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Contents

03 04 20 24 28

Investor Information Financial Highlights Message from the Chairman

40 42 44 52 58

Shareholding Structure Report of the Board of Directors

60

Board of Directors Executive Committee Profile of Directors &Key Management Organization Structure Product Portfolio

Operating and Financial Review

94 96 98 100 108 112 116 117

Our people Our Success Credit Rating Announcement

Awards Corporate Governance Report

Corporate Social Responsibility Report PR Talk Audit Committee Report Audit Report of Certified Public Accountant

118 149 213 215 216

Financial Statements Interested Persons Transactions Report Accounting Manual Policy/ SAP System Announcements to SGX 2007 General Corporate 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 Reuters Bloomberg Google Finance

30 May 2006 S$ 0.28 December 31 KPMG Phoomchai Audit Ltd. Not less than 50% of net profit after deducting all appropriated reserves

ThaiBev's stock performance Vol. (M shares)

Price (S$) Thaibev close

Share price*

Volume

0.3

1600

2007 High S$ 0.29 2007 Low S$ 0.24 *data from January 3 to December 31, 2007

Source: www.shareinvestor.com

1400

Investor Relations Contact 0.25

1200

Investor Relations Department

Thai Beverage Public Company Limited 14 Vibhavadi Rangsit Road, Chomphon Chatuchak, Bangkok 10900, THAILAND

1000

Mr. Richard W. Jones 800

0.2

600

Tel: +662 127 5035 Fax: +662 272 2280 E-mail: richard.j@thaibev.com

Ms. Namfon Aungsutornrungsi

400

0.15

Tel: +662 127 5037 E-mail: namfon.a@thaibev.com

Ms. Ariya Silakorn Tel: +662 127 5036 E-mail: ariya.s@thaibev.com December

November

October

September

August

July

June

May

0

April

President

March

200 February

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 somehow didn't seem enough for the bustling energy with which we filled every bottle of ThaiBev products. Simply put, our steady growth truly stemmed from our 110% dedication. For us at ThaiBev, the mere sight of sparkling bubbles and a golden smile-shaped reflection no doubt convey our brimming happiness to customers worldwide. With such rippling effects across the globe, this happiness and your collective trust in us concurrently foster our robust business.By any standard, 2007 was a memorable year for all ... so much so that I wish there were Mr. Thapana Sirivadhanabhakdi more than 24 hours in a day!

IPO date IPO offer price Fiscal year ends External Auditor Dividend Policy

January

8,760 HOURS OF HAPPINESS

THBEV tbev.si thbev sp SIN:Y92

0.1 2007

Corporate website: www.thaibev.com IR website: www.thaibev.com/set/investor.html


Annual Report 2007

Thai Beverage Public Company Limited

05

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

% % % %

29.51

29.11

31.31

21.14

21.06

22.40

16.19

16.31

17.73

0.30

0.16

0.30

% % %

101.02

90.07

169.82

10.33

10.28

10.89

19.32

23.86

31.58

% % times

12.58

11.64

11.35

22.41

20.22

21.17

1.22

1.13

1.04

times

0.45

0.63

1.75

times times %

0.29

0.46

1.43

20.29

13.13

12.20

70.13

54.94

51.08

Income Statement ( Mil.Baht )

Profitability Ratio

Revenue from sales Total revenues Cost of sales Gross profit Operating profit EBIT Net profit Depreciation and amortisation EBITDA

100,541

97,798

94,903

100,839

97,956

95,190

70,873

69,325

65,188

29,668

28,473

29,715

15,979

15,789

16,534

16,277

15,946

16,822

10,383

10,055

10,337

4,974

4,652

4,432

21,251

20,598

21,254

Balance Sheet ( Mil.Baht )

Efficiency Ratio

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shareholders’ equity Total liabilities and shareholders’ equity

