.74 1.28 0.66 Debt to Equity Ratio times 0.45 0.63 1.75 Quick Ratio times 0.27 0.20 0.14 Interest Bearing Debt to Operating Cash Flows Ratio times 0.86 0.55 0.52 Equity Ratio times 0.29 0.46 1.43 Receivable Turnover times 72.20 70.32 60.51 Interest Coverage Ratio times 20.29 13.13 12.20 Average Collection Period days 5.06 5.19 6.03 Dividend Payout Ratio % 70.13 54.94 51.08 Inventory Turnover times 2.51 2.43 2.09 Average Inventory Period days 145.16 150.22 174.37 Payable Turnover times 31.32 34.95 35.20 Average Payable Period days 11.65 10.44 10.37 Cash Cycle days 138.57 144.97 170.03 Annual Report 2007 Thai Beverage Public Company Limited

What's New SHOW TIME MY TIME

Full-bodied Beer a cut above the rest Making its grand splash into the UK market with its premium look, Beer Chang is the talk of the Archa Beer town these days. Would it surprise you then to see Elephants toasted in every pub there? Archa Beer Crowned and in the Game Sooner than one can say Archa, this beer has chalked up 600% growth in revenue, sending our competitors scurrying back to their marketing textbooks. Old Liquor in New Bottles Rebottled and rebranded, your perennial favorites have now transformed into heartbreakers.

1998 1983 1982 Gold Medal from International Gold Medal from International Gold Medal from International Beer Awards Australia Spirit Awards in Madrid Spirit Awards in Madrid Chang Beer SangSom Rum SangSom Rum Annual Report 2007 Thai Beverage Public Company Limited

09 GUESS WHOSE Beer: Volume , Total 2007 : 957 2006 : 923 million liters Special Report SMILE YOU LL Low Alcohol Low Alcohol Beer Beer SEE WITH 313 102 RISING SALES ? Chang Chang 644 821

Total Sales 2007 2006

million baht

100,541 110,000 Spirits: Volume 97,798 100,000 Total 2007 : 446 2006 : 476

90,000 million liters

80,000 368

70,000 329

Sales of THB 100.5 bn in 2007 60,000

50,000 from industrial 1% 117 alcohol and others 40,000 from beer and water 30,000 108 47% from spirits 20,000 52% 10,000

White Brown White Brown 2007 2006 2007 2006 Annual Report 2007 Thai Beverage Public Company Limited

Time Travels

As the lights go out in our Bangkok headquarters, they are coming on in our New York offices, and it is ROCK only half way through the day at our Airdrie offices. Whatever the AROUND time, somewhere in the world ThaiBev is getting down to THE CLOCK business. Believe it or not ... in any given second, a ThaiBev guy is whistling away, working in a distant corner of the world. Annual Report 2007 Thai Beverage Public Company Limited

Hot Issue

Spirits Beer

GLOBAL COOLING So torrid is the alcohol beverage market these days, but not because of global warming. ThaiBev has made waves in practically all aspects of the business this past year, ranging from new looks for its brands, Expansion into global markets, to the quenching of a million thirsts. Annual Report 2007 Thai Beverage Public Company Limited

made in Thailand around the world Annual Report 2007 Thai Beverage Public Company Limited

Sukhumvit 09.00 pm

Chiangmai 10.30 pm

Lifestyle

Kaosan Road 08.22 pm

Silom Soi 4 08.38 pm

Phuket 06.30 pm

Asoke 09.46 pm

HAPPY HOURS Ramintra 06.26 pm Lung Suan 11.00 pm

Bangkok 06.30 pm

Rachadapisek 07.13 pm Annual Report 2007 Thai Beverage Public Company Limited

Society

GENTLE AS RAIN DROPS In that it is our duty to play an active role in national development, to better our society, and to assist those in need, Thai Beverage Public Company Limited (ThaiBev) has a long history of contribution to projects and activities to display our loyalty to the monarchy and improve society, education, sports, public health, safety and dissemination of a good reputation for Thailand. The following accounts describe our major contributions in 2007. Annual Report 2007

Message from the Chairman

Dear Shareholders,

Since our listing on the Singapore Exchange in May We also intend to continue what we call a premiumisation 2006, the Company has begun to plan for changes that process by launching higher margin products to lift will make it more professional and competitive inside our portfolio into the standard and premium ends and outside of Thailand. It was the Board’s intention of both spirits and beer. This will enable us to gain when we were established as a public company, with higher margins over time and prepare for consumer all that that entails regarding corporate governance and aspirations as the economy improves in the long term. greater professionalism. While these internal projects To achieve this, we will continue to invest in our brands by have not warranted detailed reports previously, needless investing in integrated marketing communications and to say, we believe that improvements to our human premiumisation. Some passing examples would be the resources structure and greater accountability at all introduction of gift boxes for some of our spirits products levels of management will assist us in implementing like Sangsom and Mekhong. We also introduced some the strategies we have made public since listing. On new beers to the Thai market, Chang Light and Chang that note, I would like to spend some time to review Draught in bottles and these have done well, in fact, these strategies as they will have a material impact on surpassing some foreign competitors whose beers our future. were introduced to the Thai market several years prior to the arrival of our brands.

Strategic Direction The key strength of ThaiBev has always been its phenomenal distribution network, which covers the A key strategy to date has been to develop the local entire country. We will need to leverage this infrastructure market and maintain market leadership by managing by taking on products from other companies, and we the marketing mix and the pricing of individual brands. need to develop it to be more modern and efficient. To enable us to offer a spirits portfolio at every price To assist in this, the Company commenced the range, the Company has acquired two white spirits construction of five major distribution centers in brands, White Tiger and White Bear, which give us different regions in August 2007. Together with greater the opportunity to offer economy spirits to compete implementation of SAP enterprise resource planning with local community spirits and homemade liquor. software throughout our group of companies, we The value of these acquisitions is in our ability to now envisage being better able to forecast the inventory compete at every price level. needs of our dealers and to ensure that products are pushed through the network in the most efﬁ cient manner. Annual Report 2007 Thai Beverage Public Company Limited

22 23

Foreign Expansion Strategy

We have also begun to establish a platform for strategic we hope, have been ameliorated by the general election the acquisition of Wrangyer in January 2008 was our international expansion. We now export our products of December 2007. Nevertheless, this uncertainty led entry into the energy drinks market. This diversification to 80 countries globally. I am pleased to inform you that to an economic slowdown and this had some effect will allow us to enter into a new market that is growing our acquisition of Inver House in October 2006 is now on this company as it did on others in the industry. 3-4% a year and where our distribution network will bearing the fruit of integration. Not only have we GDP growth for 2008 is now forecasted as a moderate contribute considerably to further sales growth. The been able to make Inver House’s Airdrie headquarters 4.5 - 5.5% by the Office of the National Economic construction of the five distribution centers mentioned the base for all operations in the UK, and thus save and Social Development Board, however, the above will help us to manage the increase in the on several costs, but our distribution of Chang beer Consumer Confidence Index has risen to 119 at portfolio too. The Company will be looking very closely in Australia came about because of Inver House’s the end of 2007 (source: Bureau of Trade and at fruit juices and other non-alcoholic beverages; contacts. In a later chapter, we will report in more Economic Indices, Ministry of Commerce), which we will keep you informed about planned acquisitions detail on our overseas strategies. However, suffice should be cause for optimism. when they become material. to say that there are plans to increasingly export our products as premium offerings and acquire businesses As the domestic market still counts for 96.4% of total that add more value. Our investments aim to have an sales, I should like to bring to your attention sales Corporate Development internal rate of return (IRR) in the suitable amount. growth of 2.8% in 2007, compared with 2006, and As a public company, we have not rushed into foreign a commensurate increase of 3.3% in net profit As we enter into 2008, our vision of the evolution of the acquisitions over the past year. We are focusing on the year-on-year. This increase reflects the strength of the Company is an important issue for shareholders. We Asian region as there are many cultural and consumer company under less-than-ideal economic conditions. want to continue improvements to the management similarities among Asian countries that would make Massive flooding over much of the country from the structure and build a team that is able to react faster the region more attractive for us at the beginning. end of 2006 into the first half of 2007 meant that many to events and think further ahead. We will rely more We are already making inroads into certain markets of our agents were unable to handle large orders and more on professional management to drive our such as Singapore and Malaysia for instance, but during our peak period. In spite of these difficulties, growth. We will then also be better able to satisfy our our eye must be on markets such as China and India we managed to grow our revenue. distributors by offering more professional services. as these are phenomenal regional growth markets. Two tax rises were implemented in Thailand, one in I have a vision of ThaiBev as a leading player in the In Europe, the USA and Australia, ThaiBev has August 2007 and one in January 2008. The former ASEAN region and want to assure shareholders not commenced selling Chang beer in its export version had been discussed for some time and the Company only that our above-mentioned strategies are well as a premium beer, while Mekhong rum is being was to some extent prepared for it. The second rise, of thought-out, but that we have the ability to implement positioned at the high end of the consumer market. one and a half percent, was to cover the establishment them successfully. The natural outcome will be higher This is a signal of the confidence we have in the quality of a public broadcasting system. Shareholders will revenue growth and profitability. of our products. We intend to enter continental want to know if there is any way to forecast future European markets as and when we can set up tax increases, however, this depends on government As for our relationship with you, our shareholders and distribution, which is a critical success factor. While policy and tax collection targets that may change from other investors, we must now strive towards a goal entry through Thai and Asian restaurants and outlets time to time, making forecasting unfeasible. of becoming a role model of transparency and good is an appropriate first step, we will certainly be seeking corporate governance so that you remain fully aware of to penetrate the mainstream drinks markets over time. our plans and achievements moving forwards. Diversification into Non-alcoholic Beverages I believe ThaiBev will be an even better company five Domestic Factors years from now and I shall continue to work with One other strategy not listed above is the diversification the Board of Directors to help guide the Company to Most shareholders will be aware of the political events of the Company into non-alcoholic beverages. This is ensure that we not only achieve our goals but satisfy in Thailand in our recent history that left the country in a deliberate move to ensure that we explore other all stakeholders in the process. Charoen Sirivadhanabhakdi a state of uncertainty for over a year. These problems, products that fit in with our portfolio. Post year-end, Chairman of the Board Annual Report 2007 Thai Beverage Public Company Limited

24 25

Shareholding Structure ANNUAL REPORT 2007 Thai Beverage Public Company Limited

Thai Beverage Public Company Limited

Authorized share capital of Baht 29,000,000,000 of which paid-up capital of Baht 25,110,025,000 consisting of 25,110,025,000 issued common shares, with the par value of Baht 1 each.

100%

Brewery Group Trademark Group Thai Alcohol Distillery Group 1 Distillery Group 2 Distillery Group 3 Public Company Limited Beer Thip Brewery (1991) Co., Ltd. T.C.C. Cosmo Corporation Limited Sangsom Co., Ltd. Sura Bangyikhan Co., Ltd. Red Bull Distillery (1988) Co., Ltd.* Cosmos Brewery (Thailand) Co., Ltd. Beer Chang Co., Ltd. Banglen Agriculture Co., Ltd. Fuengfuanant Co., Ltd. Athimart Co., Ltd. Simathurakij Co., Ltd. Beer Thai (1991) Public Company Limited Archa Beer Co., Ltd. Sint Ek Panich Co., Ltd. Mongkolsamai Co., Ltd. S.S. Karnsura Co., Ltd. Nateechai Co., Ltd. - Vidhayathan Co.,Ltd. Thanapakdi Co., Ltd. Kankwan Co., Ltd. Luckchai Liquor Trading Co., Ltd. Kanchanasingkorn Co., Ltd. Theparunothai Co., Ltd. United Winery & Distillery Co., Ltd. Sura Piset Thipharat Co., Ltd. *Sura Piset Pattharalanna Co., Ltd. 80.82% - United Products Co., Ltd. 83.20% - S P M Foods and Beverage Co., Ltd. 58.55% - Sura Piset Sahasan Co., Ltd. 100%

Beer Marketing Group Liquor Marketing Group Distribution Agent Group Related Business Group Logistics Group

Pomthip Co., Ltd. Num Yuk Co., Ltd. Thipchalothorn Co., Ltd. Bionic Humus Co., Ltd. Thai Beverage Logistics Co., Ltd. Pomkit Co., Ltd. Num Thurakij Co., Ltd. Krittayabun Co., Ltd. Additive Food Co., Ltd. Pomchok Co., Ltd. Num Muang Co., Ltd. Surathip Co., Ltd. Charun Business 52 Co., Ltd. Porncharoen Co., Ltd. Num Nakorn Co., Ltd. Sunthornpirom Co., Ltd. Dhanasindhi Co., Ltd. Pomklung Co., Ltd. Num Palang Co., Ltd. Piromsurang Co., Ltd. Dhospaak Co., Ltd. Pomburapa Co., Ltd. Num Kijjakarn Co., Ltd. Maharas Agri Co., Ltd.** Bang-na Logistics Co., Ltd. Thai Molasses Co., Ltd. Thai Cooperage Co., Ltd. Pan International (Thailand) Co., Ltd. Muangkij Co., Ltd. 100%

Marketing Group Overseas Group Thai Cooperage Co.,Ltd. Red Bull Distillery (1988) Co., Ltd.* 93.50% Thai Thum Distillery Co., Ltd. Thai Beverage Marketing Co., Ltd. International Beverage Holdings Limited*** 36.57% Sura Piset Sahasan Co., Ltd. 58.63% 33.83% - Sura Piset Samphan Co., Ltd. 7.54% 100% Pan Alcohol Co., Ltd.

** The name has been changed to Wrangyer (2008) Beverage Co., Ltd. as of February 19, 2008. Annual Report 2007 Thai Beverage Public Company Limited

26 27

Shareholding Structure ANNUAL REPORT 2007 Thai Beverage Public Company Limited

Thai Beverage Public Company Limited - 100%

Thai company listed in Singapore Exchange

International Beverage Holdings Limited ***

100% 100% 100% 100% 100% 100%

International Beverage Best Spirits Company Limited InterBev (Singapore) Limited InterBev Malaysia Sdn. Bhd. InterBev (Cambodia) Co.,Ltd. International Beverage Holdings (UK) Limited Holdings Limited USA, Inc.

*** Name Changed from Pacific ** Name Changed from InterBev Spirits (UK) Limited on Dec 2, 2007 USA Inc. on Jan 30, 2007 100%

Blairmhor Limited

100% 100% 100%

Blairmhor Distillers Limited Inver House Distillers Limited 6 non-trading subsidiaries

49.49% 44% 100% 50.02% 100%

Liquorland Limited Inver House Polska Limited Wee Beastie Limited Inver House Distribution SA Moffat & Towers Limited

100% 100% 100% 100%

The Knockdhu Distillery Speyburn-Glenlivet Distillery The Pulteney Distillery The Balblair Distillery Company Limited Company Limited Company Limited Company Limited Note : Figures circa Dec 12, 2007 Annual Report 2007 Thai Beverage Public Company Limited

28 29

Report of the Board of Directors

Breakdown in Shares and Types of Share No. of No. of Type of Type of Paid-Up Capital Shares Held % of Type of Type of Paid-Up Capital Shares Held % of Company / Location Business Share (Baht) Shares Issued (Direct/Indirect) Shareholding Remark Company / Location Business Share (Baht) Shares Issued (Direct/Indirect) Shareholding Remark

1. Beer Thai (1991) PLC. Beer, Drink & Common 5,550,000,000.00 555,000,000 554,999,985 100.00% 11. Kankwan Co., Ltd. Liquor Production Common 800,000,000.00 80,000,000 79,999,994 100.00% 15 Moo 14, Vibhavadi Rangsit Road, Soda Production 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chomphon Sub-District, Chatuchak District, Bangkok 10900 Chatuchak District, Bangkok 10900

2. Beer Thip Brewery (1991) Co., Ltd. Beer, Drink & Common 6,600,000,000.00 660,000,000 659,999,940 100.00% 12. Theparunothai Co., Ltd. Liquor Production Common 700,000,000.00 70,000,000 69,999,994 100.00% 15 Moo 14, Vibhavadi Rangsit Road, Soda Production 99 Moo 4, Tambon Hat Kham Chomphon Sub-District, Amphoe Muang, Nong Khai 43000 Chatuchak District, Bangkok 10900 13. Red Bull Distillery (1988) Co., Ltd. Liquor Production Common 5,000,000,000.00 500,000,000 499,999,940 100.00% 3. Sangsom Co., Ltd. Liquor Production Common 7,500,000,000.00 750,000,000 749,999,994 100.00% 15 Moo 14, Vibhavadi Rangsit Road, 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Chomphon Sub-District, Bangkok 10900 Chatuchak District, Bangkok 10900 14. United Winery & Distillery Co., Ltd. liquor Production Common 1,800,000,000.00 180,000,000 179,999,994 100.00% 4. Fuengfuanant Co., Ltd. Liquor Production Common 900,000,000.00 90,000,000 89,999,994 100.00% 14 Sangsom Building Soi Yasoob 1, 333 Moo 1, Tambon Tha Toom Vibhavadi Rangsit Road, Chompon Sub-District, Amphoe Si Maha Phot, Chatuchak District, Bangkok 10900 Prachin Buri 25140 15. Simathurakij Co., Ltd. Liquor Production Common 900,000,000.00 90,000,000 89,999,994 100.00% 5. Mongkolsamai Co., Ltd. Liquor Production Common 700,000,000.00 70,000,000 69,999,994 100.00% 1 Moo 6, Tambon Ban Daen 14 Vibhavadi Rangsit Road, Amphoe Banphot Phisai, Nakon Sawan 60180 Chomphon Sub-District, Chatuchak District, Bangkok 10900 16. Nateechai Co., Ltd. Liquor Production Common 800,000,000.00 80,000,000 79,999,994 100.00% 14 Vibhavadi Rangsit Road, 6. Thanapakdi Co., Ltd. Liquor Production Common 700,000,000.00 70,000,000 69,999,994 100.00% Chomphon Sub-District, 315 Moo 4, Tambon Mae Faek, Chatuchak District, Bangkok 10900 Amphoe San Sai, Chiang Mai 50290 17. Luckchai Liquor Trading Co., Ltd. Liquor Production Common 800,000,000.00 80,000,000 79,999,994 100.00% 7. Kanchanasingkorn Co., Ltd. Liquor Production Common 700,000,000.00 70,000,000 69,999,994 100.00% 46 Moo 1, Tambon Nong Klang Na 14 Vibhavadi Rangsit Road, Amphoe Muang, Ratchaburi 70000 Chomphon Sub-District, Chatuchak District, Bangkok 10900 18. Sura Piset Thipharat Co., Ltd. Liquor Production Common 500,000,000.00 5,000,000 4,999,994 100.00% 14 Sangsom Building, Soi Yasoob 1, 8. Sura Bangyikhan Co., Ltd. Liquor Production Common 4,000,000,000.00 400,000,000 399,999,994 100.00% Vibhavadi Rangsit Road, Chompon Sub-District, 82 Moo 3, Tambon Bang Khoo Wat Chatuchak District, Bangkok 10900 Amphoe Muang, Pathum Thani 12130 19. Thai Alcohol PLC. Alcohol Production Common 800,000,000.00 160,000,000 159,999,986 100.00% 9. Athimart Co., Ltd. Liquor Production Common 900,000,000.00 90,000,000 89,999,994 100.00% 31-35 Chalermkhet 1 Road, 170 Moo 11, Tambon Nikhom, Wat Thepsirin Sub-District, Amphoe Satuek, Buri Ram 31150 Pomprab District, Bangkok 10100

10. S.S. Karnsura Co., Ltd. Liquor Production Common 800,000,000.00 80,000,000 79,999,994 100.00% 20. Pomthip Co., Ltd. Beer Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 101 Moo 8, Tambon Kaeng Dom 2194 Charoen Krung Road, King Amphoe Sawang Wirawong Wat Phraya Krai Sub-District, Ubon Ratchathani 34190 Bang Kho Laem District, Bangkok 10120

Annual Report 2007 Thai Beverage Public Company Limited

30 31

No. of No. of Type of Type of Paid-Up Capital Shares Held % of Type of Type of Paid-Up Capital Shares Held % of Company / Location Business Share (Baht) Shares Issued (Direct/Indirect) Shareholding Remark Company / Location Business Share (Baht) Shares Issued (Direct/Indirect) Shareholding Remark

21. Pomkit Co., Ltd. Beer Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 34. Surathip Co., Ltd. Liquor Distribution Common 1,200,000.00 120,000 119,940 100.00% 48,50,52 Suranaree Road, 14 Vibhavadi Rangsit Road, Agent Tambon Nai Muang, Amphoe Muang, Chompon Sub-District, Chatuchak District, Nakhon Ratchasima 30000 Bangkok 10900

22. Pomklung Co., Ltd. Beer Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 35. Sunthornpirom Co., Ltd. Liquor Distribution Common 5,000,000.00 500,000 499,994 100.00% 80/13-14 Ekathosarot Road, 14 Vibhavadi Rangsit Road, Agent Tambon Nai Muang, Amphoe Muang, Chompon Sub-District, Chatuchak District, Phitsanulok 65000 Bangkok 10900

23. Pomchok Co., Ltd. Beer Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 36. Piromsurang Co., Ltd. Liquor Distribution Common 5,000,000.00 500,000 499,994 100.00% 16/1 Moo 1,U Thong Road, 14 Vibhavadi Rangsit Road, Agent Tambon Tha Wasukri, Amphoe Muang, Chompon Sub-District, Chatuchak District, Ayutthaya 13000 Bangkok 10900

24. Pomcharoen Co., Ltd. Beer Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 37. Bionic Humus Co., Ltd. Fertilizer Sale Common 860,000,000.00 8,600,000 8,599,994 100.00% 135/3 Moo 4, Kanchanavithi Road, 15 Moo 14, Vibhavadi Rangsit Road, Tambon Bang Kung, Amphoe Muang Chompon Sub-District, Chatuchak District, Surat Thani 84000 Bangkok 10900

On January 25, 2008 25. Pomburapa Co., Ltd. Beer Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 38. Maharas Agri Co., Ltd. Japanese Rice Common 2,000,000.00 200,000 199,940 100.00% Increase in shares capital to 51/42 Moo 3, Sukhumvit Road, 14 Vibhavadi Rangsit Road, Planting 20,000,000 shares @ 10 Baht, totalling 200,000,000 Baht. Tambon Ban Suan, Amphoe Muang, Chompon Sub-District, Chatuchak District, Name Changed to Chon Buri 20000 Bangkok 10900 “Wrangyer Beverage (2008)” Co., Ltd. as of 19 Feb 2008

26. Num Yuk Co, Ltd. Liquor Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 39. Thai Molasses Co., Ltd. Molasses Common 40,000,000.00 40,000 39,885 99.72% 95/390-391 Trok Nokkhet, Rama III Road, 14 Vibhavadi Rangsit Road, Distribution Chong Nonsi Sub-District, Chompon Sub-District, Chatuchak District, Yannawa District, Bangkok 10120 Bangkok 10900

27. Num Kijjakarn Co., Ltd. Liquor Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 40. Additive Food Co., Ltd. Animal Feed Common 1,000,000.00 10,000 9,994 100.00% 1,3,5 Trok Wat Muang, Suranaree Road, 15 Moo 14, Vibhavadi Rangsit Road, Distribution Tambon Nai Muang, Amphoe Muang, Chompon Sub-District, Chatuchak District, Nakhon Ratchasima 30000 Bangkok 10900

28. Num Palang Co., Ltd. Liquor Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 41. Pan International (Thailand) Co., Ltd. Trading of Supplies Common 1,000,000.00 10,000 9,994 100.00% 1/7-8 Phraya Surasi Road, 15 Moo 14, Vibhavadi Rangsit Road, and Procurement Tambon Nai Muang, Amphoe Muang, Chompon Sub-District, Chatuchak District, Phitsanulok 65000 Bangkok 10900

29. Num Muang Co., Ltd. Liquor Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 42. Charun Business 52 Co., Ltd. Brick Production Common 121,800,000.00 1,218,000 1,217,994 100.00% 16/2 Moo 1, U Thong Road, 15 Moo 14, Vibhavadi Rangsit Road, Tambon Tha Wasukri, Amphoe Muang, Chompon Sub-District, Chatuchak District, Ayutthaya 13000 Bangkok 10900

30. Num Nakorn Co., Ltd. Liquor Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 43. Thai Cooperage Co., Ltd. Oakwood Barrel Common 300,000,000.00 30,000,000 29,999,940 100.00% 149/3 Chulachomklao Road, 15 Moo 14, Vibhavadi Rangsit Road, Production Tambon Tha Kham, Amphoe Phun Phin, Chompon Sub-District, Chatuchak District, Surat Thani 84130 Bangkok 10900

31. Num Thurakij Co., Ltd. Liquor Distribution Common 10,000,000.00 1,000,000 999,994 100.00% 44. Bang-na Logistics Co., Ltd. Bottle Distribution Common 123,000,000.00 1,230,000 1,229,994 100.00% 51/40-41 Moo 3, Sukhumvit Road, 15 Moo 14, Vibhavadi Rangsit Road, Tambon Ban Suan, Amphoe Muang, Chompon Sub-District, Chatuchak District, Chon Buri 20000 Bangkok 10900

32. Thipchalothorn Co., Ltd. Beer and Liquor Common 1,000,000.00 100,000 99,994 100.00% 45. Thai Beverage Logistics Co., Ltd. Logistics Common 12,000,000.00 1,200,000 1,199,940 100.00% 15 Moo 14, Vibhavadi Rangsit Road, Distribution Agent 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Chompon Sub-District, Chatuchak District, Bangkok 10900 Bangkok 10900

33. Krittayabun Co., Ltd. Beer and Liquor Common 5,000,000.00 500,000 499,994 100.00% 46. Thai Beverage Marketing Co., Ltd. Liquor Import & Common 300,000,000.00 30,000,000 29,999,940 100.00% On February 28, 2008 Increase in shares capital 14 Vibhavadi Rangsit Road, Distribution Agent 15 Moo 14, Vibhavadi Rangsit Road, Export / Overseas to 101,200,000 shares Chompon Sub-District, Chompon Sub-District, Chatuchak District, Marketing @ 10 Baht, totalling 1,012,000,000 Baht. Chatuchak District, Bangkok 10900 Bangkok 10900 Annual Report 2007 Thai Beverage Public Company Limited

32 33

47. Dhanasindhi Co., Ltd. Construction Common 20,000,000.00 20,000 19,994 100.00% 60. Pan Alcohol Co., Ltd. # Vinegar Production Common 2,000,000.00 20,000 20,000 100.00% 949/6-8 Nakhon Chaisi Road, 15 Moo 14, Vibhavadi Rangsit Road, & Distribution Dusit District, Bangkok 10300 Chompon Sub-District, Chatuchak District, Bangkok 10900 48. Dhospaak Co., Ltd. Advertising Common 25,000,000.00 2,500,000 2,499,994 100.00% 195 Empire Tower, 25th Floor, 61. Banglen Agriculture Co., Ltd. # Agricultural Common 20,000,000.00 20,000 20,000 100.00% Sathon Tai Road, Yannawa 31-35 Chalermkhet 1 Road, Planting Sub-District, Sathon District, Bangkok 10120 Wat Thepsirin Sub-District, Pomprab Satru-pai District, 49. International Beverage Holdings Limited Holding Company Common HK$ 1,470,000,000 1,470,000,000 100.00% Bangkok 10100 Room 901-2, Silvercord, Tower 1, 1,470,000,000.00 30 Canton Road, Tsim Sha Tsui, 62. Vidhayathan Co., Ltd. Conservation Common 5,000,000 500,000 500,000 100.00% Kowloon, Hong Kong 15 Moo 14, Vibhavadi Rangsit Road, Public Relations Chompon Sub-District, Chatuchak District, 50. Cosmos Brewery (Thailand) Co., Ltd. Beer, Drink & Common 1,666,666,500.00 166,666,650 166,666,590 100.00% Bangkok 10900 15 Moo 14, Vibhavadi Rangsit Road, Soda Production Chompon Sub-District, Chatuchak District, 63. United Products Co.,Ltd. Liquor Production Common 350,000,000.00 3,500,000 2,828,850 80.82% Bangkok 10900 56 Sukhapibal Road, Tambon Nokornchaisri, & Distribution Amphoe Nokornchaisri, 51. T.C.C. Cosmo Corporation Ltd. Trademark Common 5,000,000.00 50,000 49,940 100.00% Nakornpathom 73120 15 Moo 14, Vibhavadi Rangsit Road, Proprietor Chompon Sub-District, Chatuchak District, 64. S P M Foods and Beverages Co.,Ltd. Seasoning Sauce, Common 100,000,000.00 1,000,000 832,000 83.20% Bangkok 10900 79 Pholdumri Road, Tambon Lamlukbua, Fruit Juice, Amphoe Dontoom, Energy Drink, 52. Beer Chang Co., Ltd. Trademark Common 1,000,000.00 10,000 9,940 100.00% Nakornpathom 73150 Liquor Agent 15 Moo 14, Vibhavadi Rangsit Road, Proprietor & Beer Chompon Sub-District, Chatuchak District, Concentrate 65. InterBev (Singapore) Limited Trading of alcoholic Common SGD 3,000,000.00 3,000,000 3,000,000 100.00% Bangkok 10900 Production 3 Philip Street # 13-04 Commerce Point, beverages Singapore 53. Archa Beer Co., Ltd. Trademark Common 1,000,000.00 100,000 99,940 100.00% 14, Vibhavadi Rangsit Road, Proprietor & Beer 66. InterBev (Cambodia) Co.,Ltd. Trading of alcoholic Common USD 200,000.00 1,000 1,000 100.00% The “shares Chompon Sub-District, Chatuchak District, Concentrate 140 Nehru (Street # 215) Sankat Vealvong, beverages issued” & “no. Bangkok 10900 Production Khan 7 Makara, Phnom Penh of shares held Kingdom of Combodia are amended 54. Sura Piset Pattharalanna Co., Ltd. Holding Company Common 600,000,000.00 6,000,000 5,999,994 100.00% from “NA” 14 Sangsom Building, Soi Yasoob 1, “to” 1,000”. Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 67. InterBev Malaysia Sdn. Bhd. Trading of alcoholic Common MYR 100,000.00 100,000 100,000 100.00% Suite 6.01, 6th Floor, Plaza See Hoy Chan, beverages 55. Thai Thum Distillery Co., Ltd. # Liquor Distribution Common 17,500,000.00 17,500 17,483 100.00% Jalan Raja Chulan, 50200 Kuala Lumpur, 14 Vibhavadi Rangsit Road, Malaysia Chompon Sub-District, Chatuchak District, Bangkok 10900 68. International Beverage Holdings Trading of alcoholic Common USD 2,600,000.00 2,600,000 2,600,000 100.00% Name Changed Limited USA, Inc. beverages from “InterBev 56. Sura Piset Sahasan Co., Ltd. # Liquor Production Common 100,000,000.00 1,000,000 1,000,000 100.00% 405 Lexington Avenue, 25th Floor, USA Inc.” 14 Sangsom Building, Soi Yasoob 1, & Distribution Suite 2532, New York, USA as of 7 Feb 2007 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 69. Best Spirits Company Limited Trading of alcoholic Common HKD 15,300,000.00 15,300,000 15,300,000 100.00% Room 901-2, Silvercord Tower 1, beverages 57. Sura Piset Samphan Co., Ltd. # Liquor Production Common 100,000,000.00 1,000,000 1,000,000 100.00% 30 Canton Road, Tsim Sha Tsui, 14 Sangsom Building, Soi Yasoob 1, & Distribution Kowloon, Hong Kong Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 70. International Beverage Holding (UK) Limited Holding Company Common £68,500,000.00 68,500,000 68,500,000 100.00% Name Changed Moffat Distillery, Airdrie, ML6 8PL, from “Paciﬁ c Spirits 58. Muangkij Co., Ltd. # Oakwood Supply Common 3,810,000.00 38,100 38,100 100.00% Scotland (UK) Limited” on 9 Dao Khanong-Chom Thong Road, 2 Dec 2007 Bang Kho Sub-District, Chom Thong District, Bangkok 10150 71. Blairmhor Limited Holding Company Common £9,009,406.7 900,940,670 900,940,670 100.00% Moffat Distillery, Airdrie ML6 8PL, 59. Sint Ek Panich Co., Ltd. # Mining Common 9,000,000.00 90,000 90,000 100.00% Scotland 31-35 Chalermkhet 1 Road, Wat Thepsirin Sub-District, 72. Inver House Distillers Limited Production and Common £10,000,000 10,000,000 10,000,000 100.00% Pomprab Satru-pai,Bangkok 10100 Moffat Distillery, Airdrie ML6 8PL, distribution of Scotland spirits Annual Report 2007 Thai Beverage Public Company Limited

34 35

No. of List of Direct and Deemed Interests of Each Director Type of Type of Paid-Up Capital Shares Held % of As at January 21, 2008 Company / Location Business Share (Baht) Shares Issued (Direct/Indirect) Shareholding Remark

73. Blairmhor Distillers Limited # Dormant Common £200.00 2,000 2,000 100.00% Moffat Distillery, Airdrie, ML6 8PL, Percentage Percentage Name of shareholders Number of of Number of Deemed of Scotland Direct Interests Shares Shareholding Shares Interests Shareholding

74. Wee Beastie Limited Trading of alcoholic Common £100.00 100 100 100.00% 1. Mr. Charoen Sirivadhanabhakdi Thai Beverage Public Company Limited 3,156,500,000 12.57 - - - Moffat Distillery, Airdrie, ML6 8PL, beverages Good Show Holdings Limited (2) - - MM Group Limited 5,000 100 Scotland Risen Mark Enterprise Ltd. (3) - - MM Group Limited 50,000 100 Siriwana Co., Ltd. (4) 199,999,997 50.00 - - - 75. Speyburn-Glenlivet Distillery Company Limited # Dormant Common £100.00 100 100 100.00% Golden Capital (Singapore) Limited (5) - - MM Group Limited 10,000,000 100 Moffat Distillery, Airdrie ML6 8PL, MM Group Limited 25,000 50.00 - - - Scotland 2. Khunying Wanna Sirivadhanabhakdi Thai Beverage Public Company Limited 3,156,500,000 12.57 - - - 76. The Knockdhu Distillery Company Limited # Dormant Common £100.00 100 100 100.00% Good Show Holdings Limited (2) - - MM Group Limited 5,000 100 Moffat Distillery, Airdrie ML6 8PL, Risen Mark Enterprise Ltd. (3) - - MM Group Limited 50,000 100 Scotland Siriwana Co., Ltd. (4) 199,999,997 50.00 - - - Golden Capital (Singapore) Limited (5) - - MM Group Limited 10,000,000 100 77. The Pulteney Distillery Company Limited # Dormant Common £2.00 2 2 100.00% MM Group Limited 25,000 50.00 - - - Moffat Distillery, Airdrie ML6 8PL, Scotland 3. Mr. Narong Srisa-an Thai Beverage Public Company Limited 1 0.00 - - -

78. The Balblair Distillery Company Limited # Dormant Common 2.00 2 2 100.00% 4. Mr. Komen Tantiwiwatthanaphan Thai Beverage Public Company Limited 34,068,668 0.14 - - - Moffat Distillery, Airdrie ML6 8PL, Scotland 5. Mr. Puchchong Chandhanakij Thai Beverage Public Company Limited 1 0.00 - - -

79. R. Carmichael & Sons Limited # Dormant Common £30,000.00 30,000 30,000 100.00% 6. Mr. Staporn Kavitanon ------Moffat Distillery, Airdrie, ML6 8PL, Scotland 7. Prof. Kanung Luchai ------

80. J MacArthur Junior & Company Limited # Dormant Common £100.00 100 100 100.00% 8. Mr. Manu Leopairote ------Moffat Distillery, Airdrie, ML6 8PL, Scotland 9. Mr. Ng Tat Pun ------

81. Mason & Summers Limited # Dormant Common £10,030.00 10,030 10,030 100.00% 10. Mr. Michael Lau Hwai Keong ------10 Foster Lane, London, EC2V 6HH, England 11. Prof. Pornchai Matangkasombut ------

82. Hankey Bannister & Company Limited # Dormant Common £100.00 100 100 100.00% 12. Gen. Dr. Choo-Chat Kambhu Na Ayudhya ------Moffat Distillery, Airdrie, ML6 8PL, Scotland 13. Mr. Sakthip Krairiksh ------

83. James Catto & Company Limited # Dormant Common £50,000.00 50,000 50,000 100.00% 14. Mr. Vivat Tejapaibul Thai Beverage Public Company Limited 291,541,500 1.16 - - - Moffat Distillery, Airdrie ML6 8PL, Scotland 15. Mr. Panote Sirivadhanabhakdi (1) Thai Beverage Public Company Limited 107,000,000 0.43 - - -

84. Glen Calder Blenders Limited # Dormant Common £100.00 100 100 100.00% 16. Mr. Thapana Sirivadhanabhakdi Thai Beverage Public Company Limited 107,000,000 0.43 - - - Moffat Distillery, Airdrie, ML6 8PL, Scotland 17. Mr. Samut Hatthasing Thai Beverage Public Company Limited 1 0.00 - - -

85. Moffat & Towers Limited # Dormant Common £1.00 100 100 100.00% 18. Ms. Kanoknart Rangsithienchai Thai Beverage Public Company Limited 1 0.00 - - - Moffat Distillery, Airdrie ML6 8PL, Scotland 19. Mr. Sithichai Chaikriangkrai Thai Beverage Public Company Limited 1 0.00 - - -

86. Liquorland Limited Off licences Common £495,000 495,000.00 245,000.00 49.49% 20. Mr. Ueychai Tantha-Obhas ------8 Westbank Road, Belfast, BT3 9JL Northern Ireland 21. Dr. Pisanu Vichiensanth ------

87. Inver House Polska Limited Trading of alcoholic Common 700,000.00 zl 700,000 308,000 44.00% 22. Mr. Chukiet Tangpongprush Thai Beverage Public Company Limited 1 0.00 - - - ul. Obodrzyców 34 A/1, 81-812 Sopot, beverages Poland Remark: (1) Mr. Panote Sirivadhanabhakdi was appointed as the member of the Board of Directors on February 27, 2007.

(2) Good Show Holdings Limited holds 3,492,720,000 shares in Thai Beverage Public Company Limited. 88. Inver House Distribution SA # Dormant Common £24,450.00 2,493.00 1,247.00 50.02% (3) Risen Mark Enterprise Ltd. holds 3,193,150,000 shares in Thai Beverage Public Company Limited. Avenue des Tilleuls, 62140 Marconne (4) Siriwana Co., Ltd. holds 2,197,200,000 shares in Thai Beverage Public Company Limited. France (5) Golden Capital (Singapore) Limited holds 608,638,000 shares in Thai Beverage Public Company Limited.

Remark: # These are currently non - trading Annual Report 2007 Thai Beverage Public Company Limited

36 37

Statistics Of Shareholders Top Twenty Shareholders As at March 12, 2008 No. Name of shareholders Number of Shares % INFORMATION ON SHARE CAPITAL Authorised share capital Baht 29,000,000,000 1. The Central Depository (PTE) Limited 6,325,659,920 25.19 Issued and fully paid-up capital Baht 25,110,025,000 2. Good Show Holdings Limited 3,492,720,000 13.91 Class of shares Common shares with a par value of Baht 1 3. Mr. Charoen Sirivadhanabhakdi 3,156,500,000 12.57 Number of shares issued 25,110,025,000 shares Voting rights One vote per one share 4. Khunying Wanna Sirivadhanabhakdi 3,156,500,000 12.57 5. Risen Mark Enterprise Ltd. 2,359,815,000 9.40

6. Siriwana Co., Ltd. 2,197,200,000 8.75

Analysis of Shareholders by Size of Shareholdings 7. Mr. Suchin Worawongwasu 900,000,000 3.58 Size of Shareholdings Number of Shareholders % Number of Shares % 8. Mrs. Siriluck Maithai 338,519,080 1.35

1 – 999 8 6.84 8 0.00 9. Mr. Vivat Tejapaibul 291,541,500 1.16

1,000 – 10,000 N/A N/A N/A N/A 10. Miss Somrhudee Siriaongprasert 213,188,000 0.85

10,001 – 1,000,000 23 19.66 6,491,469 0.03 11. Mr. Paisal Chevasiri 150,000,000 0.60

1,000,001 and above 86 73.50 25,103,533,523 99.97 12. Golden Capital (Singapore) Limited 116,480,000 0.46

Total 117 100 25,110,025,000 100 13. Mrs. Wantanee Chevasiri 110,236,750 0.44 14. Mrs. Wongchanok Chevasiri 110,236,750 0.44 The 19.69 % the Company’s shares are held in the hands of public. Accordingly, the Company has complied 15. Mr. Thapana Sirivadhanabhakdi 107,000,000 0.43 with Rule 723 of the Listing Manual of the SGX-ST. 16. Mr. Panote Sirivadhanabhakdi 107,000,000 0.43

17. Mrs. Atinant Sirivadhanabhakdi 107,000,000 0.43

18. Mrs. Thapanee Techajareonvikul 107,000,000 0.43

19. Mrs. Wallapa Trisorat 107,000,000 0.43

20. Mr. Suthep Opaspanich 80,000,000 0.32

Total 23,533,597,000 93.72 Annual Report 2007 Thai Beverage Public Company Limited

38 39

Statistics of Shareholders under the Central Depository (PTE) Limited Particular of material contracts with related parties Size of Shareholdings Number of Shareholders % Number of Shares % for the year 2007 consist of: 1 – 999 9 0.08 1,802 0.00 Sell and Purchase Bottle Agreement between Berli Jucker Public Company Limited (a related company) who is 1,000 – 10,000 8,224 69.85 36,420,764 0.58 seller and Bang-na Logistic Co., Ltd. (a wholly owned subsidiary of Thai Beverage Public Company Limited) who 10,001 – 1,000,000 3,550 29.81 213,724,054 3.38 is purchaser for a period of two years and eight months effective date from May 1, 2007 to December 31, 2009. The sell and purchase amounts of bottle for the year 2007 was Baht 2,247.08 million. 1,000,001 and above 31 0.26 6,075,513,300 96.04

Total 11,774 100.00 6,325,659,920 100.00 Net book value of the company freehold land and building as at December 31, 2007 are as follows:

Twenty Largest Shareholders under the Central Depository (PTE) Limited (million Baht)

Land 8,145 No. Name of shareholders Number of Shares % Surplus on land revaluation 4,389 1. DBS Nominees Pte Ltd 2,479,016,824 39.19 Land improvement 741 2. Risen Mark Enterprise Limited 833,335,000 13.17 Building and improvements 10,693 3. Citibank Nominees Singapore Pte Ltd 761,301,938 12.04 Total 23,968 4. UOB Kay Hian Pte Ltd 565,234,500 8.94 5. DBSN Services Pte Ltd 496,837,414 7.85 Current land revaluations were conducted in the year 2007 by independent professional valuers. 6. HSBC (Singapore) Nominees Pte Ltd 438,217,570 6.93 The company leases various premises, primarily for the branch offices and warehouses. All of these leases 7. United Overseas Bank Nominees Pte Ltd 270,171,461 4.27 are operating leases and not financial leases. 8. Golden Capital (Singapore) Limited 75,000,000 1.19

9. Raffles Nominees Pte Ltd 51,261,451 0.81 As at December 31, 2007, the amount of freehold land held for planned future business operations amounted to Baht 1,721 million which is 11.3% of profit before income tax. 10. DB Nominees (S) Pte Ltd 36,396,000 0.58

11. Merrill Lynch (Singapore) Pte Ltd 21,702,000 0.34

12. Morgan Stanley Asia (S’pore) Securities Pte Ltd 6,542,000 0.10

13. OCBC Securities Private Ltd 6,520,000 0.10

14. ING Nominees (S’pore) Pte Ltd 5,148,000 0.08

15. DBS Vickers Securities (S) Pte Ltd 3,336,500 0.05

16. CLSA Singapore Pte Ltd 3,130,000 0.05

17. Chang Kuei Chue 2,110,000 0.03

18. Freddie Tan Poh Chye 2,000,000 0.03

19. Yala Pte Ltd 1,954,642 0.03

20. Liauw Lee Lee @ Kartini Djantin @ Iskandar Lilianti 1,900,000 0.03

Total 6,061,115,300 95.81 Annual Report 2007 Thai Beverage Public Company Limited

40 41

Board of Directors

1. Mr. Charoen Sirivadhanabhakdi 2. Khunying Wanna Sirivadhanabhakdi 3. Mr. Narong Srisa-an Chairman Vice Chairman Vice Chairman

1 2 3 4 5

4. Mr. Komen Tantiwiwatthanaphan 5. Mr. Puchchong Chandhanakij 6. Mr. Staporn Kavitanon Vice Chairman Director Independent Director and Audit Committee Chairman

7. Prof. Kanung Luchai 8. Mr. Manu Leopairote 9. Mr. Ng Tat Pun Independent Director and Independent Director and Independent Director and Audit Committee Member Audit Committee Member Audit Committee Member

10. Mr. Michael Lau Hwai Keong 11. Prof. Pornchai Matangkasombut 12. Mr. Sakthip Krairiksh 6 7 8 910 Independent Director Independent Director Independent Director

13. Gen.Dr. Choo-Chat Kambhu Na Ayudhya 14. Mr. Vivat Tejapaibul 15. Mr. Panote Sirivadhanabhakdi Independent Director Director Director

16. Mr. Samut Hatthasing 17. Mr. Thapana Sirivadhanabhakdi 18. Ms. Kanoknart Rangsithienchai Director President Director and Executive Vice President

11 12 13 14 15

19. Mr. Sithichai Chaikriangkrai 20. Mr. Ueychai Tantha-Obhas 21. Dr. Pisanu Vichiensanth Director and Senior Vice President Director and Senior Vice President Senior Vice President

22. Mr. Chukiet Tangpongprush Director and Senior Vice President

16 17 18 19 20

Mr. Thapana Sirivadhanabhakdi was appointed President by the Board of Directors on January 18, 2008.