33,129

33,522

36,349

46,398

52,058

50,788

79,527

85,580

87,137

19,049

26,151

55,228

5,568

6,875

195

24,617

33,026

55,423

54,910

52,554

31,714

79,527

85,580

87,137

1.74

1.28

0.66

0.27

0.20

0.14

0.86

0.55

0.52

72.20

70.32

60.51

5.06

5.19

6.03

Liquidity Ratio Current Ratio Quick Ratio Operating Cash Flows Ratio Receivable Turnover Average Collection Period Inventory Turnover Average Inventory Period Payable Turnover Average Payable Period Cash Cycle

Gross Profit Margin EBITDA Margin EBIT Margin Other Profit Margin Operating Cash Flows to Operating Profit Ratio Net Profit Margin Return on Equity

Return on Assets Return on Fixed Assets Fixed Assets Turnover

Leverage Ratio times times times times days times days times days days

2.51

2.43

2.09

145.16

150.22

174.37

31.32

34.95

35.20

11.65

10.44

10.37

138.57

144.97

170.03

Debt to Equity Ratio Interest Bearing Debt to Equity Ratio Interest Coverage Ratio Dividend Payout Ratio


Annual Report 2007

Thai Beverage Public Company Limited

07

SHOW TIME MY TIME

What's New

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 town these days. Would it surprise you then to see Elephants toasted in every pub there?

Archa Beer

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 Beer Awards Australia Chang Beer

Gold Medal from International Spirit Awards in Madrid SangSom Rum

Gold Medal from International Spirit Awards in Madrid SangSom Rum


Annual Report 2007

Thai Beverage Public Company Limited

09

Special Report

GUESS WHOSE , SMILE YOU LL SEE WITH RISING SALES ?

Beer: Volume Total

2007 : 957

2006 : 923

million liters

Low Alcohol Beer

Low Alcohol Beer

313

102

Chang

Chang

644

821

2007

Total Sales

2006

million baht

100,541

110,000

97,798

Spirits: Volume

100,000

Total 90,000

2007 : 446

2006 : 476

million liters

368

80,000

70,000

Sales of THB 100.5 bn in 2007

329

60,000

50,000

1%

from industrial alcohol and others

117 40,000

from beer and water

47%

108

30,000

from spirits

20,000

52% 10,000

0

White

2007

2006

Brown

2007

White

Brown

2006


Annual Report 2007

Thai Beverage Public Company Limited

Time Travels

ROCK

AROUND THE CLOCK Believe it or not ... in any given second, a ThaiBev guy is whistling away, working in a distant corner of the world.

As the lights go out in our Bangkok headquarters, they are coming on in our New York offices, and it is only half way through the day at our Airdrie offices. Whatever the time, somewhere in the world ThaiBev is getting down to business.


Annual Report 2007

Thai Beverage Public Company Limited

13

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

15

made in Thailand

around the world


Annual Report 2007

Thai Beverage Public Company Limited

17

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

Lung Suan 11.00 pm

Bangkok 06.30 pm Rachadapisek 07.13 pm

Ramintra 06.26 pm


Annual Report 2007

Thai Beverage Public Company Limited

19

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

20

Message from the Chairman

Dear Shareholders, Since our listing on the Singapore Exchange in May 2006, the Company has begun to plan for changes that will make it more professional and competitive inside and outside of Thailand. It was the Board’s intention when we were established as a public company, with all that that entails regarding corporate governance and greater professionalism. While these internal projects have not warranted detailed reports previously, needless to say, we believe that improvements to our human resources structure and greater accountability at all levels of management will assist us in implementing the strategies we have made public since listing. On that note, I would like to spend some time to review these strategies as they will have a material impact on our future.

We also intend to continue what we call a premiumisation process by launching higher margin products to lift our portfolio into the standard and premium ends of both spirits and beer. This will enable us to gain higher margins over time and prepare for consumer aspirations as the economy improves in the long term. To achieve this, we will continue to invest in our brands by investing in integrated marketing communications and premiumisation. Some passing examples would be the introduction of gift boxes for some of our spirits products like Sangsom and Mekhong. We also introduced some new beers to the Thai market, Chang Light and Chang Draught in bottles and these have done well, in fact, surpassing some foreign competitors whose beers 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 entire country. We will need to leverage this infrastructure by taking on products from other companies, and we need to develop it to be more modern and efficient. To assist in this, the Company commenced the construction of five major distribution centers in different regions in August 2007. Together with greater implementation of SAP enterprise resource planning software throughout our group of companies, we envisage being better able to forecast the inventory needs of our dealers and to ensure that products are pushed through the network in the most efďŹ cient manner.

A key strategy to date has been to develop the local market and maintain market leadership by managing the marketing mix and the pricing of individual brands. To enable us to offer a spirits portfolio at every price range, the Company has acquired two white spirits brands, White Tiger and White Bear, which give us the opportunity to offer economy spirits to compete with local community spirits and homemade liquor. The value of these acquisitions is in our ability to now compete at every price level.


Annual Report 2007

Thai Beverage Public Company Limited

22

23

Foreign Expansion Strategy We have also begun to establish a platform for strategic international expansion. We now export our products to 80 countries globally. I am pleased to inform you that our acquisition of Inver House in October 2006 is now bearing the fruit of integration. Not only have we been able to make Inver House’s Airdrie headquarters the base for all operations in the UK, and thus save on several costs, but our distribution of Chang beer in Australia came about because of Inver House’s contacts. In a later chapter, we will report in more detail on our overseas strategies. However, suffice to say that there are plans to increasingly export our products as premium offerings and acquire businesses that add more value. Our investments aim to have an internal rate of return (IRR) in the suitable amount. As a public company, we have not rushed into foreign acquisitions over the past year. We are focusing on the Asian region as there are many cultural and consumer similarities among Asian countries that would make the region more attractive for us at the beginning. We are already making inroads into certain markets such as Singapore and Malaysia for instance, but our eye must be on markets such as China and India as these are phenomenal regional growth markets. In Europe, the USA and Australia, ThaiBev has commenced selling Chang beer in its export version as a premium beer, while Mekhong rum is being positioned at the high end of the consumer market. This is a signal of the confidence we have in the quality of our products. We intend to enter continental European markets as and when we can set up distribution, which is a critical success factor. While entry through Thai and Asian restaurants and outlets is an appropriate first step, we will certainly be seeking to penetrate the mainstream drinks markets over time.

we hope, have been ameliorated by the general election of December 2007. Nevertheless, this uncertainty led to an economic slowdown and this had some effect on this company as it did on others in the industry. GDP growth for 2008 is now forecasted as a moderate 4.5 - 5.5% by the Office of the National Economic and Social Development Board, however, the Consumer Confidence Index has risen to 119 at the end of 2007 (source: Bureau of Trade and Economic Indices, Ministry of Commerce), which should be cause for optimism. As the domestic market still counts for 96.4% of total sales, I should like to bring to your attention sales growth of 2.8% in 2007, compared with 2006, and a commensurate increase of 3.3% in net profit year-on-year. This increase reflects the strength of the company under less-than-ideal economic conditions. Massive flooding over much of the country from the end of 2006 into the first half of 2007 meant that many of our agents were unable to handle large orders during our peak period. In spite of these difficulties, we managed to grow our revenue. Two tax rises were implemented in Thailand, one in August 2007 and one in January 2008. The former had been discussed for some time and the Company was to some extent prepared for it. The second rise, of one and a half percent, was to cover the establishment of a public broadcasting system. Shareholders will want to know if there is any way to forecast future tax increases, however, this depends on government policy and tax collection targets that may change from time to time, making forecasting unfeasible.