Mrs. Vaewmanee Soponpinij Mr. Thidi Suwanarat Company Secretary / Secretary to the Board Assistant Secretary

21 22 Annual Report 2007 Thai Beverage Public Company Limited

42 43

Executive Committee Executive Committee

1. Mr. Charoen Sirivadhanabhakdi 2. Khunying Wanna Sirivadhanabhakdi 3. Mr. Narong Srisa-an Executive Chairman 1st Executive Vice Chairman 2 nd Executive Vice Chairman

4. Mr. Komen Tantiwiwatthanaphan 5. Mr. Samut Hatthasing 6. Mr. Puchchong Chandhanakij 3 rd Executive Vice Chairman 4 th Executive Vice Chairman 5 th Executive Vice Chairman

7. Mr. Thapana Sirivadhanabhakdi 8. Ms. Kanoknart Rangsithienchai 9. Mr. Sithichai Chaikriangkrai President Executive Vice President Senior Vice President

10. Mr. Ueychai Tantha-Obhas 11. Dr. Pisanu Vichiensanth 12. Mr. Chukiet Tangpongprush Senior Vice President Senior Vice President Senior Vice President 1 2 3 4 5

13. Mr. Sawat Sopa 14. Mr. Saikeaw Vongpisethkul 15. Mr. Jean Lebreton Executive Vice President Senior Vice President Senior Vice President

* Mr. Sawat Sopa, Mr. Saikeaw Vongpisethkul, and Mr. Jean Lebreton were appointed on February 27, 2008.

6 7 8 9 10

Management Committee

1. Mr. Thapana Sirivadhanabhakdi 2. Mr. Thapana Sirivadhanabhakdi 3. Ms. Kanoknart Rangsithienchai 11 12 13 14 15 President President Director and Executive Vice President Business Development Sales Planning and Support Corporate Services

4. Mr. Sithichai Chaikriangkrai 5. Mr. Ueychai Tantha-Obhas 6. Dr. Pisanu Vichiensanth Director and Senior Vice President Director and Senior Vice President Director and Senior Vice President Finance Marketing Beer Production

7. Mr. Chukiet Tangpongprush 8. Mr. Sawat Sopa 9. Mr. Saikeaw Vongpisethkul Director and Senior Vice President Executive Vice President Senior Vice President General Affairs Spirit Production Non-Alcohol Production

10. Mr. Jean Lebreton Senior Vice President Strategy

* Set up January 2008 Annual Report 2007 Thai Beverage Public Company Limited

44 45

Mr. Charoen Sirivadhanabhakdi Mr. Narong Srisa-an Director Profi le Chairman / Executive Chairman Vice Chairman / 2nd Executive Vice Chairman

Mr. Charoen Sirivadhanabhakdi was appointed Khunying Wanna Sirivadhanabhakdi Mr. Narong Srisa-an was appointed Vice Chairman Chairman of the Board of Directors of ThaiBev in Vice Chairman / 1st Executive Vice Chairman of the Board of Directors in 2003. He has 44 years’ 2003. He has been the Chairman of Beer Thai (1991) experience in the banking industry, having served Public Company Limited and the Red Bull Distillery Khunying Wanna Sirivadhanabhakdi was appointed in Kasikorn Bank Plc. from 1954 to 1998 as its Group of Companies since 2004; the Chairman of Vice Chairperson of the Board of Directors in 2003. Executive Vice Chairman. He also holds directorships T.C.C. Land Co., Ltd. since 2002; the Chairman of She has been the Chairperson of Beer Thip Brewery in several public companies in Thailand, including T.C.C Capital Land Limited since 2003; the Chairman (1991) Company Limited and the Sangsom Group of Vice-Chairman of Berli Jucker Plc., Chairman of of Berli Jucker Public Company Limited since 2001 Companies since 2004. She has also been the Vice Advance Agro Plc., and Independent Director of True and the Chairman of T.C.C Capital Co., Ltd. since Chairperson of T.C.C. Capital Land Company Limited Corporation Plc. He holds an Honorary Master of 1997. In addition, he has been the Chairman of the since 2003, a Vice Chairperson of Berli Jucker Public Economics from Thammasat University. Executive Board of T.C.C. Holding Co., Ltd. since Company Limited since 2001 and the Vice Chairperson 1987. Mr. Charoen holds an Honorary Doctoral Degree of the Executive Board of T.C.C. Company Limited in Agricultural Business Administration from Maejo since 1972. Khunying Wanna holds an Honorary Mr. Komen Tantiwiwatthanaphan Institute of Agricultural Technology and an Honorary Doctoral Degree in Bio-technology from Ramkhamhaeng Vice Chairman / 3rd Executive Vice Chairman Doctoral Degree in Industrial Technology from University, an Honorary Doctoral Degree in Agricultural Chandrakasem Rajabhat University. Mr. Charoen has Business Administration from Maejo University and an Mr. Komen Tantiwiwatthanaphan was appointed Vice received many honors and Royal decorations, including Honorary Degree in Business Administration from Chairman of the Board of Directors and Vice President the Knight Grand Cordon (Special Class) of the Most Chiang Mai University. She is also the Vice Chairperson in 2003. He has had over 40 years’ experience in Exalted Order of the White Elephant, Knight Grand Cordon of the Sirivadhanabhakdi Foundation, a Director of the managing companies in the distilling industry. He has (Special Class) of the Most Noble Order of the Crown Siriraj Foundation and a Director of Ramathibodi served as President of Sahasan (2529) Co., Ltd., since of Thailand, the Knight Grand Cross (First Class) of the Foundation. Khunying Wanna has received numerous 1986, and as Director and Senior Vice President of Most Admirable Order of the Direkgunabhorn and the honors and royal Thai decorations, such as the Knight Suramaharas Plc. from 1986 to 1999. He holds a High Grand Companion (Third Class, Higher Grade) of the Grand Cordon (Special Class) of the Most Exalted Order School Certificate. Most Illustrious Order of Chula Chom Klao. of the White Elephant (Ladies), the Knight Grand Cordon (First Class) of the Most Noble Order of the Crown of Thailand (Ladies), the Knight Commander (Second Mr. Puchchong Chandhanakij Class, Lower Grade) of the Most Illustrious Order of Director / 5th Executive Vice Chairman Chula Chom Klao and the Knight Grand Cross (First Class) of the Most Admirable Order of the Direkgunabhorn. Mr. Puchchong Chandhanakij was appointed a Director and Executive Vice Chairman in 2003. Before joining ThaiBev, he was Managing Director of LSPV Co., Ltd., from 1988 to 2003; he was Executive Director (Finance) of the T.C.C. group of companies from 1983 to 1988; the Director of Administration of Robina Credit Ltd. from 1980 to 1982; and Vice President of Asia Credit Ltd., from 1975 to 1979. He holds a Bachelor of Business Administration and a Master of Science in Accounting from California State University, Long Beach. Annual Report 2007 Thai Beverage Public Company Limited

46 47

Mr. Michael Lau Hwai Keong Mr. Manu Leopairote Independent Director Independent Director and Audit Committee Member Mr. Michael Lau Hwai Keong was appointed as an Mr. Manu Leopairote was appointed an Independent Independent Director in 2006. He is a Managing Director in 2004. He has extensive experience in the Director, Advisory Services of Octagon Advisors Pte. Mr. Staporn Kavitanon public sector, having served as a Director, Secretary Ltd., a business and risk management consultancy Mr. Sakthip Krairiksh Independent Director and Audit Committee Chairman General, Inspector and Director General from 1968 to company. From June 2000 to September 2004, he Independent Director 1999, and as the Permanent Secretary at the Ministry of served as the Executive Vice President of United Mr. Staporn Kavitanon was appointed a Director in Industry from 1999 to 2004. He was also the Chairman Overseas Bank Ltd., where he was responsible for Mr. Sakthip Krairiksh was appointed an Independent 2004. He has extensive experience in the management of the Petroleum Authority of Thailand from 1999 to the administration and governance of the bank’s Director in 2005. He has extensive experience in the of companies with directorship and membership of 2004. From 1994 to present, he is the Chairman of international operations. He was an Advisor to Asia public sector, having worked in Thai ministries. He Committee at various companies, such as Bangkok Technonet Asia, and from 1995 to 1996, the Chairman Pulp and Paper Ltd. from February 1999 to May began his career as a civil servant in 1971 at the Bank Berhad, Kanyong Electric Plc. and Berli Jucker of the International Sugar Organization Council of 2000. He has held various positions at the Monetary Ministry of Interior. From 1979 to 2004, he served as Plc. From 1994 to 1999, he was the Vice Chairman England. He was also part-time lecturer at the Faculty Authority of Singapore (MAS) from February 1985 to a Diplomat in the Ministry of Foreign Affairs, where of Bangkok Bank Plc. He holds a Bachelor of Arts in of Economics, Thammasat University, Assumption July 1989, and from April 1991 to August 1997. His he held various positions, including Secretary to Economics from Thammasat University and a Master University, and Bangkok University. He was the last position at the MAS was Senior Deputy Director the Minister; Deputy Chief of Mission of the Embassy of Arts in Economics from Vanderbilt University. President of the Thammasat University Association (Development and Domestic Institutions). From August in Washington, USA; Director-General, Protocol Department; from 2002 to 2004 and was the President of the 1989 to March 1991, he was a Senior Manager Director General, Information Department; Spokesman Thammasat University Economics Association from (Institutional Sales) at J M Sassoon & Company, a stock of the Foreign Ministry; and Ambassador to the Kingdom Prof. Kanung Luchai 2000 to 2006. He holds a Bachelor of Economics broking company. He was also the Executive Vice of Cambodia, Japan and the United States. He was an Independent Director and Audit Committee Member (Honors) from Thammasat University and a Master of President of the Central Depository (Pte.) Limited Advisor to the Prime Minister in 2004 and from 2004 Science in Economics from the University of Kentucky. (CDP) from November 1997 to February 1999. He to September 2007 the Permanent Secretary, Ministry Prof. Kanung Luchai was appointed an Independent He won the Asian Productivity Organization Award holds a Bachelor of Business Administration (First Class of Tourism and Sports. Director in 2005. He has wide-ranging experience in in 2005 Honors) from the National University of Singapore and the public sector and legal business, having worked as the Chartered Financial Analyst (CFA) charter. He holds a Bachelor of Political Science from Boston Junior and Senior Public Prosecutor in the Department University and has attended the National Defense of Public Prosecution from 1946 to 1971; Director- Mr. Ng Tat Pun College. He has received various royal Thai and foreign General of the Policy and Planning Department of the Independent Director and Audit Committee Member Prof. Pornchai Matangkasombut decorations, such as the Knight Grand Cordon (Special Ministry of Interior from 1971 to 1973. He served as the Independent Director Class) of the Most Noble Order of the Crown of Thailand, Deputy Under-Secretary of State for the Ministry of Mr. Ng Tat Pun was appointed as an Independent the Knight Grand Cordon (Special Class) of the Most Interior from 1973 to 1974 and as the Deputy Minister Director in 2006. He has extensive experience in the Prof. Pornchai Matangkasombut was appointed as an Exalted Order of the White Elephant, the Grand Companion of Interior from 1974 to 1975. He practised law at banking and finance industry. He started his banking Independent Director in 2006. He is the President of (Second Class, Lower Grade) of the Most Illustrious Bangkok International Law Offices Co., Ltd. from 1976 career with Citibank in 1971 and was a Vice President the Mahidol University and, before his appointment in Order of Chula Chom Klao, the Order of the Sacred to 1985, and at Kanung-Prok Law Office Co., Ltd. from when he left in 1982. Since then, he has served in 1999, was a professor at the University. He has been Treasure, Gold and Silver Star and the Grand Cordon 1986 to 1992. He is currently a Director of Kanung & various senior positions with local and foreign ﬁ nancial a member of the International Union of Immunological of the Order of the Rising Sun. Partners Law Offices Company Limited and a Director institutions. From 1988 to 1997, he was the Executive Societies since 1971 and a Member of the Executive of Kanung & Partners International Consultancy Vice President of OCBC Bank, Singapore, in charge of Board of the International Union of Microbiological He is currently a Chairman of the Board of the Tourism Company Limited. He is also a Director of Thailand its International Banking and Financial Institutions Societies from 1986 to 1990. He has won the highest Authority of Thailand and Chairman of the University Iron Works Plc. and Bangkok Bank Plc. In 2001, he business. In 1998, he was appointed the Executive Director level of Royal Decorations (Knight Grand Cordon of Council at the Rajamangala University of Technology received the Prof. Sanya Thammasak Award for being and Chief Executive Officer of OCBC Bank Malaysia. White Elephant, Special Class and Knight Grand Cordon Krungthep. an Outstanding Lawyer from the Private Sector. He was a Managing Director at JP Morgan Chase of the Crown of Thailand, Special Class) and the Royal He holds a Bachelor of Law from Thammasat from 1999 to 2002 and a Managing Director and Thai Award of Chula Chom Klao Order (Special Third University, and a Bachelor of Arts and Bachelor of Law subsequently, a Senior Advisor at UBS, AG from 2003 Class) and the Palmes Academiques (Commandeur) from the University of Cambridge. He is also a member to 2008. He is also an Independent Director of Engro from the Government of France, the Borden Research of the Thai Bar Association. Corporation Limited, Singapore and SP Chemicals Limited, Award in Medicine. He was also an Honorary Research Singapore. Mr. Ng holds a Bachelor of Arts degree Associate at Harvard University and a Visiting Professor (Economics and History) from the University of Singapore. at Osaka University and the University of Saigon. He holds a Bachelor of Arts degree and M.D. and Ph.D. . from the University of Wisconsin. Annual Report 2007 Thai Beverage Public Company Limited

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Mr. Sithichai Chaikriangkrai Gen. Dr. Choo-Chat Kambhu Na Ayudhya Director and Senior Vice President Independent Director Mr. Thapana Sirivadhanabhakdi Mr. Sithichai Chaikriangkrai was appointed a Director Gen. Dr. Choo-Chat Kambhu Na Ayudhya was President and Senior Vice President in 2004. He joined the appointed Independent Director in 2006. He served Mr. Panote Sirivadhanabhakdi T.C.C. Group in year 1990 and has also been the the Royal Thai Army from 1973 to 1987 as General Director Mr. Thapana Sirivadhanabhakdi was appointed the Chairman of Group Financial Center since 2003. He Surgeon of the Medical Department. From 1987 to President of the Company in January 2008. Prior to this has over 23 years’ experience in financial positions, 1991, he was Chairman of the Department of Anatomy Mr. Panote Sirivadhanabhakdi was appointed Director appointment, he was the director and Executive Vice including the Finance and Accounting Manager of of the Phra Mongkut College of Medicine. From 1994 in February 2007. He has been Director of Beer Thai President of the Company from 2003 to January 2008. In Asia Voyages & Pansea Hotel Co., Ltd., from 1983 to 2004, he held various positions in the Royal Thai (1991) Plc. from 2000 to 2004 and Director of Beer addition, he has also held several executive positions in to 1990; as a Financial Analyst of Goodyear (Thailand) Army, including the Director-General of the Armed Thip Brewery (1991) Co., Ltd. since 2004 and Director many leading companies such as Vice Chairman of Red Co., Ltd., from 1980 to 1983; and as an External Forces Research Institute of Medical Service; an of Sura Bangyikhan Group of Companies since 2002. Bull Distillery (1998) Co., Ltd. since 2004, and Executive Auditor in Coopers & Lybrand from 1977 to 1980. He Assistant Surgeon-General; Deputy Surgeon-General; He holds a Bachelor of Science in Manufacturing Director of Berli Jucker Public Company Limited since holds a Bachelor of Accountancy (First Class Honors) Surgeon-General; and General Special Army Expert Engineering from Boston University and a Master of 2001. In 2004, he was appointed Vice Chairman of Thai from Thammasat University, and has a Diploma in and Consultant. He is a senior surgeon and physician Science in Analysis, Design and Management of Alcohol Public Company Limited, Executive Director of Computer Management from Chulalongkorn University at the Medical Bureau to the Royal Court of Thailand. Information System from the London School of Beer Thai (1991) Public Company Limited, and Vice and completed the Director Certification Program with He received his Diploma in Medicine from Westf. Economics and Political Science. Chairman of Dhospaak Co., Ltd. Since 2006, he has the Thai Institute of Directors. He also has a mini M.B.A. Wilhelms Universitat zu Munster, and Doctorate been Vice Chairman of Oishi Group Public Company in Leadership Management from Kasetsart University. in Medicine from the Georg-August Universitat zu Limited. Furthermore, since 2007, he has held other Goettingen. He also has a Diploma from the National Mr. Samut Hatthasing important positions, such as Director and Chairman of the Defense College of Thailand and a Certificate of Director / 4th Executive Vice Chairman Executive Committee of Univentures Public Company Mr. Ueychai Tantha-Obhas Proficiency in General Surgery from the Royal College Limited, and Vice Chairman of Siam Food Products Director and Senior Vice President of Surgeons of Thailand. He is a permanent member Mr. Samut Hatthasing has been the Fourth Executive Public Company Limited. He has also acted as a Director of the Royal College of Surgeons of Thailand and Vice Chairman since January 2008 and was the President of several ThaiBev subsidiary companies. Mr. Ueychai Tantha-Obhas has been a Director since the Medical Association of Thailand. As for royal of ThaiBev from February 2004 to December 2007. September 2005. Before joining ThaiBev, he was the decorations, he has won the Knight Grand Commander He joined the Group in 1986 and has held various He holds a Bachelor of Business Administration in Chief Executive Officer, from July 1995 to December (Special Class, Higher Grade) of the Most Illustrious Order marketing positions. He was also a Trading Manager of Finance and a Master of Science Administration in 2002, and Managing Director of Riche Monde of Chula Chom Klao and Knight Grand Cordon (Special Sura Maharas Plc from 1986 to 1999. He was a Director Finance Economics from Boston University, USA. (Bangkok) Ltd., from January 1988 to February 1994; Class) of the Most Exalted Order of the White Elephant. and Executive Vice President of the Sura Bangyikhan the Managing Director of Sarin Property Co., Ltd., from Group of Companies from 2000 to 2003. In 1980, he March 1994 to June 1995; and the Group Product was a Provincial Manager of the Surathip Group of Ms. Kanoknart Rangsithienchai Manager of Colgate Palmolive Co., Ltd., from September Mr. Vivat Tejapaibul Companies and later Marketing Manager of Surathip Director and Executive Vice President 1979 to June 1983. From May 1973 to August 1979, Director Co., Ltd. from 1981 to 1985. He was a Senior Manager he held various sales and marketing positions in of PTI Co., Ltd. in 1979 and a Supervisor in the Ms. Kanoknart Rangsithienchai was appointed as a Karnasuta General Assembly Co., Ltd. He holds a Mr. Vivat Tejapaibul was appointed a Director in 2003. Agricultural Credit Division of Thai Military Bank Director and Executive Vice President in 2003. She has Bachelor of Science in Accounting from St. Louis He has over 18 years’ experience in the banking from 1977 to 1978. From 1967 to 1976, he served extensive experience in finance and accounting. University, a Master of Business Administration from industry, having served in Bangkok Metropolitan Bank as an Assistant Branch Manager of the Bank of Before joining the Company, she had been the Thammasat University and is certified to have Plc. in various positions from 1979 to 1998, including Agriculture and Agricultural Cooperatives. He holds a Executive Vice President of the Sangsom Group of completed the Advanced Management Program from Secretary to the Managing Director, Deputy Director of Bachelor of Economics from Thammasat University and Companies from 2000 to 2003, and the Vice President INSEAD, France. the Trading Department, Director of Branch Administrative has completed the Director Accreditation Program with of the Office of Controller, Surathip Group of Companies and Vice President. He holds a Bachelor of Law from the Thai Institute of Directors. from 1983 to 1999. From 1975 to 1982, she served Thammasat University and a Master’s degree from as the Accounting Manager of the T.C.C. Group of Fairleigh Dickinson University, USA. Companies and as an accountant at J&JHO Co., Ltd., from 1970 to 1975. She holds a Bachelor of Accounting from Thammasat University and has completed the Director Accreditation Program with the Thai Institute of Directors. Annual Report 2007 Thai Beverage Public Company Limited

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Dr. Pisanu Vichiensanth Director and Senior Vice President

Dr. Pisanu Vichiensanth has been a Director and Top Executive Profile Senior Vice President since February 2004. He has held several positions in ThaiBev, including Executive Vice President from 2000 to 2003 and Senior Vice Mr. Sawat Sopa Mr. Saikeaw Vongpisethkul Executive President from 2003 to 2004, at subsidiary Executive Vice President Senior Vice President Beer Thai (1991) Plc. He is currently the President of Beer Thai (1991) Plc. Before joining ThaiBev, Mr. Sawat Sopa was appointed Executive Vice President Mr. Saikeaw Vongpisethkul was appointed Senior Vice he had been the Vice President of Engineering and in 2004, responsible for liquor production and President in 2006. He has over 39 years’ experience Development (1997-2000) and Assistant Plant technique. He was the Managing Director of Beer Thai in management as Vice President of Thai Pure Drink Executive (1994-1996) of Carlsberg Brewery (1991) Co., Ltd., and Executive Vice Chairman of Red Co., Ltd. from 1967 to 2006. He was also an Advisor of (Thailand) Co., Ltd. Bull Distillery (1988) Co., Ltd., from 1992 to 1995, the Association for Overseas Technical Scholarships and from 1995 to Present, respectively. From 1980 from 1991 to 1993. He has served the Federation He was a consultant at Pan Engineering Consultant to 1992, he served as an Executive Director of the 43 of Thai Industries as Logistics Committee Member Co., Ltd., from 1992 to 1994. From 1977 to 1993, Group of companies and Assistant Chief Executive and Environmental Committee Member since 1981. He he held several teaching positions, including Head of Director, responsible for liquor and alcohol production. holds a Bachelor of Engineering (Honors) from Food Science and Technology at Thammasat University From 1964 to 1975, he served first as an engineer and Chulalongkorn University. and Head of Food Technology at Khon Kaen University later as the Chief Engineer of Siam Chem Co., Ltd. From from 1992 to 1993, and from 1989 to 1992, respectively. 1963 to 1964, he served as an engineer in Bangchak He lectured in food technology at Khon Kaen University Oil Refinery. Mr. Sawat sits on the boards of directors Mr. Jean Lebreton from 1977 to 1990. He holds a Ph.D. in Engineering of various organizations including the Thab Neelaniti Head of Strategy and Business Development from Technical University, Berlin; a Master of Foundation, Chulalongkorn University Association, The Technology (Second Class Honors) in Biotechnology Petroleum & Petrochemical College, Chulalongkorn Mr. Lebreton worked for the Boston Consulting Group from Massey University; and a Bachelor of Science University and President of Gymnastics Association (BCG) from 1989 to 2005. He became a partner in the (Food Science) from Kasetsart University. of Thailand. He has also been appointed as Special company in 1995. After working for BCG in France Commissioner of the Secretariat of the House of for five years, he moved to Thailand in 1994 to open Representatives to consider draft bills on workmen’s the Bangkok office of BCG. After leaving BCG in 2005, Mr. Chukiet Tangpongprush protection, the securities and stock market and excise Mr. Lebreton worked independently for several years Director and Senior Vice President tax; a specialist to the Committee of the House Standing before joining ThaiBev in January 2008. Committee on Natural Resources and Environment; Mr. Chukiet Tangpongprush was appointed as a and a member of the Financial Committee and Mr. Lebreton has extensive experience in Asia, including Director and Senior Vice President of ThaiBev in 2003. Subcommittee of the Ethanol Investment Project under several years in Shanghai, China. He has worked in Before joining, he was a lawyer from 1963 to 1983. the Royal Ethanol Project Bureau, Ministry of Science, many industry sectors as a consultant, including From 1983 to 1986, he served first as Manager of Technology and Environment. He holds a Bachelor consumer goods, banking, and energy, covering topics law firm and later as Executive Director of Surathip degree of Science in Chemical Engineering and has such as market development, consumer research, Sansukko Co., Ltd. From 1987 to 1999, he served completed the Director Accreditation Program with re-engineering, and value management. first as Executive Director and later as the head of the Thai Institute of Directors. He is a Member (Fifth the General Affairs Department of Suramaharas Plc. Class) of the Most Exalted Order of the White Elephant At ThaiBev, Mr. Lebreton will work with other senior He joined Surabangyikhan Co., Ltd., in 2000 as and a Companion (Fourth Class) of the Most Noble executives to develop and implement strategy and the head of the Human Administration and General Order of the Crown of Thailand. facilitate the integration of future acquisitions. Affairs. He holds a Bachelor of Law from Thammasat University and the Thai Barrister at Law from the Mr. Lebreton has an MBA from Wharton School of Institute of Legal Education Barrister at Law, and has the University of Pennsylvania. completed the Director Accreditation Program with the Thai Institute of Directors. He is also a member of the Thai Bar and of the Lawyers Council of Thailand. Annual Report 2007 Thai Beverage Public Company Limited

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Organization Structure ANNUAL REPORT 2007 Thai Beverage Public Company Limited

Audit Committee Board of Directors Risk Management Committee

Office of Internal Audit Executive Committee Nomination Committee Remuneration Committee

Office of Chairman of Executive Committee

General Affairs President and CEO International Businesses

Office of the CEO

Office of Corporate Communications

Office of Corporate Secretariat

Office of External Affairs

Office of Legal Affairs

Corporate Strategy Finance Sales MarketingBusiness Non-Alcohol Beer Spirit Services - Office of Strategic - Office of Controller - Office of Sales - Office of Marketing Development Production Production Production Planning Planning and - Office of Human - Office of Treasury Support - Office of Business - Office of Non-Alcohol - Office of Beer - Office of Liquor Resources - Centre of Development Production Production Production Excellence - Office of - Office of Technical Information Service and Environment Technology - Office of Engineer - Office of Corporate Planning & - Office of Natural General Services Essences Production

*Effective from January 18, 2008 Annual Report 2007 Thai Beverage Public Company Limited

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Office of Chairman of the Offi ce of Liquor Production Office of Non-Alcohol Office of Sales Planning Responsibilities Executive Board Manages and oversees operations Production and Support Manages and screens items to be of the three liquor groups in Manages and oversees operations Supervises and oversees support proposed to the Chairman of the compliance with the goals and of the non-alcoholic beverages on the sale activities by coordinating and authorization Executive Board and manages policies of Thai Beverage Public in compliance with the goals and with Office of Marketing in order to general tasks for the Chairman Company Limited, including the policies of Thai Beverage Public ensure that the sale activities are of the Executive Board. promotion of the development of Company Limited, including the performed according to the strategic of each Office production and personnel skills promotion of the development of plan. Office of President for the sustainable benefit of the production and personnel skills Manage secretarial tasks for the Company. for the sustainable benefit of the Office of Controller President. Provide essential back-up Company. Supervises and oversees the in both administrative and strategic Office of Technical corporate functions of accounting tasks. Coordinate with all internal Service & Environment Office of Business and budgeting to ensure the units as well as external organizations Formulates liquor production Development compliance with generally accepted both domestically and internationally. processes and controls liquor Supervises and oversees all related accounting principles in Thailand to Arrange meetings of each ad hoc production at 17 distilleries to meet businesses in order to ensure the present the complete, accurate and committee as assigned. the requirements of each type as compliance to the Company timely fi nancial informations as well well as the standards of the Thai business policy including giving as compliance with the procedures Office of Internal Audit Industrial Standards Institute. advice and strategic planning to set forth by the Board of Directors. Assists the Board in promoting This includes the formulation of develop each business unit to good corporate governance; reports environmental management systems gain a maximize value added to Office of Treasury to the Audit Committee significant and controlling water treatment the Company. Supervises and oversees support for issues of risk management, internal systems. treasury affairs to ensure technical controls and governance; provides Office of Marketing and legal compliance of operations, advisory services and the resolution Office of Engineer Creates marketing, sales, advertising, as well as compliance with the of issues concerning internal Oversees the engineering section public relations, product development procedures set forth by the Board of controls; and promotes risk to support the distilleries and the and merchandise distribution plans Directors. management to all units’ operations. Company’s affiliates to align with in support of Group activities. goals for the utmost benefit to the Manages budgets, arranges and Offi ce of Strategic Planning Group. controls the total product distribution To oversee and coordinate in compliance with goals. Analyzes Thai Beverage Public Company Office of Natural and formulates marketing strategies Limited transformation program Essences Production in line with market competition. through the Project Management Oversees the process of natural Office (PMO), centralize all M&A essences production to meet the activities in close coordination with quality set forth by the Company. the finance Office, with a focus on strategic evaluation and Post Office of Beer Production Merger Integration, and leads key Manages and oversees the production projects as required to define and of the three beer companies in implement the group’s strategy. compliance with the goals and policies of Thai Beverage Public Company Limited, including the promotion of the development of production and personnel skills for the sustainable benefit of the Group. Annual Report 2007 Thai Beverage Public Company Limited

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Centre of Excellence To manage the budgeting and Office of Corporate Office of External Affairs reporting processes, oversee the Communications Oversees external affairs. Directly investor relation department, and Supervises and is responsible for all and indirectly creates positive identify and disseminate best aspects of corporate communications relationships with business practices. functions, namely public relations, partners, leading to commercial internal and external communications, oppotunities and supporting Office of Human Resources electronic communications as well as negotiations and business Institutes international-standard investor relations, to garner the utmost connections over the short human resources procedures that beneﬁ ts for the Company, particularly and long terms. In addition, build are capable of coordinating between in regards to corporate image and relations with government and the headquarters and regional the fostering of relationship to social aspects organizations as offices - taking into account the efficiently support the Company’s well as planning and running value of human resources, commitment businesses and activities. corporate community programmes. to ethics, and compliance with laws. Office of Corporate Office of Legal Affairs Office of Information Secretariat Analyzes and advises all units of the Technology Arranges all Board and shareholders Company on legal issues to ensure Responsible for information meetings of the Company and its full compliance with the law and for technology (IT) services, including group companies and oversees in the best interests of the Company development of advanced IT compliance with Securities Laws as well as being responsible for systems so that business units and the Listing Manual of the litigation matters, juristic acts/ can access information and tools Singapore Exchange as well as contracts matters, registration to enhance the Company’s controls disclosure of material matters relating to partnerships/ competitiveness. information to ensure compliance companies, and intellectual with laws, regulations and the Lising property. Office of General Services Manual, as well as Company policy. Oversees administrative works for Provides suitable advice to all both the Company and its affiliates, directors and key executives. such as cleaning services and Administers corporate information maintenance of office buildings, and analyzes Securities Laws relating supply of office equipment and to Company business. Oversees the stationery, security systems and share registration of the Company insurance for the assets. Ensures and its group companies and that the work complies with coordinates with related parties Company policies and regulations to the share registrar work and to efficiently support the major organizes the preparation of the business and activities of the annual report. Group. Annual Report 2007 Thai Beverage Public Company Limited

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Product Portfolio White Spirits Brown Spirits SangSom SangSom Superior SangSom Premium SangSom Similan Mekhong Mekhong Superior Mungkorn Thong Hong Thong Crown 99 Blue Blend 285 Ruang Khao28Degrees Ruang Khao30Degrees Ruang Khao35Degrees Ruang Khao40Degrees Paitong 30Degrees Paitong 35Degrees White Tiger 28Degrees White Tiger 30Degrees White Tiger 35Degrees White Tiger 40Degrees Niyomthai 28Degrees Niyomthai 30Degrees Niyomthai 35Degrees Niyomthai 40Degrees Others Chinese Herb Spirits Beer Shinobu Chang DrinkingWater Chang SodaWater Chiang-Chun Sua Dum Chang Chang Draught Chang Light Archa Chang Chang Draught Chang Light Archa Choo 3New Choo 10New Annual Report 2007 Thai Beverage Public Company Limited

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Operating and Financial Review

Contents Corporate Vision 1. Overview 2. Corporate Vision “We will strive to become a leading global 3. Business in Thailand beverage company with focus on commercial 4. Overseas Business 5. Management Discussion and Analysis excellence, continued premiumisation of our 6. Shareholder Returns 7. Risk Factors products, and professionalism.”

Overview Mission

Thai Beverage Public Company Limited (“ThaiBev”) was incorporated in Thailand in October 2003 in order to We will seek “partnerships” among our key stakeholders through six guiding values consolidate Thailand’s leading beer and spirits businesses owned by the principal shareholders and their business associates under a single holding company. ThaiBev was subsequently listed on the Singapore Exchange (“SGX”) • Offer quality products for every customer segment on May 30, 2006. The listing was the largest in Singapore in ten years, raising US$1.574 billion (or Baht • Satisfy distributors’ needs by offering professional services 38.08 billion) and received great interest. • Provide first quartile returns to our shareholders with consistent high revenue growth and profitability • Become a role model in terms of professionalism, transparency, and good corporate governance The major substantial shareholder in ThaiBev is Mr. Charoen Sirivadhanabhakdi, family and associates, who • Trust, empower, and reward our staff to make them accountable own approximately 64.94% of the company’s paid-up share capital (as of December 31 2007), the rest being held • Contribute to public and local communities by private groups, investment institutions and retail investors.

Not only is ThaiBev Thailand’s largest alcohol beverages producer, it is also one of Southeast Asia’s largest, though Corporate Development Strategy today 96.4% of its revenues are generated in Thailand. Our corporate development strategy will emphasize premiumisation, internationalization and professionalisation. Since listing, ThaiBev has implemented a strategy to allow it to expand overseas. To this end, its wholly-owned We will discuss premiumisation and internationalization in following sections, but the professional development subsidiary, International Beverage Holdings Limited (“IBHL”) is charged with this task. To date, IBHL has set up of our management and other human resources will play an increasing role in the success of the Company over sales offices in 6 countries and commenced active promotion of sales to countries like the USA, UK, Australia, time. Part of the impetus has been the conversion of the Company from private to public, and there are ongoing and others of two of ThaiBev’s products, Chang Beer and Mekhong rum. Expansion will also include whiskies measures to allow management to embrace accountability and create an organization that is more efficient and made in Scotland by IBHL’s subsidiary Inver House. focused on operational excellence. Professionalism is linked to good corporate governance, which will ensure the Company is well-run on behalf of shareholders. Investors should note that we have commenced the introduction of international-standard metrics that will assist management monitor their performance and thus help to improve Corporate Vision it over time.

“We will strive to become a leading global beverage company with focus on commercial excellence, continued premiumisation of our products, and professionalism.” Annual Report 2007 Thai Beverage Public Company Limited

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Business in Thailand

While 2007 has seen a continuation of the vigorous competition seen in 2006, the alcohol beverage industry has Investment in machinery picked up as seen in rising capital goods’ imports in the latter half of the year. However, continued to grow. ThaiBev has continued to see a rise in demand for low alcohol beers and brown spirits. White construction continued to contract. Private consumption rose 1.3% year-on-year but this was lower than expected. spirits sales were affected by economic difficulties, but remain the key underpinning of ThaiBev’s profitability for the present. Business sentiment has been reasonably stable, with the Business Sentiment Index (BSI) now standing at 44.5 in December 2007. However, the outlook is positive due to public satisfaction with the election result. Domestic demand in 2007 has improved gradually. Export growth slowed but the trade surplus remained high due to lower Domestic Business Strategy imports. The Thai economy in 2007 grew by 4.5% with domestic demand contributing to overall growth. Negative factors that may slow down the pick-up in future domestic demand are higher oil prices and consumer goods ThaiBev’s strategy for the domestic market focuses on the protection of the core businesses of beer and spirits. We driven by higher transportation costs. intend to continue growing the portfolio and become a leader in all alcoholic segments. We strongly believe that the Thai market has room to grow further as there is still a lack of choice regarding the number of brands available and the narrow segmentation of brands. Thai people aspire to move to higher-end drinks, whether alcoholic or non-alcoholic and as the economy improves, as it must do over time, ThaiBev will have products ready to meet consumer demand. Core Inflation 0.8-1.3% (2007) GDP Growth 4.3-4.8% (2007) Today, the Company dominates the economy segment of its businesses. In future, we will introduce standard and premium products that will extend the portfolio upwards. This will provide us with higher margins and greater Exchange Rates 34.5367 Baht/US$ (2007 avg.) profitability over time. We have noted that the spirits market will move toward brown spirits over the long term and Population 65.6 Million (2005) a more balanced portfolio will allow us to diversify the inherent risk of relying on one type of product or another Alcohol Consumption over time. Beer 31.3 (liters per capita, 2006) We also intend to continue to premiumize our current portfolio. For instance, we have already introduced gift boxes Spirits 10.4 (liters per capita, 2006) for several spirits products such as Sangsom rum in 2007. We re-launched Hong Thong in 2006 with new packaging that led to a good response from consumers. These steps will raise the market perception of our products and lead to more sustained growth in the future. Source: Bank of Thailand, Canadean, The Beer Service Annual Report - 2007 Cycle In order to diversify the portfolio further, the Company will expand further into the non-alcoholic drinks market to offer a complete range of beverages. The Company has already acquired all the energy drinks and ready-to-drink Legislation (RTD) coffee assets of Wrangyer Beverage Company Limited, in January 2008 and we have informed the market that we are negotiating for another acquisition in the energy drinks business. The energy drinks market is growing The Alcohol Control Act was passed by parliament in December 2007. A National Committee for Alcoholic Beverage by approximately 3% per annum and the net profit margins are around 10%, making it an attractive entry point Policy was set up to provide the framework of how the Act is to be implemented. The final draft of the Act was into non-alcoholic beverages for us. approved by parliament on February 13, 2008, and promulgated in the Royal Gazette on February 14, 2008.

ThaiBev has one of the largest distribution networks in Thailand and it will have to make more strategic use of this Many of the regulations mentioned here were expected by the Company for some time and we are already prepared network over time by offering it to outside organizations. First the Company needs to make it more efficient in, and to comply with the law. more capable of, handling a wider range of products. To achieve this, the Company introduced a logistics project in August 2007. One of the objectives of which is to introduce five huge distribution centers around Thailand that Sites where alcohol may be sold and consumed are now regulated. Alcohol may not be sold or consumed in would be able to store more products and distribute them to surrounding regions more efficiently. temples and other religious places, health-related sites, hospitals and pharmacies. Neither may alcohol be sold at government sites, hostels and educational institutions. However, shops, private rest areas and clubs situated on The Thai Economy government sites are exempt. Sites that have traditionally been used for eating and drinking are also exempt.

The Thai economy has declined slowly over the course of 2007, but with some positive sentiment towards the Alcohol may not be sold in petrol or fuel service stations or shops in their vicinity, nor is alcohol allowed in public 1 end of the year as the election on December 23 approached. Private investment fell 0.8% year-on-year in 2007. parks run by the state.

We should note that petrol stations in Thailand have not been selling alcohol in the shops on their premises for 1 Source: Bank of Thailand estimate some time due to an earlier Ministerial Regulation. Annual Report 2007 Thai Beverage Public Company Limited

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Although the Minister of Health may on occasion proclaim days and times when alcohol may not be sold, this The Cabinet approved raising the excise tax ceiling from an ad valorem rate of 60% and a specifi c rate of Baht 400 per would be in addition to existing restrictions on times when alcohol may not be sold. Normally alcohol is not liter of pure alcohol, to an ad valorem rate of 99% and a specifi c rate of Baht 1,000 per liter of pure alcohol as proposed sold the evening before an election, for instance. by the Minister of Finance. The objective of this ceiling rate increase is to provide fl exibility to the Excise Department in managing future excise tax rates. The matter must be passed by Act of Parliament. Due to the change of government It is now forbidden to sell alcoholic drinks to anyone under 20 years old. following the election on December 23, 2007, the Act must be re-submitted to the new parliament for its approval.