Diversification into Non-alcoholic Beverages Domestic Factors Most shareholders will be aware of the political events in Thailand in our recent history that left the country in a state of uncertainty for over a year. These problems,

One other strategy not listed above is the diversification of the Company into non-alcoholic beverages. This is a deliberate move to ensure that we explore other products that fit in with our portfolio. Post year-end,

the acquisition of Wrangyer in January 2008 was our entry into the energy drinks market. This diversification will allow us to enter into a new market that is growing 3-4% a year and where our distribution network will contribute considerably to further sales growth. The construction of the five distribution centers mentioned above will help us to manage the increase in the portfolio too. The Company will be looking very closely at fruit juices and other non-alcoholic beverages; we will keep you informed about planned acquisitions when they become material.

Corporate Development As we enter into 2008, our vision of the evolution of the Company is an important issue for shareholders. We want to continue improvements to the management structure and build a team that is able to react faster to events and think further ahead. We will rely more and more on professional management to drive our growth. We will then also be better able to satisfy our distributors by offering more professional services. I have a vision of ThaiBev as a leading player in the ASEAN region and want to assure shareholders not only that our above-mentioned strategies are well thought-out, but that we have the ability to implement them successfully. The natural outcome will be higher revenue growth and profitability. As for our relationship with you, our shareholders and other investors, we must now strive towards a goal of becoming a role model of transparency and good corporate governance so that you remain fully aware of our plans and achievements moving forwards. I believe ThaiBev will be an even better company five years from now and I shall continue to work with the Board of Directors to help guide the Company to ensure that we not only achieve our goals but satisfy all stakeholders in the process.

Charoen Sirivadhanabhakdi 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% Thai Alcohol Public Company Limited

Distillery Group 1

Distillery Group 2

Distillery Group 3

Sangsom Co., Ltd.

Sura Bangyikhan Co., Ltd.

Red Bull Distillery (1988) Co., Ltd.*

Beer Chang Co., Ltd.

Banglen Agriculture Co., Ltd.

Fuengfuanant Co., Ltd.

Athimart Co., Ltd.

Simathurakij Co., Ltd.

Archa Beer Co., Ltd.

Sint Ek Panich Co., Ltd.

Mongkolsamai Co., Ltd.

S.S. Karnsura Co., Ltd.

Nateechai Co., Ltd.

Thanapakdi Co., Ltd.

Kankwan Co., Ltd.

Luckchai Liquor Trading Co., Ltd.

Kanchanasingkorn Co., Ltd.

Theparunothai Co., Ltd.

United Winery & Distillery Co., Ltd.

Brewery Group

Trademark Group

Beer Thip Brewery (1991) Co., Ltd.

T.C.C. Cosmo Corporation Limited

Cosmos Brewery (Thailand) Co., Ltd. Beer Thai (1991) Public Company Limited - Vidhayathan 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 Thai Beverage Marketing Co., Ltd.

Overseas Group International Beverage Holdings Limited***

Red Bull Distillery (1988) Co., Ltd.*

Thai Cooperage Co.,Ltd. 93.50% 36.57% 33.83%

Thai Thum Distillery Co., Ltd. Sura Piset Sahasan Co., Ltd. 58.63% - Sura Piset Samphan Co., Ltd.

7.54%

** The name has been changed to Wrangyer (2008) Beverage Co., Ltd. as of February 19, 2008.

100%

Pan Alcohol Co., Ltd.


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%

International Beverage

100%

Best Spirits Company Limited

100%

InterBev (Singapore) Limited

100%

InterBev Malaysia Sdn. Bhd.

100%

InterBev (Cambodia) Co.,Ltd.

100%

International Beverage

Holdings (UK) Limited

Holdings Limited USA, Inc.