It is also forbidden to sell alcohol using automatic vending machines, by hawking or to offer discounts to promote On August 28, 2007, the government approved and announced new excise tax increases. The increases were on sales. No gifts, rewards or prizes may be provided to those purchasing alcoholic drinks or by using the redemption white and compound spirits and brandy. The tax increases affected ThaiBev’s white spirits and its three compound of things like bottle tops, for example. Companies may not offer alcoholic drinks for people to try or to impose spirit brands; Mungkorn Thong, Hong Thong, Blend 285 and Chinese herbal spirits. The white spirits specific rate any conditions that oblige the purchase of alcohol. increased from Baht 70 per liter of 100 per cent alcohol to Baht 110 per liter of 100 per cent alcohol, while the ad valorem rate changed from 25% to 50%. The specific rate for compound and Chinese spirits increased from Regarding advertising, it is now forbidden to advertise alcoholic beverages directly or show the drinking of alcohol. Baht 240 per liter of 100 per cent alcohol to Baht 280 per liter while the ad valorem rate remains 50 per cent of the The industry cannot show the name or brand of alcoholic drinks to accentuate the merits of alcoholic drinks or ex-factory price. For brandy, the ad valorem rate increased from 40 per cent to 45 per cent of the ex-factory price, entice people to drink. This has been a regulation for some time and the Company already complies with it. while the specific rate remained unchanged at Baht 400 per liter of 100 per cent alcohol. On 14 January 2008, the Government applied an additional amount of 1.5% onto the excise tax of all alcoholic beverages in order to pay Advertising and public relations of alcoholic beverages are allowed per se but there are exemptions relating to for the new public broadcasting system. advertising subject to Ministerial Regulations (that have not yet been issued). These would be limited to information and news about social contributions without the appearance of any product photos or the packaging of alcoholic drinks, except for the symbol or logo of the drink or company only. In principle, this implies that advertising may Table of Excise Taxes levied on the Company’s products showing the rise in August 2007 on certain now be allowed, but the focus must be on meritorious activities, such as how ThaiBev provides support to society. products and the addition of 1.5% across the board in January 2008 Examples here would be our continued support for arts and crafts, health, sports, religious activities, youth projects and other support for the poor and underprivileged that ThaiBev has pursued over the years. Therefore, as long as the advert does not show bottles or drinking scenes, it should be allowed. We note this will enable ThaiBev to continue to build its corporate image in Thailand. Product Ad Valorem Rate Specific Rate (Ex-factory) Unit Bt/Unit The law does not cover advertisements that originate outside Thailand. Investors should note that ThaiBev is a shirt sponsor Fermented Liquor of Everton Football Club in the UK and that this sponsorship will not be affected by these new regulations in Thailand. Beer 55% Liter of pure alcohol 100 Wine & Sparkling wine from grapes 60% Liter of pure alcohol 100 After consideration of these regulations under the Alcohol Control Act, ThaiBev believes that while there will be Local Fermented Liquor 25% Liter of pure alcohol 70 some effect on promotional activities, the Company’s extensive distribution network mitigates the loss of some Other 25% Liter of pure alcohol 70 other marketing tools. Moreover, while the restrictions on public places where alcohol may be sold and consumed Distilled Liquor are reasonable, we should note that the vast majority of ThaiBev’s products today are drunk in the home. White spirits* 25% - > 50% Liter of pure alcohol 70 - > 110 Compounded spirits (Hong Thong, Mungkorn Thong, Chinese Herb)* 50% Liter of pure alcohol 240 - > 280 In sum, the Alcohol Control Act is a restriction on the ability of companies to promote and position their products Blended spirits (Mekhong) 50% Liter of pure alcohol 400 in the minds of consumers, but is not in itself an obstruction to sales. Nothing in the Act forbids consumers from Special spirits Brandy* 40% - > 45% Liter of pure alcohol 400 purchasing and drinking alcohol. Certainly, there is a risk to new entrants that they may not be able to establish Whisky 50% Liter of pure alcohol 400 themselves with consumers who will be unaware of their presence if they can only advertise logos and social Other (Sangsom, Crown99, Blue) 50% Liter of pure alcohol 400 contributions as they will not have the distribution network in place to offer a pervasive brand presence. ThaiBev has an Absolute Alcohol extensive distribution network in Thailand for alcoholic beverages which is advantageous to the sales of new products. used in industry 2% Liter 1 used in medicine, pharmaceuticals, science 0.10% Liter 0.05 Taxation other 10% Liter of pure alcohol 6

Besides corporate income tax, which is set at a rate of 30% in Thailand, the Company pays excise tax on its alcoholic beverages. This is imposed before our products leave the factory and explains why the Company has a relatively high + Municipal Taxes: 10% of Excise use of short term cash. There are two methods that can be used by the Government to levy the tax; either according to the + Health Promotion Fund Contribution: 2% of Excise amount of alcohol per liter, called a speciﬁ c rate, or based on a determined ex-factory price, called the ad valorem rate. + Thai Public Broadcasting Service Fund Contribution: 1.5% of Excise** The Excise Department may use either the specific or ad valorem rates depending on which one is the higher. * New Tax Rate Applied from 28 Aug 2007, ** TPBS Funds Applied From 14 Jan 2008 Annual Report 2007 Thai Beverage Public Company Limited

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Beer Business Archa Beer was the only Since the introduction of Chang Archa Beer was the only Thai beer Ban in Ayutthaya province, the Beer to the masses in 1995, people to have received a Gold Medal. Company now has a total production Thai beer to have received in rural areas had limited choice Back in 1998, Chang Beer was capacity of 1,550 million liters per and there was a potential to provide the first Thai beer to win this award, annum, making us one of the a Gold Medal. Back in 1998, more products to them. In 2006 it making ThaiBev the only Thai largest brewers in Southeast Asia. became clear that an alternative brewer to have won AIBA Gold Utilization normally runs at Chang was the fi rst Thai beer would either have to be introduced Medals. approximately 68% of total by ThaiBev or a competitor. capacity per annum. However, to win this award, making The re-launch of Archa Beer into There has been phenomenal this sometimes increases to the northeast and other rural areas growth among the lighter beers in almost 95% utilization prior to Thai Beverage Public proved the case that there is a the portfolio on the back of a rising and during peak periods as our section of society that wants trend globally. ThaiBev intends to brewing team has a policy of Company Limited the only a lighter alternative to Chang Beer. continue this success by introducing providing only fresh beer to Along with Chang Light and Chang new beers at the right time at high consumers and therefore does Thai brewer to have won Draught, lighter beers are finding market positions and higher margins not normally brew well in advance favor in both rural and urban as part of its premiumisation policy. of a peak period and store the areas, with the total sales volume beer. At this level of utilization, AIBA Gold Medals. at the end of 2007 Climbing to In 2004, the Company decided to and the growth of the beer industry 956.8 million liters. Total sales of expand the capacity of its northern in 2007 of 6%, ThaiBev expects Archa Beer alone accounts for brewery at Kamphaengphet full utilization in approximately 31% of ThaiBev’s beer portfolio. province. This was done as the beer six years. market had risen to the extent that Archa Beer won over more than the former total capacity of the 20 judges to claim the coveted Company’s three breweries was Gold Medal in European Lager already running at full capacity. Division at the 2007 Australian With plans to expand production International Beer Awards (AIBA). to include exports, the expansion Archa Beer was cited for being was timed well to meet the current “an outstanding beer that displays upsurge in demand for beer. the correct balance of taste, aroma The Baht 7.2 billion project was and appearance appropriate for completed in 2007, bringing the the style and excellent technical capacity of Kamphaengphet merit”. province up to 900 million liters. Together with the two other breweries at Wang Noi and Bang Annual Report 2007 Thai Beverage Public Company Limited

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The past year has seen the Thai economy slow measurably, with the effect being felt mostly in rural areas and among laborers. As consumer Spirits Business confi dence has declined, the Company In October 2006, we launched has seen a noticeable effect on its Blend 285 and positioned it to white spirits’ sales, which acts as provide the consumer with a superior While approximately 52% of a barometer of the rural economy. quality product at an affordable ThaiBev’s sales come from spirits, Sales volume of white spirits began price. The product features premium this product accounts for about to decline as consumers switched to clues such as an individual gift 85% of net profi t. ThaiBev’s spirits half bottles or single shots. In some box, non-refi llable cap (“NRF”), and portfolio is split into two types, cases the community spirits sector westernized packaging design. brown and white spirits. All the in Thailand was the beneficiary. The product has proven popular Company’s white spirits are made However, we know that white spirits throughout 2007 and sold 14.8 from molasses (a product of sugar are consumed mostly by the older million liters, a success that cane) as are the majority of its generation and we do not expect clearly demonstrates the strength brown spirits made in Thailand. the younger generation to continue of our distribution platform which Only Crown 99 and Blue are whiskies. this tradition forever. By nature, enables new products to gain Whereas white spirits are an economy younger people prefer to consume deep market penetration over drink, commonly consumed in rural brown spirits and beer, and this is a short period of time. areas and among the segment of the area that the Company will be society that performs physical labor, concentrating more on in the future. brown spirits are what most consumers aspire to drink.

ThaiBev has approximately 74% of the spirits market. In May 2007, the prices of some brown spirits were raised.

The selling price in Baht for one In September 2007, we acquired case (i.e. a dozen bottles) increased United Products Company Limited as illustrated here: (“UPC”) and SPM Foods and Beverages Company Limited (“SPM”).

Increase per case (Baht)

Bottle Half bottle Hong Thong 110 (+7.1%) 118 (+15.3%) Sangsom 120 (+5.5%) 60 (+5.6%) Mekhong 110 (+7.7%) 55 (+7.7%) Blend 285 150 (+8.5%) N/A Mungkorn Thong None 118 (+16.6%) Annual Report 2007 Thai Beverage Public Company Limited

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Industrial Alcohol Business

UPC is primarily engaged in the manufacturing We acquired our industrial alcohol plant in 2002 to create further integration in our alcohol business. We are now and distribution of spirits, including contract increasing our exports of industrial alcohol products to key markets such as Japan and India. Since September distilling. UPC has various brands in its portfolio, 2004, we have produced ethanol to make gasohol fuel as a substitute for 95 octane gasoline. We have increased for example “White Bear” white sprits, “Mungkorn our capacity of ethanol production to meet the expected demand for gasohol and capitalize on the Government’s Taejean” white sprits, “Noble Lords” whisky, policy on clean energy. “Tumbler” whisky, etc. Its distillery is located in Nakhon Pathom province, not far from Bangkok. In 2007, our sales volume of ethanol was 42.6 million liters compared to 46.6 million liters in 2006. However, our The total design capacity of UPC’s distillery overall sales volume of industrial alcohol in 2007 is slightly more than that of 2006 due to a temporary production at 50 degree alcohol content is approximately halt as a result of unfavorable product margins in the first quarter of 2006. 30,000 liters per day. In 2007, UPC has been operating its distillery at approximately 35% The industrial alcohol business throughout 2007 was still under pressure. The postponement of an import ban utilization of its design capacity. This utilization on 95 octane gasoline by the transitional government directly affected demand in the industrial alcohol business comprises 90.18% white spirits and 9.82 special in Thailand. Most of the domestic industrial alcohol producers were stuck with high inventories forcing them to spirits, known as Bacardi Breezer, under the lower their prices to deplete stocks. Oil companies are enjoying good profit from gasohol due to low alcohol prices Bacardi brand. We have agreed to renew but this was not enough to motivate them to promote gasohol. Exporting industrial alcohol is the only available Bacardi’s current contract for another year and source of business open to ThaiBev. However, global industrial alcohol prices have been very competitive due are now working on a longer-term contract. to abundant supplies from Brazil. Despite all the difficulties, ThaiBev managed to sell a total of 59.5 million liters of alcohol,which was 23 percent higher than total sales of the same period last year. ThaiBev will continue to focus on SPM is a company primarily engaged in the the exporting business for the remainder of this year. manufacture and distribution of mineral drinks, sports drinks, fruit juices and seasoning sauce. Domestic sales in 2007 were 36.7 million liters, which was 9.4% lower than the sales in 2006. The average price It produces OEM products under contract, for per liter of Baht 24.97 in 2006 decreased to Baht 16.14 per liter in 2007. Thai Alcohol Public Company Limited example “Gatorade” sports drink, “Fruitnette Jelly exported 22.8 million liters in 2007, mainly to Japan. There were no export sales in 2006. The Company showed Drink,” “SPM” juice, “Furen” seasoning sauce, etc. a gross loss of Baht 6 million compared to a gross profit of Baht 211 million last year. The Company is considering the extension of the Gatorade contract to the middle of 2008. SPM’s factory is located at Nakhon Pathom province. Related Businesses

The rationale for these acquisitions was to enable The Glass Bottle Purchase Agreement between Bangna Logistics Co., Ltd. (a wholly-owned subsidiary of ThaiBev) ThaiBev to obtain new customers and new brands and Berli Jucker Public Company Limited. expired on April 30, 2007 and the parties entered into a new Glass Bottle of liquor products, in particular white liquor; to Purchase Agreement dated May 24, 2007 for a period of two years and eight months (effective from May 1, 2007 diversify our current alcohol beverage business, to December 31, 2009). and to enter into new non-alcohol beverage businesses.

ThaiBev is interested to become a comprehensive producer of drinks, both alcoholic and non-alcoholic as part of its strategy to diversify its portfolio and seek higher returns. Annual Report 2007 Thai Beverage Public Company Limited

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Overseas Business

International Beverage Holdings Limited (“IBHL” see: www. IBHL is responsible for ThaiBev’s international business and is engaged in activities such interbevgroup.com) has been established to be the international as the production, marketing and distribution of our portfolio of alcoholic beverages including arm of Thai Beverage Public Company Limited (ThaiBev). ThaiBev’s domestically-produced products and Scotch whisky. These global operations are managed out of our four regional headquarters located in Hong Kong, Singapore, North America and the United Kingdom together with our major Scotch whisky operations in five distilleries in Scotland. Business Strategy

We currently export our brands to over 80 countries outside International Strategy Thailand managing this directly with our in-house sales and marketing teams as well as through suitable local distributors where The Company’s strategy with regard to international expansion remains consistent. The necessary. Company strongly believes that it must adopt an appropriate route to market, wholly owned or third party depending on our ambitions in that market and market circumstances. The changing face of the world’s drinks industry will create We actively seek out distribution partners. Should our beverages begin to gain traction in opportunities for the development of our company in the years a country, we would then consider, at least in the case of beer, either contract brewing or ahead. Consumers are demonstrating an increasing desire to trade purchasing a brewery locally. Where we want to strengthen our presence, we are actively up to more premium products as well as to experiment with new considering investing in existing businesses or start-up companies. Due to the need to and interesting brands and these are just two of the trends that identify projects that offer good value, any we believe will help IBHL achieve its strong brand growth targets. investment made would have to offer an internal rate of return in the suitable IBHL is incorporated in Hong Kong and currently has subsidiaries in amount. In any investment, IBHL will six countries, as follows: consider value and potential synergy over price.

Initially, IBHL is focusing on flagship brands – Chang beer, Mekhong rum • InterBev (Singapore) Limited (branded overseas with the legend: “the Spirit of Thailand”), its single malt whis- • InterBev Malaysia Sdn. Bhd. kies, Balblair, Old Pulteney, Speyburn and • InterBev (Cambodia) Co., Ltd. AnCnoc and blended scotch whiskies such as Hankey Bannister. IBHL has identified • International Beverage Holdings Limited USA, Inc. key focus markets for each brand and is • International Beverage Holdings (UK) Ltd. and subsidiaries directing its efforts and resources at these ‘brand market units’. IBHL intends to be including Inver House Distillers Limited a global player with a comprehensive portfolio • Best Spirits Company Limited of products. Annual Report 2007 Thai Beverage Public Company Limited

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We also believe that local partners and management We aim to build a strong and unique brand presence Inver House Recognized Quality are ways of moving into new markets without a steep in all our core target markets throughout the world learning curve. Key international executives are and 2007 has already seen the repackaging and Inver House Distillers Limited (www.inverhouse.com) Inver House Distillers recently received (28 th February internationally sourced, and chosen for their long successful launch of the iconic Chang Beer and is a leading ﬁ rm of Scotch whisky distillers, headquartered 2008) the prestigious ‘International Distiller of the experience in the business. We are also assembling a Mekhong brands on the international stage. in Central Scotland, exporting to over 80 countries Year’ award at a glittering ceremony held in London. strong talent pool in the areas of Sales and Marketing worldwide. It is held by IBHL through a holding The Airdrie based company beat off impressive from candidates with wide-ranging experience across Chang Beer has been repackaged and recently company called International Beverage Holdings (UK) competition from exceptional companies throughout both beer and spirits. We are doing this by recruitment launched in the major Western markets including USA, Limited. The company’s principal business is the the world including Japan, Ireland, Canada, India, and through the integration of the Inver House UK, Europe and Australia with a focus on the distillation and sale of Scotch whisky. Sweden and the USA. commercial team. We are at the same time building premium imported beer market. a strong platform of marketing expertise. Inver House Distillers Limited owns ﬁ ve malt distilleries Inver House, who in the last year has globally Mekhong has also been revamped to appeal to the and markets a number of multi-award winning Single re-launched their Balblair Single Malt as a super- By employing high-quality, experienced management, more discerning spirits drinkers. It will be sold through malt Scotch Whiskies: Old Pulteney, Balblair, anCnoc premium ‘vintage’ offering, reached the final of the IBHL intends to expand faster than it would otherwise high-end restaurants and cocktail bars in Europe and (pronounced ‘a-nock’) and Speyburn. It also distills, ‘Icons of Whisky’ event by first beating off competition be able to do. In some markets, strong local partners North America with the help of its Thai-inspired blends and bottles a number of Blended Scotch Whisky in Scotland from Glenmorangie, Bowmore and William will be sought to assist us to work with local collection of cocktail recipes. brands including: Hankey Bannister, Catto’s and Grant & Sons, before claiming whisky’s highest accolade distribution networks and overcome indigent cultural and McArthur’s, which are marketed and sold in over 78 over seven other global finalists. The industry-voted business practice hurdles. countries. award is designed to highlight the company who has ‘shown the most commitment to the development of A successful redesign of core Thai Product for key whisky at all levels’ and is highly sought after. export markets. Announced on the eve of Whisky Live London, the Icons of Whisky dinner was created to celebrate the people and places behind the greatest whiskies and whisky companies in the world. The event’s international judging panel recognized Inver House Distillers for bringing ‘dynamic, inspirational and dedicated passion’ to the world of whisky.

Milestones

2003 2004 2006 2007

October June May October September

Thai Beverage was established Expansion of Kamphaengphet Thai Beverage successfully Acquisition of distillery assets from Acquisition of United Products Co., Ltd. as a holding company for the alcohol brewery commenced listed in the Singapore Exchange Sin Surang Karn Sura Co., Ltd., and SPM Foods and Beverages Co., Ltd. beverage business main board manufacturer of White Tiger manufacturer of White Bear spirits and other products Acquisition of Pacific Spirits UK (PSUK), owner of Inver House Distillers in Scotland and acquisition of Best Spirits Company Limited

Remark: In January 2008: Acquisition of energy drink and ready-to-drink coffee assets from Wrangyer Beverage Company Limited Annual Report 2007 Thai Beverage Public Company Limited

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Major re-launch of fl agship malt whisky brand

Balblair (www.balblair.com), was successfully repackaged Inver House Distillers Limited, which was purchased by and relaunched during 2007 in our biggest-ever launch IBHL in October 2006, has benefited from a buoyant program to date for an Inver House single malt whisky. Scotch market as well as a strategic shift towards The striking new identity inspired by a 4,000 year old focusing more on core malt brands. As a result, pre tax Pictish standing stone overlooking the distillery, has profit have risen to £4.0 million, up 121% for the same been carefully crafted and will mean the vintages offer period in 2006. a superior choice for informed whisky drinkers across Europe, North America and the fast growing Asian region. The company’s strategy is to position Balblair as a super-premium single malt scotch whisky. Balblair was successfully launched in UK, France, Mexico, Holland, Greece and Japan among other countries.

As part of this process, the company developed a new direct marketing program to associate the brand with other luxury goods through a partnership marketing program. Current partners include Mackintosh (www.mackintoshrainwear.com), the original manufacturer of rainwear, who have repositioned themselves in the luxury arena and are one of the “hot brands” in Japan at present. Another partner is John Lowrie Morrison (www.jolomo.com). He is one of the UK’s most prestigious artists and he has exhibited widely in the UK as well as Hong Kong and the USA.

The company’s premium single malt whiskies are Old Pulteney (www.oldpulteney.com) and anCnoc (www.ancnoc.com) and its entry-level single malt is Speyburn (www.speyburn.com).

Inver House is now poised to enter markets with a clear positioning for all its key brands. Blended scotch whiskies will aid the company in establishing its reputation in global markets. A new blended Scotch whisky is expected to be introduced into Thailand in 2008. Annual Report 2007 Thai Beverage Public Company Limited

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USA Launch

IBHL USA now operational

International Beverage Holdings Ltd. USA, Inc. (IBHL USA) was established as the regional headquarters for launching the business in North America. The office, based in New York City, is charged with developing the company’s diverse international portfolio of branded Asian spirits and beer throughout North America. IBHL USA is a wholly owned-subsidiary of IBHL, which is 100% owned by ThaiBev.

Strategy

The introduction to Americans commenced on July 4, 2007, with initial focus on the 5,000 Thai, Vietnamese, Cambodian and Asian-Fusion restaurants in the USA. Unlike in Thailand, Chang is being presented as a super-premium beer in the US market. By offering choice to consumers we believe the category will expand, as demonstrated by Mexican, Japanese and Italian beers. The strategy is to build a platform for growth in East and West Coast markets and to expand further into the interior once these core coastal markets have reached critical mass. While the company is focusing on Thai and other Asian restaurants as its entry point into this market, the following phases include a presence in off-premise trade and, when Chang becomes more established, entry into the mass consumer on-premise market. As part of IBHL’s global strategy, the US market will not be limited to Chang beer alone. Inver House, for instance, counts the USA as a major market for single malt whiskies already. In early 2008, ThaiBev is planning to launch Mekhong rum into the US as part of its strategy of approaching overseas markets as a complete beer and spirits producer. Mekhong will be positioned as a unique Thai spirit using the series of cocktails that have been created to drive interest in this product.

Chang is available in six-packs of 330 ml (11.2 oz.) and 640 ml (22 oz.). To the end of 2007, approximately 240,000 liters of beer have been shipped to the USA during the initial six month launch period. Over 30,000 cases have been sold.

Key successes in 2007 Initially, the company is targeting the key states of California, Washington, Oregon, Arizona, Nevada, Texas, Georgia, the D.C. area, Pennsylvania, New York, New Jersey, Connecticut, Massachusetts and Illinois. In the early stages, IBHL’s key successes in 2007 include the successful the key markets are New York City metropolitan area and California. These two major markets are expected integration of Inver House and the improvement of to account for almost 30% of total Chang imports. In fact, 66% of Asian Americans live in the states of New York, California, Hawaii, Texas and Illinois; over half of Asian Americans live in Los Angeles, New York City, its business performance. IBHL was able to integrate San Francisco, Honolulu, the District of Columbia and Baltimore, and Chicago. The United States’ highest Hong Kong-based Best Spirits Company Limited and consumption of alcoholic beverages occurs in New York, Pennsylvania, Florida, Illinois, Texas and California. improve its business performance. The company’s brand marketing and presentation of key brands has To date, the company has established Chang in 16 states and 26 metropolitan areas, mainly focused on the developed considerably and revenue is growing faster East and West coasts. than volume due to premiumisation and better management. Finally, we have commenced operating Consumers in the USA have been moving towards super premium imported and craft beers (unique beers made by in the USA, UK and Australia, not just an achievement local small or micro breweries) for several years. The drivers have been the improved economic environment, in itself but a sign that the company has the potential consumers seeking new, different flavors and a narrowing of the price gap between imported and craft beers, which to enter any market it finds attractive. have held the line on pricing, and major domestic beers. A 330ml bottle of Chang currently sells for around US$4-5 in on premise outlets, while the price is around US$ 7.99 per six-pack of 330ml bottles for off premise outlets.

In May 2007, the Company increased the total paid-in capital of IBHL USA, from US$1,000 to US$2.6 million. The capital increase was surplus cash injected by International Beverage Holdings Limited from its working capital. The proceeds provided working capital to support the operations of IBHL USA for 2007. Annual Report 2007 Thai Beverage Public Company Limited

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UK Launch Australia

In May 2007, International Beverage Holdings (UK) ThaiBev added Australia to its network of product sales Limited (IBHL UK), launched Chang beer into the UK in 2007. The Company has established a relationship after testing of the products in the market proved with Woolworths, Australia’s largest retailer, to distribute favorable. At present, a 330ml bottle sells in a restaurant and sell Chang Beer. for an average of £3.00, and is clearly positioned as a premium imported beer. In Everton FC’s stadium a 330ml This deal provides a major launch platform that will mean can sells for £1.90 (only sold where draught is not a Chang Beer will be available nationally for Australians vailable) and a pint (568ml) of Chang draught sells for to enjoy. Woolworths has almost 3,000 stores nationwide £3.00. This in the only UK venue where Chang is and over 175,000 employees. available on draught. Europe When Chang Draught was introduced at Everton FC’s Goodison Park stadium at the end of 2006, it broke the Chang sales in Europe, especially in the Netherlands, record for the most pints sold at Goodison in the first have seen steady growth since 2006 and after a very game. It was sold and has quickly established itself strong year in 2007, will see further expansion as new as a firm fans’ favorite. Sales volume at the stadium initiatives are implemented and joined with Mekhong rum has risen from 33,185 liters at the end of 2006 to launch activity. 50,400 liters in 2007, showing a growth rate of 52%.

Throughout the UK, Chang beer has seen some remarkable growth, with sales for the country rising 138% New Markets from the previous year. ThaiBev will continue to concentrate on its domes- Strategy tic market, but is now seeking opportunities abroad. While there have been entries into 19 markets to date, IBHL has launched Chang through Thai restaurants in the Company feels that Asia in general and ASEAN in the UK, but will then extend over time into mainstream particular are interesting potential markets. One of the outlets such as pubs and bars. In the case of the UK, advantages of exports within the ASEAN Free Trade Area the company has the advantage of distribution contacts (AFTA) is the low duties imposed on trade within the through the Inver House subsidiary and is expanding region today. The other is the similarity of business throughout the country. Mekhong, The Spirit of Thailand, cultures. Local spirits made from molasses or sugar cane was launched in January 2008 and is being intro- are evident within the region as is the rising trend for beer. duced to high-end cocktail bars and is being positioned Vietnam and the Philippines are potential markets that as a premium product. The Inver House’s whiskies are need to be explored. Further afield, China and India are receiving consistent and innovative marketing initiatives now fast-awakening economic giants that the Company to establish them as key brands in the UK. The same cannot ignore. Investments overseas will be thoroughly strategy will be employed in other appropriate markets. scrutinized to ensure they are good value for money. Annual Report 2007 Thai Beverage Public Company Limited

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Management Discussion and Analysis

The Company has completed the acquisition of a distillery named United Products Company Limited (UPC) Earnings before interest, tax, depreciation and amortization (EBITDA) was Baht 21,251 million, an increase of and a non-alcohol beverage manufacturer named SPM Foods and Beverages Company Limited (SPM) by Baht 652 million, or 3.2%, mainly due to the increase in gross profit from the spirits business. purchasing about 81% and 83% of the shares in the companies respectively. The operations of UPC and SPM have been included in the Company’s financial statements since November 2007 onwards. Net profit was Baht 10,383 million, an increase of Baht 328 million, or 3.3%, mainly from the spirits business.

The Thai Excise Tax Department, Ministry of Finance, declared an increase of the excise tax rate with immediate Unit :Million Baht effect on white spirits, compounded spirits and brandy (which falls under the “special spirits” tax classification) on August 28, 2007. The new excise tax as related to the Company’s products increased about 16.7% for YTD_2007 Beer % to % to % to % to % to /Water Sales Spirits Sales Alcohol Sales Eliminate Sales Total Sales compounded spirits and about 57.1% to 70.8% for white spirits compared with the previous excise tax. However, the Company had a substantial volume of spirits finished goods on which excise tax had already been paid at Sales 47,557 100.0 52,940 100.0 966 100.0 (922) 100.0 100,541 100.0 the previous rate. The Company has already increased the selling price of spirits to cover the excise tax rise. Cost of sales 37,040 77.9 33,924 64.1 972 100.6 (1,063) 115.3 70,873 70.5 Gross profit 10,517 22.1 19,016 35.9 (6) (0.6) 141 (15.3) 29,668 29.5 The Company is planning to improve the efficiency of its distribution network and establish more effective cost Selling and administrative control by implementing a Logistics Project. This consists of the establishment of five Regional Distribution expenses 6,456 13.6 7,055 13.3 140 14.5 38 (4.1) 13,689 13.6 Centers, the charter of a new side-loading fleet and the implementation of a Supply Chain Management System. Operating profit 4,061 8.5 11,961 22.6 (146) (15.1) 103 (11.2) 15,979 15.9 Total cost of the Logistics Project will be approximately Baht 2,541 million from the fourth quarter of 2007 to 2009. Other income / Interest income 111 0.2 237 0.4 19 2.0 (69) 7.5 298 0.3 EBIT 4,172 8.8 12,198 23.0 (127) (13.1) 34 (3.7) 16,277 16.2 The Company has also planned to increase PET (Polyethylene Terephthalate) drinking water bottle production Interest expenses 278 0.6 731 1.4 38 3.9 - - 1,047 1.0 capacity from the current approximately 7 million litres per year to about 70 million litres per year. Total cost of Income tax 2,192 4.6 2,652 5.0 3 0.3 - - 4,847 4.8 the project will be approximately Baht 194 million from the fourth quarter of 2007 to the third quarter of 2008. Net Profit 1,702 3.6 8,815 16.7 (168) (17.4) 34 (3.7) “ 10,383 10.3 Depreciation & Amortization 2,364 5.0 2,418 4.6 192 19.9 - - 4,974 4.9 EBITDA 6,536 13.7 14,616 27.6 65 6.7 34 (3.7) 21,251 21.1 The Company adopted current accounting policy which require an appraisal to be conducted by independent professional valuer every three to five years to determine fair value of land owned by the Company and its subsidiaries and recorded the impacts in the period ended December 31, 2007 whereas the previous appraisals were conducted in 2003. The appraisals resulted net decrease of Baht 2,121.6 million which Unit :Million Baht were recorded to equity Baht 2,062.7 million and to statements of income Baht 58.9 million. YTD_2006 Beer % to % to % to % to % to /Water Sales Spirits Sales Alcohol Sales Eliminate Sales Total Sales

From the third quarter of 2007 onwards, the reporting of business segments has been rearranged to present Sales 46,103 100.0 51,576 100.0 1,205 100.0 (1,086) 100.0 97,798 100.0 transactions with external customers more meaningfully. Related business segments that normally conduct Cost of sales 35,944 78.0 33,470 64.9 994 82.5 (1,083) 99.7 69,325 70.9 most of their business within the group will no longer be presented separately as in previous periods but Gross profit 10,159 22.0 18,106 35.1 211 17.5 (3) 0.3 28,473 29.1 will be allocated to the Company core business segments which consist of Beer/Water, Spirits and Industrial Selling and administrative Alcohol. The segmental information for the same period of 2006 has been restated for comparison with 2007. expenses 5,768 12.5 6,740 13.1 178 14.8 (2) 0.2 12,684 13.0 Operating profit 4,391 9.5 11,366 22.0 33 2.7 (1) 0.1 15,789 16.1 Group Other income / Interest income 70 0.2 106 0.2 6 0.5 (24) 2.2 158 0.2 EBIT 4,461 9.7 11,472 22.2 39 3.2 (25) 2.3 15,947 16.3 In 2007, total sales revenue of the Company was Baht 100,541 million, an increase of 2.8%, or Baht 2,743 million, Interest expenses 309 0.7 1,202 2.3 62 5.1 (4) 0.4 1,569 1.6 from Baht 97,798 million in the previous year, mainly due to the increase of sales revenue from the spirits business Income tax 1,989 4.3 2,325 4.5 9 0.7 - - 4,323 4.4 of about 2.6% and the beer/water business of about 3.2% Net Profit 2,163 4.7 7,945 15.4 (32) (2.7) (21) 1.9 10,055 10.3 Depreciation & Amortization 2,226 4.8 2,300 4.5 126 10.5 - - 4,652 4.8 Gross profit was Baht 29,668 million, an increase of Baht 1,195 million, or 4.2%, mainly due to higher margin EBITDA 6,687 14.5 13,772 26.7 165 13.7 (25) 2.3 20,599 21.1 from the spirits business. Annual Report 2007 Thai Beverage Public Company Limited

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Increase (Decrease) Beer /Water % Spirits % Alcohol % Eliminate % Total %

Gross profit of Baht 19,016 million reflected an increase of Baht 910 million, or 5%, mainly due to higher margins Sales 1,454 3.2 1,364 2.6 (239) (19.8) 164 15.1 2,743 2.8 Cost of sales 1,096 3.0 454 1.4 (22) (2.2) 20 1.8 1,548 2.2 from new sales price increases and lower raw material cost of molasses. Gross profit 358 3.5 910 5.0 (217) (102.8) 144 4,800.0 1,195 4.2 Selling and administrative EBITDA of Baht 14,616 million increased by Baht 844 million, or 6.1%, mainly due to the above-mentioned higher expenses 688 11.9 315 4.7 (38) (21.3) 40 2,000.0 1,005 7.9 gross profit, which helped cover higher employee expenses and the increase in marketing expenses from free goods Operating profit (330) (7.5) 595 5.2 (179) (542.4) 104 10,400.0 190 1.2 used for sales promotion. Free spirits volume used for sales promotion as a percentage of sales volume increased Other income / Interest income 41 58.6 131 123.6 13 216.7 (45) (187.5) 140 88.6 from 1.3% on average over the year 2006, to 1.7% in 2007. EBIT (289) (6.5) 726 6.3 (166) (425.6) 59 236.0 330 2.1 Interest expenses (31) (10.0) (471) (39.2) (24) (38.7) 4 100.0 (522) (33.3) Net profit of Baht 8,815 million increased by Baht 870 million, or 11%, mainly due to higher EBITDA and lower Income tax 203 10.2 327 14.1 (6) (66.7) - - 524 12.1 interest expense, which covered higher depreciation cost. Net Profit (461) (21.3) 870 11.0 (136) (425.0) 55 261.9 328 3.3 Depreciation & Amortization 138 6.2 118 5.1 66 52.4 - - 322 6.9 EBITDA (151) (2.3) 844 6.1 (100) (60.6) 59 236.0 652 3.2 Industrial Alcohol Business Segment

In 2007, sales of Baht 966 million reflected a decrease of Baht 239 million, or 19.8%, over the previous year mainly due to the decrease in the selling price resulting from oversupply in the Thai market. The sales volume of ethanol The Beer, Soda & Drinking Water Business was 42.6 million litre, a decrease of 8.5% over 2006, and the average selling price decreased from Baht 24.94 per litre in 2006 to Baht 16.63 per litre in 2007. Alcohol 95 sales volume was 16.8 million litres, which mostly Sales revenue of this segment was Baht 47,557 million in 2007, rising by Baht 1,454 million, or 3.2%, mainly due came from exports, an increase of 1,032.7%, while the average sales price decreased from Baht 24.60 per litre to an increase in beer sales volume. Total sales volume of beer was 956.8 million litres, an increase of 3.7% in 2006 to Baht 14.81 per litre in 2007. over the year 2006. Low alcohol beer sales volume was 312.6 million litres, an increase over the year 2006 of 210.7 million litres or 206.9%. The sales volume of soda was 10.6 million litres, a decline of 15.6%, The gross loss of Baht 6 million in 2007 showed a decrease of Baht 217 million, or 102.8% over gross profit and the sales volume of drinking water was 43.8 million litres, an increase of 2.9%. of Baht 211 million in 2006, mainly due to lower sales volume of ethanol and a lower margin caused by oversupply in the domestic market although lower raw material cost of molasses. Gross profit of Baht 10,517 million reflected an increase of Baht 358 million, or 3.5%, over the year 2006, mainly due to the increase of the beer sales volume. EBITDA of Baht 65 million decreased by Baht 100 million, or 60.6%, from the previous year, mainly due to the above-mentioned gross loss; however, other income increased. EBITDA of Baht 6,536 million decreased by Baht 151 million, or 2.3%, over the previous year mainly due to higher employee expenses, marketing expenses and transportation costs that offset the higher gross profit. Free beer The net loss was Baht 168 million, an increase of Baht 136 million or 425% over 2006, mainly due to the decrease volume for sales promotion as a percentage of total sales volume was 8.2% by average over the year 2007, in sales margin and higher depreciation but lower interest expense. close to the 8.1% achieved in 2006.

Net Profit of Baht 1,702 million decreased by Baht 461 million or 21.3% mainly due to lower EBITDA and higher depreciation associated with the commencement of depreciation on the capital expenditure of the Kamphaengphet Financial Position brewery expansion project but lower interest expense. Assets The Spirits Business Total assets as at end of December 2007 was Baht 79,527 million, a decrease of Baht 6,053 million, or 7.1%, compared Sales in the year 2007 amounted to Baht 52,940 million, higher than in 2006 by Baht 1,364 million, or 2.6%, with the end of 2006. Current assets decreased by Baht 393 million, mainly due to the decrease in inventory of mainly due to the increase of brown spirits’ sales volume and the increase in the sales price in May and August. The finished goods. Non-current assets decreased by Baht 5,659 million, mainly due to the sale of land and a building total sales volume of spirits was 446.3 million litres, a decrease of 6.2%. This is attributed to the white spirits’ sales known as the ThaiBev Tower Project, plus the impact of land revaluation, and depreciation of property, plant and volume declining by 10.3% to 329.4 million litres, though brown spirits sales increased by 8.1% to 116.9 million litres. equipment. Annual Report 2007 Thai Beverage Public Company Limited

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Liabilities Financial Ratios Dec.31, 07 Dec.31, 06 Total liabilities as at end of December 2007 was Baht 24,617 million down by Baht 8,409 million, or 25.5%, compared with the end of 2006. This was mainly due to the re-payment of loans and bonds. Current Ratio (times) 1.74 1.28 Total Debt to Equity Ratio (times) 0.45 0.63 The maturity of loans and bonds are as follows. Net asset value per share (Baht) 2.19 2.21 Unit: Million Baht

Within December 2008 10,753 Within December 2009 5,025 Jan.- Dec 07 Jan.- Dec 06 Within January 2010 375 Accounts Receivable Turnover (days) 5 5 Total 16,153 Inventory Turnover (days) Shareholders’ Equity Beer/water Business

Total shareholders’ equity as at end of December 2007 was Baht 54,910 million, an increase of Baht 2,356 million, Finished Goods 15 12 or 4.5% compared with the end of 2006. This was mainly due to the increase of retained earnings although the Raw Materials 4 4 decrease of land revaluation surplus of Baht 2,062.7 million. Spirits Business Liquidity Finished Goods (Excl. Legacy Stocks) 79 75 Raw Materials 12 8 Cash and cash equivalents as at December 31, 2007 was Baht 2,189 million. The net increase from the beginning of the period was Baht 269 million. Details of activities are as follows. Shareholder Returns

Unit: Million Baht Dividends

Net cash provided by operating activities 16,444 The current policy of the Board of Directors is to recommend to our shareholders a dividend of not less than 50% Net cash used in investing activities (715) of net profits after deduction of all specified reserve, subject to investment plans and as the Board of Directors deems appropriate. For the financial year ended December 31, 2007, the Board of Directors has recommended Net cash used in financing activities (15,271) total dividend of Baht 7,281.91 million. Adjustment from financial statement translation (189) Net increase in cash and cash equivalents in period 269 2007 2006 2005 Cash and cash equivalents at beginning of period 1,920 Dividend for the year (Million Baht) 7,281.91 5,524.21 5,280.00 Cash and cash equivalents at end of period 2,189 Number of shares issued (Million Shares) 25,110 25,110 22,000 Interim dividend per share (Baht) 0.12 0.11 - Final dividend per share (Baht) 0.17 0.11 0.24 Net cash provided by operating activities of Baht 16,444 million. This was mainly derived from net income of Baht Total dividend per share (Baht) 0.29 0.22 0.24 10,383 million and adjusted with non-cash items, such as depreciation and amortization, of Baht 4,975 million. Pay Out Ratio (%) 70.13% 54.94% 51.08% Net cash used in investing activities of Baht 715 million was mainly due to the investment activities in property, plant Return on Equity and equipment, which exceeded the proceeds from sales of land and building, called the Thai Bev Tower project. Return on Average Equity (%) 19.3% 23.9% 31.6%

Net cash used in financing activities of Baht 15,271 million was mainly due to the dividend paid of Baht 5,775 Earning Per Share million and the repayments of bonds and loans Earning per Weighted Average Ordinary Shares (Baht) 0.41 0.42 0.47 Weighted Average number of ordinary shares for 25,110 23,785 22,000 the year (million shares) Annual Report 2007 Thai Beverage Public Company Limited

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Risk Factors Operation Risks

Strategic Risks Raw-material or container material price hikes or shortages could raise production costs, potentially hurting the company’s business If the company cannot expand its business to markets for beer and spirits of higher prices, or cannot expand to international markets, the As a rule, raw materials and container materials critical to production and distribution are sold by third-party company’s growth may be affected distributors, making it questionable whether such distributors can deliver them as required. In other words, the company’s operation could be affected by shortages or price hikes of such materials, namely molasses, malt, hops, A major strategy is brand base expansion through the launch of new brands of water, glass bottles, labels, caps, and other packaging products. In addition, some raw materials and container higher prices, which will lead to greater sales revenue. It is believed that beer materials are sold in currencies other than the Baht, therefore making their prices susceptible to changes in and spirits of higher prices in the domestic market have considerable potential foreign-exchange rates, currency controls, government controls, world-market demand-supply changes, and for expansion, and that consumers have altered their behavior of consuming climate. The higher the prices of these materials, the higher the production costs. Unless such cost rises are economy beer and spirits to those of higher prices. That said, business expansion passed on to consumers, the company’s margins will shrink. And if delivery of these materials cannot be sustained, into such markets is very challenging for the company because of intense their prices are bound to sharply rise or affect production processes. All these could raise production costs, competition, thereby calling for massive investments associated with marketing, which may harm the company’s financial status, performance, and business opportunities. brand promotion, distribution development, and product sale, and the company is relatively new to marketing of products under this group. However, without To mitigate such risks, the company has purchased critical raw materials and container materials in advance. development, promotion, and sale of higher-priced products under new brands, the As regards foreign-exchange risks, the company is going to use suitable ﬁ nancial tools together with the policy prohibiting company may lose opportunities for growth, particularly if the demand for premium a speculation on the foreign exchange. beer rises at the expense of economy products. Equally important, this may harm the company’s financial status, performance, and business opportunities. Taking due care of crucial senior executives and succession plan Completed in 2007, expansion at the Kamphaengphet brewery has raised the company’s total capacity to 1,550 million liters per year. One possible strategy is to The company’s business today is executed by a group of senior executives and management team members with export the additional volume of beer to countries like Cambodia, Laos, and extensive experiences in its beverage subsidiaries, the loss of whom without equally competent successors could neighboring countries. However, with relatively little experience in selling consistently hurt the company’s business. high volumes of beer in foreign countries, the company is unsure if it can raise its beer sales overseas. For continued growth and success, the company needs to retain qualified and experienced personnel in management, sale, marketing, and production, and to train personnel to efficiently carry out production and Besides, the company cannot guarantee sale of the above - mentioned additional product distribution. If the company cannot attract, retain, or motivate the above-mentioned personnel, or cannot volume of beer, which accompanies greater fixed costs. Still, the sales prices of find a suitable replacement for them, it is bound to lose customers and revenue. Still, should it successfully attract such beer may not yield commercially acceptable profits - or yield potential losses. and retain such personnel, brain-drains are a distinct possibility, causing the company to pay these personnel If so, the company may need to cut production, which will lower its capacity elevated compensation to keep them, which may in turn harm the company’s financial status, performance, utilization of the brewery in question as well as its profit margin. In short, being and business opportunities. unable to sell the above-mentioned additional volume of beer may harm the company’s financial status, performance, and business opportunities. The Office of Human Resources has initiated projects to continuously and sustainably raise the efficiency and effectiveness of recruitment, development, and retention of personnel critical to the company’s business. To mitigate such risks, the company has set up an international sales team under the International Beverage Holdings Limited to take charge of international business expansion. In addition, to raise sales efficiency, domestic sales personnel have received training on ways to sell higher-priced products. Annual Report 2007 Thai Beverage Public Company Limited

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Financial and Investment Risks

It requires massive investment to conduct and expand the business, which is fraught with This business falls under several regulations, making it susceptible risks and uncertainties to changes in such regulations - including higher costs and business limitations The company’s business is highly capital-intensive, calling for continuous investment in research and development of innovative products, new plant construction, as well as the maintenance and development of existing In the beverage business, compliance is essential to the production, packaging, quality plants. In addition, the company needs to constantly monitor beverage market development, both domestic and maintenance, labeling, and domestic distribution, apart from compliance with the regional (Southeast Asia). regulations of importing countries. Production and distribution are subjected to several laws and regulations concerning the environment and workplace conditions issued by the While past investments relied on loan sources, recapitalization, and internal cash flows, future business capital or Ministry of Public Health, Ministry of Commerce, and Ministry of Finance. Non-compliance fund used for improving breweries and distilleries is likely to come from additional loans and internal cash flows. or violation of these laws and regulations, now or in the future, could result in excessive Should such loan sources, however, be unavailable under desirable commercial conditions, the company may expenses and harm the company’s ﬁ nancial status, performance, and business opportunities. need to call for recapitalization, which will dilute shareholding. If the company cannot find a proper loan source, this may harm the company’s ﬁ nancial status, performance, and business opportunities. The company must also comply with regulations concerning beer and spirits advertisement, which is subject to more rigorous enforcement in the future, thereby To mitigate such risks, the finance group is required to participate in every investment planning, so that it may use diminishing the current and future marketing capability of such products, which may pertinent information for its future financial structure preparation. harm the company’s financial status, performance, and business opportunities.

The government’s regulations concerning the time and location of alcoholic beverage sale, or other future limitations concerning retail sales, could hurt sales, which may harm Compliance Risks the company’s ﬁ nancial status, performance, and business opportunities.

Tax hikes or changes in tax computation methods may affect the demand for the company’s products The Risk Management Committee has assigned relevant ofﬁ ces to constantly monitor and report on new laws and regulations so that business and production departments The alcoholic beverage business calls for not only collection of excise and interior taxes, but contribution to the may efficiently develop marketing strategies and modify production processes national fund for health promotion as well. Therefore, any tax hike or change in tax computation methods could to mitigate the impacts. cause the company to raise product prices at the expense of consumption and sales revenue. Apart from this, the company could end up wholly or partially bearing additional tax burdens. All these may harm the company’s Compliance and exemption from compliance with environmental laws financial status, performance, and business opportunities. and regulations could hurt the company’s fi nancial status, performance, and business opportunities Business expansion to products of higher prices and the international market plays an instrumental role in mitigating such tax implications for the company and its financial standing. Operation under this business comes under laws concerning the environment, health, and safety, as well as those concerning air emissions, effluent discharges into water bodies, and related matters. Violations are regarded as both civil and criminal offenses, potentially resulting in the revocation of licenses and factory closure. Even if the company is not the culprit, expenses are bound to be incurred for fact-finding examination and elimination of contaminants.

Expenses are naturally incurred for compliance with the laws concerning the environment, health, and safety, and other regulations alike. If new laws become more rigorous or drastically modified, if it can be proved that the company’s past operation emitted contaminants without the company’s knowledge, or if new regulations are issued concerning the cleaning of contaminants, more expenses than previously projected are a possibility, which may harm the company’s ﬁ nancial status, performance, and business opportunities. Annual Report 2007 Thai Beverage Public Company Limited

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IBHL Highlights

International Beverage Holdings Limited

International Beverage Holdings Limited (InterBev) has been established to be the international arm of Asia’s leading drinks business, the Thai Beverage Public Company Limited (ThaiBev) with an outstanding portfolio of beverage alcohol brands across spirits, wine and beer categories.

These global operations are managed out of our 4 regional headquarters located in Hong Kong, Singapore, North America, and the United Kingdom together with our major scotch operation of 5 distilleries in Scotland.

We currently export our brands to over 80 countries outside Thailand, managing this directly with our in-house sales and marketing teams as well as through suitable local distributors where relevant.

The changing face of the world’s drinks industry will create opportunities for the development of our company in the years ahead. Consumers are demonstrating an increasing desire to trade up to more premium products as well as to experiment with new and interesting brands and these are just two of the trends that we believe will help InterBev achieve its strong brand growth targets.

A successful redesign of core Thai products for key export markets

We aim to build a strong and unique brand presence in all our core target markets throughout the world and 2007 The Risk Management Committee has assigned relevant offices to constantly monitor and report on new laws and has already seen the repackaging and successful launch of the iconic Chang Beer and Mekhong brands on the regulations so that production departments can prepare to modify production processes and successfully comply international stage with laws and regulations while mitigating potential impacts. • Chang Beer, Thailand’s number one beer brand, has been repackaged and recently launched in Enactment of a 1999 Thai law against trade monopoly could affect the company’s financial status, the major Western markets including the USA, UK, Europe and Australia with a focus on the premium performance, and business opportunities imported beer market. • Mekhong has also been revamped to appeal to the more discerning spirits drinkers. It will be sold The Trade Competition Act of 1999 prohibits practices against free trade while empowering the Trade Competi- through high-end restaurants and cocktail bars in Europe, and North America with the help of its tion Commission to issue injunctions to dominant operators and unfair operators to refrain from, suspend, or alter Thai-inspired collection of cocktail recipes. their market shares. Unfair practices include price fixing and making unfair conditions. Since the company is Thailand’s largest brewer and distiller, with several products occupying leading market shares, it is subject to Major relaunch of flagship malt whisky brand complaints from rivals and other parties of unlawful practices. Therefore, the act and accompanying regulations could harm the company’s financial status, performance, and business opportunities. Balblair, one of our high-end malt brands, was also successfully repackaged and relaunched during 2007 in our biggest-ever launch programme to date for a single malt whisky. The Risk Management Committee has assigned the Office of Legal Affairs to investigate and closely monitor such law and regulations, and educate other units to prevent wrongdoings. The striking new identity has been carefully crafted and will mean the vintages offer a superior choice for informed whisky drinkers across Europe, North America and the fast growing Asian region. Thai Beverage Public Company Limited has established a systematic risk management process, with at least quarterly meetings of the Risk Management Committee designed to review risk levels, issue measures, and approve Inver House Distillers, which was purchased by InterBev during 2007, has beneﬁ ted from a buoyant Scotch market contingency outlays for risk management. The objective is to ensure that these risks are accounted for by company as well as a strategic shift towards focusing more on core malt brands. As a result, pre tax profits have risen personnel and work plans prudently executed, so that if undesirable events occurred, the damage could be alleviated. significantly from the same period in 2006. Annual Report 2007 Thai Beverage Public Company Limited

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Our People Our Success

We believe that our people are the most crucial engine appropriate career and development opportunities. alignment of people performance with corporate efficiency improvement. All implemented ideas were that drives our sustainable growth and future success We also develop a career and development plan for performance as well as a performance-oriented culture. collected and maintained in databases to share and and that human capital is one of the critical pillars of each workforce group which properly aligns with The process involved senior management and middle allow others to learn from them. Knowledge can be our growth strategy. We aim to develop happy, highly- business needs and growth. management in managing and driving the expected passed on throughout the organization which is the committed, and performance-driven teams instilled performance of the organization, the departments, and beginning of– a learning organization. with social responsibility spirit. By our definition, a high the individuals. A performance monitoring system is performer highly contributes to the success to the Career Opportunities also applied to the implementation of key strategic organization and the well-being of society. initiatives, which strengthens disciplined execution. TEAM SPIRIT: THE POWER OF ONE The opportunities for our people are expanding with Our people will grow together with our business in our business. With our business expansion, our people At ThaiBev, we believe in working as a team. We recognize competency development and career opportunities. We are also provided with greater career opportunities, Learning and Development the power of unity and the power of our people when they have launched the Human Capital Transformation Program not only within our current businesses, but in the share and collaborate. The organizational structure, to align our human capital management and development businesses of non-alcoholic beverages as well as We believe in providing our people with learning and work processes, and work assignments encourage with our business strategy and long-term direction. non-beverages across the ThaiBev Group. We are development opportunities. Along with our growth teamwork across the organization. In short, our meaning The initiatives of this program will enhance the strategic committed to providing borderless opportunities to our strategy, our human resource development plan has of teamwork is equal to cross-functional teams. Our alignment of all human capital elements within the people. We initiate the “employee exchange program” been defined to reflect the required strategy for critical learning and development approach also emphasizes employee lifecycle: workforce planning, career deployment with our strategic partners, where our people can obtain capabilities. Learning and development is through on how to develop the spirit of teamwork and how to and management, performance management, reward experience and knowledge from working with different knowledge sharing on–the-job training and regular form teams that work. One of the performance factors management, learning and development, retention organizations and different people. These are not only training session, local and international. We prepare the that we use to evaluate our people is the ability to management, and workplace management. career opportunities, but also learning opportunities next generation of leaders by providing our middle work as a team and collaborate with others inside and which have proven powerful to our people and our business. management with opportunities to explore new outside their work units. We aim to continually cultivate management techniques and practical experiences in team spirit as our core value. The power of one will be Employee Segmentation our mini-MBA program. The program was organized and realized when our people work as an effective team and Performance Management designed in conjunction with Chulalongkorn University, we will do our best to make it happen. We care for different needs among our different Thailand’s top university. We successfully develop workforces. We arrange our employees into groups We have recently adopted the key performance highly-qualified brew masters as well as engineers and A high-performance organization is made up of which represent the nature and characteristics of job indicator (KPI) system as the key mechanism of our spirit production’s technical team by providing our high-performing people. At ThaiBev, it is our commitment and required competencies. It enables us to develop performance management where the expected people with both in-house and overseas training. Our to develop happy and highly-competent people who human resource management mechanisms to match corporate performance was cascaded down to the people learn from our “continuous improvement pro- can fulfill their career aspirations and grow their the different needs of each workforce while providing operating level. The system has enhanced the strategic gram” which allows them to initiate new ideas for potential domestically and internationally. Annual Report 2007 Thai Beverage Public Company Limited

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Credit Rating Announcement

ON FEBRUARY 18, 2008, THE ANNUAL REVIEW ANNOUNCEMENT, TRIS RATING CO., LTD. (“TRIS”) AFFIRMED THE RATING OF THAI BEVERAGE PLC. (“THAIBEV”) AND THE RATING OF THAIBEV’S SENIOR GUARANTEED DEBENTURES OUTSTANDING BAHT 3,000 MILLION AT “AA-” WITH A “STABLE” OUTLOOK. To gain an international credit rating in order to establish Company’s overseas credit flexibility in the financial markets, the Company engaged Standard and Poors (“S&P”) and Moody’s Investors Service Pty Limited (“Moody’s”), both well-recognized globally in their field. On January 15, 2007, S&P assigned the ThaiBev rating at “BBB” rating with a “Stable” outlook, and Moody’s rated the ThaiBev rating at “Baa2” with a “Stable” outlook.

Note: The Thailand Country Rating from TRIS is “AAA”, “BBB+” from S&P and “Baa1” by Moody’s. The rating, if assigned, will be subjected to revision or withdrawal by each of the Rating Companies, TRIS, S&P or Moody’s when there has been material change to the rating and/or annual review and/or review on opinion of each of the Rating Companies. Annual Report 2007 Thai Beverage Public Company Limited

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Awards Onward to the Number One spot with Thai Beverage Public Company Limited the pride of Thai businesses.

Thai Beverage Public Company Limited (“ThaiBev”) Shortly after, the Company was named Best Investor and to increase awareness through the encouragement listed on the Singapore Exchange (SGX) with the intention Relations in the 2006 Singapore Market By a Thai of social responsibility reporting that business enterprises of becoming a good example of a public company with Company by IR Magazine. This UK journal relating to and organisations are responsible to the community good corporate governance. We stated at that time investors relations is published worldwide. To illiustrate both as employers and corporate citizens.” that we would try not simply to follow the rules and further that the Company had not relaxed its efforts regulations of the market with regard to disclosure and to maintain steady communications with investors, Besides corporate governance, ThaiBev has received Thai Beverage PLC. wins the transparency, but would strive to exceed them. Our “2006 Merit Award for Transparency among ThaiBev was awarded Best Investor Relations in the international recognition for the quality of the drinks it success can only be measured by the stakeholders newly-listed Companies (New Issue) Singapore Market By a Thai Company in 2007 also. produces. It was a matter of great pride that the Company who experience our services firsthand. We were proud on the Singapore Exchange” The judging panel cited as its reason for bestowing was awarded a gold medal at the Australian International to receive some recognition within a very short time the Best Investor Relations award on ThaiBev as: Beer Awards (AIBA) 2007 for its Archa Beer. The beer after listing in Singapore when it was announced we “Thai Beverage Public Company Limited has a very won over the judges to claim the coveted Gold Medal in had been awarded The Securities Investor Association good person doing its investor relations, especially in the European Lager Division. The Company holds the of Singapore’s (SIAS) 2006 Merit Award for transparency terms of explaining the business, providing disclosures distinction of being the first Thai company to win a gold among newly-listed companies (New Issue) on the and being knowledgeable about the company.” medal at AIBA, which is a globally recognized beer Singapore Exchange. This was given to ThaiBev to declare competition, in 1998 with Chang beer. that it was among the most transparent new listings Contrary to popular belief, the eligibility for the “Best in Singapore as the company has hosted activities Investor Relations in the Singapore Market”award is not Inver House Distillers was named ‘International Distiller to disseminate information to investors and media restricted to companies listed on the SGX, but rather of the Year’ in February 2008. The company beat off continuously, as well as for transparently running its all Southeast Asian companies that had some form of competition from exceptional companies throughout business. investor relations activities in Singapore in that year. the world, including Japan, Ireland, Canada, India and There were no runners-up in 2007. Sweden and the USA.

Acclaim for “Capital Markets Deal of As the Company’s listing in Singapore was one of the largest Inver House, who in the last year has globally re-launched the Year 2006” in terms of market cap, it was perhaps unsurprising their Balblair Single Malt as a super-premium ‘vintage’, that the listing was recognized and nominated for the IFR reached the final of the ‘Icons of Whisky’ event by first Asia Awards 2006. In February, 2007, IFR Asia Magazine beating competition in Scotland from Glenmorangie, named ThaiBev as winner of the Thailand Capital Market Bowmore and William Grant & Sons, before claiming Deal of the year-Singapore IPO 2006, based on the ﬁ rm’s whisky’s highest accolade over seven other global initial public offering in Singapore of S$ 1.37 billion. finalists. The industry-voted award is designed to highlight the company who has ‘shown the most Most recently, ThaiBev also garnered a silver medal for commitment to the development of whisky at all best annual report by a newly listed company by the levels’ and is highly sought after. Singapore Corporate Awards. The Awards are organised by the Business Times in collaboration with UBS and The event’s international judging panel recognised supported by the SGX. The Award “seeks to encourage Inver House for bringing ‘dynamic, inspirational and excellent financial reporting presentation and a wider dedicated passion’ to the world of whisky. Said one of scope of disclosures beyond the minimum regulatory the judges, “Inver House pioneer a creative approach Whisky Magazine for “Icons of Whisky Distiller of the Year 2008” requirements... to create awareness of the role of to whisky and we believe that their team brings genuine both mandatory accounting standards and voluntary passion and fresh thinking to all they do. They’ve made practices issued and recommended by the Council a very bold statement in recent times and every person on Corporate Disclosure and Governance and The on our panel strongly backed their win.” IR Magazine accolades for “Best Investor Relations” Institute of Certified Public Accountants of Singapore Annual Report 2007 Thai Beverage Public Company Limited

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Corporate Governance Report

The Board met 10 times in 2007, and the following table shows directors’ attendances up to December 31, 2007:

Name Position Number of Attendances / Total of Meetings May 30, 2006 is the day that we will never forget. It 1. Mr. Charoen Sirivadhanabhakdi Chairman 9/10 was the day that our symbol “THBEV” started ticking 2. Khunying Wanna Sirivadhanabhakdi Vice Chairman 9/10 on the main board of Singapore Exchange. THBEV 3. Mr. Narong Srisa-an Vice Chairman 9/10 conducts our business activities with a view to bring 4. Mr. Komen Tantiwiwatthanaphan Vice Chairman 10/10 value of added to our shares and ensure benefit to our (1) 5. Mr. Paisal Chevasiri Director 1/10 stakeholders. As time goes by, our commitment to good 6. Mr. Puchchong Chandhanakij Director 10/10 corporate governance remains unchanged. The adherence 7. Mr. Staporn Kavitanon Independent Director and Audit Committee Chairman 7/10 to the principles and guidelines of the Singapore Code 8. Prof. Kanung Luchai Independent Director and Audit Committee Member 10/10 of Corporate Governance 2005 stay with us. 9. Mr. Manu Leopairote Independent Director and Audit Committee Member 9/10 10. Mr. Ng Tat Pun Independent Director and Audit Committee Member 6/10 In 2007, we were proud to receive Best Investor 11. Mr. Michael Lau Hwai Keong Independent Director 9/10 Relations in the Singapore Market by a Thai Company 12. Prof. Pornchai Matangkasombut Independent Director 8/10 in 2007 award. 13. Mr. Sakthip Krairiksh Independent Director 7/10 14. Gen. Choo-Chat Kambhu Na Ayudhya Independent Director 9/10 15. Mr. Vivat Tejapaibul Director 4/10 The Board’s Conduct of Affairs (2) 16. Mr. Panote Sirivadhanabhakdi Director 6/10 17. Mr. Samut Hatthasing Director 8/10 Principle 1 (3) 18. Mr. Thapana Sirivadhanabhakdi President 9/10 Our Board of Directors oversees the Company’s business 19. Ms. Kanoknart Rangsithienchai Director 10/10 and affairs with shareholder approval in accordance with 20. Mr. Sithichai Chaikriangkrai Director 10/10 applicable laws. The Board must exercise good business 21. Mr. Ueychai Tantha-Obhas Director 8/10 judgment and act in good faith for the best interests 22. Dr. Pisanu Vichiensanth Director 9/10 of the Company. 23. Mr. Chukiet Tangpongprush Director 10/10

Remark (1) Mr. Paisal Chevasiri resigned from the member of the Board of Directors effective on February 26, 2007. (2) Mr. Panote Sirivadhanabhakdi was appointed the member of the Board of Directors on February 27, 2007. (3) Mr. Thapana Sirivadhanabhakdi was appointed the President by the Board of Directors on January 18, 2008. Annual Report 2007 Thai Beverage Public Company Limited

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Matters Requiring Board Approval some of them are also top executive officers of the • approve the appointment of the Company’s representatives to the Board and/or subsidiaries’ subcommittees to Our Board recognizes their duties to Company’s Company. To enhance Company business operation, ensure compliance with the Company’s business policies, goals, plans, strategies, budget and other management shareholders. They oversee and responsible for the the Board granted them the authority to perform their powers approved by the Board, to improve efficiency and facilitate the business; administration of the Company’s affairs and thus duties. To help the Board run the Company properly, ensure that the Company complies with the law, its it established four committees: the Audit Committee • supervise and approve operational issues; at times appointing or authorizing persons to engage specified Articles of Associations and objectives. In addition to (AC), Risk Management Committee (RMC), Nomination activities on behalf of the Executive Committee, or appoint subcommittees with particular knowledge and its general oversight of management in compliance Committee (NC) and Remuneration Committee (RC). expertise to manage and screen work before discussion by the Executive Committee, provided the with shareholders’ resolutions in good faith, our Executive Committee is entitled to repeal or modify the scope of such authorization; and Board ensures that the Company and its subsidiary Normally the Executive Committee meets once a month companies comply with the Listing Manual of the to oversee business operations, or more than once to • perform any other activity delegated by the Board. Singapore Exchange. consider and approve any important or urgent matter. No one, including the Executive Committee, is authorized to approve any transaction in which the board or the The Board is required by the law to meet not less than The Board also appoints executive members to hold individual has or may have a conflict of interest, or where the transactions require the approval of the Board and/or four times a year, during 2007 the Board met more directorships in subsidiaries, both domestic and of a Shareholders’ meeting. than requirement in order to consider special issues. overseas, to monitor the Company’s interests. In brief, the Board monitors major plans and activities, During 2007, the Executive Committee met 18 times and the following table shows Executive Committee’ s and oversees control of subsidiary companies. The Executive Committee’s responsibilities are to: attendances up to December 31, 2007:

Training • prepare and propose business plans, targets, Name Position Number of Attendances / Total of Meetings All directors have passed the Director Accreditation operational plans, business strategies and annual Program (DAP) of the Thai Institute of Directors. budgets for the Board of Directors; 1. Mr. Charoen Sirivadhanabhakdi Executive Chairman 13/18 Some also accredited the Director Certification 2. Khunying Wanna Sirivadhanabhakdi 1st Executive Vice Chairman 10/18 Program (DCP) of the same institution. We also encourage • determine business plans, budgets and management 3. Mr. Narong Srisa-an 2nd Executive Vice Chairman 15/18 and support directors to understand Singapore Law authorizations for approval; 4. Mr. Komen Tantiwiwatthanaphan 3rd Executive Vice Chairman 17/18 (1) and the Listing Manual applicable to our Company 5. Mr. Samut Hatthasing 4th Executive Vice Chairman 16/18 through in-house training and information updating. • monitor the operations of the Group, that they are in 6. Mr. Puchchong Chandhanakij 5th Executive Vice Chairman 17/18 (2) line with business plans, targets, operational plans, 7. Mr. Thapana Sirivadhanabhakdi President 11/18 All directors receive a clear explanation of their roles business strategies, budgets and management 8. Ms. Kanoknart Rangsithienchai Executive Vice President 18/18 and responsibilities at the time of their proposed authorizations approved by our Board to facilitate 9. Mr. Sithichai Chaikriangkrai Senior Vice President 18/18 appointment to the Board. corporate efficiency and appropriate to business 10. Mr. Ueychai Tantha-Obhas Senior Vice President 13/18 conditions; 11. Dr. Pisanu Vichiensanth Senior Vice President 16/18 12. Mr. Chukiet Tangpongprush Senior Vice President 17/18 Board Composition and Guidance • propose investments, borrowing or lending, including acting as a guarantor if that is in line Remark (1) Mr. Samut Hatthasing resigned from President effective on January 1, 2008. He was appointed the 4th Executive Vice Chairman Principle 2 with the normal business of the Group; by the Executive Committee on December 25, 2007. Board of Directors (2) Mr. Thapana Sirivadhanabhakdi was previously Executive Vice President and appointed President and CEO by the Board of Our Board consists of 22 directors, including eight • approve payments as determined by our Board; Directors on January 18, 2008. independent directors, or more than one-third. Each (3) On February 27, 2008 the Board of Directors appointed three additional Executive Committee members, who are Mr. Sawat Sopa, director either has long-term experience in business • determine the organization and management Mr. Saikeaw Vongpisethkul and Mr. Jean Lebreton. or attained honorary positions. structure of the Group for the Board;

Executive Committee • supervise and approve all employment and salary On January 18, 2008 the Board approved the change of the composition of the Executive Committee. The Executive The Board appointed an Executive Committee matters relating to the Company (other than Committee will be elected from directors and/or other persons as the Chairman of the Executive Committee (previously called “Executive Board of Directors”), which matters which are within the purview of the RC); deemed appropriate and propose the nominee(s) to the Board of Directors to approve the appointment. consists of 12 members from the Board members; Annual Report 2007 Thai Beverage Public Company Limited

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Audit Committee relations among the Board,Executive Committee and Board Performance The Audit Committee members are Mr. Staporn Kavitanon, management.The Chairman approves the agenda for Prof. Kanung Luchai, Mr. Manu Leopairote, and Mr. Ng Tat Board and Executive Committee meetings and exercise Principle 5 Pun. The Chairman of the Audit Committee is Mr. Staporn control over quality, quantity and timeless of the flow of Our Board members include self-assessment in their If a member of the RC has an interest in a matter Kavitanon. information between management and the Board. In performances, and take the result of business operations deliberated by the Committee, he will abstain from addition, an independent director who is a Singaporean into their consideration. The Board expressed opinions participating in the review and approval process for The AC meets at least each quarter. Please refer to Audit was appointed to act as the lead independent director and asked questions in the meeting to exercise their that matter. Committee Report. for Interested Persons Transactions undertake by our duty of care. Group. Risk Management Committee Level and Mix of Remuneration The Risk Management Committee members are the On January 18, 2008, Mr. Thapana Sirivadhanabhakdi Access to Information directors, Mr. Narong Srisa-an, Mr. Samut Hatthasing, was appointed President and Chief Executive Officer to Principle 8 Ms. Kanoknart Rangsithienchai, Mr. Thapana oversee the business operation in accordance with Principle 6 The components of remuneration are structured to Sirivadhanabhakdi, Mr. Chukiet Tangpongprush, the new business plan of the Company. We are committed to providing our Board members reward both executive and non-executive directors Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, with adequate, complete, continuous and timely based on corporate and individual performance, Dr. Pisanu Vichiensanth, Mr. Puchchong Chandhanakij, information before Board meetings. The Board including our two top executives. The level of and the employees, Mr. Chalerm Pornrutchakit, Mr. Board Membership members have separate and independent access to remuneration reﬂ ects their experience and dedication. Pichit Burapavong, Mr. Mahin Kraivixien, and Mr. Thidi the Company Secretary. The Company Secretary, in The remuneration bands rank from A to C as follows. Suwanarat who is the secretary to the Committee. The Principle 4 consultation and cooperation with the Office of Legal Chairman of the Risk Management Committee is In order to assure a transparent process for the Affairs, is responsible for advising the Board, through Remuneration Bands: Mr. Narong Srisa-an. appointment of new directors to the Board, we the Chairman, on all governance matters. In this respect, established the Nomination Committee (NC) to review and we set up a Compliance Unit, having a Compliance “A” refers to remuneration below the equivalent Among others responsibilities, the Risk Management assess candidates for directorships (including executive Manager responsible with the unit under supervision of of S$250,000 Committee ensured the analysis of both internal and directorships) before making recommendations to our the Company Secretary. This is to ensure compliance external risks, determined the acceptable level of risks Board. The NC also reviews the retirement and re-election with legal and regulatory requirements. The Board “B” refers to remuneration between the equivalent with timely review the criteria of risk management. of directors at each annual general meeting under our approves the appointment and the removal of the of S$250,000 and S$499,999 Articles of Associations and makes recommendations Company Secretary. This year the Company Secretary Nomination Committee to the Board. attended all Board meetings and Executive Committee “C” refers to remuneration between the equivalent The Nomination Committee members are Mr. Staporn meetings. of S$500,000 and above. Kavitanon, Mr. Manu Leopairote, and Khunying Wanna The NC consists of three directors with a majority of Sirivadhanabhakdi. The Chairman of the Nomination independent directors, including the Chairman. It The Company entered into a long-term employment Committee is Mr. Staporn Kavitanon. adopted a charter and proposed it to the Board for Procedure for Developing agreement with Dr. Pisanu Vichiensanth, who is our approval. Remuneration Policies director, the Managing Director of Beer Thai (1991) Remuneration Committee Public Company Limited and a Senior Master Brewer. The Remuneration Committee members are Mr. Staporn The Company also established a Remuneration Committee Principle 7 Kavitanon, Mr. Manu Leopairote, and Prof. Kanung Luchai. (RC) that makes recommendations to the Board, for it The Remuneration Committee reviews matters The Chairman of the Remuneration Committee is to endorse remuneration policies and guidelines, and concerning the remuneration of Board members, Mr. Staporn Kavitanon. to set the remuneration for Directors, Executive Directors, Presidents, Executive Vice Presidents and Senior President, Executive Vice Presidents and Senior Vice Vice Presidents in consultation with the Chairman of Presidents. the Board. Chairman and Chief Executive Officer In performing their roles, our NC and RC adhere to the Principle 3 law and the Listing Manual applicable to our Company. Our Chairman and Chief Executive Officer is the same person. Our Chairman encourages constructive Annual Report 2007 Thai Beverage Public Company Limited

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Disclosure of Remuneration Audit Committee

Principle 9 Principle 11 As at December 31, 2007, directors and two top executives received the remuneration under the following bands: The Board appointed an Audit Committee, which In this respect, the AC appointed the head of the Office consists of four independent directors: three Thais of Internal Audit the secretary to the AC. Annual audit Name of Directors Remuneration Band and one Singaporean. Their responsibilities are clearly schedules ensure that the performance of internal set forth in the Audit Committee Charter, for instance, audit is accurate. 1. Mr. Charoen Sirivadhanabhakdi C assessing the adequacy and effectiveness of the 2. Khunying Wanna Sirivadhanabhakdi B internal controls, preparing the process of financial 3. Mr. Narong Srisa-an C statements and information disclosures and reviewing Communication with Shareholders 4. Mr. Komen Tantiwiwatthanaphan B (1) the compliance with applicable laws, regulations and 5. Mr. Paisal Chevasiri A rules of the Stock Exchange of Thailand and the Singapore Principle 14 6. Mr. Puchchong Chandhanakij B Exchange. This includes internal investigations and Not only we make various announcements via 7. Mr. Staporn Kavitanon A consideration of Interested Persons Transactions to SGX-NET to communicate with our shareholders, Mr. 8. Prof. Kanung Luchai A prevent an occurrence of conflict of interests. Richard W. Jones, head of Investor Relations Unit 9. Mr. Manu Leopairote A works closely with our top management to ensure 10. Mr. Ng Tat Pun A timely disclosure. The unit arranges quarterly brieﬁ ngs 11. Mr. Michael Lau Hwai Keong A Internal Controls following the disclosure of interim and full year results, 12. Prof. Pornchai Matangkasombut A so that investors may query management about 13. Mr. Sakthip Krairiksh A Principle 12 financial, marketing or strategic issues. Between 14. Gen. Choo-Chat Kambhu Na Ayudhya A Our Board values a sound management internal control reporting periods, the unit regularly meets with

15. Mr. Vivat Tejapaibul A (Remark: 1 S$ = Baht 24) (2) system. To safeguard shareholders’ investments and investors to communicate the policies and strategies 16. Mr. Panote Sirivadhanabhakdi A the Company’s assets, it appointed an Executive of the Company so that investors have a good 17. Mr. Samut Hatthasing C Committee, each member of which oversees different understanding of them. Investor Relations provides 18. Mr. Thapana Sirivadhanabhakdi C departments and business units to ensure the adequacy timely detailed information via the corporate website. 19. Ms. Kanoknart Rangsithienchai C of financial, operational and compliance controls, The unit also reports to management about investors’ 20. Mr. Sithichai Chaikriangkrai C including risk management policies. comments and concerns. Contact information for the 21. Mr. Ueychai Tantha-Obhas C Investor Relations Unit appears in this annual report 22. Dr. Pisanu Vichiensanth C In support of this, the Board also assigned the Office or on the investor relations section of the corporate 23. Mr. Chukiet Tangpongprush B of the Corporate Secretariat to oversee compliance website http://www.thaibev.com/set/investor.html. with the law and regulations concerning public Top Executives companies and the issuer of securities. 1. Mr. Sawat Sopa B 2. Mr. Saikeaw Vongpisethkul* A Based on the information provided to it, the AC believes that the system of internal controls and risk management Remark (1) Mr. Paisal Chevasiri resigned from the member of the Board of Directors effective on February 26, 2007. is adequate. (2) Mr. Panote Sirivadhanabhakdi was appointed the member of the Board of Directors on February 27, 2007 in replace of Mr. Paisal Chevasiri. Internal Audit Accountability Principle 13 Principle 10 The Company established the Office of Internal The Board is responsible for providing a balanced and understandable assessment of the Company’s performance, Audit to assist the Board through Audit Committee and for providing shareholders with quarterly and annual financial reports. The financial statements for the first (AC) in promoting sound risk management and good three quarters are released to shareholders within 45 days of the end of each quarter. The annual result is released corporate governance by assessing the adequacy and within 60 days of the end of each financial year. In addition, our top management also participated in quarter effectiveness of the internal controls for key businesses results briefing and telephone conference from time to time. This is to ensure the timely update to our investors. and operations in areas described in the audit plan. Annual Report 2007 Thai Beverage Public Company Limited

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Corporate Social Responsibility Report

Activities related to education included a joint program with other members of the Thai private sector to set up a fund for Thai students and educators who wish to pursue higher studies at Johns Hopkins Universi- ty’s Paul H. Nitze School of Advanced International Studies (SAIS), as well as activities to promote Thai and US relations. In addition, ThaiBev sponsored the construction of a school building for Wat Hom Kred School, Sam Phran District, Nakhon Pathom Province. Other projects and activities included support to educational funds, school lunches for needy students, provision for educational equipment and sports Thais Are Ready to equipment. On arts & culture, one of ThaiBev’s major projects was the renovation of mural ThaiBev embarked on paintings in the Buddha Saiyas Vihara, or the chapel of the Reclining Buddha, at the 8th “ThaiBev Unites to Give Each Other… Wat Phra Chetuphon Wimonmangkhlaram Rajwaramahawihan. The 150-year-old-plus Fight the Cold” project in paintings here were a prototype of the Rattanakosin Period art. The restoration took which 200,000 blankets 10 years to complete and was ready for public viewing in 2007. The mural paintings, worth 30 million baht Thai Bev for Thai Society particularly the ones higher up near the ceiling thus difficult to view, were were donated to villagers photographed and put on exhibit. Incidentally, these photographs appeared in in 15 northern and the 2008 ThaiBev calendar. northeastern provinces. Since the establishment in 2003 of Thai Beverage Public Company Limited, a conglomerate of affiliated companies, our core commitment has been to map out the policy and implement projects that benefit The healthcare aspects included the donation of modern medical equipment for the Thai society, Thai people, and Thai spirit. This is because ThaiBev is convinced that ‘Thais never the Chalerm Phra Kiat Sixth-cycle Birthday Anniversary of His Majesty the King abandon other Thais’. Thais are ready to help each other, as reflected in ThaiBev’s social activities. Building, Phra Mongkutklao Hospital, valued at 3,000,000 baht. In addition, the These activities can be categorized into four aspects: education, sports, healthcare, and arts & culture. much appreciated “Chang Clinic” in Kamphaengphet Province has continued to provide the people in the surrounding community with diagnosis and treatment All through the years, ThaiBev has always been at the forefront in the private sector in its contribution by experienced specialists from hospitals in Bangkok and Kamphaengphet who to society. Our Corporate Social Responsibility (CSR) projects will be further strengthened as volunteer their time at the clinic. Other healthcare activities included donation everyone at ThaiBev, from senior executives down to the junior staff, recognizes the importance of ambulances to hospitals, donation of equipment to the mobile prostheses of participating in public service activities. The importance of the support for the society has units of the Maha Vajiralongkorn Foundation and many other activities. been impressed upon all ThaiBev staffs, and is now being disseminated throughout the country. The sports aspects included our active support to football, volleyball, tennis, snooker, In 2007, ThaiBev implemented several projects under our commitment to “Give back to the Thai and many other sports of interest to the Thai people, with expectations of improving Society”. These projects included “ThaiBev Unites to Fight the Cold”, “Drive Safely with ThaiBev”, the health of Thai youths, sporting skills and future victories in the international arena. as well as other projects to help flood victims. The ‘ThaiBev Unites to Fight the Cold’ project has been carried out for eight consecutive years. This year we donated 200,000 blankets to villagers ThaiBev also launched the “ThaiBev… Thai Talent” project in support of talented in 15 northern and northeastern provinces. The ‘Drive Safely with ThaiBev’ project, a joint project and gifted young Thais in various fields. These fields include music, sports, with the Royal Thai Police for the second year in a row, urged motorists to minimize road accidents arts & cultural, and educational. Assorted forms of support are provided, such as and drive properly. As part of the project, safety helmets were given away to motorcyclists scholarships, travel expenses to participate in tournaments or events in Thailand while copies of “Drive Safely with ThaiBev” manual were distributed to motorists in general. and abroad, as well as allowances. Annual Report 2007 Thai Beverage Public Company Limited

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One of the “Drive Safely with ThaiBev” projects was to provide 10,000 safety helmets to motorcyclists in Bangkok and the provinces. ThaiBev helmets were of Khunying Wanna Sirivadhanabhakdi, high safety standards as certified by the Thai Vice Chairman of ThaiBev, dedicated Industrial Standard Institute. Picture shows the happy the ‘SangSom’ school building to atmosphere at the ceremony attended by hundreds of Wat Hom Kred School in Sam Phran motorcyclists. District of Nakhon Pathom Province. ThaiBev donated 3-million-baht Khunying Wanna (left) is shown worth of medical equipment to presenting a token photo of the building the Chalerm Phra Kiat Sixth-cycle to Khunying Kasama Varavarn, Birthday Anniversary of His Majesty Secretary-General of the Basic the King Building, Phra Mongkutklao Education Commission. Hospital. Accepting the donation from Khunying Wanna Sirivadhanabhakdi (right) was former prime minister General Surayud Chulanont (4th from left).

The renovation of mural paintings at Buddha Saiyas Vihara, Wat Phra Chetuphon Wimonmangkhlaram Rajwaramahawihan (Wat Pho) which began in 2000 was finally completed in 2007. Attending the press conference at the completion of the renovation and the ThaiBev presented 2 million baht cash opening of the photo exhibition to the national soccer team as a way was ThaiBev President, to provide moral support. ThaiBev President, Mr. Thapana Sirivadhanabhakdi Mr. Polapatr Suvarnazorn (right, center), ThaiBev Mr. Thapana Sirivadhanabhakdi (center, (left), the abbot of Wat Phra Vice President for External Affairs, presented a in yellow shirt), said the Thai national team Chetuphon (center) and donation to cover the travel expenses of the Sax deserved the award for its gutsy performance well known photographer, Chamber Orchestra, which was on its way to give and determination. Mr. Nitikorn Kraivixian (right). concert performances in Germany and Switzerland. This troupe consisted of talented youths under the ThaiBev organized a joint program with Thai private sector “ThaiBev… Thai Talent” project. Accepting the donation called The PremTinsulanonda Fellowship Program, established to was Associate Professor Dr. Sukree Charoensook provide a fund to Thai students and educators who wished to (left, center), director of the College of Musical Arts, pursue their studies at Johns Hopkins University’s Paul H.Nitze Mahidol University. School of Advanced International Studies (SAIS), as well as related activities to promote Thai and US relations. Annual Report 2007 Thai Beverage Public Company Limited

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PR Talk

The year 2007 was extremely auspicious, as Thai people from all walks of life celebrated the 80th Birthday Anniversary of His Majesty the King who has devotedly himself to the development of the country and his subjects.

ThaiBev was a proud part of this grand celebration in expressing its gratitude to His Majesty the King by participating in the “Ruam Jai Phak Rak Nai Luang” activities – one of which was the setting up of the “Thais Love the King Exhibition House” as a means to communicate to the viewers the bond between a king and his people as well as the sacrifice His Majesty made to better the livelihood of the Thai people in every corner of the country.

In addition, ThaiBev in cooperation with the Photography Association of Thailand under traditional massage, and classical dances. It also included ‘Ruam Jai Phak Rak Nai Luang’ activities: His Majesty’s Royal Patronage organized the ‘Photos of the Land’, a photographic contest special demonstrations of kite-making, sword-fighting, the “Thais Love the King Exhibition House” with four royal trophies, to celebrate the auspicious occasion of His Majesty the King’s 80th and boxing lessons. – a means to communicate to the visitors Birthday Anniversary. This was the first time for a photography competition to feature four Royal trophies in the same event, namely His Majesty the King’s trophy to be awarded In addition, ThaiBev solely, or in partnership with under the theme “Thai People Love the King”; Her Majesty the Queen’s trophy under the the public sector, the private sector and the mass theme “United in Harmony”; His Royal Highness Crown Prince Maha Vajiralongkorn’s media, implemented various public service activities. trophy under the theme “Love the Forest, Conserving the Water”; and Her Royal Highness A significant example was its campaign to alleviate Princess Maha Chakri Sirindhorn’s trophy under the theme “Agriculture the Thai Way”. global warming – a critical issue for international organizations and nations worldwide, including Thailand. Dr. Sumet Tantivejkul, Secretary-General of the Chaipattana Foundation, chaired the judging panel. Moreover, an exhibition of His Majesty the King’s photographic worked were put on ThaiBev recognizes the importance and urgency of display to the general public at Lifestyle Hall, 2nd floor, Siam Paragon shopping mall, from this issue and has drawn up policies for the corporation December 4 to 12, 2007. and afﬁ liated companies. These include the cooperation with various organizations to implement measures Last year, Thailand hosted the 24th University Summer Games – Universiade. ThaiBev, as the against global warming. ThaiBev has also invited the major sponsor, in cooperation with the Thai Sports Association under the Royal Patronage, media and investors to visit its plants to observe our constructed a “Thai Sports Village” to promote the uniqueness of Thai traditional sports for modern production processes reflecting responsibility the appreciation of sports people and visitors from all over the world. It displayed all aspects of for society and the environment, efficient use of energy, the Thai way of life from the perspective of sports as well as the history and uniqueness of Thai as well as the application of alternative energy derived sports. The Thai Sports Village housed an exhibition of Thai sports history, the demonstration of from the waste treatment systems. This is our corporate traditional Thai sports such as loop takraw, kite flying, sword-fighting, boxing, chess, draughts, pride in being a responsible member of the society. Annual Report 2007 Thai Beverage Public Company Limited

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The Photography Association of Thailand, in cooperation with ThaiBev, organizes the first ‘Photos of the Land’ competition featuring four Royal trophies, to celebrate the auspicious occasion of His Majesty the King’s 80th Birthday Anniversary. Dr. Sumet Tantivejkul (2nd from left), Secretary-General of Chaipattana Foundation, chaired the judging panel. Also present at ThaiBev supported the “Cosmopolitan and GM Single the press conference was ThaiBev President, Party 2007” event under the theme “100 Couples Unite to Fight Mr. Thapana Sirivadhanabhakdi (Center). Global Warming”. This activity promoted global warming awareness in 200 youths who would become representatives in promoting the anti-global warming campaign.

ThaiBev, a major sponsor of the 24th University Games – Universiade, in cooperation with the Thai Sports Association under the Royal Patronage, constructed a ‘ Thai Sports Village’, inaugurated on August 16 to welcome athletes from all over the world. The exhibition displayed Members of the media visited all aspects of the Thai way of living from sports Beer Thai (1991) Public Co., Ltd., perspectives, as well as demonstration and Kamphaengphet Province, lessons on Thai sports. A certiﬁ cate was granted to observe the brewing processes to each participant. Presiding at the opening of Chang Beer and Archa Beer, ceremony of the “Village” was ThaiBev President, Thai and foreign investors familiarized on the occasion of Archa Beer Mr. Thapana Sirivadhabhakdi (3rd from left). themselves with the production processes winning a gold medal award at of Chang Beer and Archa Beer at the Australian International Beer Thai (1991) Public Company Limited BeeAwards (AIBA) 2007. Khamphaeng Phet Province. Annual Report 2007 Thai Beverage Public Company Limited

116 117

Audit Committee Report Audit report of Certified Public Accountant Annual Report 2007 Thai Beverage Public Company Limited To the shareholders of Thai Beverage Public Company Limited

The Audit Committee is comprised of four directors named below. I have audited the accompanying consolidated and separate balance sheets as at 31 December 2007 and 2006, and the related statements of income, changes in shareholders’ equity and cash flows for the years then ended of Thai Beverage 1. Mr. Staporn Kavitanon Chairman of the Audit Committee Public Company Limited and its subsidiaries, and of Thai Beverage Public Company Limited, respectively. The Company’s 2. Mr. Kanung Luchai Member of the Audit Committee management is responsible for the correctness and completeness of information presented in these financial statements. 3. Mr. Manu Leopairote Member of the Audit Committee My responsibility is to express an opinion on these financial statements based on my audits. 4. Mr. Ng Tat Pun Member of the Audit Committee I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan Each member of the Audit Committee is an independent director who meets the independence, experience and and perform the audits to obtain reasonable assurance about whether the financial statements are free of material other qualifi cations requirements of the Stock Exchange of Thailand and the Securities and Exchange Commission. misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made The Audit Committee has reviewed and discussed the Company’s audited financial statements with Management by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a and KPMG Phoomchai Audit Limited, its external auditor for 2007, to express the Audit Committee’s opinion of the reasonable basis for my opinion. conformity to the Company’s audited financial statements with generally accepted accounting principles. It also reviewed and expressed its opinion on the audit plan, and considered results of the audit from the Company’s internal In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material audit division to ensure that the internal control system is adequate and appropriate. respects, the financial positions as at 31 December 2007 and 2006 and the results of operations and cash flows for the years then ended of Thai Beverage Public Company Limited and its subsidiaries, and of Thai Beverage Public Company The Audit Committee has recommended that the Board propose for consideration and approval the continued Limited, respectively, in accordance with generally accepted accounting principles. nomination of KPMG Phoomchai Audit Limited as the Company’s external auditor for 2008 and its remuneration to the Annual General Meeting of Shareholders. As described in note 29 to the financial statements, the Company’s financial statements for the year ended 31 December 2006 have been restated for the effects of the change in accounting policy for investments in subsidiaries and associates Based on the above-mentioned reviews and discussions, the Audit Committee views that the Company has an adequate from the equity method of accounting to the cost method, and are now termed ‘separate’ financial statements. internal control and its fi nancial statement is fairly presented in accordance with the generally accepted accounting principles. Disclosure of significant differences between generally accepted accounting principles in Thailand and International Financial Reporting Standards is not a required part of the basic fi nancial statements under generally accepted accounting principles in Thailand, but it is presented in Note 36 to the notes to financial statements for information purposes only. I have not audited or reviewed such information and therefore do not express any audit opinion or review report thereon.