*** Name Changed from Pacific Spirits (UK) Limited on Dec 2, 2007

** Name Changed from InterBev USA Inc. on Jan 30, 2007

100%

Blairmhor Limited

100%

Blairmhor Distillers Limited

100%

Inver House Distillers Limited

49.49% Liquorland Limited

100%

100%

100%

6 non-trading subsidiaries

44% Inver House Polska Limited

100%

100% Wee Beastie Limited

50.02%

100%

Inver House Distribution SA

Moffat & Towers Limited

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 Company / Location

Type of Business

Type of Share

No. of Shares Held

Shares Issued

% of (Direct/Indirect) Shareholding

Paid-Up Capital (Baht)

Remark

Company / Location

Type of Business

Type of Share

No. of Shares Held

Paid-Up Capital (Baht)

% of

Shares Issued

(Direct/Indirect) Shareholding

1. Beer Thai (1991) PLC. 15 Moo 14, Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Beer, Drink & Soda Production

Common

5,550,000,000.00

555,000,000

554,999,985

100.00%

11. Kankwan Co., Ltd. 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Liquor Production

Common

800,000,000.00

80,000,000

79,999,994

100.00%

2. Beer Thip Brewery (1991) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Beer, Drink & Soda Production

Common

6,600,000,000.00

660,000,000

659,999,940

100.00%

12. Theparunothai Co., Ltd. 99 Moo 4, Tambon Hat Kham Amphoe Muang, Nong Khai 43000

Liquor Production

Common

700,000,000.00

70,000,000

69,999,994

100.00%

Common

5,000,000,000.00

500,000,000

499,999,940

100.00%

Liquor Production

Common

7,500,000,000.00

750,000,000

749,999,994

100.00%

13. Red Bull Distillery (1988) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Liquor Production

3. Sangsom Co., Ltd. 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

1,800,000,000.00

180,000,000

179,999,994

100.00%

Liquor Production

Common

900,000,000.00

90,000,000

89,999,994

100.00%

14. United Winery & Distillery Co., Ltd. liquor Production 14 Sangsom Building Soi Yasoob 1, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Common

4. Fuengfuanant Co., Ltd. 333 Moo 1, Tambon Tha Toom Amphoe Si Maha Phot, Prachin Buri 25140

Common

900,000,000.00

90,000,000

89,999,994

100.00%

Liquor Production

Common

700,000,000.00

70,000,000

69,999,994

100.00%

15. Simathurakij Co., Ltd. 1 Moo 6, Tambon Ban Daen Amphoe Banphot Phisai, Nakon Sawan 60180

Liquor Production

5. Mongkolsamai Co., Ltd. 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Liquor Production

Common

800,000,000.00

80,000,000

79,999,994

100.00%

6. Thanapakdi Co., Ltd. 315 Moo 4, Tambon Mae Faek, Amphoe San Sai, Chiang Mai 50290

Liquor Production

Common

700,000,000.00

70,000,000

69,999,994

100.00%

16. Nateechai Co., Ltd. 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Common

800,000,000.00

80,000,000

79,999,994

100.00%

Liquor Production

Common

700,000,000.00

70,000,000

69,999,994

100.00%

17. Luckchai Liquor Trading Co., Ltd. 46 Moo 1, Tambon Nong Klang Na Amphoe Muang, Ratchaburi 70000

Liquor Production

7. Kanchanasingkorn Co., Ltd. 14 Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900

Common

500,000,000.00

5,000,000

4,999,994

100.00%

8. Sura Bangyikhan Co., Ltd. 82 Moo 3, Tambon Bang Khoo Wat Amphoe Muang, Pathum Thani 12130

Liquor Production

Common

4,000,000,000.00

400,000,000

399,999,994

100.00%

18. Sura Piset Thipharat Co., Ltd. Liquor Production 14 Sangsom Building, Soi Yasoob 1, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

800,000,000.00

160,000,000

159,999,986

100.00%

Liquor Production

Common

900,000,000.00

90,000,000

89,999,994

100.00%

19. Thai Alcohol PLC. 31-35 Chalermkhet 1 Road, Wat Thepsirin Sub-District, Pomprab District, Bangkok 10100

Alcohol Production Common

9. Athimart Co., Ltd. 170 Moo 11, Tambon Nikhom, Amphoe Satuek, Buri Ram 31150 10. S.S. Karnsura Co., Ltd. 101 Moo 8, Tambon Kaeng Dom King Amphoe Sawang Wirawong Ubon Ratchathani 34190