Staporn Kavitanon (Nirand Lilamethwat) Chairman of the Audit Committee Certified Public Accountant Date: February 26, 2008 Registration No. 2316

KPMG Phoomchai Audit Ltd. Bangkok 27 February 2008 Annual Report 2007 Thai Beverage Public Company Limited

118 119 Thai Beverage Public Company Limited and its Subsidiaries Balance Sheets As at 31 December 2007 and 2006

Consolidated Separate Consolidated Separate

financial statements financial statements financial statements financial statements

Note 2007 2006 2007 2006 Note 2007 2006 2007 2006

Assets (Restated) Liabilities and shareholders’ equity (Restated)

(in Baht) (in Baht)

Current assets Current liabilities

Cash and cash equivalents 6 2,188,991,774 1,919,576,970 9,168,240 15,622,582 Bank overdrafts and short-term

Current investments 7 7,685,085 4,358,600 - - loans from financial institutions 15 5,998,233,815 6,753,305,295 4,797,684,522 3,029,559,266

Trade accounts receivable 5, 8 1,467,001,317 1,317,930,493 - - Trade accounts payable 16 2,249,329,022 2,275,670,644 - -

Short-term loans to and amounts Short-term guaranteed bonds 15 - 2,200,000,000 - 2,200,000,000

due from related parties 5 4,371,057 50,951,648 3,916,012,461 11,035,118,471 Current portion of long-term

Inventories 9 28,056,925,651 28,315,158,270 - - guaranteed bonds 15 3,000,000,000 2,300,000,000 3,000,000,000 2,300,000,000

Other current assets 10 1,403,965,020 1,914,238,542 8,481,487 16,988,878 Current portion of long-term loans 15 1,755,000,000 1,500,000,000 1,755,000,000 1,500,000,000

Total current assets 33,128,939,904 33,522,214,523 3,933,662,188 11,067,729,931 Short-term loans from and amounts

due to related parties 5, 15 69,141,215 4,837,042,378 2,115,288,548 13,084,828,757

Non-current assets Income tax payable 2,773,848,081 2,180,870,323 146,248,940 47,791,738

Investments in subsidiaries and associates 11 124,518,368 135,490,042 71,470,329,894 63,594,730,188 Other current liabilities 17 3,203,278,986 4,103,314,358 161,542,579 394,209,562

Other long-term investments 7 3,633,579 3,753,619 - - Total current liabilities 19,048,831,119 26,150,202,998 11,975,764,589 22,556,389,323

Long-term loans to and amounts

due from related parties 5 1,172,250 13,563,000 9,411,471,969 5,500,898,900 Non-current liabilities

Property, plant and equipment 12 43,216,507,663 49,428,039,362 71,600,623 845,926,385 Long-term guaranteed bonds 15 - 3,000,000,000 - 3,000,000,000

Intangible assets 13 978,770,498 354,876,536 16,165,989 12,353,346 Long-term loans from financial institutions 15 5,400,000,000 3,755,000,000 5,400,000,000 3,755,000,000

Other non-current assets 14 2,073,413,637 2,121,574,962 351,336,250 357,128,650 Long-term loans from related parties 5, 15 - - 6,540,500,000 4,372,200,000

Total non-current assets 46,398,015,995 52,057,297,521 81,320,904,725 70,311,037,469 Other non-current liabilities 168,184,325 120,753,208 117,900 -

Total non-current liabilities 5,568,184,325 6,875,753,208 11,940,617,900 11,127,200,000

Total assets 79,526,955,899 85,579,512,044 85,254,566,913 81,378,767,400 Total liabilities 24,617,015,444 33,025,956,206 23,916,382,489 33,683,589,323

The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. Annual Report 2007 Thai Beverage Public Company Limited

120 121

Thai Beverage Public Company Limited and its Subsidiaries Thai Beverage Public Company Limited and its Subsidiaries Balance Sheets Statements of Income As at 31 December 2007 and 2006 For the years ended 31 December 2007 and 2006

Consolidated Separate Consolidated Separate

financial statements financial statements financial statements financial statements

Note 2007 2006 2007 2006 Note 2007 2006 2007 2006

Liabilities and shareholders’ equity (Restated) (Restated)

(in Baht) (in Baht) Shareholders’ equity Revenues 5 Share capital 18 Revenue from sales 100,540,895,079 97,797,921,895 - -

Authorised share capital 29,000,000,000 29,000,000,000 29,000,000,000 29,000,000,000 Interest income 40,834,243 56,452,361 775,352,387 858,621,337

Issued and paid-up share capital 25,110,025,000 25,110,025,000 25,110,025,000 25,110,025,000 Management fees - - 2,577,305,358 3,432,470,973

Difference arising from common Dividends - - 18,985,153,408 8,055,408,868

control transactions (17,141,406,365) (17,141,406,365) - - Other income 21 228,524,668 77,938,829 89,527,428 4,873,832

Reserves 19 Share of profits from investments

Share premium 17,215,736,603 17,215,736,603 17,215,736,603 17,215,736,603 accounted for using the equity method 28,641,891 23,684,083 - -

Currency translation changes (208,076,374) (19,508,334) - - Total revenues 100,838,895,881 97,955,997,168 22,427,338,581 12,351,375,010

Fair value changes and

revaluation surpluses 4,388,935,374 6,586,263,579 - 134,521,429 Expenses 5

Retained earnings Cost of sales 70,872,565,833 69,325,121,958 - -

Appropriated - legal reserve 19 2,900,000,000 1,700,000,000 2,900,000,000 1,700,000,000 Selling and administrative expenses 22 13,689,414,856 12,684,556,582 1,154,217,891 943,322,290

Unappropriated 22,644,726,217 19,102,445,355 16,112,422,821 3,534,895,045 Total expenses 84,561,980,689 82,009,678,540 1,154,217,891 943,322,290

Total shareholders’ equity 54,909,940,455 52,553,555,838 61,338,184,424 47,695,178,077

Profit before interest and

Total liabilities and shareholders’ equity 79,526,955,899 85,579,512,044 85,254,566,913 81,378,767,400 income tax expenses 16,276,915,192 15,946,318,628 21,273,120,690 11,408,052,720

Interest expense 24 1,047,277,561 1,568,651,172 1,577,560,366 2,253,267,473

Income tax expense 25 4,846,572,448 4,322,890,312 277,248,227 149,318,355

Net profit 10,383,065,183 10,054,777,144 19,418,312,097 9,005,466,892

Basic earnings per share 26 0.41 0.42 0.77 0.38

The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. Thai Beverage Public Company Limited and its Subsidiaries Statements of Changes in Shareholders’ Equity Consolidated financial statements For the years ended 31 December 2007 and 2006 Reserves Retained earnings

Issued and Difference arising Currency Fair value changes paid-up from common Share translation and revaluation Appropriated Total shareholders’ Note share capital control transactions premium changes surpluses to legal reserve Unappropriated equity

(in Baht)

Balance at 1 January 2006 22,000,000,000 (15,630,789,676) - (5,341,471) 6,584,735,444 1,110,000,000 17,655,899,298 31,714,503,595 Change in shareholders’ equity for 2006 Net surplus on property revaluation - - - - 1,528,135 - - 1,528,135 Translation loss relating to financial statements of foreign operations - (8,543,855) - (14,166,863) - - - (22,710,718) Net expense recognised directly in shareholder’s equity - (8,543,855) - (14,166,863) 1,528,135 - - (21,182,583) Net profit - (23,871,663) - - - - 10,078,648,807 10,054,777,144 Total recognised income and expense - (32,415,518) - (14,166,863) 1,528,135 - 10,078,648,807 10,033,594,561 Legal reserve - - - - - 590,000,000 (590,000,000) - Dividends 28 ------(8,042,102,750) (8,042,102,750) Consideration paid to shareholders of subsidiaries for the common control transactions - (1,505,240,976) - - - - - (1,505,240,976) Increase in share capital in subsidiaries before business restructuring - 27,039,805 - - - - - 27,039,805 Issue of ordinary shares 18 3,110,025,000 - 17,215,736,603 - - - - 20,325,761,603 Balance at 31 December 2006 25,110,025,000 (17,141,406,365) 17,215,736,603 (19,508,334) 6,586,263,579 1,700,000,000 19,102,445,355 52,553,555,838 Change in shareholders’ equity for 2007 Net surplus on property revaluation - - - - (2,197,328,205) - 134,521,429 (2,062,806,776) Translation loss relating to financial statements of foreign operations - - - (188,568,040) - - - (188,568,040) Net expense recognised directly in shareholder’s equity - - - (188,568,040) (2,197,328,205) - 134,521,429 (2,251,374,816) Net profit ------10,383,065,183 10,383,065,183 Total recognised income and expense - - - (188,568,040) (2,197,328,205) - 10,517,586,612 8,131,690,367 Legal reserve - - - - - 1,200,000,000 (1,200,000,000) - Dividends 28 ------(5,775,305,750) (5,775,305,750) Balance at 31 December 2007 25,110,025,000 (17,141,406,365) 17,215,736,603 (208,076,374) 4,388,935,374 2,900,000,000 22,644,726,217 54,909,940,455

The accompanying notes are an integral part of these financial statements.

Thai Beverage Public Company Limited and its Subsidiaries Statements of Changes in Shareholders’ Equity Separate financial statements (Restated) For the years ended 31 December 2007 and 2006 Reserves Retained earnings

(in Baht)

Balance at 1 January 2006 22,000,000,000 (15,979,264,833) - (5,341,471) 6,584,735,444 1,110,000,000 17,655,899,298 31,366,028,438

Changes in accounting policy 29 - 15,979,264,833 - 5,341,471 (6,450,214,015) - (14,494,368,395) (4,959,976,106)

Restated balance 22,000,000,000 - - - 134,521,429 1,110,000,000 3,161,530,903 26,406,052,332

Changes in shareholders’ equity for 2006

Net profit ------9,005,466,892 9,005,466,892

Legal reserve - - - - - 590,000,000 (590,000,000) -

Dividends 28 ------(8,042,102,750) (8,042,102,750)

Issue of ordinary shares 18 3,110,025,000 - 17,215,736,603 - - - - 20,325,761,603

Balance at 31 December 2006 25,110,025,000 - 17,215,736,603 - 134,521,429 1,700,000,000 3,534,895,045 47,695,178,077

Balance at 1 January 2007 25,110,025,000 (17,141,406,365) 17,215,736,603 (19,508,334) 6,586,263,579 1,700,000,000 19,102,445,355 52,553,555,838

Change in accounting policy 29 - 17,141,406,365 - 19,508,334 (6,451,742,150) - (15,567,550,310) (4,858,377,761)

Restated balance 25,110,025,000 - 17,215,736,603 - 134,521,429 1,700,000,000 3,534,895,045 47,695,178,077

Change in shareholders’ equity for 2007

Net surplus on property revaluation - - - - (134,521,429) - 134,521,429 -

Net profit ------19,418,312,097 19,418,312,097

Total recognised income and expense - - - - (134,521,429) - 19,552,833,526 19,418,312,097

Legal reserve - - - - - 1,200,000,000 (1,200,000,000) -

Dividends 28 ------(5,775,305,750) (5,775,305,750)

Balance at 31 December 2007 25,110,025,000 - 17,215,736,603 - - 2,900,000,000 16,112,422,821 61,338,184,424

The accompanying notes are an integral part of these financial statements. Annual Report 2007 Thai Beverage Public Company Limited

124 125

Thai Beverage Public Company Limited and its Subsidiaries Statements of Cash Flows For the years ended 31 December 2007 and 2006

Consolidated Separate Consolidated Separate

financial statements financial statements financial statements financial statements

Note 2007 2006 2007 2006 Note 2007 2006 2007 2006

(Restated) (Restated)

(in Baht) (in Baht)

Cash flows from operating activities Changes in operating assets and liabilities

Net profit 10,383,065,183 10,054,777,144 19,418,312,097 9,005,466,892 Trade accounts receivable (95,274,423) 143,293,100 - -

Adjustments for Amounts due from related parties 57,800,991 35,968,778 1,293,629,337 (354,909,409)

Depreciation and amortisation 4,974,695,900 4,651,978,462 28,966,567 24,071,862 Inventories 240,314,893 76,897,733 - -

Interest income (40,834,243) (56,452,361) (775,352,387) (858,621,337) Other current assets 543,222,112 657,219,479 8,507,390 (7,432,139)

Interest expense 1,047,277,561 1,568,651,172 1,577,560,366 2,253,267,473 Trade accounts payable (52,736,803) 583,226,076 - -

Unrealised loss on exchange rate 5,841,586 11,720,775 1,164,320 16,321,434 Amounts due to related parties (152,525,782) 45,335,778 16,230,422 5,885,734

Amortisation of advance payments to Other current liabilities (1,220,696,777) (1,444,554,668) (139,223,931) 78,444,379

a specialist 50,000,000 50,000,000 9,375,000 9,375,000 Other non-current liabilities 4,841,922 (2,775,617) 117,900 -

Allowance for obsolete inventories 145,536,197 354,960,794 - - Advance payments to a specialist - (2,000,000,000) - (375,000,000)

Allowance for impairment loss on property 58,768,300 - - - Income taxes paid (4,253,594,691) (4,671,000,532) (178,791,025) (198,576,232)

(Gain) loss on sale and disposal of property, Net cash provided by operating activities 16,443,526,789 14,362,352,061 2,488,704,230 1,692,253,453

plant and equipment and intangible assets (70,105,694) 3,190,891 (63,880,601) 50,309

Gain on sale of investment - 708,828 (6,044) -

Dividends - - (18,985,153,408) (8,055,408,868)

Share of profits from investments

accounted for using the equity method (28,641,891) (23,684,083) - -

Income tax expense 4,846,572,448 4,322,890,312 277,248,227 149,318,355

21,372,175,347 20,938,741,934 1,488,234,137 2,543,841,120

126 127 Thai Beverage Public Company Limited and its Subsidiaries Statements of Cash Flows For the years ended 31 December 2007 and 2006

Consolidated Separate Consolidated Separate

financial statements financial statements financial statements financial statements

Note 2007 2006 2007 2006 Note 2007 2006 2007 2006

(Restated) (Restated)

(in Baht) (in Baht)

Cash flows from investing activities Cash flows from financing activities

Interest received 40,930,836 58,093,432 780,791,231 847,583,522 Interest paid (1,139,354,066) (1,420,545,600) (1,708,451,681) (2,086,173,156)

Dividends received - 16,975,616 20,290,212,836 8,055,408,868 Dividends paid (5,775,305,750) (8,042,102,750) (5,775,305,750) (8,042,102,750)

Current investments (3,326,485) 5,640,990 - - Bank overdrafts and short-term loans

Loans to related parties - 40,850,000 1,908,300,440 (1,144,799,640) from financial institutions (1,140,914,252) (33,405,319,840) 1,768,125,256 (33,570,440,734)

Investments in subsidiaries and associates 39,613,566 - (9,180,660,910) (509,999,340) Proceeds from short-term guaranteed bonds - 4,700,000,000 - 4,700,000,000

Consideration paid to shareholders of subsidiaries Repayment of short-term guaranteed bonds (2,200,000,000) (2,500,000,000) (2,200,000,000) (2,500,000,000)

for the common control transactions - (1,505,240,976) - - Loans from related parties (4,615,231,380) 629,727,420 (8,776,000,000) 1,815,500,000

Increase in share capital in subsidiaries Proceeds from long-term guaranteed bonds - 5,300,000,000 - 5,300,000,000

before business restructuring - 27,039,805 - - Repayment of long-term guaranteed bonds (2,300,000,000) - (2,300,000,000) -

Sale of long-term investments 120,039 26 7,820 - Proceeds from issuance of share capital - 20,325,761,603 - 20,325,761,603

Purchase of property, plant and equipment (1,454,554,671) (4,231,904,150) (9,205,674) (129,607,370) Proceeds from long-term loans from

Decrease in property, plant and equipment 933,321,336 51,883,323 819,205,608 58,906 financial institutions 5,400,000,000 26,600,000,000 5,400,000,000 26,600,000,000

Purchase of intangible assets (26,925,503) (12,511,963) (8,595,148) (6,666,764) Repayment of long-term loans from

Decrease in intangible assets 11,202,717 37,899 - - financial institutions (3,500,000,000) (22,431,600,000) (3,500,000,000) (21,345,000,000)

Other non-current assets (1,211,354) (24,843,220) (3,582,600) (4,716,900) Net cash used in financing activities (15,270,805,448) (10,244,079,167) (17,091,632,175) (8,802,455,037)

Net cash outflow on acquisition of Currency translation changes (188,568,040) (22,710,718) - -

indirect subsidiaries (253,908,978) - - - Net increase (decrease) in cash and

Net cash provided by (used in) cash equivalents 269,414,804 (1,478,417,042) (6,454,342) (2,940,302)

investing activities (714,738,497) (5,573,979,218) 14,596,473,603 7,107,261,282 Cash and cash equivalents at beginning of year 1,919,576,970 3,397,994,012 15,622,582 18,562,884

Cash and cash equivalents at end of year 6 2,188,991,774 1,919,576,970 9,168,240 15,622,582

128 129 Thai Beverage Public Company Limited and its Subsidiaries Notes to the Financial Statements For the years ended 31 December 2007 and 2006

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the directors on 27 February 2008.

Note Contents Note Contents 1. General information

Thai Beverage Public Company Limited, the “Company”, is incorporated and registered as a public company in Thailand 1 General information 19 Reserves on 29 October 2003. The registered office of the Company is at 14 Vibhavadi Rangsit Road, Chomphon, Chatuchak, 2 Basis of preparation of the financial statements 20 Segment information Bangkok. 3 Significant accounting policies 21 Other income

4 Business restructuring 22 Selling and administrative expenses The Company was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) in May 2006. 5 Related party transactions and balances 23 Personnel expenses

6 Cash and cash equivalents 24 Interest expense The principal businesses of the Company and its subsidiaries are the production, distribution and marketing of alcoholic 7 Other investments 25 Income tax expense and non-alcoholic beverages, industrial alcohol and other by-products. Details of the Company’s subsidiaries as at

8 Trade accounts receivable 26 Earnings per share 31 December 2007 and 2006 were as follows:

9 Inventories 27 Promotional privileges Ownership 10 Other current assets 28 Dividends Country of interest (%) 11 Investments in subsidiaries and associates 29 Changes in accounting policy Name of the entity Type of business incorporation 2007 2006

12 Property, plant and equipment 30 Financial instruments

13 Intangible assets 31 Commitments with non-related parties Direct subsidiaries 1. Beer Thai (1991) PCL. Beer brewery Thailand 100.00 100.00 14 Other non-current assets 32 Litigation 2. Beer Thip Brewery (1991) Co., Ltd. Beer brewery Thailand 100.00 100.00 15 Interest-bearing liabilities 33 Events after the balance sheet date 3. Sangsom Co., Ltd. Spirits distillery Thailand 100.00 100.00 16 Trade accounts payable 34 Thai Accounting Standards (TAS) not yet adopted 4. Fuengfuanant Co., Ltd. Spirits distillery Thailand 100.00 100.00 17 Other current liabilities 35 Reclassification of accounts 5. Mongkolsamai Co., Ltd. Spirits distillery Thailand 100.00 100.00 18 Share capital 36 Significant differences between Thai GAAP and IFRS 6. Thanapakdi Co., Ltd. Spirits distillery Thailand 100.00 100.00 7. Kanchanasingkorn Co., Ltd. Spirits distillery Thailand 100.00 100.00 8. Sura Bangyikhan Co., Ltd. Spirits distillery Thailand 100.00 100.00 9. Athimart Co., Ltd. Spirits distillery Thailand 100.00 100.00 10. S.S. Karnsura Co., Ltd. Spirits distillery Thailand 100.00 100.00 11. Kankwan Co., Ltd. Spirits distillery Thailand 100.00 100.00 12. Theparunothai Co., Ltd. Spirits distillery Thailand 100.00 100.00 13. Red Bull Distillery (1988) Co., Ltd. Spirits distillery Thailand 100.00 100.00 14. United Winery and Distillery Co., Ltd. Spirits distillery Thailand 100.00 100.00 15. Simathurakij Co., Ltd. Spirits distillery Thailand 100.00 100.00 Annual Report 2007 Thai Beverage Public Company Limited

130 131

Ownership Ownership Country of interest (%) Country of interest (%) Name of the entity Type of business incorporation 2007 2006 Name of the entity Type of business incorporation 2007 2006

16. Nateechai Co., Ltd. Spirits distillery Thailand 100.00 100.00 49. International Beverage Holdings Ltd. Holding company Hong Kong 100.00 100.00 17. Luckchai Liquor Trading Co., Ltd. Spirits distillery Thailand 100.00 100.00 50. Cosmos Brewery (Thailand) Co., Ltd. Beer brewery Thailand 100.00 100.00 18. Sura Piset Thipparat Co., Ltd. Spirits distillery Thailand 100.00 100.00 51. T.C.C. Cosmo Corporation Ltd. Trademark holding Thailand 100.00 100.00 19. Thai Alcohol PCL. Alcohol distillery Thailand 100.00 100.00 52. Beer Chang Co., Ltd. Trademark holding and 20. Pomthip Co., Ltd. Beer distributor Thailand 100.00 100.00 production of concentrate 21. Pomkit Co., Ltd. Beer distributor Thailand 100.00 100.00 materials Thailand 100.00 100.00 22. Pomkung Co., Ltd. Beer distributor Thailand 100.00 100.00 53. Archa Beer Co., Ltd. Trademark holding and 23. Pomchok Co., Ltd. Beer distributor Thailand 100.00 100.00 production of concentrate 24. Pomcharoen Co., Ltd. Beer distributor Thailand 100.00 100.00 materials Thailand 100.00 100.00 25. Pomburapa Co., Ltd. Beer distributor Thailand 100.00 100.00 54. Sura Piset Phatra Lanna Co., Ltd. ## Holding company Thailand 100.00 100.00 26. Num Yuk Co., Ltd. Spirits distributor Thailand 100.00 100.00 27. Num Kijjakarn Co., Ltd. Spirits distributor Thailand 100.00 100.00 Indirect subsidiaries 55. Thai Thum Distillery Co., Ltd. # Trading of spirits Thailand 99.90 99.90 28. Num Palang Co., Ltd. Spirits distributor Thailand 100.00 100.00 56. Sura Piset Sahasan Co., Ltd. # Production and distribution 29. Num Muang Co., Ltd. Spirits distributor Thailand 100.00 100.00 of spirits Thailand 100.00 100.00 30. Num Nakorn Co., Ltd. Spirits distributor Thailand 100.00 100.00 57. Sura Piset Sampan Co., Ltd. # Production and distribution 31. Num Thurakij Co., Ltd. Spirits distributor Thailand 100.00 100.00 of spirits Thailand 100.00 100.00 32. Thipchalothorn Co., Ltd. Beer and sprits agency Thailand 100.00 100.00 58. Muangkij Co., Ltd. # Import of oak woods Thailand 100.00 100.00 33. Krittayabun Co., Ltd. Beer and sprits agency Thailand 100.00 100.00 59. Sint Ek Panich Co., Ltd. # Mining Thailand 100.00 100.00 34. Surathip Co., Ltd. Spirits agency Thailand 100.00 100.00 60. Pan Alcohol Co., Ltd. # Production and distribution 35. Sunthronpirom Co., Ltd. Spirits agency Thailand 100.00 100.00 of vinegar Thailand 100.00 100.00 36. Piromsurang Co., Ltd. Spirits agency Thailand 100.00 100.00 61. Banglen Agriculture Co., Ltd. # Agriculture Thailand 100.00 100.00 37. Bionic Humus Co., Ltd. Trading of fertilizer Thailand 100.00 100.00 62. Vitayathan Co., Ltd. Environmental public relations Thailand 100.00 100.00 38. Maharas Agri Co., Ltd. Japanese rice farming Thailand 100.00 100.00 63. InterBev (Singapore) Limited Trading of alcoholic beverages Singapore 100.00 100.00 39. Thai Molasses Co., Ltd. Trading of molasses Thailand 99.72 99.72 64. InterBev (Cambodia) Co., Ltd. Trading of alcoholic beverages Cambodia 100.00 100.00 40. Additive Food Co., Ltd. Trading of feeds Thailand 100.00 100.00 65. InterBev Malaysia Sdn. Bhd. Trading of alcoholic beverages Malaysia 100.00 100.00 41. Pan International (Thailand) Co., Ltd. Trading of supplies and 66. International Beverage Holdings Limited United States procurement Thailand 100.00 100.00 USA, Inc. (Formerly: InterBev USA Inc.) Trading of alcoholic beverages of America 100.00 100.00 42. Charun Business 52 Co., Ltd. Brick producer Thailand 100.00 100.00 67. Best Spirits Company Limited Trading of alcoholic beverages Hong Kong 100.00 100.00 43. Thai Cooperage Co., Ltd. Oak barrel producer Thailand 100.00 100.00 68. International Beverage Holdings 44. Bang-Na Logistic Co., Ltd. Trading of bottles Thailand 100.00 100.00 (UK) Limited (Formerly: Paciﬁ c Spirits 45. Thai Beverage Logistics Co., Ltd. (UK) Limited) Holding company United Kingdom 100.00 100.00 (Formerly: Sahatipkarnkonsong Co., Ltd.) Transportation Thailand 100.00 100.00 69. United Products Co., Ltd. Production and distribution 46. Thai Beverage Marketing Co., Ltd. Import and export spirits for of spirits Thailand 80.82 - trading/ international marketing Thailand 100.00 100.00 70. S P M Foods and Beverages Co., Ltd. Production and distribution 47. Dhanasindhi Co., Ltd. Construction Thailand 100.00 100.00 of water and energy drinks 48. Dhospaak Co., Ltd. Advertising agency Thailand 100.00 100.00 and spirits agency Thailand 83.20 -

Annual Report 2007 Thai Beverage Public Company Limited

132 133

Ownership 2. Basis of preparation of the financial statements Country of interest (%) Name of the entity Type of business incorporation 2007 2006 The financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language. Subsidiaries of indirect subsidiaries* 71. Blairmhor Limited # Holding Company United Kingdom 100.00 100.00 The financial statements are prepared in accordance with Thai Accounting Standards (“TAS”) including related 72. Inver House Distillers Limited Production and distribution interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) and with generally of spirits United Kingdom 100.00 100.00 accepted accounting principles in Thailand. 73. Blairmhor Distillers Limited # Dormant United Kingdom 100.00 100.00 74. Wee Beastie Limited Production and distribution During 2007, the FAP issued the following revised TAS relevant to the Group’s operations and effective for accounting of alcoholic beverages United Kingdom 100.00 100.00 periods beginning on or after 1 January 2007: 75. Speyburn-Glenlivet Distillery Company Limited # Dormant United Kingdom 100.00 100.00 TAS 44 (revised 2007) Consolidated and Separate Financial Statements 76. The Knockdhu Distillery TAS 45 (revised 2007) Investments in Associates Company Limited # Dormant United Kingdom 100.00 100.00 77. The Pulteney Distillery Company Limited # Dormant United Kingdom 100.00 100.00 The adoption of these revised TAS has resulted in a change in the Company’s accounting policy for interests in 78. The Balblair Distillery Company Limited # Dormant United Kingdom 100.00 100.00 subsidiaries and associates in the separate financial statements of the Company. The effects of this change are 79. R. Carmichael & Sons Limited # Dormant United Kingdom 100.00 100.00 disclosed in note 29. 80. J MacArthur Junior & Company Limited # Dormant United Kingdom 100.00 100.00 81. Mason & Summers Limited # Dormant United Kingdom 100.00 100.00 In addition to the above revised TAS, the FAP has issued during 2007 a number of other new and revised TAS which 82. Hankey Bannister Limited # Dormant United Kingdom 100.00 100.00 are only effective for financial statements beginning on or after 1 January 2008 and have not been adopted in the 83. James Catto & Company Limited # Dormant United Kingdom 100.00 100.00 preparation of these financial statements. These new and revised TAS are disclosed in note 34. 84. Glen Calder Blenders Limited # Dormant United Kingdom 100.00 100.00 85. Moffat & Towers Limited # Dormant United Kingdom 100.00 100.00 The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to the nearest

million, unless otherwise stated. They are prepared on the historical cost basis except as stated in the accounting Associates of indirect subsidiaries** policies. 86. Liquorland Limited Off licences United Kingdom 49.49 49.49 87. Inver House Polska Limited Trading of alcoholic beverages Poland 44.00 44.00 The preparation of financial statements in conformity with TAS requires management to make judgements, estimates 88. Inver House Distribution SA # Dormant France 50.02 50.02 and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. * Subsidiaries of International Beverage Holdings (UK) Limited The estimates and associated assumptions are based on historical experience and various other factors that are ** Associates of International Beverage Holdings (UK) Limited believed to be reasonable under the circumstances, the results of which form the basis of making the judgements # These are currently non-trading. about carrying amounts of assets and liabilities that are not readily apparent from other sources. Accordingly, actual

## A subsidiary was changed from indirect subsidiary to direct subsidiary in October 2007 and is currently non-trading. results may differ from these estimates.

In 2007, Sura Piset Phatra Lanna Co., Ltd., a subsidiary, acquired 2.8 million ordinary shares of United Product Co., Ltd. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are which represents 80.82% in share capital of such company for a total value of Baht 285.54 million, and 0.8 million recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the ordinary shares of SPM Foods and Beverages Co., Ltd. which represents 83.20% in share capital of such company for a revision and future periods, if the revision affects both current and future periods. total value of Baht 0.08 million from the former shareholders of both companies. Annual Report 2007 Thai Beverage Public Company Limited

134 135

3. Significant accounting policies Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions. (a) Basis of consolidation The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”) Foreign entities and the Group’s interest in associates. The assets and liabilities of foreign entities are translated to Thai Baht at the average foreign exchange rates ruling at the balance sheet date. Significant intra-group transactions between the Company and its subsidiaries are eliminated on consolidation. The revenues and expenses of foreign entities are translated to Thai Baht at rates approximating the average foreign Subsidiaries exchange rates ruling at the dates of the transactions. Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. Foreign exchange differences arising on translation are recognised in a separate component of equity until disposal of The financial statements of subsidiaries are included in the consolidated financial statements from the date that control the investments. commences until the date that control ceases.

(c) Derivative financial instruments Associates Forward exchange contracts are treated as off-balance sheet items. Associates are those companies in which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group’s share of the total recognised gains and (d) Cash and cash equivalents losses of associates on an equity accounted basis, from the date that significant influence commences until the date Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid that significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group purpose of the statement of cash flows. has incurred legal or constructive obligations or made payments on behalf of the associate.

(e) Trade and other accounts receivable Business combinations Trade and other accounts receivables (including balances with related parties) are stated at their invoice value less Business combinations involving businesses under common control have been accounted for in a manner similar to a allowance for doubtful accounts. pooling of interests, whereby the assets, liabilities and contingent liabilities transferred have been accounted for at book values. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred. Business combinations are accounted for using the purchase method. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, (f) Inventories plus costs directly attributable to the acquisition. Inventories are stated at the lower of cost and net realisable value.

(b) Foreign currencies Cost of raw material, packaging materials, work in progress and finished goods is calculated using the weighted Foreign currency transactions average cost principle, and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the cost includes an appropriate share of overheads based on normal operating capacity. transactions.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Thai Baht Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in complete and to make the sale. the statement of income. Annual Report 2007 Thai Beverage Public Company Limited

136 137

(g) Investments an appraisal to be conducted every three to five years or when there are factors that might materially impact the value Investments in subsidiaries and associates of the land, to ensure that the carrying amount of these assets does not differ materially from that which would be determined using fair values at the balance sheet date. Investments in subsidiaries and associates in the separate financial statements of the Company are accounted for using the cost method. This is a change of accounting policy, the effects of which are disclosed in note 29. Investments in Any increase in value, on revaluation, is credited to equity under the heading “revaluation surplus” unless it offsets a associates in the consolidated financial statements are accounted for using the equity method. previous decrease in value recognised in the statement of income in respect of the same asset. A decrease in value is recognised in the statement of income to the extent it exceeds an increase previously recognised in equity in respect of Investments in other equity securities the same asset. Upon disposal of a revalued asset, any related revaluation surplus is transferred from equity to retained Marketable equity securities are classified as being available-for-sale and are stated at fair value, with any resultant earnings and is not taken into account in calculating the gain or loss on disposal. gain or loss being recognised directly in equity. The exceptions are impairment losses, which are recognised in the statement of income. Subsequent expenditure Subsequent expenditure relating to an item of property, plant and equipment is added to the carrying amount of the Equity securities which are not marketable are stated at cost less impairment losses. asset when it is probable that the future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. All other subsequent expenditure is recognised as an expense in the period The fair value of financial instruments classified as available-for-sale is determined as the quoted bid price at the in which it is incurred. balance sheet date. Depreciation Disposal of investments Depreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the of an item of property, plant and equipment. The estimated useful lives are as follows: associated cumulative gain or loss that was reported in equity is recognised in the statement of income. Land improvement 5-20 years (h) Property, plant and equipment Building and structures 10-40 years Owned assets Building improvements 5-20 years Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for land, Machinery and equipment 4-40 years which is stated at its revalued amount. The revalued amount is the fair value. Oak barrels 10-20 years Furniture, fixtures and office equipment 3-10 years Property that is being constructed or developed for future use is classified as property, plant and equipment and stated Vehicles 3-10 years at cost until construction or development is complete. No depreciation is provided on freehold land and assets under construction. Leased assets Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as finance (i) Intangible assets leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and Goodwill the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and Goodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so share of the identifiable net assets acquired. as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the statement of income. Goodwill is stated at cost less accumulated amortisation and impairment losses.

Revalued assets Other intangible assets Revaluations are performed by independent professional valuers with sufficient regularity. The Group’s policy requires Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Annual Report 2007 Thai Beverage Public Company Limited

138 139

Amortisation recognises the difference arising from common control transactions under shareholders’ equity until disposal of the Amortisation is charged to the statement of income on a straight-line and unit of production basis over the estimated investment. useful lives of the assets. Intangible assets are amortised from the date that they are available for use. The estimated useful lives are as follows: (o) Revenue Revenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts. Goodwill 20 years (straight-line method) Computer software 3-10 years (straight-line method) Sale of goods and services rendered Trademark 10 years (straight-line method) Revenue is recognised in the statement of income when the significant risks and rewards of ownership have been Broadcasting rights 4 years (unit of production method) transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or Leasehold Lease term (straight-line method) there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided. (j) Impairment The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any When the outcome of a contract for the rendering of services can be estimated reliably, contract revenue is recognised indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. in the statement of income by reference to the stage of completion of the contract activity at the balance sheet date. When the outcome of the contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds recognised that are recoverable. its recoverable amount. The impairment loss is recognised in the statement of income unless it reverses a previous revaluation credited to equity, in which case it is charged to equity. Construction contracts When the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised (k) Interest-bearing liabilities in the statement of income by reference to the stage of completion of the contract activity at the balance sheet date. Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial The stage of completion is assessed the percentage of completion method, which is measured by the project engineer. recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised value being recognised in the statement of income over the period of the borrowings on an effective interest basis. immediately as an expense in the statement of income.

(l) Trade and other accounts payable Interest and dividend income Trade and other accounts payable (including balances with related parties) are stated at cost. Interest income is recognised in the statement of income as it accrues. Dividend income is recognised in the statement of income on the date the Group’s right to receive payments is established which in the case of marketable securities (m) Provisions is usually the ex-dividend date. A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a (p) Expenses reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by Operating leases discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value Payments made under operating leases are recognised in the statement of income on a straight line basis over the term of money and, where appropriate, the risks specific to the liability. of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of income in the accounting period in which they are (n) Difference arising from common control transactions incurred. Difference arising from common control transactions relates to the restructuring of businesses under the common control of the ultimate majority shareholder of the Company and arises from the difference between the cost of the Finance costs combination and the carrying amounts of net identifiable assets at the date of combination (except for businesses Interest expenses and similar costs are charged to the statement of income in the period in which they are incurred, acquired that are not under common control, net identifiable assets are measured at the fair value). The Company except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production Annual Report 2007 Thai Beverage Public Company Limited

140 141

of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest 5. Related party transactions and balances component of finance lease payments is recognised in the statement of income using the effective interest rate method. Related parties include subsidiary companies and those parties linked to the Group and the Company as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market Research and development prices or, where no market price exists, at contractually agreed prices. Research and development costs, including costs of developing new beverage products and package design is expensed in the period in which it is incurred. The followings are relationships with related parties that are being controlled by the Company or have transactions with the Group. Other income and expenses are recognised on an accrual basis.