Liquor Production

Common

800,000,000.00

80,000,000

79,999,994

100.00%

20. Pomthip Co., Ltd. 2194 Charoen Krung Road, Wat Phraya Krai Sub-District, Bang Kho Laem District, Bangkok 10120

Beer Distribution

10,000,000.00

1,000,000

999,994

100.00%

Common

Remark


Annual Report 2007

Thai Beverage Public Company Limited

30

Company / Location

Type of Business

Type of Share

No. of Shares Held

Shares Issued

% of (Direct/Indirect) Shareholding

Paid-Up Capital (Baht)

31

Remark

Company / Location

Type of Business

Type of Share

No. of Shares Held

Paid-Up Capital (Baht)

% of

Shares Issued

(Direct/Indirect) Shareholding

21. Pomkit Co., Ltd. 48,50,52 Suranaree Road, Tambon Nai Muang, Amphoe Muang, Nakhon Ratchasima 30000

Beer Distribution

Common

10,000,000.00

1,000,000

999,994

100.00%

34. Surathip Co., Ltd. 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Liquor Distribution Common Agent

1,200,000.00

120,000

119,940

100.00%

22. Pomklung Co., Ltd. 80/13-14 Ekathosarot Road, Tambon Nai Muang, Amphoe Muang, Phitsanulok 65000

Beer Distribution

Common

10,000,000.00

1,000,000

999,994

100.00%

35. Sunthornpirom Co., Ltd. 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Liquor Distribution Common Agent

5,000,000.00

500,000

499,994

100.00%

23. Pomchok Co., Ltd. 16/1 Moo 1,U Thong Road, Tambon Tha Wasukri, Amphoe Muang, Ayutthaya 13000

Beer Distribution

Common

10,000,000.00

1,000,000

999,994

100.00%

36. Piromsurang Co., Ltd. 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Liquor Distribution Common Agent

5,000,000.00

500,000

499,994

100.00%

24. Pomcharoen Co., Ltd. 135/3 Moo 4, Kanchanavithi Road, Tambon Bang Kung, Amphoe Muang Surat Thani 84000

Beer Distribution

Common

10,000,000.00

1,000,000

999,994

100.00%

37. Bionic Humus Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Fertilizer Sale

Common

860,000,000.00

8,600,000

8,599,994

100.00%

25. Pomburapa Co., Ltd. 51/42 Moo 3, Sukhumvit Road, Tambon Ban Suan, Amphoe Muang, Chon Buri 20000

Beer Distribution

Common

10,000,000.00

1,000,000

999,994

100.00%

38. Maharas Agri Co., Ltd. 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Japanese Rice Planting

Common

2,000,000.00

200,000

199,940

100.00%

26. Num Yuk Co, Ltd. 95/390-391 Trok Nokkhet, Rama III Road, Chong Nonsi Sub-District, Yannawa District, Bangkok 10120

Liquor Distribution Common

10,000,000.00

1,000,000

999,994

100.00%

39. Thai Molasses Co., Ltd. 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Molasses Distribution

Common

40,000,000.00

40,000

39,885

99.72%

27. Num Kijjakarn Co., Ltd. 1,3,5 Trok Wat Muang, Suranaree Road, Tambon Nai Muang, Amphoe Muang, Nakhon Ratchasima 30000