Country of (q) Income tax Name of the entity incorporation Nature of relationships Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date and applicable to the reporting period, and any 1. Beer Thai (1991) PCL. Thailand Direct subsidiary, 100% shareholding adjustment to tax payable in respect of previous years. 2. Beer Thip Brewery (1991) Co., Ltd. Thailand Direct subsidiary, 100% shareholding 3. Sangsom Co., Ltd. Thailand Direct subsidiary, 100% shareholding 4. Business restructuring 4. Fuengfuanant Co., Ltd. Thailand Direct subsidiary, 100% shareholding The Company was formed in 2003 to combine the separate beverages businesses of the ultimate controlling shareholder 5. Mongkolsamai Co., Ltd. Thailand Direct subsidiary, 100% shareholding group, the Siriwadhanabhakdi family, which were held as part of the operations of 89 separate companies, into a single 6. Thanapakdi Co., Ltd. Thailand Direct subsidiary, 100% shareholding group of companies. Of these, 65 businesses were transferred between 2003 and 2004, four businesses were transferred 7. Kanchanasingkorn Co., Ltd. Thailand Direct subsidiary, 100% shareholding during 2005 and 20 businesses were transferred during 2006. Prior to the restructuring these business were under the 8. Sura Bangyikhan Co., Ltd. Thailand Direct subsidiary, 100% shareholding common control of the ultimate controlling shareholder of the Company. 9. Athimart Co., Ltd. Thailand Direct subsidiary, 100% shareholding 10. S.S. Karnsura Co., Ltd. Thailand Direct subsidiary, 100% shareholding As the same ultimate controlling shareholder controlled the businesses and operations transferred to the Company 11. Kankwan Co., Ltd. Thailand Direct subsidiary, 100% shareholding both before and after the recent restructuring, the consolidated financial statements have been prepared on the 12. Theparunothai Co., Ltd. Thailand Direct subsidiary, 100% shareholding basis of a business combination involving entities and businesses under common control. Accordingly, the transfer of 13. Red Bull Distillery (1988) Co., Ltd. Thailand Direct subsidiary, 100% shareholding businesses and operations has been accounted for in a manner similar to a pooling of interests and the assets, liabilities 14. United Winery and Distillery Co., Ltd. Thailand Direct subsidiary, 100% shareholding and contingent liabilities transferred have been accounted for at book values. 15. Simathurakij Co., Ltd. Thailand Direct subsidiary, 100% shareholding 16. Nateechai Co., Ltd. Thailand Direct subsidiary, 100% shareholding The difference between the cost of the combination and the carrying amounts of net identifiable assets at the date of 17. Luckchai Liquor Trading Co., Ltd. Thailand Direct subsidiary, 100% shareholding combination (except for businesses acquired that were not under common control, whereby net identifiable assets 18. Sura Piset Thipparat Co., Ltd. Thailand Direct subsidiary, 100% shareholding were measured at their fair value) was recorded as “Difference arising from common control transactions”, which is 19. Thai Alcohol PCL. Thailand Direct subsidiary, 100% shareholding shown as a reduction in shareholders’ equity. 20. Pomthip Co., Ltd. Thailand Direct subsidiary, 100% shareholding 21. Pomkit Co., Ltd. Thailand Direct subsidiary, 100% shareholding In preparing the consolidated financial statements, those assets, liabilities, revenues and expenses that are clearly 22. Pomkung Co., Ltd. Thailand Direct subsidiary, 100% shareholding applicable to the businesses and operations transferred are included in the consolidated financial statements and 23. Pomchok Co., Ltd. Thailand Direct subsidiary, 100% shareholding are stated at their carrying values, after adjusting for intercompany transactions and transactions with the ultimate 24. Pomcharoen Co., Ltd. Thailand Direct subsidiary, 100% shareholding controlling shareholder. Expenses for which the specific identification method was not practical have been allocated 25. Pomburapa Co., Ltd. Thailand Direct subsidiary, 100% shareholding on a percentage of sales basis. Management believes that this is a reasonable basis of estimating what the expenses 26. Num Yuk Co., Ltd. Thailand Direct subsidiary, 100% shareholding would have been on a standalone basis. 27. Num Kijjakarn Co., Ltd. Thailand Direct subsidiary, 100% shareholding Annual Report 2007 Thai Beverage Public Company Limited

142 143

Country of Country of Name of the entity incorporation Nature of relationships Name of the entity incorporation Nature of relationships

28. Num Palang Co., Ltd. Thailand Direct subsidiary, 100% shareholding 64. InterBev (Cambodia) Co., Ltd. Cambodia Indirect subsidiary, 100% shareholding 29. Num Muang Co., Ltd. Thailand Direct subsidiary, 100% shareholding 65. InterBev Malaysia Sdn. Bhd. Malaysia Indirect subsidiary, 100% shareholding 30. Num Nakorn Co., Ltd. Thailand Direct subsidiary, 100% shareholding 66. International Beverage Holdings Limited United States 31. Num Thurakij Co., Ltd. Thailand Direct subsidiary, 100% shareholding USA, Inc. (Formerly: InterBev USA Inc.) of America Indirect subsidiary, 100% shareholding 32. Thipchalothorn Co., Ltd. Thailand Direct subsidiary, 100% shareholding 67. Best Spirits Company Limited Hong Kong Indirect subsidiary, 100% shareholding 33. Krittayabun Co., Ltd. Thailand Direct subsidiary, 100% shareholding 68. International Beverage Holdings (UK) Limited 34. Surathip Co., Ltd. Thailand Direct subsidiary, 100% shareholding (Formerly: Pacific Spirits (UK) Limited) United Kingdom Indirect subsidiary, 100% shareholding 35. Sunthronpirom Co., Ltd. Thailand Direct subsidiary, 100% shareholding 69. United Products Co., Ltd. Thailand Indirect subsidiary, 80.82% shareholding 36. Piromsurang Co., Ltd. Thailand Direct subsidiary, 100% shareholding 70. S P M Foods and Beverages Co., Ltd. Thailand Indirect subsidiary, 83.20% shareholding 37. Bionic Humus Co., Ltd. Thailand Direct subsidiary, 100% shareholding 71. Blairmhor Limited United Kingdom Subsidiary of indirect subsidiary, 38. Maharas Agri Co., Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 39. Thai Molasses Co., Ltd. Thailand Direct subsidiary, 99.72% shareholding 72. Inver House Distillers Limited United Kingdom Subsidiary of indirect subsidiary, 100% shareholding 40. Additive Food Co., Ltd. Thailand Direct subsidiary, 100% shareholding 73. Blairmhor Distillers Limited United Kingdom Subsidiary of indirect subsidiary, 41. Pan International (Thailand) Co., Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 42. Charun Business 52 Co., Ltd. Thailand Direct subsidiary, 100% shareholding 74. Wee Beastie Limited United Kingdom Subsidiary of indirect subsidiary, 43. Thai Cooperage Co., Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 44. Bang-Na Logistic Co., Ltd. Thailand Direct subsidiary, 100% shareholding 75. Speyburn-Glenlivet Distillery Company Limited United Kingdom Subsidiary of indirect subsidiary, 45. Thai Beverage Logistics Co., Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 46. Thai Beverage Marketing Co., Ltd. Thailand Direct subsidiary, 100% shareholding 76. The Knockdhu Distillery Company Limited United Kingdom Subsidiary of indirect subsidiary, 47. Dhanasindhi Co., Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 48. Dhospaak Co., Ltd. Thailand Direct subsidiary, 100% shareholding 77. The Pulteney Distillery Company Limited United Kingdom Subsidiary of indirect subsidiary, 49. International Beverage Holdings Ltd. Hong Kong Direct subsidiary, 100% shareholding 100% shareholding 50. Cosmos Brewery (Thailand) Co., Ltd. Thailand Direct subsidiary, 100% shareholding 78. The Balblair Distillery Company Limited United Kingdom Subsidiary of indirect subsidiary, 51. T.C.C. Cosmo Corporation Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 52. Beer Chang Co., Ltd. Thailand Direct subsidiary, 100% shareholding 79. R. Carmichael & Sons Limited United Kingdom Subsidiary of indirect subsidiary, 53. Archa Beer Co., Ltd. Thailand Direct subsidiary, 100% shareholding 100% shareholding 54. Sura Piset Phatra Lanna Co., Ltd. Thailand Direct subsidiary, 100% shareholding 80. J MacArthur Junior & Company Limited United Kingdom Subsidiary of indirect subsidiary, 55. Thai Thum Distillery Co., Ltd. Thailand Indirect subsidiary, 99.90% shareholding 100% shareholding 56. Sura Piset Sahasan Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 81. Mason & Summers Limited United Kingdom Subsidiary of indirect subsidiary, 57. Sura Piset Sampan Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 100% shareholding 58. Muangkij Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 82. Hankey Bannister Limited United Kingdom Subsidiary of indirect subsidiary, 59. Sint Ek Panich Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 100% shareholding 60. Pan Alcohol Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 83. James Catto & Company Limited United Kingdom Subsidiary of indirect subsidiary, 61. Banglen Agriculture Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 100% shareholding 62. Vitayathan Co., Ltd. Thailand Indirect subsidiary, 100% shareholding 84. Glen Calder Blenders Limited United Kingdom Subsidiary of indirect subsidiary, 63. InterBev (Singapore) Limited Singapore Indirect subsidiary, 100% shareholding 100% shareholding Annual Report 2007 Thai Beverage Public Company Limited

144 145

Country of Country of Name of the entity incorporation Nature of relationships Name of the entity incorporation Nature of relationships

85. Moffat & Towers Limited United Kingdom Subsidiary of indirect subsidiary, 102. T.C.C. Technology Co., Ltd. Thailand Directors and controlling shareholders hold 100% shareholding substantial shares indirectly 86. Liquorland Limited United Kingdom Associates of indirect subsidiary, 103. T.C.C. Capital Land Limited Thailand Directors and controlling shareholders hold 49.90% shareholding substantial shares indirectly 87. Inver House Polska Limited Poland Associates of indirect subsidiary, 104. Great Oriole Limited British Virgin 40.00% shareholding Islands Have common controlling shareholders 88. Inver House Distribution SA France Associates of indirect subsidiary, 105. Madrigal Trading Limited British Virgin Directors and shareholders are the directors 50.00% shareholding Islands of subsidiary 89. Pisetkij Co., Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly 106. Thai Glass Industries PCL. Thailand Directors and controlling shareholders hold 90. Oishi Trading Co., Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly substantial shares indirectly 107. Bang-Na Glass Co., Ltd. Thailand Directors and controlling shareholders hold 91. PS Recycle Co., Ltd. Thailand Directors and controlling shareholders are substantial shares indirectly relatives of controlling person 108. Plaza Athenee Hotel (Thailand) Co., Ltd. Thailand Directors and controlling shareholders 92. The Southeast Insurance (2000) Co., Ltd. Thailand Directors and controlling shareholders hold are the directors and hold substantial shares substantial shares indirectly indirectly 93. New Noble Property and Loan Fund Thailand Directors and controlling shareholders 109. TCC Hotel Collection Co., Ltd. Thailand Directors and controlling shareholders hold are the principal unit holder of this real estate substantial shares indirectly investment fund 110. Siam Realty Co., Ltd. Thailand Directors and controlling shareholders hold 94. The Maewang Sugar Industry Co., Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly substantial shares indirectly 95. The Chonburi Sugar Corp. Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly The pricing policies for particular types of transactions are explained further below: 96. The Utaradit Sugar Industry Co., Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly Transactions Pricing policies 97. The Suphanburi Sugar Industry Co., Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly Sale of finished goods Agreed prices which approximate market prices 98. Dynamic Assets Property and Loan Fund Thailand Directors and controlling shareholders Rendering of services Contractual prices are the principal unit holder of this real estate Purchase of raw materials Agreed prices which approximate market prices investment fund Receiving of services Contractual prices 99. Berli Jucker PCL. Thailand Directors and controlling shareholders hold Purchase and sale of property, plant and equipment Contractual prices substantial shares indirectly Purchase and sale of investments Contractual prices 100. Thai Beverage Can Co., Ltd. Thailand Directors and controlling shareholders hold Interest income and expense Rate as mutually agreed by shareholders with reference 50% shares interest rates quoted by domestic commercial banks 101. South East Capital Co., Ltd. Thailand Directors and controlling shareholders hold substantial shares indirectly Annual Report 2007 Thai Beverage Public Company Limited

146 147

Significant transactions for the years ended 31 December 2007 and 2006 with related parties were summarised Balances as at 31 December 2007 and 2006 with related parties were as follows: as follows: Consolidated Separate Trade accounts receivable from related parties financial statements financial statements

2007 2006 2007 2006 Consolidated Separate (in million Baht) financial statements financial statements

Subsidiaries 2007 2006 2007 2006

Management fees - - 2,577 3,432 (in million Baht)

Dividends - - 18,985 8,055 Other related companies

Purchases of investments - - 9,180 510 Oishi Trading Co., Ltd. 4 2 - -

Interest income - - 773 844 Pisetkij Co., Ltd. 3 4 - -

Interest expense - - 732 885 PS Recycle Co., Ltd. 3 7 - -

Other income - - 9 5 Others 4 8 - -

Other expenses - - 67 28 Total 14 21 - -

Other related parties

Revenue from sales 144 146 - -

Service income 14 33 - -

Purchases of raw materials and packaging 4,826 4,800 - -

Overhead costs 225 177 - -

Sales of property, plant and equipment 819 1 819 -

Purchases of property, plant and equipment 32 4 - -

Other income 104 18 64 -

Other expenses 296 274 73 37 Share of profits from investments accounted

for using the equity method 29 24 - - Consideration paid for

common control transactions - 1,505 - -

Interest expense 66 109 - -

Directors’ remuneration 264 265 262 255 Consolidated financial statements Separate financial statements

2007 2006 2007 2006 Short-term loans to and Short-term Amounts Short-term Amounts Short-term Amounts Short-term Amounts amounts due from related parties loans to due from Total loans to due from Total loans to due from Total loans to due from Total (in million Baht) Subsidiaries

Beer Thai (1991) PCL. ------1,786 54 1,840 1,539 136 1,675

Beer Thip Brewery (1991) Co., Ltd. ------26 26 - 146 146

Sangsom Co., Ltd. ------6 6 - 47 47

Fuengfuanant Co., Ltd. ------2 2 - 12 12

Mongkolsamai Co., Ltd. ------1 1 - 3 3

Thanapakdi Co., Ltd. ------1 1 - 4 4

Kanchanasingkorn Co., Ltd. ------182 3 185 348 6 354

Sura Bangyikhan Co., Ltd. ------8 8 1,494 45 1,539

Athimart Co., Ltd. ------3 3 - 13 13

S.S. Karnsura Co., Ltd. ------3 3 - 12 12

Kankwan Co., Ltd. ------4 4 314 14 328

Theparunothai Co., Ltd. ------3 3 - 10 10

Red Bull Distillery (1988) Co., Ltd. ------9 9 2,477 32 2,509

United Winery and Distillery Co., Ltd. ------1 1 - 7 7

Simathurakij Co., Ltd. ------519 5 524 70 9 79

Nateechai Co., Ltd. ------219 3 222 477 12 489

Luckchai Liquor Trading Co., Ltd. ------431 7 438 197 11 208

Sura Piset Thipparat Co., Ltd. ------3 3 760 2 762

Thai Alcohol PCL. ------124 7 131 244 14 258

Pomthip Co., Ltd. ------9 9 - 37 37

Pomkit Co., Ltd. ------16 16 - 107 107

Pomkung Co., Ltd. ------7 7 - 40 40

Pomchok Co., Ltd. ------9 9 - 48 48

Pomcharoen Co., Ltd. ------5 5 - 21 21

Pomburapa Co., Ltd. ------7 7 - 35 35

Num Yuk Co., Ltd. ------85 12 97 - 67 67

Num Kijjakarn Co., Ltd. ------21 21 - 89 89

Consolidated financial statements Separate financial statements

Subsidiaries (continued)

Num Palang Co., Ltd. ------8 8 - 39 39

Num Muang Co., Ltd. ------9 9 - 47 47

Num Nakorn Co., Ltd. ------5 5 - 25 25

Num Thurakij Co., Ltd. ------7 7 - 30 30

Thipchalothorn Co., Ltd. ------120 38 158 85 203 288

Krittayabun Co., Ltd. ------42 42 - 190 190

Surathip Co., Ltd. ------17 17 - 72 72

Sunthronpirom Co., Ltd. ------3 3 - 61 61

Piromsurang Co., Ltd ------1 1 - 14 14

Bionic Humus Co., Ltd. ------23 - 23

Maharas Agri Co., Ltd. ------13 - 13 Thai Beverage Logistics Co., Ltd.

(Formerly: Sahatipkarnkonsong Co., Ltd. ------67 - 67 50 - 50

International Beverage Holdings Ltd. ------12 1 13 1,276 8 1,284

T.C.C. Cosmo Corp., Ltd. ------3 - 3 - - -

Sura Piset Phatra Lanna Co., Ltd. ------2 2 - - -

Total subsidiaries ------3,548 368 3,916 9,367 1,668 11,035

Related companies

Pisetkij Co., Ltd. - 2 2 - 7 7 ------

New Noble Property And Loan Fund - - - - 3 3 ------

The Maewang Sugar Industry Co., Ltd. - - - - 6 6 ------

The Chonburi Sugar Corp. Ltd. - - - - 8 8 ------

The Utaradit Sugar Industry Co., Ltd. - - - - 7 7 ------

The Suphanburi Sugar Industry Co., Ltd. - - - - 12 12 ------

Others - 2 2 - 8 8 ------

Total related companies - 4 4 - 51 51 ------

Total - 4 4 - 51 51 3,548 368 3,916 9,367 1,668 11,035 Consolidated financial statements Separate financial statements

2007 2006 2007 2006 Long-term loans to and Long-term Amounts Long-term Amounts Long-term Amounts Long-term Amounts amounts due from related parties loans to due from Total loans to due from Total loans to due from Total loans to due from Total (in million Baht)

Subsidiaries

Beer Thai (1991) PCL. ------4,210 - 4,210 2,087 - 2,087

Thanapakdi Co., Ltd. ------7 - 7 - - -

Kanchanasingkorn Co., Ltd. ------286 - 286 64 - 64

Sura Bangyikhan Co., Ltd. ------785 - 785 425 - 425

Kankwan Co., Ltd. ------106 - 106 16 - 16

Red Bull Distillery (1988) Co., Ltd. ------565 - 565 485 - 485

Simathurakij Co., Ltd. ------96 - 96 600 - 600

Nateechai Co., Ltd. ------61 - 61 217 - 217

Luckchai Liquor Trading Co., Ltd. ------859 - 859 963 - 963

Sura Piset Thipparat Co., Ltd. ------600 - 600 - - -

Thai Alcohol PCL. ------1,145 - 1,145 436 - 436

Num Yuk Co., Ltd. ------155 - 155 - - -

International Beverage Holdings Ltd. ------196 - 196 208 - 208

Sura Piset Phatra Lanna Co., Ltd. ------340 - 340 - - -

Total subsidiaries ------9,411 - 9,411 5,501 - 5,501

Related companies

Dynamic Assets Property and Loan Fund - 1 1 - 14 14 ------

Total - 1 1 - 14 14 9,411 - 9,411 5,501 - 5,501 At Total short-termloanstorelatedparties - 2006 Decrease 2007 Increase 2006 2007 - At Decrease - - At ( Other relatedparties 2006 ( - Decrease 2007 financialstatements Increase - At 2006 Subsidiaries financialstatements Short-term loans 2007 - ( Movements duringtheyearsended Total loanstorelatedparties Long-term - Short-term - loans loans Consolidated Summary ofloanstorelatedparties Separate At At iaca ttmns financialstatements financialstatements Consolidated Loans torelatedparties Separate 1 1 1 31 31 31 Jnay - - January January - January December December December

------

31 December

2007 and 2006 ofloanstorelatedpartieswereasfollows: (in millionBaht) (in millionBaht) Thai BeveragePublicCompanyLimited 41 41 41 41 ) ( - ) - - - 12 3 6 1 9 3 6 1 9 9 3 , , , , , , , , , , , 548 889 070 367 548 889 070 367 959 411 548 ) ( ) ( 151 14 2 2 9 3 8 9 3 8 5 9 , , , , , , , , , , , 459 459 367 396 430 367 396 430 868 501 367 ) ) Annual Report 2007

92 52 95 982 057 201 130 194 398 287 307 402 312 325 124 335 120 254 171 126 176 477 597 018 678 152 , , , , 1 1 1 1

5 1 1 2 1 2 2 7 1 2 1 2 5 1 1 3 3 6 4 18 2006

Loans to related parties - - - - - 92 50 95 964 052 200 130 193 396 286 305 395 311 323 123 333 120 249 170 126 175 474 594 012 674 , , , , Consolidated Separate 1 1 1 1 financial statements financial statements

1 1 1

2007 2006 2007 2006 45 50 41 84 31 27 65 15 82 65 141 195 408 100 198 (in million Baht) Long-term loans

1 2 2 4 2 2 1 1 2 9 5 1 1

Subsidiaries 12

At 1 January - - 5,501 5,310 2007

Increase - - 4,686 964 - - - - 45 50 39 80 29 25 65 10 81 64

Decrease - - (776) (773) 129 193 406 100 189

At 31 December - - 9,411 5,501

Trade accounts payable - related parties (in million Baht) Consolidated Separate financial statements financial statements

2007 2006 2007 2006 2006 (in million Baht) Other related companies

Berli Jucker PCL. 471 554 - -

Thai Beverage Can Ltd. 139 126 - -

PS Recycle Co., Ltd. 46 74 - -

Pisetkij Co., Ltd. 10 60 - -

Others 14 5 - -

Total 680 819 - - 2007 ) Co., Ltd. - - Co., ) 1991

Short-term Amounts Short-term Amounts Short-term Amounts Short-term Amounts Amounts Short-term Amounts Short-term Amounts Short-term Amounts Short-term loans from due to Consolidated financial statements Total loans from due to Total loans from due to Total loans from due to Separate financial statements Total Beer Thip Brewery ( Sangsom Co., Ltd. Short-term loans from and Ltd. amounts due to related parties Ltd. Ltd. Co., Ltd. Subsidiaries Co., Ltd. Co., Co., Sangsom Co., Ltd. ------Fuengfuanant Co., - - - - - Mongkolsamai Karnsura Ltd. - Thanapakdi - - Co., Ltd. Athimart Ltd. - - S.S. Co., - - Ltd. Ltd. Theparunothai Co., Ltd. Ltd. United Winery and Distillery Co., Ltd. Co., Ltd. Ltd. Pomthip Co., Co., Ltd. - - Pomkit Co., Co., Ltd. Pomkung - - Co., Co., - - Ltd. Pomchok Yuk Co., ------Pomcharoen Kijjakarn Co., Pomburapa - - - - - Palang Co., Num - - - Muang - Ltd. - Num - Nakorn Ltd. - - Num Thurakij Ltd. Num - Co., Ltd. Num Co., Num Co., - Krittayabun - - Co., Surathip - - - - Sunthronpirom - - - Piromsurang - Consolidated financial statements Separate financial statements

2007 2006 2007 2006 Short-term loans from and Short-term Amounts Short-term Amounts Short-term Amounts Short-term Amounts amounts due to related parties loans from due to Total loans from due to Total loans from due to Total loans from due to Total (in million Baht) Subsidiaries (continued)

Bionic Humus Co., Ltd. ------121 - 121 - - -

Thai Molasses Co., Ltd. ------22 - 22 61 - 61

Additive Food Co., Ltd. ------25 - 25

Pan International (Thailand) Co., Ltd. ------55 - 55

Thai Cooperage Co., Ltd. ------161 1 162

Bang-Na Logistic Co., Ltd. ------30 - 30 - - -

Thai Beverage Marketing Co., Ltd. ------150 1 151 - - -

Dhospaak Co., Ltd. ------14 14 30 13 43

International Beverage Holdings Ltd. ------1 1 - - -

Cosmos Brewery (Thailand) Co., Ltd. ------177 3 180 1,690 11 1,701

Beer Chang Co., Ltd. ------1 1 100 1 101

Archa Beer Co., Ltd. ------35 - 35 20 - 20

Total subsidiaries ------2,040 65 2,105 12,984 94 13,078

Related companies

The Southeast Insurance (2000) Co., Ltd. - 19 19 - 41 41 ------

South East Capital Co., Ltd. - 14 14 - 17 17 - 2 2 - 2 2

T.C.C. Technology Co., Ltd. - 11 11 - 10 10 - 7 7 - 5 5 TCC Hotel Collection Co., Ltd.

(Formerly: Queen’s Park Hotel Group Co., Ltd. - 10 10 - 7 7 - 1 1 - - -

Plaza Athenee Hotel (Thailand) Co., Ltd. - 10 10 - 11 11 ------

Great Oriole Limited - - - 4,615 129 4,744 ------

Others - 5 5 - 7 7 ------

Total related companies - 69 69 4,615 222 4,837 - 10 10 - 7 7

Total - 69 69 4,615 222 4,837 2,040 75 2,115 12,984 101 13,085 iosrn o,Ld ------Piromsurang Co.,Ltd. - Krittayabun Co.,Ltd. Pomcharoen Co.,Ltd. 2006 Pomkung Co.,Ltd. Pomkit Co.,Ltd. 2007 Pomthip Co.,Ltd. 2006 Fuengfuanant Co.,Ltd. 2007 - Total United StatesDollars(USD) currenciesofforeign subsidiaries Thai Baht(THB)andotherfunctional The currencydenominationofshort-termloansfromandamountsduetorelatedpartiesasat utrnio o,Ld ------Sunthronpirom Co.,Ltd. - - Pomburapa Co.,Ltd. Pomchok Co.,Ltd. financialstatements United WineryandDistilleryCo.,Ltd. Theparunothai Co.,Ltd. Mongkolsamai Co.,Ltd. financialstatements Consolidated as follows: Separate erCagC. t. ------Beer ChangCo.,Ltd. Cosmos Brewery(Thailand)Co., Ltd. Charun Business financialstatements Pan International(Thailand)Co.,Ltd. Thai MolassesCo.,Ltd. financialstatements 2006 20072006 Beer ThipBrewery( Subsidiaries Consolidated Long-term loansfromrelatedparties Separate rh erC. t. ------Total Archa BeerCo.,Ltd. Dhospaak Co.,Ltd. Thai BeverageMarketingCo.,Ltd. Thai CooperageCo.,Ltd.

52 C. t. - - - Co.,Ltd. 1991 o,Ld - - - ) Co.,Ltd.

69 69

(in millionBaht) (in millionBaht) 4 4 , , Thai BeveragePublicCompanyLimited 621 837 216

- - 6 2 2 2 , , , , 178 101 284 115 426 309 682 329 210 133 104 910 115 115 540 107 320 13 10 50 10 71 10 78 90 31 ------Decemberwas 155 13 13 4 2 , , , , 372 407 189 163 250 208 140 344 525 085 085 10 15 22 99 Annual Report 2007 Thai Beverage Public Company Limited

156 157

Summary of loans from related parties Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements 2007 2006 2007 2006

2007 2006 2007 2006 (in million Baht) (in million Baht) Long-term loans

Short-term loans - 4,615 2,040 12,984 Subsidiaries

Long-term loans - - 6,540 4,372 At 1 January - - 4,372 2,733

Total loans from related parties - 4,615 8,580 17,356 Increase - - 2,443 1,704 Decrease - - (275) (65)

At 31 December - - 6,540 4,372 Movements during the years ended 31 December 2007 and 2006 of loans from related parties were as follows:

Significant agreements with related parties Loans from related parties Consolidated Separate Supporting service agreement financial statements financial statements The Company entered into the supporting service agreement with subsidiaries for the supporting service such as 2007 2006 2007 2006 human resource, administration, accounting, finance, public relations, public co-ordination, technology, law, secretary (in million Baht) and share register and internal audit for the period of one year from 1 January 2004 to 31 December 2004. Unless there Short-term loans are notifications to terminate the agreement within 30 days before the expiry date, this agreement continues to be in Subsidiaries effect for the successive one year term. The subsidiaries are committed to pay a service fee at the rate of 0.5% of their At 1 January - - 12,984 12,808 principal revenue. Increase - - 459 3,638

Decrease - - (11,403) (3,462) Up to date, supporting service fee rate was adjusted to 1% of the principal revenue. Service fee rate was adjusted for At 31 December - - 2,040 12,984 development of new goods, experiment and quality test, analysis, research and marketing survey for new products and

procurement of information. Other related parties

At 1 January 4,615 4,015 - - Application service provisioning agreement Increase - 630 - - The Company entered into the application service provisioning agreement with T.C.C. Technology Co., Ltd., a related Decrease (4,615) (30) - - party, for the providing ongoing support and maintenance of the systems and infrastructure and is committed to pay At 31 December - 4,615 - - system, hardware and software rental fee and service fee on monthly basis throughout the contract period for five years. Total short-term loans from related parties

At 1 January 4,615 4,015 12,984 12,808 Procurement agreement Increase - 630 459 3,638 The Group entered into the procurement agreement with Pan International (Thailand) Company Limited, the Company’s Decrease (4,615) (30) (11,403) (3,462) subsidiary, for necessary purchase and procurement services to the Group. The Group is committed to pay procurement

At 31 December - 4,615 2,040 12,984 fee at 1% of the value of goods and services purchased under such agreement.

Annual Report 2007 Thai Beverage Public Company Limited

158 159

Molasses purchase agreement The currency denomination of cash and cash equivalents as at 31 December was as follows: Thai Molasses Co., Ltd., the Company’s subsidiary, entered into the molasses purchase agreement with various related companies in order to sell to other subsidiary companies within the Group. The term and condition as specified in the Consolidated Separate agreements is that the sellers would sales molasses to the buyers in specified quantity, price, quality, delivery and financial statements financial statements received, payments, responsibility, weight, sample analysis on molasses, and quality control, etc. These were mutually 2007 2006 2007 2006 agreed by the parties. (in million Baht) Thai Baht (THB) and other functional currencies of foreign subsidiaries 2,015 1,899 9 16 Glass bottle purchase and sale agreement United States Dollars (USD) 174 15 - - Bang-Na Logistic Co., Ltd., the Company’s subsidiary, entered into the glass bottle purchase and sale agreement with Euro (EUR) - 6 - - Berli Jucker Public Company Limited, a related party, to purchase various types of new glass bottles in order to sell to Total 2,189 1,920 9 16 other subsidiaries within the Group for a period of two years and eight months, effective date from 1 May 2007 to 31

December 2009 under the price and condition stated in the contract. 7. Other investments

License agreement Consolidated Separate - Three subsidiaries entered into license agreements with Beer Chang Co., Ltd. and Archa Beer Co., Ltd., related financial statements financial statements companies, in order to receive the rights and obligations in drinking water, soda water, beer, draft beer and lager beer 2007 2006 2007 2006 under the trade names of “CHANG” and “ARCHA”. Subsidiaries are committed to pay fee at a rate of 2% based on (in million Baht) net sale at price distributing at the factory (excluding VAT) after deducting the excise tax and health promotion fund. Current investments Short-term deposits at financial institutions 8 4 - - - Sura Bangyikhan Co., Ltd., the Company’s subsidiary, entered into license agreements with 12 subsidiaries to provide the rights to use trademark for white liquor and Chiang - Chun blended liquor as stipulated in the agreement. Other long-term investments The trademark fee the rate ranging from Baht 0.50 - 1.50 per bottle based on contents of each type of bottles. Other non-marketable equity securities 8 8 - - Less allowance for decline in value of investments (4) (4) - - Net 4 4 - - 6. Cash and cash equivalents Total 12 8 - -

Consolidated Separate 8. Trade accounts receivable financial statements financial statements

2007 2006 2007 2006 Consolidated Separate (in million Baht) financial statements financial statements Cash on hand 33 33 - - Note 2007 2006 2007 2006 Cash at banks - current accounts 1,203 1,186 1 1 (in million Baht) Cash at banks - savings accounts 786 412 8 15 Related parties 5 14 21 - - Highly liquid short-term investments 167 289 - - Other parties 1,608 1,321 - - Total 2,189 1,920 9 16 1,622 1,342 - - Less allowance for doubtful accounts (155) (24) - - Total 1,467 1,318 - - Bad and doubtful debts expenses for the year 20 35 - - Annual Report 2007 Thai Beverage Public Company Limited

160 161

Aging analyses for trade accounts receivable were as follows: 9. Inventories

Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements 2007 2006 2007 2006 2007 2006 2007 2006 (in million Baht) (in million Baht) Related parties Finished goods 13,487 14,659 - - Within credit terms 10 18 - - Work in progress 3,769 3,423 - - Overdue: Raw materials 1,938 1,390 - - Less than 3 months 4 3 - - Packaging materials 593 582 - - 14 21 - - Maturing spirits 8,310 8,161 - -

Spare parts 455 489 - - Other parties Others 290 251 - - Within credit terms 979 940 - - 28,842 28,955 - - Overdue: Less allowance for obsolete inventories (785) (640) - - Less than 3 months 353 340 - - Net 28,057 28,315 - - 3-6 months 64 17 - - 6-12 months 72 19 - - Over 12 months 140 5 - - The cost of inventories which is recognized as an expense and included in ‘cost of sale of goods’ for 2007 amounted 1,608 1,321 - - to Baht 69,685 million (2006: Baht 67,560 million). Less allowance for doubtful accounts (155) (24) - - Net 1,453 1,297 - - 10. Other current assets Total 1,467 1,318 - - Consolidated Separate The normal credit term granted by the Group ranges from 7 days to 180 days. financial statements financial statements

2007 2006 2007 2006 The currency denomination of trade accounts receivable as at 31 December was as follows: (in million Baht)

Prepaid excise tax 583 688 - -

Consolidated Separate Refundable VAT 207 381 3 9 financial statements financial statements Prepaid property tax 154 152 - - 2007 2006 2007 2006 Refundable excise tax 135 102 - - (in million Baht) Prepaid expenses 103 56 4 1 Thai Baht (THB) and other functional Deposits 92 374 - - currencies of foreign subsidiaries 1,376 1,259 - - Others 148 179 1 7 United States Dollars (USD) 90 24 - - 1,422 1,932 8 17 Australian Dollar (AUD) 1 - - - Less allowance for doubtful accounts (18) (18) - - Euro (EUR) - 30 - - Net 1,404 1,914 8 17 Others - 5 - - Total 1,467 1,318 - - Annual Report 2007 Thai Beverage Public Company Limited

162 163

25 25 32 60 17 17 821 089 840 104 109 129 , 2006 2006 1

57 85 259 277 750 307 628 273 398 , , 2007 2007 The currency denomination of other current assets as at 31 December was as follows: 2 2 - Consolidated Separate - - 500 500 500 900 700 700 700 000 900 800 135 135 , , , , 2006 2006 financial statements financial statements 7 4 12 12 2007 2006 2007 2006

(in million Baht) 500 500 500 900 700 700 700 000 900 800 124 124 , , , , 2007 Thai Baht (THB) and other functional 2007 7 4 12 12 currencies of foreign subsidiaries 1,403 1,913 8 17

United States Dollars (USD) 1 1 - -

------4 1 51 56 550 600 500 900 700 700 700 000 900 800

Total 1,404 1,914 8 17 , , , , 2006 2006 5 6 7 4

11. Investments in subsidiaries and associates

Separate financial statements (Restated) 4 1 18 23 550 600 500 900 700 700 700 000 900 800 , , , , 2007 2007 5 6 7 4 Consolidated Separate financial statements financial statements

8 2 00 00 00 00 00 00 00 00 00 00 2007 2006 2007 2006 69 79 ...... 2006 2006

(in million Baht) 100 100 100 100 100 100 100 100 100 100

At 1 January 135 129 63,595 63,085 (%) (in million Baht)

Share of profits of investments - equity method 29 24 - - 8 2 00 00 00 00 00 00 00 00 00 00 69 79 ...... 2007 2007

Acquisitions - - 9,180 510 100 100 100 100 100 100 100 100 100 100

Disposals (33) (18) - -

Recovery of investments - - (1,305) - , and dividend income from those investments for the years then ended were as follows: 49 00 02 . . .

Translation differences on consolidation (7) - - - 49 44 50 2006 At 31 December 124 135 71,470 63,595 and

2007 49 00 02 . . . 2007 2006 49 44 50 December 31 ) Co., Ltd. 1991

) PCL. 1991

Direct subsidiaries Beer Thai ( Beer Thip Brewery ( Sangsom Co., Ltd. Fuengfuanant Co., Ltd. Mongkolsamai Co., Ltd. Thanapakdi Co., Ltd. Kanchanasingkorn Co., Ltd. Sura Bangyikhan Co., Ltd. Athimart Co., Ltd. S.S. Karnsura Co., Ltd.

Ownership interest Paid-up capital Cost method Dividend income Held by subsidiaries of indirect subsidiaries subsidiaries indirect of Investments in subsidiaries and associates as at subsidiaries by Associates Held Inver House Polska Limited (%) (in million Baht) Liquorland Limited Inver House Distribution SA Total Ownership interest Paid-up capital Cost method Equity method Consolidated financial statements Dividend income Separate financial statements (Restated) Annual Report2007 Ownership interest Paid-up capital Cost method Dividend income

2007 2006 2007 2006 2007 2006 2007 2006

(%) (in million Baht)

Direct subsidiaries (continued)

Kankwan Co., Ltd. 100.00 100.00 800 800 800 800 340 122

Theparunothai Co., Ltd. 100.00 100.00 700 700 700 700 190 95

Red Bull Distillery (1988) Co., Ltd. 100.00 100.00 5,000 3,000 5,000 3,000 - -

United Winery and Distillery Co., Ltd. 100.00 100.00 1,800 1,800 1,800 1,800 70 67

Simathurakij Co., Ltd. 100.00 100.00 900 900 889 900 138 23

Nateechai Co., Ltd. 100.00 100.00 800 800 800 800 157 38

Luckchai Liquor Trading Co., Ltd. 100.00 100.00 800 800 766 800 35 24

Sura Piset Thipparat Co., Ltd. 100.00 100.00 500 500 510 510 - -

Thai Alcohol PCL. 100.00 100.00 800 800 1,374 1,666 66 120

Pomthip Co., Ltd. 100.00 100.00 10 10 10 10 292 100

Pomkit Co., Ltd. 100.00 100.00 10 10 10 10 570 116

Pomkung Co., Ltd. 100.00 100.00 10 10 10 10 275 74

Pomchok Co., Ltd. 100.00 100.00 10 10 10 10 534 155

Pomcharoen Co., Ltd. 100.00 100.00 10 10 10 10 26 -

Pomburapa Co., Ltd. 100.00 100.00 10 10 10 10 382 93

Num Yuk Co., Ltd. 100.00 100.00 10 10 10 10 858 247

Num Kijjakarn Co., Ltd. 100.00 100.00 10 10 10 10 1,424 604

Num Palang Co., Ltd. 100.00 100.00 10 10 10 10 387 170

Num Muang Co., Ltd. 100.00 100.00 10 10 10 10 528 267

Num Nakorn Co., Ltd. 100.00 100.00 10 10 10 10 238 119

Num Thurakij Co., Ltd. 100.00 100.00 10 10 10 10 413 196

Thipchalothorn Co., Ltd. 100.00 100.00 1 1 3 3 573 233

Krittayabun Co., Ltd. 100.00 100.00 5 5 27 27 359 234 164 Surathip Co., Ltd. 100.00 100.00 1 1 7 7 649 413

Separate financial statements (Restated)

Ownership interest Paid-up capital Cost method Dividend income

2007 2006 2007 2006 2007 2006 2007 2006

(%) (in million Baht)

Direct subsidiaries (continued)

Sunthronpirom Co., Ltd. 100.00 100.00 5 5 25 25 1,075 437

Piromsurang Co., Ltd. 100.00 100.00 5 5 24 24 711 350

Bionic Humus Co., Ltd. 100.00 100.00 350 10 354 14 - -

Maharas Agri Co., Ltd. 100.00 100.00 2 2 2 2 - -

Thai Molasses Co., Ltd. 99.72 99.72 40 40 35 35 165 63

Additive Food Co., Ltd. 100.00 100.00 1 1 32 38 42 12

Pan International (Thailand) Co., Ltd. 100.00 100.00 1 1 34 54 60 19

Charun Business 52 Co., Ltd. 100.00 100.00 122 122 84 84 - -

Thai Cooperage Co., Ltd. 100.00 100.00 300 300 296 300 28 8

Bang-Na Logistic Co., Ltd. 100.00 100.00 123 123 134 134 75 30

Thai Beverage Logistics Co., Ltd.

(Formerly: Sahatipkarnkonsong Co., Ltd.) 100.00 100.00 12 12 12 12 118 23

Thai Beverage Marketing Co., Ltd. 100.00 100.00 300 300 300 300 100 7

Dhanasindhi Co., Ltd. 100.00 100.00 20 20 24 24 27 8

Dhospaak Co., Ltd. 100.00 100.00 25 25 61 61 20 -Thai BeveragePublicCompanyLimited

International Beverage Holdings Ltd. 100.00 100.00 6,760 535 6,760 535 - -

Cosmos Brewery (Thailand) Co., Ltd. 100.00 100.00 1,667 1,667 4,212 5,150 672 257

T.C.C. Cosmo Corp., Ltd. 100.00 100.00 5 5 39 39 5 -

Beer Chang Co., Ltd. 100.00 100.00 1 1 4,301 4,301 277 96

Archa beer Co., Ltd. 100.00 100.00 1 1 130 130 72 1

Sura Piset Phatra Lanna Co., Ltd. 100.00 100.00 600 - 615 - - -

Total 50,917 41,752 71,470 63,595 18,985 8,055 165 12. Property, plant and equipment Annual Report2007

Consolidated financial statements

Land Furniture surplus on Building Machinery ﬁ xtures land Land and and and ofﬁ ce Construction Cost revaluation Total improvement improvements equipment Oak barrels equipment Vehicles in progress Total

(in million Baht)

Cost/revaluation

At 1 January 2006 7,836 6,585 14,421 720 15,402 34,890 2,753 562 2,716 7,168 78,632

Additions 424 - 424 2 201 1,073 31 80 29 2,199 4,039

Surplus on revaluation - 3 3 ------3

Transfers - - - 434 796 5,439 - (35) (21) (6,613) -

Disposals - (1) (1) (2) (7) (92) - (11) (25) (1) (139)

Translation differences

on consolidation - - - - (4) - - - - - (4)

At 31 December 2006 and

1 January 2007 8,260 6,587 14,847 1,154 16,388 41,310 2,784 596 2,699 2,753 82,531

Additions 357 - 357 1 85 199 26 60 23 946 1,697

Surplus on revaluation - 731 731 ------731

Reversal of revaluation - (2,794) (2,794) ------(2,794)

Loss on revaluation (59) - (59) ------(59)

Transfers (2) - (2) 145 719 2,191 - 12 (1) (3,064) -

Disposals (410) (135) (545) - (12) (85) (5) (9) (26) (210) (892)

Translation differences

on consolidation (1) - (1) (1) (62) (46) (17) - - - (127)

At 31 December 2007 8,145 4,389 12,534 1,299 17,118 43,569 2,788 659 2,695 425 81,087

166

Consolidated financial statements

(in million Baht)

Finance costs capitalised Finance costs capitalised

during 2006 (note 24) - - - - 33 121 - - - - 154 Rate of interest capitalised

during 2006 (% per annum) - - - - 5.82 5.82 - - - - 5.82 Finance costs capitalised

during 2007 (note 24) - - - - 4 9 - - - - 13 Rate of interest capitalised

during 2007 (% per annum) - - - - 5.97 5.97 - - - - 5.97

Accumulated depreciation

At 1 January 2006 - - - 201 5,188 19,672 1,241 313 2,093 - 28,708

Depreciation charge for the year - - - 53 733 3,171 134 76 314 - 4,481

Transfers - - - 224 (261) 86 - (34) (15) - -

Disposals - - - (1) (4) (48) - (9) (22) - (84) Thai BeveragePublicCompanyLimited Translation differences

on consolidation - - - - (2) - - - - - (2)

At 31 December 2006 and

1 January 2007 - - - 477 5,654 22,881 1,375 346 2,370 - 33,103

Depreciation charge for the year - - - 81 792 3,666 134 83 167 - 4,923

Transfers - - - - 6 (16) - 11 (1) - -

Disposals - - - - (8) (63) - (8) (21) - (100)

Translation differences 167

on consolidation - - - - (19) (28) (8) - - - (55)

At 31 December 2007 - - - 558 6,425 26,440 1,501 432 2,515 - 37,871

Consolidated financial statements Annual Report2007

(in million Baht)

Net book value

Owned assets 8,260 6,587 14,847 677 10,734 18,429 1,409 250 318 2,753 49,417

Assets under finance leases ------11 - 11

Total at 31 December 2006 8,260 6,587 14,847 677 10,734 18,429 1,409 250 329 2,753 49,428

Owned assets 8,145 4,389 12,534 741 10,693 17,129 1,287 227 171 425 43,207

Assets under finance leases ------9 - 9

Total at 31 December 2007 8,145 4,389 12,534 741 10,693 17,129 1,287 227 180 425 43,216

The gross carrying amount of fully depreciated plant and equipment that was still in use as at 31 December 2007 amounted to Baht 4,264 million (2006: Baht 3,026 million).

The net book value of property, plant and equipment of certain subsidiary companies used as security under the Negative Pledge agreement as disclosed in Note 15 as at

31 December 2007 amounted to Baht 31,238 million (2006: Baht 34,530 million).

The carrying amount of idle land which is held for planned future business operations as at 31 December 2007 amounted to Baht 1,721 million (2006: Baht 1,516 million). 168 iaca ttmns financialstatements financialstatements Consolidated Separate At At 20 20 20 2006 2007 2006 2007 Total Included insellingandadministrative expenses Included incostofproduction Depreciation ofplantandequipmentfortheyearsended - - - - ( - Land Disposals ( Additions Disposals Additions At Cost/revaluation ad adofc Construction andoffice Total land in Vehicles progress equipment Total revaluation Cost surplus on fixtures

ercaincag o h er - - - - At At - - Net bookvalue At - Depreciation chargefortheyear At Depreciation chargefortheyear At Accumulated depreciation 1 1 1 1 31 31 31 31 31 31 January January January January December December December December December December

2007 2007 2006 2006

2007 2006 2007 2006 2007 2006 - - - - and - and

411 411 411 411 ) (

134 134 134 134 31 ) (

4 1 3 Decemberwasasfollows: , , , 923 837 086

Separated financialstatements 545 545 545 545 ) - (

(in millionBaht) Furniture, (in millionBaht) 4 1 2 , , , Thai BeveragePublicCompanyLimited 100 481 601 880 95 27 68 59 73 41 19 22 17 5 5 - -

- - 12 18 11 23 24 24 5 6 4 2 1 - - - - - ) ( 24 24

210 210 210 100 121 11 1 1 1 ) ( ) ( 169 846 124 756 874 127 758 21 21 72 52 24 28 21 11 7 6 ) ) Annual Report 2007 Thai Beverage Public Company Limited

170 171

13. Intangible assets Separate financial statements

Consolidated financial statements Computer software Computer Broadcasting (in million Baht) Goodwill software Trademark rights Leasehold Total Cost (in million Baht) At 1 January 2006 9 Cost Additions 7 At 31 December 2006 and 1 January 2007 16 At 1 January 2006 426 16 307 162 1 912 Additions 9 Additions - 9 3 - 1 13 At 31 December 2007 25 At 31 December 2006 and

1 January 2007 426 25 310 162 2 925 Accumulated amortisation Additions 659 10 17 - - 686 At 1 January 2006 1 Decrease - - - (162) - (162) Amortisation charge for the year 3 Translation differences At 31 December 2006 and 1 January 2007 4 on consolidation (19) - - - - (19) Amortisation charge for the year 5 At 31 December 2007 1,066 35 327 - 2 1,430 At 31 December 2007 9

Accumulated amortisation Net book value At 1 January 2006 175 2 183 38 1 399 At 31 December 2006 12 Amortisation charge for the year 18 4 25 124 - 171 At 31 December 2007 16 At 31 December 2006 and

1 January 2007 193 6 208 162 1 570 14. Other non-current assets Amortisation charge for the year 18 6 27 - - 51

Decrease - - - (162) - (162) Consolidated Separate Translation differences financial statements financial statements

on consolidation (8) - - - - (8) Note 2007 2006 2007 2006 At 31 December 2007 203 12 235 - 1 451 (in million Baht)

Advance payments to a specialist 31 1,829 1,879 343 352

Net book value Idle land 106 106 - -

At 31 December 2006 233 19 102 - 1 355 Stainless steel plates 67 71 - -

At 31 December 2007 863 23 92 - 1 979 Deposits 65 58 8 5

Others 20 13 - -

2,087 2,127 351 357

Less allowance for impairment of assets (14) (5) - -

Net 2,073 2,122 351 357 Annual Report 2007 Thai Beverage Public Company Limited

172 173

15. Interest-bearing liabilities The periods to maturity of interest-bearing liabilities as at 31 December were as follows:

Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements Note 2007 2006 2007 2006 2007 2006 2007 2006 (in million Baht) (in million Baht) Current Within one year 10,753 17,368 11,593 22,014 Bank overdrafts After one year but within five years 5,400 6,755 11,940 11,127 Secured 899 1,516 - - Unsecured 101 367 - 30 Total 16,153 24,123 23,533 33,141

Short-term loans from financial institutions As at 31 December 2007 the Group had unutilized credit facilities totalling Baht 24,724 million (2006: Baht 17,790 million). Unsecured 4,998 4,870 4,798 3,000 Bank overdraft and short-term The principal features of the borrowings were as follows: loans from financial institutions 5,998 6,753 4,798 3,030

Short-term guaranteed bonds (a) Bank overdrafts are repayable on demand as at 31 December 2007, the Group has a total overdraft facilities Guaranteed / Negative pledge - 2,200 - 2,200 amounting to Baht 3,714 million (2006: Baht 3,705 million) which is partially guaranteed by five subsidiaries.

Current portion of long-term (b) Short-term loans from financial institutions as at 31 December 2007, the Group has short-term loan facilities from

guaranteed bonds several financial institutions totalling Baht 25,010 million (2006: Baht 20,820 million) with money market rate quoted by Guaranteed / Negative pledge 3,000 2,300 3,000 2,300 bank. The Group utilized those facilities in term of promissory notes issued by the Group to several domestic financial

institutions totalling Baht 3,000 million (2006: Baht 4,870 million). Current portion of long-term loans Guaranteed / Negative pledge 1,755 1,500 1,755 1,500 In September 2007, the Company issued and offered short-term bill of exchange amounting to Baht 5,000 million to two

financial institutions, the said bills represents short-term bill of exchange offered to and exchanged among institutional Short-term loans from related parties 5 Unsecured - 4,615 2,040 12,984 investors and/or substantial high net worth investors as prescribed in accordance with Notifications of the Securities 10,753 17,368 11,593 22,014 and Exchange Commission. As at 31 December 2007, the outstanding balance of bill of exchange was amounting to Non-current Baht 2,000 million. Long-term guaranteed bonds

Guaranteed / Negative pledge - 3,000 - 3,000 (c) Guaranteed bonds as at 31 December 2007 and 2006 were guaranteed bonds with a full co-guarantee by four

subsidiaries and negative pledge undertaken by the Company whereby 17 subsidiaries agree not to sell, transfer, Long-term loans from financial institutions mortgage, pledge, encumber or grant any preferential right in relation to their land, buildings, plants and machinery. Guaranteed / Negative pledge - 3,755 - 3,755 The Company is required to maintain a consolidated debt (interest-bearing debt) to equity (excluding unrealised foreign Unsecured 5,400 - 5,400 - exchange gain or loss) ratio of not more than 2.5 to 1 based on the annual consolidated financial statements prepared

Long-term loans from related parties 5 in accordance with generally accepted accounting standards in Thailand. Unsecured - - 6,540 4,372 5,400 6,755 11,940 11,127 Total 16,153 24,123 23,533 33,141 Annual Report 2007 Thai Beverage Public Company Limited

174 175

The bonds have the following payment terms: 16. Trade accounts payable

Consolidated Separate Amount Fixed interest rate Maturity financial statements financial statements (in million Baht) (% per annum) Note 2007 2006 2007 2006 First tranche 2,500 4.95 22 August 2006 (in million Baht) Second tranche 2,200 5.40 22 February 2007 Related parties 5 680 819 - - Third tranche 2,300 5.55 22 August 2007 Other parties 1,569 1,457 - - Fourth tranche 3,000 5.75 22 February 2008 Total 2,249 2,276 - -

The principal is to be redeemed at maturity. Interest is payable semi-annually commencing on 22 August 2006. The currency denomination of trade accounts payable as at 31 December was as follows:

Consolidated Separate (d) Long-term loan and its current portion as at 31 December 2006 were loan agreements with eight financial institutions financial statements financial statements to obtain long-term borrowings totalling Baht 26,600 million. Of this, the principal of Baht 23,600 million has a grace 2007 2006 2007 2006 period of 2 years and is to be repaid in 36 monthly installments, Baht 654.22 million each for the first 35 installments and (in million Baht) Baht 702.20 million for the last installment, from 28 April 2008 to 31 March 2011 with interest at the fixed rates of 5.75% Thai Baht (THB) and other functional currencies and 6% per annum for the first and the second years, respectively, and MLR-1.5% to MLR-1.75% per annum from the of foreign subsidiaries 2,039 1,984 - - third year onwards, payable monthly, commencing in March 2006. The remaining principal of Baht 3,000 million is to be United States Dollars (USD) 94 104 - - repaid in eight quarterly installments, Baht 375 million each, from 28 June 2006 to 28 March 2008 with a fixed interest Euro (EUR) 69 108 - - rate of 5.70% per annum, payable quarterly, commencing in June 2006. Great Britain Pound (GBP) 46 74 - - Australian Dollar (AUD) 1 6 - -

The borrowings are fully co-guaranteed by four subsidiaries with a negative pledge made by 17 subsidiaries whereby Total 2,249 2,276 - - these subsidiaries agree not to sell, transfer, mortgage, pledge, encumber or grant any preferential right in relation to 17. Other current liabilities their land, buildings, plant and machinery.

Consolidated Separate In 2006 and May 2007, the Company partially repaid long-term loans amounting to Baht 20,220 million and Baht 2,000 financial statements financial statements million, respectively, with accrued interest to seven financial institutions and the interest rate in the second year 2007 2006 2007 2006 decrease from 6% to 5% per annum. (in million Baht) Accrued expenses 737 883 9 90

During February 2007, the Company entered into a long-term loan agreement with a financial institution in the amount Value added tax payable 672 687 35 105 Advanced payments from of Baht 4,500 million which is to be repaid monthly in 12 installments, Baht 375 million each, commencing in February customers for purchase of goods 506 1,005 - - 2009. Interest is payable monthly at 5.60% per annum for the first year and 5.75% per annum afterwards. Assets payable 372 418 - 5 Outstanding cheque paid for excise tax 281 295 - - Subsequently on 19 October 2007, the Company has been granted the reduction of interest rate to be 4.50% per annum Accrued promotion expense 252 133 - - for the first year and 4.75% per annum afterwards. The Company was charged an unwind fee of Baht 11.25 million for Withholding tax payable 128 79 30 22 this change. Accrued interest expense 71 163 67 157 Deposits and retention payable 38 273 - 3 During December 2007, the Company entered into a long-term loan agreement with a financial institution in the amount Others 146 167 21 12 of Baht 900 million which is to be repaid in 2009. The interest is payable monthly at 3.9625% per annum. Total 3,203 4,103 162 394 Annual Report 2007 Thai Beverage Public Company Limited

176 177

The currency denomination of other current liabilities as at 31 December was as follows: The Company listed on the SGX-ST on 29 May 2006 received net proceeds of Baht 16,191.60 million from the issue

of 2,444.45 million new ordinary shares, sold to the public through an Initial Public Offering (the “IPO”) at a price of

Consolidated Separate Singapore Dollar 0.28 per share. Directly attributable expenses for the IPO amounting to Baht 676.49 million are financial statements financial statements accounted for as a deduction from the premium on share capital received from the IPO. The Company registered the

2007 2006 2007 2006 change in paid-up capital with the Ministry of Commerce on 29 May 2006 from Baht 22,000 million to Baht 24,444.45 million. (in million Baht) Thai Baht (THB) and other functional currencies On 3 July 2006, an over allotment option was exercised related to its recent IPO, whereby the Company sold a further of foreign subsidiaries 3,126 3,829 160 357 665.58 million new ordinary shares, raising Baht 4,390.54 million in proceeds. The Company registered the change in Euro (EUR) 72 212 - - paid-up capital with the Ministry of Commerce on 3 July 2006 from Baht 24,444.45 million to Baht 25,110.03 million. Great Britain Pound (GBP) 4 16 1 -

Singapore Dollars (SGD) 1 1 1 - 19. Reserves United States Dollars (USD) - 42 - 37

Others - 3 - - Share premium

Total 3,203 4,103 162 394 Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available 18. Share capital for dividend distribution.

Par value 2007 2006 Currency translation changes per share Number Amount Number Amount The currency translation changes recognized in shareholders’ equity relate to foreign exchange differences arising (in Baht) (million shares/million Baht) from translation of the financial statements of foreign operations to Thai Baht. Authorised

At 1 January and 31 December 1 29,000 29,000 29,000 29,000 Fair value changes and revaluation surpluses Fair value changes and revaluation surpluses recognised in shareholders’ equity relate to cumulative net changes in the

fair value of available-for-sale investments and surpluses arising from the revaluations of land. Issued and paid

At 1 January 1 25,110 25,110 22,000 22,000 Legal reserve Issue of new shares 1 - - 3,110 3,110 Section 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5% of its At 31 December 1 25,110 25,110 25,110 25,110 annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this

account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.

20. Segment information

Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business segments is based on the Group’s management and internal reporting structure. Annual Report 2007 Thai Beverage Public Company Limited

178 179 56 798 102 956 325 684 009 947 569 323 055 , , , , , , , , , 2006 1 4 97 97 69 82 15 12 10

41 541 257 839 873 689 562 277 047 847 383 , , , , , , , , , 2007

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be 1 4 70 13 84 16 10 100 100 allocated on a reasonable basis. ) ) ) ) ) ) ) ) ) ) 4 2 4 20 25 21

In preparing segmental information, those liabilities and related interest expense that are not specifically attributable 086 110 083 085 , , , , 2006 1 1 1 1 to a particular segment are allocated on a percentage of net assets basis. Management believes this to be a fair indication of the actual use of the liabilities. ) ( ) ( ) ( ) ( ( ) ( ( ( 69 38 34 34 922 991 063 025 , , 2007 Inter-segment transactions are eliminated on consolidation. 1 1

Business segments ( ( - ( ( ( ( ( - - - ) 2 4 9 39 62 32 205 211 994 178 172 , , , 2006

The Group comprises the following main business segments: 1 1 1

Beer/water Production and sales of branded beer and water products (mostly outside the group); ) ) ( 1 3 18 38

Spirits Production and sales of branded spirits products (mostly outside the group); and 966 985 972 140 112 127 168 , 2007 1 Alcohol Production and sales of alcohol (mostly outside the group) ( (

Geographic segments 30 76 576 682 470 740 210 472 202 325 945 , , , , , , , , , 2006 6 1 2 7

Operating units of the Group are mainly located in Thailand. Portions of product produced from these units are exported 51 51 33 40 11 directly or indirectly through foreign subsidiaries to external customers. Certain operating units of subsidiaries are

located in foreign countries. 17 940 220 177 924 055 979 198 731 652 815 , , , , , , , , 2007 7 2 8 52 53 33 40 12 In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.

28 42 103 173 944 768 712 461 309 989 163 , , , , , , , , 2006 5 4 1 2 46 46 35 41

23 88 557 668 040 456 496 172 278 192 702 , , , , , , , , 2007 6 4 2 1 47 47 37 43

Beer/water Spirits Alcohol Elimination Total Elimination Alcohol Spirits Business segment results Beer/water administrative Revenue from sales interest Interest income Other income revenues and Total before Cost of sales Selling (loss) expenses expenses Total Profit and income tax expenses Interest expense Income tax expense Net profit (loss) (in million Baht) Business segments financial position Annual Report2007

Beer/water Spirits Alcohol Total

2007 2006 2007 2006 2007 2006 2007 2006

(in million Baht)

Inventories 3,588 2,838 23,988 25,202 481 275 28,057 28,315

Property, plant and equipment 17,910 20,619 23,137 26,600 2,169 2,209 43,216 49,428

Other assets 1,817 1,906 5,921 5,364 516 567 8,254 7,837

Total assets 23,315 25,363 53,046 57,166 3,166 3,051 79,527 85,580

Total debts 4,444 5,633 11,041 17,797 668 693 16,153 24,123

Other liabilities 4,065 5,249 4,357 3,604 42 50 8,464 8,903

Total liabilities 8,509 10,882 15,398 21,401 710 743 24,617 33,026

Capital expenditure

- Property, plant and equipment 361 1,358 1,277 2,612 59 69 1,697 4,039

- Intangible assets 11 5 675 8 - - 686 13

Depreciation 2,360 2,100 2,371 2,255 192 126 4,923 4,481

Amortisation 4 126 47 45 - - 51 171 180 Property, plantand Consolidatedfinancialstatements Revenue as follows: equipment 20 20 20 2006 2007 2006 2007 Thailand The segmentfinancialinformationoftheGroupbasedongeographicalsegmentsforyear Geographic segments iaca ttmns financialstatements financialstatements financialstatements Depreciation andamortisation 2006 20072006 Vehicle andtransportationexpenses Idle capacity Personnel expenses financialstatements Marketing andadvertisingexpenses Consolidated 22. Sellingandadministrative expenses 2006 20072006 Total Gain ondisposalofassets Revenue fromsalesofscraps Separate Consolidated 21. Otherincome Total Overseas Separate Others etl Total Others Donation Rental

100 97 13 1 2 3 4 3 1 , , , , , , , , , 200 467 228 001 498 205 228 102 839 639 689 691 274 325 84 42

97 95 12 (in millionBaht) (in millionBaht) (in millionBaht) 1 1 3 3 2 1 , , , , , , , , , Thai BeveragePublicCompanyLimited 118 679 095 993 956 850 106 684 760 241 282 516 78 44 32 2 - - - -

43 41 1 1 , , , , 216 603 613 154 297 577 144 73 10 29 24 90 26 64 2007 - and 2006 181 49 47 1 , , , was 943 198 522 428 500 928 77 24 19 98 5 5 5 Annual Report 2007 Thai Beverage Public Company Limited

182 183

23. Personnel expenses (a) the different treatments for accounting and taxation purposes of certain items of income and expense for 2007 amounted to Baht 233 million (2006: Baht (102) million). Consolidated Separate

financial statements financial statements (b) unutilised tax losses brought forward from the previous years have been utilised during the year to set-off against

2007 2006 2007 2006 the current year’s tax charge for 2007 amounted to Baht 64 million (2006: Baht 31 million). (in million Baht) Salaries and wages 3,548 3,265 342 321 (c) losses suffered by certain subsidiaries cannot be set-off against the profits of other subsidiaries for tax purposes Bonus 721 637 171 154 for 2007 amounted to Baht 103 million (2006: Baht 144 million). Overtime and perdiem allowance 266 246 13 11 The current tax expenses in the separate statements of income are more than the amounts determined by applying Contribution to defined contribution plans 11 9 6 5 the Thai corporation tax rate to the accounting profit for the year principally because: Others 557 541 45 31 Total 5,103 4,698 577 522 (a) dividends are not subject to tax for 2007 amounted to Baht 5,696 million (2006: Baht 2,417 million). (number of employees) (b) the different treatments for accounting and taxation purposes of certain items of income and expense for 2007 Number of employees as at 31 December 22,590 22,412 366 335 amounted to Baht 65 million (2006: Baht (180) million).

The defined contribution plans comprise provident funds established by companies in the Group for their employees. 26. Earnings per share Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 2% to 3% of their basic salaries and by the Group at rates ranging from 2% to 3% of the employees’ basic salaries. The calculation of basic earnings per share for the year ended 31 December is based on the net profit attributable to The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund ordinary shares and the weighted average number of shares outstanding during the year as follows: Manager.

Consolidated Separate 24. Interest expense financial statements financial statements

Consolidated Separate 2007 2006 2007 2006 financial statements financial statements (Restated) Note 2007 2006 2007 2006 (in million Baht) (in million Baht) Profit attributable to ordinary Shareholders (basic) 10,383 10,055 19,418 9,005 Interest expense relating to: Related parties 5 66 109 732 885 Weighted average number of ordinary shares (basic) Financial institutions 723 1,179 574 947 Others 271 435 271 421 Consolidated Separate 1,060 1,723 1,577 2,253 financial statements financial statements

Capitalised as cost of 2007 2006 2007 2006 assets under construction 12 (13) (154) - - (in million shares)

Net 1,047 1,569 1,577 2,253 Issued ordinary shares at 1 January 25,110 22,000 25,110 22,000

Effect of shares issued on 29 May 2006 - 1,453 - 1,453

25. Income tax expense Effect of shares issued on 3 July 2006 - 332 - 332 Weighted average number of The current tax expenses in the consolidated statements of income are more than the amounts determined by applying ordinary shares (basic) 25,110 23,785 25,110 23,785 the Thai corporation tax rate to the accounting profit for the year principally because: Annual Report 2007 Thai Beverage Public Company Limited

184 185

27. Promotional privileges At the annual general meeting of the shareholders of the Company held on 27 March 2006, the shareholders approved the appropriation of dividends of Baht 0.24 per share, amounting to Baht 5,280 million. The dividend was

Promotional privileges from the Board of Investment paid to shareholders during 2006. By virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, a subsidiary has been granted privileges by the Board of Investment relating to the production of alcohol and agricultural fuel. The privileges granted 29. Changes in accounting policy include:

The following change of accounting policy by the Company has no effect on the consolidated financial statements (a) exemption from payment of import duty on machinery approved by the Board; of the Group.

(b) exemption from payment of income tax for certain operations for a period of eight years from the dates on which Until 31 December 2006, the Company accounted for its investments in subsidiary companies and associates in its the income is first derived from such operations; financial statements using the equity method.

(c) a 50% reduction in the normal tax rate on the net profit derived from certain operations for a period of five years, commencing from the expiry date in (b) above; and During 2007, the FAP issued the following revised TAS which are effective for accounting periods beginning on or after 1 January 2007:

(d) exemption from income tax on dividends derived from the promoted business of its subsidiary during this eight year period. TAS 44 (revised 2007) Consolidated and Separate Financial Statements

TAS 45 (revised 2007) Investment in Associates As a promoted company, the subsidiary must comply with certain terms and conditions prescribed in the promotional certificate. These revised TAS require a parent company which has an investment in a subsidiary company, or an associate company, which is not classified as a “held for sale” investment, to record such investment in accordance with either In 2007, the Board of Investment has granted same privileges as above mentioned to another subsidiary by virtue of the the cost method or with the recognition and measurement basis for financial instruments (when a TAS on financial provisions of the Industrial Investment Promotion Act of B.E. 2520 relating to the production of bio-gas. instruments is issued and becomes effective), instead of the equity method currently used.

Privileges granted to business operator in Free Zone Starting from 1 January 2007, the Company has, accordingly, changed its accounting policy for its investments in Also in 2004 another subsidiary was granted approval from the Customs Department to operate in a “Free Zone”, subsidiary companies and associate companies in its financial statements from the equity method to the cost method. whereby the subsidiary obtains privileges related to the payment of import and export taxes, valued added tax and excise tax. Various other privileges are also granted. The change in accounting policy has been applied retrospectively and the Company’s 2006 financial statements, which are included in the Company’s 2007 financial statements for comparative purposes, have been restated 28. Dividends accordingly. The effects of the change in accounting policy on the Company’s annual 2007 and 2006 financial statements are as follows:

At the Board of Directors’ Meeting held on 14 August 2007, an interim dividend payment for the first half of 2007 of 25,110 million ordinary shares, Baht 0.12 per share, totalling Baht 3,013 million was approved. The interim dividend was paid to shareholders on 11 September 2007.

At the annual general meeting of the shareholders of the Company held on 20 April 2007, the shareholders approved the appropriation of dividends of Baht 0.22 per share, totalling Baht 5,524 million. On 8 September 2006, the interim dividend was paid of Baht 0.11 per share, totalling Baht 2,762 million. The remaining dividend payment of Baht 0.11 per share, totalling Baht 2,762 million was paid on 16 May 2007. Annual Report 2007 Thai Beverage Public Company Limited

186 187

Separate 30. Financial instruments financial statements

2007 2006 Financial risk management policies (in million Baht) The Group is exposed to normal business risks from changes in market interest rates and currency exchange rates Investments in subsidiaries and associates and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative Balance at 1 January before change in accounting policy 69,391 68,046 financial instruments for speculative or trading purposes. Decrease in retained earnings (15,567) (14,494)

Decrease in revaluation surpluses (6,452) (6,450) Interest rate risk Increase in currency translation changes 20 5 Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s Increase in difference arising from common control transactions 17,141 15,979 operations and its cash flows because loan interest rates are mainly fixed. The Group is primarily exposed to interest

Decrease in excess of share losses over cost of investment (938) (1) rate risk from its borrowings (Note 15). The Group mitigates this risk by ensuring that the majority of its borrowings are Net decrease (5,796) (4,961) at fixed interest rates. Balance at 1 January after change in accounting policy 63,595 63,085

The effective interest rates of loans receivable as at 31 December and the periods in which the loans receivable mature Retained earnings or reprice were as follows: Balance at 1 January before change in accounting policy 19,102 17,656

Increase in dividend income from subsidiaries and associates 14,358 6,302 Separate financial statements

Decrease in share of profits from investments accounted Effective interest Within 1 year After 1 year but Total

for using the equity method, net (29,925) (20,796) rates within 5 years Net decrease (15,567) (14,494) (% per annum) (in million Baht)

Balance at 1 January after change in accounting policy 3,535 3,162 2007 Current

Net profit Loans receivable - Related parties 5.96 3,548 - 3,548 Net profit for the year before change in accounting policy 10,383 10,079 Non-current

Increase in dividend income from subsidiaries and associates 18,985 8,055 Loans receivable - Related parties 5.96 - 9,411 9,411

Decrease in share of profits from investments accounted Total 3,548 9,411 12,959 for using the equity method, net (9,950) (9,129)

Net increase (decrease) 9,035 (1,074) 2006 Net profit for the year after change in accounting policy 19,418 9,005 Current

Increase (decrease) in earnings per share (Baht) 0.36 (0.05) Loans receivable - Related parties 5.68 9,367 - 9,367 Non-current

Loans receivable - Related parties 5.68 - 5,501 5,501

Total 9,367 5,501 14,868 Annual Report 2007 Thai Beverage Public Company Limited

188 189

The effective interest rates of interest-bearing financial liabilities as at 31 December and the periods in which those Separate financial statements liabilities mature or reprice were as follows: Effective interest Within 1 year After 1 year but Total

rates within 5 years Consolidated financial statements (% per annum) (in million Baht)

Effective interest Within 1 year After 1 year but Total 2007

rates within 5 years Current

(% per annum) (in million Baht) Loans payable - Financial institutions 4.05 6,553 - 6,553

2007 Current portion of long-term

Current guaranteed bonds 5.75 3,000 - 3,000

Bank overdrafts 6.75 1,000 - 1,000 Loans payable - Related parties 5.75 2,040 - 2,040

Loans payable - Financial institutions 3.64 6,753 - 6,753 Non-current

Current portion of long-term Loans payable - Financial institutions 4.41 - 5,400 5,400

guaranteed bonds 5.75 3,000 - 3,000 Loans payable - Related parties 5.75 - 6,540 6,540

Non-current Total 11,593 11,940 23,533

Loans payable - Financial institutions 4.41 - 5,400 5,400

Total 10,753 5,400 16,153 2006 Current

2006 Bank overdrafts 8.28 30 - 30

Current Loans payable - Financial institutions 5.54 4,500 - 4,500

Bank overdrafts 7.16 1,883 - 1,883 Short-term guaranteed bonds 5.40 2,200 - 2,200

Loans payable - Financial institutions 5.41 6,370 - 6,370 Current portion of long-term

Short-term guaranteed bonds 5.40 2,200 - 2,200 guaranteed bonds 5.55 2,300 - 2,300

Current portion of long-term Loans payable - Related parties 6.00 12,984 - 12,984

guaranteed bonds 5.55 2,300 - 2,300 Non-current

Loans payable - Related parties 2.80 4,615 - 4,615 Loans payable - Financial institutions 5.74 - 3,755 3,755

Non-current Long-term guaranteed bonds 5.75 - 3,000 3,000

Loans payable - Financial institutions 5.75 - 3,755 3,755 Loans payable - Related parties 6.00 - 4,372 4,372

Long-term guaranteed bonds 5.75 - 3,000 3,000 Total 22,014 11,127 33,141

Total 17,368 6,755 24,123 Annual Report 2007 Thai Beverage Public Company Limited

190 191

Foreign currency risk Consolidated Separate The Group is exposed to foreign currency risk relating to purchases and sales which are denominated in foreign financial statements financial statements currencies. The Group primarily utilises forward exchange contracts to hedge such financial assets and liabilities Note 2007 2006 2007 2006 denominated in foreign currencies. The forward exchange contracts entered into at the balance sheet date also relate (in million Baht) to anticipated purchases and sales, denominated in foreign currencies, for the subsequent period. Euro Cash and cash equivalents 6 - 6 - -

At 31 December, the Group and the Company were exposed to foreign currency risk in respect of financial assets and Trade accounts receivable 8 - 30 - - liabilities denominated in the following currencies: Trade accounts payable 16 (69) (108) - - Other current liabilities 17 (72) (212) - -

Gross balance sheet exposure (141 284 Consolidated Separate ) ( ) - -

financial statements financial statements Estimated forecast purchase of assets (25) (137) - - Note 2007 2006 2007 2006 Estimated forecast purchase of goods (1,158) (454) - - (in million Baht) Gross exposure (1,324) (875) - - United States Dollars

Cash and cash equivalents 6 174 15 - - Forwards to buy foreign currency 1,173 773 - - Trade accounts receivable 8 90 24 - - Net exposure (151) (102) - - Other current assets 10 1 1 - -

Trade accounts payable 16 (94) (104) - - Great Britain Pound Short-term loans from and Trade accounts payable 16 (46) (74) - - amount due to related parties 5 - (216) - - Other current liabilities 17 (4) (16) (1) - Other current liabilities 17 - (42) - (37) Gross balance sheet exposure (50) (90) (1) - Gross balance sheet exposure 171 (322) - (37)

Estimated forecast purchase of goods (288) (462) - - Estimated forecast sale of goods 286 - - - Gross exposure (338) (552) (1) - Estimated forecast purchase of goods (2,994) (1,917) - -

Gross exposure (2,537) (2,239) - (37) Forwards to buy foreign currency 287 472 - -

Net exposure (51) (80) (1) - Currency forwards 2,508 1,929 - - Net exposure (29) (310) - (37) Australian Dollar

Trade accounts receivable 8 1 - - -

Trade accounts payable 16 (1) (6) - -

Gross exposure - (6) - -

Forwards to buy foreign currency 1 25 - -

Net exposure 1 19 - -

Annual Report 2007 Thai Beverage Public Company Limited

192 193

Consolidated Separate Fair values financial statements financial statements The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,

Note 2007 2006 2007 2006 willing parties in an arm’s length transaction. In determining the fair value of its financial assets and liabilities, the Group (in million Baht) takes into account its current circumstances and the costs that would be incurred to exchange or settle the underlying Singapore Dollars financial instrument.

Other current liabilities 17 (1) (1) (1) -

Estimated forecast proceed from loans - - 208 1,484 31. Commitments with non-related parties

Gross exposure (1) (1) 207 1,484 Consolidated Separate

Forwards to buy foreign currency - - (208) (1,484) financial statements financial statements

Net exposure (1) (1) (1) - 2007 2006 2007 2006 (in million Baht) Japanese Yen Capital commitments

Estimated forecast purchase of assets (5) - - - Contracted but not provided for

Forwards to buy foreign currency 5 - - - Land, buildings and other constructions 217 392 - -

Net exposure - - - - Machinery and equipment 218 846 - -

Computer software - 11 - 11

Others Total 435 1,249 - 11

Trade accounts receivable 8 - 5 - -

Other current liabilities 17 - (3) - - Non-cancellable operating lease commitments

Exposure - 2 - - Within one year 165 142 9 -

After one year but within five years 157 70 14 1

Credit risk Total 322 212 23 1 Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group as and when they fall due. Other commitments

Unused letters of credits 86 332 - -

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit Forward contracts to sell foreign currencies 524 1,505 217 1,505 evaluations are performed on all customers requiring credit over a certain amount. At the balance sheet date there Forward contracts to buy foreign currencies 5,036 3,330 - - were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying Bank guarantees 247 102 31 154 amount of each financial asset in the balance sheet. However, due to the large number of parties comprising the Group’s Goods and raw materials purchasing agreements 4,386 2,815 - - customer base, management does not anticipate material losses from its debt collection. Molasses purchasing agreements 296 1,596 - -

Computer system installation agreements 53 96 53 96

Liquidity risk Advertising services and sponsorship agreements 154 105 - -

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by Others 60 43 1 - management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. Total 10,842 9,924 302 1,755 Annual Report 2007 Thai Beverage Public Company Limited

194 195

(a) During 2004, the Company and four subsidiaries entered into production and blending control agreements with (b) On 31 January 2008, Pan Alcohol Co., Ltd. the Company’s indirect subsidiary has entered into a memorandum of a specialist for a period of 40 years from 1 August 2004 to 1 August 2044. Under the agreements, the Company and understanding to acquire majority of ordinary shares in Carabao Tawandang Co., Ltd. who is engaging in the production its subsidiaries are obliged to pay monthly service fees of Baht 4.3 million which are to be annually increased by 5% and sales of energy drink. The completion of the acquisition is being in the process. for the first 20 years from 1 August 2004 to 1 August 2024. Afterwards, the Company and its subsidiaries have to pay monthly service fees of Baht 250,000 until the expiration of the agreements. Service fee under the agreements totaled (c) The Executive Board of Directors’ Meeting held on 18 February 2008 unanimously passed the following resolutions: Baht 1,766.2 million. Subsequently, the addendums were made on 5 January 2006, under which the Company and its subsidiaries have to pay additional amount to this specialist amounting to Baht 2,000 million. Therefore, the total service - Approval in principle of the decrease of authorised share capital of S P M Foods and Beverages Co., Ltd. twice at 75% fees under the agreements both outstanding and already paid by the Company and its subsidiaries amounted to each and the increase of authorized share capital afterwards. The authorised share capital will be decreased from Baht 3,766.2 million. Baht 100 million to Baht 25 million firstly and from Baht 25 million to Baht 6.25 million secondly. After that the

authorised share capital will be increased by Baht 600 million to Baht 606.25 million. As at 31 December 2007 the remaining commitments to be paid, relating to these agreements, amounted to Baht 1,579 million. - Approval in principle of the increase of authorised share capital of International Beverage Holdings Limited from HKD

1,470 million to HKD 1,490 million to increase in capital of International Beverage Holdings Limited USA, Inc. (b) During 2005, a subsidiary renewed a sponsorship agreement with Everton Football Club, in the United Kingdom, for a period of three years as from 1 June 2005 to 31 May 2008 in order to promote the Group’s businesses globally. Under (d) The Board of Directors’ Meeting held on 27 February 2008 unanimously agreed to propose a dividend payment of the agreement, the subsidiary is obliged to pay a minimum amount of GBP 0.5 million and a maximum amount of GBP

2.9 million per year, dependent on the performance of Everton football team in each year. Baht 0.29 per share, totalling Baht 7,282 million. The interim dividend was paid of Baht 0.12 per share, amounting to Baht 3,013 million. The remaining is a dividend payment of Baht 0.17 per share, amounting to Baht 4,269 million.

Subsequently, on 17 January 2008, the sponsorship agreement was extended to another period of three years as from

1 June 2008 to 31 May 2011. The subsidiary is obliged to pay a minimum amount of GBP 0.5 million and a maximum 34. Thai Accounting Standards (TAS) not yet adopted amount of GBP 3.5 million per year, dependent on the performance of Everton football team in each year. The Group has not adopted the following TAS that have been issued as of the balance sheet date but are not yet

32. Litigation effective. These TAS will become effective for financial periods beginning on or after 1 January 2008.

A subsidiary filed the application to the Central Tax Court to withdraw the assessment of the property tax of 2002 up TAS 25 (revised 2007) Cash Flows Statements to 2007. Subsequently, on 12 and 13 February 2008, the Supreme Court has sentenced that the above subsidiary can TAS 29 (revised 2007) Leases receive the property tax back in the amount of Baht 128 million from the paid amount of Baht 128.5 million. TAS 31 (revised 2007) Inventories

TAS 33 (revised 2007) Borrowing Costs 33. Events after the balance sheet date TAS 35 (revised 2007) Presentation of Financial Statements

TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors (a) On 25 January 2008, Maharas Agri Co., Ltd. the Company’s subsidiary increase its authorised share capital from TAS 41 (revised 2007) Interim Financial Reporting Baht 2 million to Baht 200 million by issuing 19.8 million ordinary shares with a Baht 10 par value, totaling Baht 198 TAS 43 (revised 2007) Business Combinations million. TAS 49 (revised 2007) Construction Contracts

TAS 51 Intangible Assets Subsequently, on 28 January 2008, the Company’s subsidiary has entered into a sale and purchase agreement to acquire assets in the production and sale of energy drink and ready-to-drink coffee owned by Wrangyer Beverage

Co., Ltd. at a consideration of Baht 420 million. Part of the fund will be derived from the increase of the authorised The adoption and initial application of these TAS is not expected to have any material impact on the consolidated or share capital in the amount of Baht 200 million. separate financial statements. Annual Report 2007 Thai Beverage Public Company Limited

196 197

35. Reclassification of accounts Retirement benefits are recognised as a liability, being the net total of the present value of the obligation at the balance sheet date less the fair value of any plan assets and recognised as an expense the net total of current service costs,

Certain accounts in the 2006 financial statements have been reclassified to conform with the presentation in the 2007 interest costs, past service costs and any actuarial gains and losses. financial statements. (c) Financial instruments 36. Significant differences between Thai GAAP and IFRS (unaudited/ unreviewed) Thai GAAP has certain disclosure requirements for financial instruments, but only limited guidance on the recognition and measurement of financial instruments. The Group has decided not to recognise derivative financial instruments on These consolidated financial statements have been prepared in accordance with generally accepted accounting the balance sheet. However, foreign currency assets and liabilities hedged by these contracts are translated into Thai principles in Thailand (“Thai GAAP”), which differ in certain significant respects from International Financial Reporting Baht at exchange rates prevailing on the balance sheet date. Standards (“IFRS”). The following disclosure provides a summary of certain significant differences between Thai GAAP and IFRS, as applicable to the consolidated financial statements of the Group, and a reconciliation of net profit and total Under IFRS, derivative financial instruments are recognised on the balance sheet as either an asset or a liability initially shareholders’ equity from Thai GAAP to IFRS. Neither the narrative summary nor the reconciliation should be construed at cost, which is the fair value of consideration given (in the case of an asset) or received (in the case of a liability). as being exhaustive or presented fairly in all material respects and are provided for information purposes only. Transaction costs are included in the initial measurement. Subsequent to initial recognition, derivative financial instruments are stated at fair value. Movements in fair values are recognised in the consolidated statement of income. (a) Deferred tax There is no Thai accounting standard currently effective in relation to accounting for deferred taxes. Whilst not (d) Investment in property specifically addressed in Thai GAAP, provisions for income taxes of the Group are typically based on corporate In accordance with Thai GAAP, owned land held to earn rentals is classified as part of property, plant and equipment. income taxes currently payable in the period under the Revenue Code of Thailand. The Group does not, therefore, This land is carried at a revalued amount less any subsequent accumulated impairment losses. Movements on the recognise deferred tax assets and liabilities for the current period. revaluation surplus are reflected in equity.

Under IFRS, provision is made for deferred tax using a balance sheet approach, with deferred tax calculated on Under IFRS, owned property held to earn rentals is classified as part of investment property. This is covered by IAS temporary differences, being the differences between the tax and the book values of assets and liabilities. The deferred No. 40 Investment Property. IAS No. 40 allows enterprises to choose either a fair value model or a cost model to tax charge or credit is the change in the period in deferred tax liabilities and assets. Deferred tax assets are recognised measure investment property. to the extent that it is probable that future taxable profits will be available against which the temporary differences can be fully utilised. In accordance with the fair value model, an enterprise should measure all of its investment property at its fair value. A gain or loss arising from a change in the fair value of investment property should be included in net profit or loss (b) Employee benefits for the period in which it arises. There is currently no Thai accounting standard in relation to accounting for employee benefits, including termination, retirement and post-retirement benefits. The Group’s primary obligations in respect of employee benefits are In accordance with the cost model, land and buildings held as investment property should be measured at cost less contributions on behalf of employees to provident funds and the payment of statutory severance benefits on retirement any accumulated impairment losses. and terminating employment involuntarily. Severance termination and retirement benefits vary according to various factors, including the employee’s service life and salary. Whilst not specifically addressed in Thai GAAP, contributions For the purposes of disclosure under IFRS, the Group has adopted the cost model for investment property consisting are charged as an expense as incurred. of both land and buildings. For Thai GAAP, the land has been revalued while the buildings have not.

Under IFRS, employee benefits are accounted for in accordance with IAS No. 19 Employee Benefits. Accordingly, (e) Business combination (Goodwill) termination benefits are recognised as a liability and an expense when, and only when, the enterprise is demonstrably committed to either terminate the employment of an employee or group of employees before the normal retirement date Thai GAAP requires goodwill acquired in business combination to be systematically amortised over its estimated useful or provide termination benefits as a result of an offer made in order to encourage voluntary redundancy. life, although its useful life should not exceed 20 years from initial recognition. Annual Report 2007 Thai Beverage Public Company Limited

198 199 Thai Beverage Public Company Limited Interested Persons Transactions Audited results for the year ended 31 December 2007

Under IFRS, acquired goodwill is measured after initial recognition at cost less any accumulated impairment losses. Therefore, goodwill is not amortised and must be tested for impairment annually, or more frequently if events or Interested Persons Transactions for the year ended December 31, 2007 changes in circumstances indicate that it might be impaired.

Aggregate value of all interested Aggregate value of all Consolidated net profit persons transactions during interested persons

2007 2006 the year ended December 31, 2007 transactions conducted (in million Baht) under review (excluding transactions under the mandate less than S$100,000* and transactions (excluding transactions As reported in these consolidated financial conducted under Shareholders’ Mandate) less than S$100,000*) statements under Thai GAAP 10,383 10,055 Baht ‘000 Baht ‘000 Add (less) : Thai GAAP/IFRS differences (net of tax effect) A Revenue from sales and service income (a) Deferred tax 107 16 1 Pisetkij Co., Ltd. - 21,780.45 (b) Employee benefits (60) (62) 2 PS Recycle Co., Ltd. - 100,526.82 (c) Financial instruments 82 (45) 3 Oishi Trading Co., Ltd. 17,422.58 - (d) Investment in property 3 - 4 The Chonburi Sugar Corp. Ltd. - 3,424.38

(e) Business combination (Goodwill) 29 19 5 TCC Hotel Collection Co., Ltd. (**) 3,506.41 -

Under IFRS 10,544 9,983 B Other income 1 Pisetkij Co., Ltd. - 11,369.29 Consolidated total 2 Thai Glass Industries PCL - 3,843.76 shareholders’ equity 3 Liquorland Limited 22,069.48 - 2007 2006

(in million Baht) C Cost of sales As reported in these consolidated financial 1 PS Recycle Co., Ltd. - 1,185,082.81 statements under Thai GAAP 54,910 52,554 2 The Chonburi Sugar Corp. Ltd. - 31,293.89 Add (less) : Thai GAAP/IFRS differences (net of tax effect) 3 The Maewang Sugar Industry Co., Ltd. - 21,587.07 (a) Deferred tax (636) (1,429) 4 The Suphanburi Sugar Industry Co., Ltd. - 53,596.63

(b) Employee benefits (581) (521) 5 Dhipaya Sugar (1999) Co., Ltd. - 15,601.26

(c) Financial instruments 12 (70) 6 Southeast Capital Co., Ltd. - 7,612.98 7 T.C.C. Technology Co., Ltd. - 30,923.00 (d) Investment in property (47) (51) 8 Thai Beverage Can Co., Ltd. - 1,211,761.35 (e) Business combination (Goodwill) 102 73 9 Berli Jucker PCL. - 2,247,081.29 Under IFRS 53,760 50,556 10 The Southeast Insurance (2000) Co., Ltd. - 111,024.07 11 The Southeast Life Insurance Co., Ltd. - 4,020.37 12 The Utaradit Sugar Industry Co., Ltd. - 29,223.90 13 New Noble Property And Loan Fund - 14,071.60 14 BJC Industrial and Trading Company Limited (***) - 2,723.56 15 TCC Hotel Collection Co., Ltd. (**) 2,884.82 - 16 Dynamic Assets Property and Loan Fund 44,880.40 - 17 T.C.C. Ningbo Best Spirits Co., Ltd. 9,795.79 - 18 Siam Food Products Public Co., Ltd. 14,984.00 -

Annual Report 2007 Thai Beverage Public Company Limited

200 201

Aggregate value of all interested Aggregate value of all Appexdix persons transactions during interested persons the year ended December 31, 2007 transactions conducted under review (excluding transactions under the mandate Renewal of Shareholders’ Mandate for Interested Person Transactions less than S$100,000* and transactions (excluding transactions conducted under Shareholders’ Mandate) less than S$100,000*) 1. Background Baht ‘000 Baht ‘000 The Board of Directors of Thai Beverage Public Company Limited (the “Company”) refer to (a) the Notice of Annual

D Interest expenses General Meeting of the Company dated April 10, 2008 (the “Notice”), accompanying the Annual Report 2007, convening 1 Great Oriole Limited 161,024.95 - the Annual General Meeting (“AGM”) of the Company to be held on April 28, 2008, and (b) Resolution No. 9 under the

heading “Special Business” set out in the Notice. E Other expenses 1 Southeast Capital Co., Ltd. - 109,629.64 2 T.C.C. Technology Co., Ltd. - 44,969.75 2. Shareholders’ Mandate 3 The Southeast Insurance (2000) Co., Ltd. - 30,661.14 Pursuant to the Company’s Prospectus dated May 19, 2006 (the “Prospectus”), approval of the Shareholders was 4 The Southeast Life Insurance Co., Ltd. - 5,136.26 deemed obtained for a shareholders’ mandate to enable the Company and its subsidiaries which are considered to be

5 Plaza Athenee Hotel (Thailand) Co., Ltd. - 30,706.72 “entities at risk” within the meaning of Rule 904(2) of the listing manual (the “Listing Manual”) of the Singapore 6 Regent Gold Property Fund - 5,331.15 Exchange Securities Trading Limited (“SGX-ST”), in their ordinary course of businesses, to enter into categories of 7 North Park Golf And Sport Club Co., Ltd. - 10,581.56 transactions with specified classes of the Company’s interested persons, provided that such transactions are entered 8 T.C.C. Capital Land Limited 5,218.50 - into on an arm’s length basis and on normal commercial terms. The details of the interested person transactions and 9 TCC Hotel Collection Co., Ltd. (**) 25,251.67 - shareholders’ mandate were disclosed in pages 124 to 148 of the said Company’s Prospectus. An amendment was 10 Dynamic Assets Property and Loan Fund 4,135.36 - 11 Best Wishes co Ltd 5,494.44 - made to the said shareholders’ mandate at last year’s annual general meeting held on April 20, 2007 in the manner set 12 T.C.C. International Limited 3,399.86 - out on page 180 of our annual report for the financial year ended December 31, 2006 (the shareholders’ mandate as amended, the “Shareholders Mandate”). F Sales of assets 1 TCC Hotel Collection Co., Ltd. (**) 819,000.00 - 3. Proposed Renewal of the Shareholders’ Mandate

The Shareholders’ Mandate was expressed to take effect until the conclusion of the next AGM. Accordingly, the Directors G Purchase of assets propose that the Shareholders’ Mandate be renewed at the forthcoming AGM on April 28, 2008, to take effect until the 1 Siam Realty Co., Ltd. 30,810.06 - next AGM of the Company.

* Exchange rate Baht 23.00 per 1 SGD. ** Formerly : Queen’s Park Hotel Group Co., Ltd. 4. Details of the Shareholders’ Mandate *** Formerly : BJC Engineering Co., Ltd. Details of the Shareholders’ Mandate, including the rationale for, and the beneﬁ ts to, the Company, the review procedures

for determining transaction prices with interested persons and other general information relating to Chapter 9 of the Listing Manual, are set out in the Annexure to this Appendix.