Liquor Distribution Common

10,000,000.00

1,000,000

999,994

100.00%

40. Additive Food Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Animal Feed Distribution

Common

1,000,000.00

10,000

9,994

100.00%

28. Num Palang Co., Ltd. 1/7-8 Phraya Surasi Road, Tambon Nai Muang, Amphoe Muang, Phitsanulok 65000

Liquor Distribution Common

10,000,000.00

1,000,000

999,994

100.00%

41. Pan International (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Trading of Supplies Common and Procurement

1,000,000.00

10,000

9,994

100.00%

29. Num Muang Co., Ltd. 16/2 Moo 1, U Thong Road, Tambon Tha Wasukri, Amphoe Muang, Ayutthaya 13000

Liquor Distribution Common

10,000,000.00

1,000,000

999,994

100.00%

42. Charun Business 52 Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Brick Production

Common

121,800,000.00

1,218,000

1,217,994

100.00%

30. Num Nakorn Co., Ltd. 149/3 Chulachomklao Road, Tambon Tha Kham, Amphoe Phun Phin, Surat Thani 84130

Liquor Distribution Common

10,000,000.00

1,000,000

999,994

100.00%

43. Thai Cooperage Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Oakwood Barrel Production

Common

300,000,000.00

30,000,000

29,999,940

100.00%

31. Num Thurakij Co., Ltd. 51/40-41 Moo 3, Sukhumvit Road, Tambon Ban Suan, Amphoe Muang, Chon Buri 20000

Liquor Distribution Common

10,000,000.00

1,000,000

999,994

100.00%

44. Bang-na Logistics Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Bottle Distribution

Common

123,000,000.00

1,230,000

1,229,994

100.00%

32. Thipchalothorn Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Beer and Liquor Distribution Agent

Common

1,000,000.00

100,000

99,994

100.00%

45. Thai Beverage Logistics Co., Ltd. 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Logistics

Common

12,000,000.00

1,200,000

1,199,940

100.00%

33. Krittayabun Co., Ltd. 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Beer and Liquor Distribution Agent

Common

5,000,000.00

500,000

499,994

100.00%

46. Thai Beverage Marketing Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Liquor Import & Export / Overseas Marketing

Common

300,000,000.00

30,000,000

29,999,940

100.00%

Remark

On January 25, 2008 Increase in shares capital to 20,000,000 shares @ 10 Baht, totalling 200,000,000 Baht. Name Changed to “Wrangyer Beverage (2008)” Co., Ltd. as of 19 Feb 2008

On February 28, 2008 Increase in shares capital to 101,200,000 shares @ 10 Baht, totalling 1,012,000,000 Baht.


Annual Report 2007

Thai Beverage Public Company Limited

32

Company / Location

Type of Business

Type of Share

No. of Shares Held

Paid-Up Capital (Baht)

Shares Issued

(Direct/Indirect)

% of Shareholding

47. Dhanasindhi Co., Ltd. 949/6-8 Nakhon Chaisi Road, Dusit District, Bangkok 10300

Construction

Common

20,000,000.00

20,000

19,994

100.00%

48. Dhospaak Co., Ltd. 195 Empire Tower, 25th Floor, Sathon Tai Road, Yannawa Sub-District, Sathon District, Bangkok 10120

Advertising

Common

25,000,000.00

2,500,000

2,499,994

100.00%

49. International Beverage Holdings Limited Room 901-2, Silvercord, Tower 1, 30 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong

Holding Company

50. Cosmos Brewery (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Beer, Drink & Soda Production

51. T.C.C. Cosmo Corporation Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Trademark Proprietor

52. Beer Chang Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Trademark Proprietor & Beer Concentrate Production

Common

53. Archa Beer Co., Ltd. 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Trademark Proprietor & Beer Concentrate Production

Common

54. Sura Piset Pattharalanna Co., Ltd. Holding Company 14 Sangsom Building, Soi Yasoob 1, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Common

55. Thai Thum Distillery Co., Ltd. # 14 Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Common

Common

Common

Liquor Distribution Common

56. Sura Piset Sahasan Co., Ltd. # Liquor Production 14 Sangsom Building, Soi Yasoob 1, & Distribution Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Common

57. Sura