5. Audit Committee Statement The Audit Committee has reviewed the terms of the Shareholders’ Mandate and confirms that:- Annual Report 2007 Thai Beverage Public Company Limited

202 203

(a) the review procedures for determining the transaction prices under the Shareholders’ Mandate have not changed For the reasons set out in the Annexure to this Appendix, the Independent Directors recommend that Shareholders to

since May 19, 2006, date of the Company’s prospectus; and vote in favour of Resolution No. 9, being the Ordinary Resolution relating to the proposed renewal of the Shareholders’

Mandate at the 2008 AGM. (b) the review procedures referred to in the Annexure are sufficient to ensure that the transactions will be carried

out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority 9. Directors’ Responsibility Statement Shareholders. The Directors collectively and individually accept responsibility for the accuracy of the information given herein and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the If, during the periodic reviews by the Audit Committee, it is of the view that the established review procedures are no opinions expressed herein are fair and accurate and that there are no material facts the omission of which would make longer appropriate or adequate to ensure that the Interested Person Transactions will be transacted on normal any statement herein misleading. commercial terms and will not be prejudicial to the interests of the Company and minority Shareholders, the Company will seek a fresh mandate from Shareholders based on new review procedures. 10. Action To Be Taken By Shareholders Any Shareholder who is not able to attend the AGM in person should please duly complete a proxy form and submit to

6. Directors’ and Substantial Shareholders’ Interests the Chairman of the Meeting prior to his proxy attending the Meeting. The interests of the directors and substantial shareholders of the Company in the issued shares in the capital of the

Company as at January 21, 2008 and March 12, 2008 respectively can be found in the Annual Report in respect of the 11. SGX-ST financial year ended December 31, 2007 to be, or which has been, distributed to shareholders. The SGX-ST takes no responsibility for the accuracy of any statements or opinions made in this Appendix.

7. Abstention from Voting Mr. Charoen Sirivadhanabhakdi, Khunying Wanna Sirivadhanabhakdi, Mr. Thapana Sirivadhanabhakdi and Mr. Panote Sirivadhanabhakdi, who are Directors of the Company, have interests in the shares of the Interested Persons (as described in the Annexure to this Appendix), and also hold directorships and/or executive positions in them.

They and their respective associates will abstain from voting on Resolution No. 9 being the Ordinary Resolution relating to the proposed renewal of the Shareholders’ Mandate in respect of their shareholdings in the Company, if any, at the forthcoming AGM.

8. Directors Recommendation The Directors who are considered independent for the purposes of the proposed renewal of the Shareholders’ Mandate are Mr. Komen Tantiwiwatthanaphan, Mr. Narong Srisa-an, Mr. Samut Hatthasing, Ms. Kanoknart Rangsithienchai, Mr. Chukiet Tangpongprush, Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, Dr. Pisanu Vichiensanth, Mr. Vivat Tejapaibul, Mr. Puchchong Chandhanankij, Gen. Dr. Choo-Chat Kambhu Na Ayudhya, Prof. Pornchai Matangkasombut, Mr. Michael Lau Hwai Keong, Mr. Sakthip Krairiksh, Mr. Staporn Kavitanon, Prof. Kanung Luchai, Mr. Manu Leopairote and Mr. Ng Tat Pun (the “Independent Directors”). The Independent Directors are of the opinion that the entry into of the Mandated Transactions described in the Annexure to this Appendix and those Interested Persons (as described in the Annexure to this Appendix is in the ordinary course of its business will be entered into to enhance the efficiency of the Group and are in the best interests of the Company. Annual Report 2007 Thai Beverage Public Company Limited

204 205

Annexure Entities At Risk For the purposes of the Shareholders’ Mandate, an “Entity At Risk” means:

General Mandate for Interested Persons Transactions • our Company;

• a subsidiary of our Company that is not listed on the SGX-ST or an approved exchange; or We anticipate that we would, in the ordinary course of business, continue to enter into certain transactions with our interested persons, including but not limited to those categories of transactions described below. In view of the • an associated company of our Company that is not listed on the SGX-ST or an approved exchange, provided time-sensitive nature of commercial transactions, it would be advantageous for us to obtain a shareholders’ mandate that the Group or the Group and interested persons has control over the associated company. to enter into certain interested persons transactions in our ordinary course of business, provided that all such transactions are carried out on normal commercial terms and are not prejudicial to the interests of our Company Classes of Mandated Interested Persons and our minority Shareholders. The Shareholders’ Mandate will apply to our Group’s transactions with the list of interested persons as set out in the Schedule – List of Our Interested Persons and Mandated Interested Persons (the “Mandated Interested Persons” and

Chapter 9 of the Listing Manual allows a listed company to obtain a mandate from its shareholders for recurrent each a “Mandated Interested Person”). interested persons transactions which are of a revenue or trading nature or for those necessary for its day-to-day operations. These transactions may not include the purchase or sale of assets, undertakings or businesses which are Transactions with Mandated Interested Persons which do not fall within the ambit of the Shareholders’ Mandate shall not part of our day-to-day operations. be subject to the relevant provisions of Chapter 9 of the Listing Manual.

Pursuant to Rule 920(2) of the Listing Manual, our Company may treat a general mandate as having been obtained from Mandated Transactions The transactions with interested persons which will be covered by the Shareholders’ Mandate (“Mandated Transactions”) our Shareholders (“Shareholders’ Mandate”) for us to enter into interested persons transactions with our interested relating to the provision to, or obtaining from, interested persons of products and services in the ordinary course of persons, if the information required under Rule 920(1)(b) of the Listing Manual is included in this document. In relation business of our Group or which are necessary for the day-to-day operations of our Group (but not in respect of the to us, the information required by Rule 920(1)(b) is as follows: purchase or sale of assets, undertakings or businesses which are not part of our day-to-day operations) are as follows:

(a) the class of interested persons with which the Entity At Risk (as defined below) will be transacting; (a) purchases from interested persons of raw materials and packaging materials including new and used glass bottles, aluminium cans, molasses, herbs for the production of beer concentrate, cartons and caps; (b) the nature of the transactions contemplated under the mandate;

(b) obtaining from interested persons of insurance and insurance-related services; (c) the rationale and benefit to the Entity At Risk;

(c) purchases from interested persons of all kinds of consumer products, office and storage supplies including tissue (d) the methods or procedures for determining transaction prices; paper and sugar for office use, scrap steel, malt bags and wooden pallets;

(e) the independent financial advisor’s opinion on whether the methods or procedures in (d) above are sufficient to (d) obtaining from interested persons of services, including services relating to provision of accommodation, vehicles ensure that the transactions will be carried out on normal commercial terms and will not be prejudicial to the and facilities for the directors of the Company and/or subsidiaries, staff training, telecommunications and interests of our Company and our minority Shareholders; software licensing, marketing and advertising and management services and services for the manufacturing and distributorship of products; (f) an opinion from our Audit Committee if it takes a different view to the independent financial advisor; and

(e) obtaining from interested persons of leases or subleases of office space, warehouses, passenger cars and land; (g) a statement from us that we will obtain a new mandate from our Shareholders if the methods or procedures in (d) above become inappropriate. (f) provision to interested persons of services including procurement services, property improvement services, advertising and sales services and manufacturing services; The Shareholders’ Mandate, if renewed, will be effective until the next annual general meeting. (g) lease or sub-lease to interested persons of office space, warehouses, passenger cars and land; Annual Report 2007 Thai Beverage Public Company Limited

206 207

(h) sale to interested persons of by-products including fertilizer, used bottles, and factory remnants such as Approval Limits Relevant Approving Authority aluminium and glass remnants and scrap paper;

Interested person transaction not exceeding A deputy managing director (i) sale to interested persons of our beer, spirits and water, and soda and other products; and Baht 500,000 in value or officer of equivalent rank

(j) provision or the obtaining of such other products and/or services which are incidental to or in connection with Interested person transaction above A managing director or officer the provision or obtaining of products and/or services in sub-paragraphs (a) to (i) above. Baht 500,000 but not exceeding Baht 5 million in value of equivalent rank

Review Procedures for Interested Persons Transactions Interested person transaction above A vice-chairman or officer of Our Audit Committee has oversight of all interested persons transactions undertaken by our Group including, the review Baht 5 million but not exceeding Baht 10 million in value equivalent rank and where required, approval of such transactions. For this purpose, our Board of Directors has appointed Mr. Ng Tat Pun, Interested person transaction above A chairman or officer of an independent non-executive Director and member of the Audit Committee, to lead the Audit Committee in its role in Baht 10 million but not exceeding Baht 20 million in value equivalent rank respect of interested persons transactions undertaken by our Group (the “Lead Independent Director for IPTs”).

We have also established the following procedures to ensure that the interested persons transactions are undertaken Interested person transaction above Any two vice-chairmen on an arm’s length basis and on normal commercial terms. Baht 20 million but not exceeding 3% of the latest audited and/or chairmen or officers net tangible assets of the Group in value of equivalent rank Review Procedures and Threshold Limits Interested person transaction above 3% of the latest audited Any two Audit Committee members, In general, there are procedures established by our Group to ensure that interested persons transactions, including the net tangible assets of the Group in value one of whom must be the Lead Mandated Transactions with the Mandated Interested Persons, are undertaken on an arm’s length basis and on normal Independent Director for IPTs commercial terms consistent with our Group’s usual business practices and policies, and on terms which are generally no more favorable to the interested persons than those extended to or obtained from unrelated third parties.

In relation to paragraph (j) above under “General Mandate for Interested Persons Transactions - Mandated In particular, the following review procedures have been implemented: Transactions,” the Relevant Approving Authority (as determined by the value of the transaction) will also (1) Procurement and purchase of goods and obtaining services assess and approve that the proposed transaction is one which is incidental to or in connection with the provision or obtaining of products and/or services in sub-paragraphs (a), (b), (c) and (d) above under (a) All procurement and purchases made by our Group of a recurring nature which are in the ordinary course “General Mandate for Interested Persons Transactions-Mandated Transactions.” of business of our Group or which are necessary for the day-to-day operations of our Group, including procurement and purchases which are Mandated Transactions with Mandated Interested Persons (such as (b) In the event that we cannot obtain competitive quotations (for instance, if there are no unrelated third party the transactions referred to in paragraphs (a), (b), (c), (d) and (j) above under “General Mandate for vendors of similar products and services (taking into account quantum, specifications and delivery schedules Interested Person Transactions - Mandated Transactions”) will be governed by internal control procedures, among others), or if the product is proprietary in nature), based on the value of the proposed interested which detail matters such as the constitution of internal approving authorities, their approval limits, the number of vendors (minimum of two) who provide us quotes, and the review procedures. The guiding persons transaction, the corresponding Relevant Approving Authority as set out above (not being an principle is to objectively obtain the best goods and/or services on the best terms through competitive interested person or his associate) and who does not have any interests, direct or indirect, in relation to the quotations, if appropriate. In determining whether the price and terms offered by interested persons are fair transaction, will determine whether the price and terms offered by the interested person are fair and and reasonable, factors such as, but not limited to, delivery schedules, specification compliance, track record, reasonable. experience and expertise, preferential rates, discounts or rebates offered for bulk purchases, will be taken into consideration. In addition, each interested person transaction entered into by our Group will be monitored as an individual transaction and based on the value of the transaction, will require the prior approval of the corresponding approving authority who is a Director or management employee of the Group (not being an interested person or his associate) and who does not have any interests, whether direct or indirect, in relation to the transaction (the “Relevant Approving Authority”) as follows: Annual Report 2007 Thai Beverage Public Company Limited

208 209

(c) Purchases under the prevailing terms of the Glass Bottle Purchase Agreement dated May 24, 2007 entered Approval Limits Relevant Approving Authority into between Bang-Na Logistic Co., Ltd. and Berli Jucker Public Company Limited (the “Glass Bottle Purchase Agreement”) will be covered under the Shareholders’ Mandate, provided that any amendment to the Interested person transaction not exceeding Baht A deputy managing director material provisions of the Glass Bottle Purchase Agreement, including any adjustment authorized by the 200,000 in value or officer of equivalent rank agreement to the purchase price for glass bottles pursuant to and any renewal or extension of tenure Interested person transaction above Baht 200,000 but A managing director or of the Glass Bottle Purchase Agreement, requires the approval of our Board of Directors and the not exceeding Baht 500,000 in value officer of equivalent rank Audit Committee.

Interested person transaction above Baht 500,000 but A vice chairman or officer (2) Other interested persons transactions of a recurring nature not exceeding Baht 5 million in value of equivalent rank

Interested person transaction above Baht 5 million but A chairman or officer of (a) We intend to conduct other interested persons transactions not covered by paragraph (1) above which not exceeding 3% of the latest audited net tangible equivalent rank are of a recurring nature and that occur in the ordinary course of business of our Group. These transactions assets of the Group in value are necessary for the day-to-day operations of our Group and include the sale of products and provisions of services to interested persons and lease or sub-lease of property to or from interested persons and the Interested person transaction above 3% of the latest Any two Audit Committee audited net tangible assets of the Group in value members, one of whom must Mandated Transactions with Mandated Interested Persons referred to in paragraphs (e), (f), (g), (h), (i) be the Lead Independent and (j) under “General Mandate for Interested Persons Transactions - Mandated Transactions” above. Director for IPTs We intend to conduct these transactions at the prevailing market rates or prices of the product or service to be provided, and at prevailing market rentals for leases and sub-leases of property, on terms no more favorable to the interested person than the usual commercial terms extended to or, where applicable, by In relation to paragraph (j) above under “General Mandate for Interested Persons Transactions - Mandated unrelated third parties (including, where applicable, preferential rates, discounts to favored customers or for Transactions,” the Relevant Approving Authority (as determined by the value of the transaction) will also assess bulk purchases) or otherwise in accordance with applicable industry norms, provided that: and approve that the proposed transaction is one which is incidental to or in connection with the provision or obtaining of products and/or services in sub-paragraphs (e), (f), (g), (h) and (i) above under “General Mandate (i) in relation to the sale of products and provision of services which are not contemporaneously in time for Interested Persons Transactions - Mandated Transactions.” as the proposed interested person transaction being sold or provided to an unrelated third party, quotes from at least two other suppliers who are unrelated third parties not being the relevant interested person (b) Where the prevailing market rates or prices are not available, whether due to the nature of products to be or his associates of similar products or services will be obtained; and sold or services to be provided, the unavailability or impracticality of obtaining quotes from third party sources or otherwise, our Group’s pricing for these products and services will be determined in accordance (ii) in relation to the lease or sub-lease of property, we are required to obtain enquiries with at least two with the Group’s usual business practices and pricing policies, consistent with the usual margin our Group landlords and/or tenants who are unrelated third parties not being the relevant interested person or his will obtain for the same or substantially similar type of transaction with unrelated third parties. In determining associates of similarly sized and located properties put to similar use. the transaction price payable by Mandated Interested Persons for these products or services, factors such as, but not limited to, quantity, volume, consumption, customer requirements, specifications, duration of contract In addition, each interested person transaction entered into by our Group will be monitored as an individual and strategic purposes of the transaction will be taken into account. In relation to leases and sub-leases transaction and based on the value of the transaction, will require the prior approval of the corresponding of property, where prevailing market rentals are not available, whether due to the unavailability or impracticality Relevant Approving Authority who is a Director or management employee of the Group (not being an of obtaining rental comparisons or otherwise, rental will be determined according to the Group’s usual business interested person or his associate) and who does not have any interests, whether direct or indirect, practices and policies. In addition, based on the value of the proposed interested person transaction, in relation to the transaction as follows: the corresponding Relevant Approving Authority as set out in paragraph (a) above (not being an interested person or his associate) and who does not have any interests, direct or indirect, in relation to the transaction, will determine whether the price and terms offered by the interested person are fair and reasonable. Annual Report 2007 Thai Beverage Public Company Limited

210 211

(3) Non-recurring interested persons transactions Other Review Procedures Our Audit Committee led by the Lead Independent Director for IPTs will also review all interested persons transactions We may from time to time also conduct interested persons transactions not covered by paragraphs (1) and (2) including, Mandated Transactions to ensure that the prevailing rules and regulations of the SGX-ST (in particular, above and which do not form part of the Shareholders’ Mandate. These transactions are not of a recurring nature Chapter 9 of the Listing Manual) are complied with. or occur outside the ordinary course of business of our Group or which may not be necessary for the day-to-day

operations of our Group and include the purchase or sale of assets, undertakings or businesses which are not Our Group has also implemented the following procedures for the identification of interested persons transactions part of our day-to-day operations. We intend to conduct such transactions in accordance with the SGX-ST Listing (including Mandated Transactions) and interested persons (including Mandated Interested Persons) and the recording Manual, including the threshold, approval and other requirements under paragraphs 905 and 906 of the SGX-ST of all our interested person transactions: Listing Manual. In addition, we will monitor each transaction on an individual basis, and each transaction will require the prior approval of the corresponding Relevant Approving Authority below who is a Director or (a) our Group Chief Financial Officer will maintain a register of all transactions carried out with interested persons, management employee of the Group (not being an interested person or his associate) and who does not have including the Mandated Interested Persons (and the basis, including the quotations obtained to support such basis, any interests, whether direct or indirect, in relation to the transaction. The Relevant Approving Authority will also on which these transactions are entered into), whether mandated or non-mandated; and review the transaction to ensure that they are carried out on normal commercial terms and not prejudicial to the (b) on a quarterly basis, our Group Chief Financial Officer will submit a report to our Audit Committee of all recorded interests of our Company and minority Shareholders: interested persons transactions, and the basis of all recorded interested persons transactions, entered into by our Group. Our Company’s annual internal audit plan will incorporate a review of all interested persons transactions, including the established review procedures for the monitoring of the interested persons transactions including Approval Limits Relevant Approving Authority Mandated Transactions, entered into or existing interested persons transactions that are renewed or revised during Interested person transaction not exceeding Baht A deputy managing director or the current financial year, pursuant to the Shareholders’ Mandate. 200,000 in value officer of equivalent rank

In addition, our Audit Committee led by the Lead Independent Director for IPTs will review, on a quarterly basis, Interested person transaction above Baht 200,000 but A managing director or officer internal controls and review procedures for interested persons transactions to determine if they are adequate and/or not exceeding Baht 500,000 in value of equivalent rank commercially practicable in ensuring that the transactions between our Group and interested persons are conducted Interested person transaction above Baht 500,000 but A vice chairman or officer of on normal commercial terms and are not prejudicial to the interests of our Company and our minority Shareholders. not exceeding Baht 5 million in value equivalent rank In conjunction with this review, our Audit Committee will also ascertain whether we have complied with the established review procedures. Further, if during these periodic reviews by our Audit Committee, our Audit Committee is of the view Interested person transaction above Baht 5 million but A chairman or officer of that the internal controls and review procedures for interested persons transactions are inappropriate or not sufficient not exceeding 3% of the latest audited net tangible equivalent rank assets of the Group in value to ensure that the interested persons transactions will be on normal commercial terms and not prejudicial to the interests of our Company and our minority Shareholders, our Audit Committee will (pursuant to Rule 920(1)(b)(iv) and Interested person transaction above 3% of the latest Any two Audit Committee (vii) of the Listing Manual) revert to our Shareholders for a new Shareholders’ Mandate based on new internal controls audited net tangible assets of the Group in value members, one of whom must and review procedures for transactions with the Mandated Interested Persons. During the period prior to obtaining a be the Lead Independent new mandate from Shareholders, all transactions with interested persons will be subject to prior review and approval Director for IPTs by the Audit Committee.

For the purposes of the above review of the internal controls and review procedures, any member of our Audit Committee In the event that these interested persons transactions require the approval of our Shareholders, additional who is not considered independent will abstain from participating in the Audit Committee’s review of the internal information may be required to be presented to Shareholders and an independent financial adviser may be controls and review procedures. appointed for an opinion. Our Audit Committee will have overall responsibility for determining the review procedures with the authority to delegate to individuals or committees within our Group as they deem appropriate. Annual Report 2007 Thai Beverage Public Company Limited

212 213

Schedule Accounting Manual Policy Annual Report 2007 Thai Beverage Public Company Limited List of our Mandated Interested Persons Accounting Manuals Mandated Interested Persons ThaiBev and all subsidiaries in Thailand have already implemented the use of the accounting manuals which were assisted to develop by Deloitte Touche Tohmatsu Jaiyos Advisory (Deloitte), part of one of the world’s top four auditing 1. TCC Holding Co., Ltd. 23. Pisetkij Co., Ltd. firms, to assist. The accounting manuals will be used eventually to aid in the uniform understanding and utilization of 2. Bang-Na Glass Co., Ltd. 24. Plastic Agachon Co., Ltd. the accounting system throughout companies in ThaiBev group. They formally comprises our accounting policy, chart 3. Berli Jucker Cellox Co., Ltd. 25. Plaza Athenee Hotel (Thailand) Co., Ltd. of accounts, organization chart, accounting process flow, samples of documents and reports received and generated in 4. BJC Industrial and Trading Company Limited (1) 26. Queen’s Park Hotel Co., Ltd. the accounting process and etc. 5. Berli Jucker Foods Co., Ltd. 27. Regent Gold Property Fund

6. Berli Jucker Logistics Co., Ltd. 28. Siam Realty Co., Ltd. All subsidiaries outside Thailand will apply and implement the use of these accounting manuals within 2008. 7. Berli Jucker Public Company Limited 29. Southeast Capital Co., Ltd.

8. Berli Jucker Special Co., Ltd. 30. The Southeast Insurance (2000) Co., Ltd.

9. BJC Marketing Co., Ltd. , 31. The Southeast Life Insurance Co., Ltd.

10. BJC Healthcare Co., Ltd. (2) 32. The Suphanburi Sugar Industry Co., Ltd. SAP System 11. Chalitlarp Co., Ltd. 33. T.C.C. Service Apartment Co., Ltd. (3)

12. Dhipaya Sugar (1999) Co., Ltd. 34. Terragro Co., Ltd. (4)

13. Golden Wealth Co., Ltd. 35. T.C.C. Capital Co., Ltd. Implementation and Status of ThaiBev’s SAP Project (for this year)

14. Indara Insurance Public Company Limited 36. T.C.C. Commercial Property Management Co., Ltd.

15. Lake View Golf and Yacht Club Co., Ltd. 37. T.C.C. Technology Co., Ltd. In 2001, Beer Thai (1991) Public Company Limited, a subsidiary of ThaiBev, started SAP implementation for its brewery group and realized benefits from data consistency and cooperation across departments/companies. Even though the 16. Lake View Land Co., Ltd. 38. Thai Beverage Can Co., Ltd. existing system could support financial and management operations and enable ThaiBev to close its accounting book 17. Mae Ping Hotel (1988) Co., Ltd. 39. Thai Charoen Insurance Public Company Limited efficiently and in a timely manner, ThaiBev wished to further realize the benefits of collaboration across business 18. N.C.C. Management and Development Co., Ltd. 40. The Chonburi Sugar Corporation Limited units and consistent business processes via SAP implementation. In the initial phase, ThaiBev approved a budget 19. New Noble Property and Loan Fund 41. Thai Glass Industries Public Company Limited in 2006 to implement the SAP system for holding company and 33 core subsidiaries in Thailand. 20. Nongkhai Country Golf Club Co., Ltd. 42. The Maewang Sugar Industry Co., Ltd.

21. North Park Golf and Sports Club Co., Ltd. 43. The New Imperial Hotel Public Company Limited 2006 2007 Plan in 2008 22. P.S. Recycle Co., Ltd. 44. The Utaradit Sugar Industry Co., Ltd.

No of Companies

- Direct subsidiaries 51 52 54 Note (1) Its former name was BJC Engineering Co., Ltd. - Indirect subsidiaries 10 9 9 (2) Its former name was BJC Trading Co., Ltd. - Overseas subsidiaries 2 11 11 (3) Its former name was Tara Hotel Co., Ltd. - Overseas subsidiaries - 11 11 (4) Its former name was T.C.C. Agro Co., Ltd. (currently non-trading)

- Overseas indirect associates - 3 3 Annual Report 2007 Thai Beverage Public Company Limited

214 215

2006 2007 Plan in 2008 Announcement to SGX 2007

ThaiBev Existing System 1 Existing System 1 SAP System 1 Compliance with Singapore Exchange Regulations and Best Practices

Direct subsidiaries SAP System 2 SAP System 34 SAP System 42 The Company recognizes how important of the transparency of information disclosure. In 2007, the Company made Existing System 49 Existing System 18 BC-Account 12 two hundred and sixty-five announcements via SGX-NET categorized as follows: w interface to SAP

1. Six announcements of quarterly financial statements and dividend declaration. Indirect subsidiaries Existing System 10 Existing System 9 SAP System 9

2. Two hundred and two notices of substantial shareholders’ and directors’ interests and changes in interest.

Overseas subsidiaries Existing System 2 Existing System 11 Existing System 11 When the Company Secretary was informed of the changes in interest of any director(s), the Company Secretary also reported such information to other directors.

Overseas subsidiaries

(currently non-trading) - Existing System 11 Existing System 11 3. Three announcements/report involving with occupying the positions of Directors and Executives

Overseas Indirect associates - Existing System 3 Existing System 3 (1) Mr. Panote Sirivadhanabhakdi was appointed as Director of Thai Beverage Public Company Limited to replace Mr. Paisal Chevasiri who resigned from the position.

(2) Mr. Kasemsan Veerakul resigned from the position of Vice President of Ofﬁ ce of Corporate Communications The SAP implementation for ThaiBev in this initial phase is slightly ahead of the original schedule and covers more of Thai Beverage Public Company Limited and also resigned from the position of director of subsidiary companies in its scope than that in the proposed plan. In 2007, ThaiBev successfully went live using the SAP system in companies. 32 subsidiaries in Thailand, including sixteen distilleries, one industrial alcohol distillery, five beer and spirits’ agencies, and 10 related business companies. In addition, ThaiBev is going live with the SAP system in another 3 companies, (3) Report of persons occupying a managerial position who are related to a director, CEO, or substantial including Thai Beverage Logistics Co., Ltd., Cosmos Brewery (Thailand) Co., Ltd. and ThaiBev on the January 1, 2008. shareholder.

To aid in the uniform understanding and utilization of the standardized processes, ThaiBev plans to extend SAP 4. One announcement of acquisitions and realizations of assets of other companies resulting from acquisitions by implementation to another 15 direct and indirect subsidiaries in Thailand, including recently acquired distillery in 2008. Company’s subsidiary. In addition, the key sales and accounting information from BC-Accounting systems used in 12 distribution companies will also be interfaced to the SAP system to better provide integrated view of overall operations in Thailand. The extension 5. Fifty three miscellaneous announcements to either conform to the regulations of the SGX or to give information to of the project scope in 2008 will mainly be implemented by the ThaiBev IT team with some support from the existing investors, involving details of capital increases of the Company’s subsidiaries, the change of the name of Company’s consulting team and its implementation costs will still be within the originally approved budget. subsidiaries, a summary of business performance results for each quarter for investors, a clarification of news about the Company, and disclosure of connected transactions among interested persons.

Because of the diversity of ThaiBev’s overseas business, ThaiBev will consider IT investment in these subsidiaries based on their existing IT system, size of business, local regulations and social environment. Meanwhile, ThaiBev will continuously improve its financial consolidation process by utilizing the Consolidated Performance Management System, based on the current SAP implementation in Thailand, to collect key accounting and operational information from both the SAP and existing systems used in subsidiaries. Annual Report 2007 Thai Beverage Public Company Limited

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General Corporate Information

Annual Report 2007 Thai Beverage Public Company Limited

Company Name Address Post Code Telephone Fax Remark Company Name Address Post Code Telephone Fax Remark

Alcohol Group 4. Thanapakdi Co., Ltd. 315 Moo 4, Tambon Mae Faek, 50290 (053) 849 550-3 (053) 849 555 Amphoe San Sai, Chiangmai 1. Thai Alcohol Public Company Limited 31-35 Chalermkhet 1 Road, 10100 (02) 223 6679 (02) 225 4205 Wat Thepsirin Sub-District, (02) 223 6626 5. Kanchanasingkorn Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5383 (02) 272 2330 Pomprab Satru-pai District, Bangkok Chomphon Sub-District, (02) 272 2295 Chatuchak District, Bangkok 2 Moo 5, Tambon Bang Sai Pa, 73130 (034) 391 021-4 (034) 234 909 Factory Amphoe Banglen Nakhon Pathom 50 Moo 7, Tambon Wangkhanai, 71110 (034) 611 783-5 (034) 611 786 Factory Amphoe Thamuang, Kanchanaburi Brewery Group 6. Sura Piset Thipharat Co., Ltd. 14 Sangsom Building, Soi Yasoob 1, 10900 (02) 127 5386 (02) 272 2330 1. Beer Thai (1991) Public Company Limited 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 617 9545 Vibhavadi Rangsit Road, Chomphon Sub-District, Chomphon Sub-District, Chatuchak District, Bangkok Chatuchak District, Bangkok

488 Moo 1, Tambon Wangdong, 71190 (034) 527 100 (034) 527 111 Factory 349 Moo 2 Tambon Mae Lad, 62120 (055) 728 400-15 (055) 728 416 Factory Amphoe Muang, Kanchanaburi Amphoe Klong Klung, Kempaengphet

7. Sura Bangyikhan Co., Ltd. 82 Moo 3, Tambon Bang Khoo Wat, 12000 (02) 598 2850-9 (02) 598 2858 Factory 2. Beer Thip Brewery (1991) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 617 9546 Amphoe Muang, Pathum Thani Chomphon Sub-District, Chatuchak District, Bangkok 8. Athimart Co., Ltd. 170 Moo 11, Tambon Nikhom, 31150 (044) 627 200-3 (044) 627 202 Amphoe Satuek, Buri Rum (044) 681 011-2 68 Moo 2, Tambon Namtoa, 13250 (035) 289 333-47 (035) 289 371 Factory Amphoe Bangban, Ayutthaya 9. S.S. Karnsura Co., Ltd. 101 Moo 8, Tambon Kaeng Dom, 34190 (045) 202 210-1 (045) 202 212 King Amphoe Sawang Wirawong, (045) 442 006-8 3. Cosmos Brewery (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 617 9685 Ubon Ratchathani Chomphon Sub-District, Chatuchak District, Bangkok 10. Kankwan Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2321 Chomphon Sub-District, (02) 272 2295 77 Moo 1 Phaholyothin Road KM. 54, 13170 (035) 362 175-8 (035) 362 179 Factory Chatuchak District, Bangkok Amphoe Wangnoi, Ayutthaya 309 Moo 6, Nampong-Kranuan Road, 40310 (043) 441 013-5 (043) 441 017, Factory Distillery Group Tambon Nampong, Amphoe Nampong, 441 438

Khon Kaen 1. Sangsom Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5384 (02) 272 2330 Chomphon Sub-District, 11. Theparunothai Co., Ltd. 99 Moo 4, Tambon Hat Kham, 43000 (042) 462 657 (042) 012 524 Chatuchak District, Bangkok Amphoe Muang, Nong Khai (042) 012 521 (042) 012 525 49 Moo 4, Tambon Hormkret, 73110 (034) 321 777-9 (034) 321 777 Factory 1

Amphoe Sampran, Nakhon Pathom 12. Red Bull Distillery (1988) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2330 Chomphon Sub-District, 37/3 Moo 7, Tambon Wangkhanai, 71110 (034) 611 053 (034) 611 778 Factory 2 Chatuchak District, Bangkok Amphoe Thamuang, Kanchanaburi 8 Moo 5, Setthakit 1 Road, 74000 (034) 830 213-6 (034) 830 213-6 Factory 2. Fuengfuanant Co., Ltd. 333 Moo 1, Tambon Tha Toom, 25140 (037) 285 016-20 (037) 285 237 Tambon Nadee Amphoe Muang, Amphoe Si Maha Phot, Prachin Buri Samut Sakhon

3. Mongkolsamai Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5382 (02) 272 2330 13. United Winery and Distillery Co., Ltd. 14 Sangsom Building, Soi Yasoob 1, 10900 (02) 127 5555 (02) 272 2321 Chomphon Sub-District, Vibhavadi Rangsit Road, (02) 272 2334 Chatuchak District, Bangkok Chomphon Sub-District, Chatuchak District, Bangkok 149 Moo 5, Wangseesoob 53000 (055) 449 126-30 (055) 449 131 Factory Ngew-Ngam Road, Tambon Phajud, 54 Moo 2, Sukhaphiban Road, 73120 (034) 331 954 (034) 331 955 Factory Amphoe Muang, Uttaradit Tambon Nakhonchaisri, (034) 227 754-7 Amphoe Nakhonchaisri, Nakhon Pathom Annual Report 2007 Thai Beverage Public Company Limited

218 219

Company Name Address Post Code Telephone Fax Remark Company Name Address Post Code Telephone Fax Remark

14. Simathurakij Co., Ltd. 1 Moo 6, Tambon Ban Daen, 60180 (056) 279 088-9 (056) 350 660 Liquor Marketing Group Amphoe Banphot Phisai, Nakhon Sawan 1. Num Yuk Co., Ltd. 95/390-391 Trok Nokkhet, 10120 (02) 291 9711-5 (02) 289 4751 Rama III Road, Chong Nonsi Sub-District, 15. Nateechai Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2330 Yannawa District, Bangkok Chomphon Sub-District, (02) 272 2295 Chatuchak District, Bangkok 2. Num Thurakij Co., Ltd. 51/40-41 Moo 3, Sukhumvit Road, 20000 (038) 287 268-9 (038) 272 525 Tambon Ban Suan, Amphoe Muang, 1 Moo 2, Highway No. 41 Road, 84130 (077) 357 170-3 (077) 357 174 Factory Chon Buri Tambon Tharongchang, Amphoe Punpin, Surat Thani 3. Num Muang Co., Ltd. 16/2 Moo 1, U Thong Road, 13000 (035) 242 691 (035) 242 691 Tambon Tha Wasukri, 16. Luckchai Liquor Trading Co., Ltd. 46 Moo 1, Tambon Nong Klang Na, 70000 (032) 321 791-2 (032) 321 793 Amphoe Phra Nakhon Si Ayutthaya, Amphoe Muang, Ratchaburi (032) 313 611-2 Ayutthaya

17. Sura Piset Pattharalanna Co., Ltd. 14 Sangsom Building, Soi Yasoob 1, 10900 (02) 127 5555 (02) 272 2330 Dormant 4. Num Nakorn Co., Ltd. 149/3 Chulachomklao Road, 84130 (077) 224 771-4 (077) 224 775 Vibhavadi Rangsit Road, Tambon Tha Kham, Chomphon Sub-District, Amphoe Phun Phin, Surat Thani Chatuchak District, Bangkok 5. Num Palang Co., Ltd. 1/7-8 Phraya Surasi Road, 65000 (055) 241 132 (055) 243 610 18. United Products Co., Ltd. 56 Moo 2, Sukhaphiban Road, 73120 (034) 331 157 (034) 331 787 Factory Tambon Nai Muang, Amphoe Muang, Tambon Nakhonchaisri, Phitsanulok Amphoe Nakhonchaisri, Nakhon Pathom 6. Num Kijjakarn Co., Ltd. 1, 3, 5 Trok Wat Muang, 30000 (044) 242 496 (044) 241 747 Suranaree Road, Tambon Nai Muang, 19. SPM Foods and Beverages Co., Ltd. 79 Moo 3, Tambon Lumlookbua, 73150 (034) 302 194 (034) 302 194 Factory Amphoe Muang, Nakhon Ratchasima Amphoe Dontoom, Nakhon Pathom Distribution Agent Group Beer Marketing Group 1. Thipchalothorn Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 1. Pomthip Co., Ltd. 2194 Charoen Krung Road, 10120 (02) 291 9711 (02) 289 4751 Chomphon Sub-District, Wat Phraya Krai Sub-District, Chatuchak District, Bangkok Bang Kho Laem District, Bangkok 2. Krittayabun Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 2. Pomkit Co., Ltd. 48, 50, 52 Suranaree Road, 30000 (044) 242 496 (044) 241 747 Chomphon Sub-District, Tambon Nai Muang, Amphoe Muang, Chatuchak District, Bangkok Nakhon Ratchasima 3. Surathip Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 3. Pomchok Co., Ltd. 16/1 Moo 1, U Thong Road, 13000 (035) 241 678 (035) 241 313 Chomphon Sub-District, Tambon Tha Wasukri, Chatuchak District, Bangkok Amphoe Phra Nakhon Si Ayutthaya, Ayutthaya 4. Sunthornpirom Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 Chomphon Sub-District, 4. Pomcharoen Co., Ltd. 135/3 Moo 4, Kanchanavithi Road, 84000 (077) 224 774 (077) 224 775 Chatuchak District, Bangkok Tambon Bang Kung, Amphoe Muang, Surat Thani 5. Piromsurang Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 Chomphon Sub-District, 5. Pomklung Co., Ltd. 80/13-14 Ekathosarot Road, 65000 (055) 241 132 (055) 243 610 Chatuchak District, Bangkok Tambon Nai Muang, Amphoe Muang, Phitsanulok Import - Export & Logistics Group

6. Pomburapa Co., Ltd. 51/42 Moo 3, Sukhumvit Road, 20000 (038) 287 268 (038) 272 525 1. Thai Beverage Marketing Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5203 (02) 617 9600 Tambon Ban Suan, Amphoe Muang, Chomphon Sub-District, Chon Buri Chatuchak District, Bangkok Annual Report 2007 Thai Beverage Public Company Limited

220 221

Company Name Address Post Code Telephone Fax Remark Company Name Address Post Code Telephone Fax Remark

2. Thai Beverage Logistics Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5840 (02) 617 9619 2. InterBev (Singapore) Limited 3 Philip Street # 13-04 Commerce Point, 048693 (65) 6435 2880 (65) 6436 9930 Chomphon Sub-District, (02) 127 5555 Singapore Chatuchak District, Bangkok 3. InterBev (Cambodia) Co., Ltd. 140 Nehru (Street # 215) (855) (23) 881 484 (855) (23) 881 484 Related Business Group Sankat Vealvong, Khan 7 Makara, Phnom Penh, Kingdom of Cambodia 1. Dhospaak Co., Ltd. 195 Empire Tower, 25th Floor, 10120 (02) 670 2525 (02) 670 2551 Sathon Tai Road, Yannawa Sub-District, 4. InterBev Malaysia Sdn. Bhd. No 9-1, Jalan USJ 1/1B, 47620 (603) 8023-4923 (603) 8023-5923 Sathon District, Bangkok Regalia Business Centre, 47620 Subang Jaya, Selangor, 2. Pan International (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 617 9685 Malaysia. Chomphon Sub-District, Chatuchak District, Bangkok 5. International Beverage Holdings Limited USA, Inc. 60 East 42nd Street, Suite 2134, 10165 (646) 896 3800 (1) 646 896 3801 New York, NY 3. Bionic Humus Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 3038 Chomphon Sub-District, 6. Best Spirits Company Limited Room 901-2, Silvercord Tower 1, (852) 2375 6648 (852) 2375 6188 Chatuchak District, Bangkok 30 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong 4. Thai Molasses Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2432 Chomphon Sub-District, 7. International Beverage Holdings (UK) Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 779001 Chatuchak District, Bangkok Scotland

5. Additive Food Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 617 9647 8. Blairmhor Limited Moffat Distillery, Airdrie ML6 8PL, (44) 1236 769377 (44) 1236 769781 Chomphon Sub-District, Scotland Chatuchak District, Bangkok 9. Blairmhor Distillers Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant 6. Charun Business 52 Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5323-4 (02) 617 9688 Scotland Chomphon Sub-District, Chatuchak District, Bangkok 10. Inver House Distillers Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Scotland 7. Thai Cooperage Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 617 9500-29 (02) 617 9530 Chomphon Sub-District, 11. Liquorland Limited 8 Westbank Road, Belfast, BT3 9JL, (44) 289 077 3990 (44) 289 037 0566 Dormant Chatuchak District, Bangkok Northern Ireland

8. Dhanasindhi Co., Ltd. 949/6-8 Nakhon Chaisi Road, 10300 (02) 241 0127 (02) 243 1607 12. Inver House Polska Limited ul. Obodrzyców 34 A/1, 81-812 Sopot, (48) 585 502 111 (48) 585 502 111 Dormant Thanon Nakhon Chaisi Sub-District, (02) 241 0858 Poland Dusit District, Bangkok 13. Wee Beastie Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 9. Bang-na Logistics Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5511 (02) 617 9549 Scotland Chomphon Sub-District, Chatuchak District, Bangkok 14. Inver House Distribution SA Avenue des Tilleuls, 62140 Marconne, (33) 2 181 6170 (33) 2 181 1321 Dormant France Non-Alcohol Group 15. Moffat & Towers Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant 1. Wrangyer Beverage (2008) Co., Ltd.* 14 Vibhavadi Rangsit Road, 10900 (02) 127 5497 (02) 272 2584 Scotland Chomphon Sub-District, Chatuchak District, Bangkok 16. The Knockdhu Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant

Remark: * Registered the change of the company’s name from Scotland “Maharas Agri Co., Ltd.” on February 19, 2008. 17. Speyburn-Glenlivet Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant Overseas Group Scotland

1. International Beverage Holdings Limited Room 901-2, Silvercord Tower 1, (852) 2375 6648 (852) 2375 6188 18. The Pulteney Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant 30 Canton Road, Tsim Sha Tsui, Scotland Kowloon, Hong Kong Annual Report 2007 Thai Beverage Public Company Limited

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Company Name Address Post Code Telephone Fax Remark Company Name Address Post Code Telephone Fax Remark

19. The Balblair Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant 9. Sura Piset Samphan Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2330 Dormant Scotland Chomphon Sub-District, Chatuchak District, Bangkok 20. Glen Calder Blenders Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant Scotland 10. Thai Thum Distillery Co., Ltd. 14 Sangsom Building, Soi Yasoob 1, 10900 (02) 127 5555 (02) 272 2330 Dormant Vibhavadi Rangsit Road, 21. Hankey Bannister & Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant Chomphon Sub-District, Scotland Chatuchak District, Bangkok

22. R. Carmichael & Sons Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant 11. Pan Alcohol Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2330 Dormant Scotland Chomphon Sub-District, Chatuchak District, Bangkok 23. J. MacArthur Junior & Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant Scotland

24. Mason & Summers Limited 10 Foster Lane, London, EC2V 6HH, (44) 1236 769377 (44) 1236 769781 Dormant England

25. James Catto & Company Limited Moffat Distillery, Airdrie, ML6 8PL, (44) 1236 769377 (44) 1236 769781 Dormant Scotland

Others Company Legal Advisor

White & Case (Thailand) Limited 1. T.C.C. Cosmo Corporation Limited 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 Chomphon Sub-District, 22nd floor, Mercury Tower Chatuchak District, Bangkok 540 Ploenchit Road Lumpini, Pathumwan 2. Archa Beer Co., Ltd. 14 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 Chomphon Sub-District, Bangkok 10330 Chatuchak District, Bangkok Company Compliance Advisor 3. Beer Chang Co., Ltd. 15 Vibhavadi Rangsit Road, 10900 (02) 127 5555 (02) 272 2584 Chomphon Sub-District, Venture Law LLC Chatuchak District, Bangkok 50 Raffles Place #31-01 Singapore Land Tower 4. Muangkij Co., Ltd. 9 Dao Khanong-Chom Thong Road, 10120 (02) 127 5328 (02) 272 2584 Bang Kho Sub-District, Singapore 048623 Chom Thong District, Bangkok Certified Public Accountant 5. Banglen Agriculture Co., Ltd. 31-35 Chalermkhet 1 Road, 10100 (02) 223 3125 (02) 225 4205 Dormant Wat Thepsirin Sub-District, Mr. Nirand Lilamethwat Pomprab Satru-pai District, Bangkok (CPA No. 2316) or Mr. Supot Singhasaneh 6. Sint Ek Panich Co., Ltd. 31-35 Chalermkhet 1 Road, 10100 (02) 223 3125 (02) 225 4205 Dormant Wat Thepsirin Sub-District, (CPA No. 2826) Pomprab Satru-pai District, Bangkok or Ms. Nittaya Chetchotiros (CPA No. 4439) 7. Vidhayathan Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, 10900 (02) 617 9500-29 (02) 617 9530 Chomphon Sub-District, Chatuchak District, Bangkok of KPMG Phoomchai Audit Ltd. has been appointed as Company Auditor 8. Sura Piset Sahasan Co., Ltd. 14 Sangsom Building, Soi Yasoob 1, 10900 (02) 127 5555 (02) 272 2330 Dormant on April 20, 2007. Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok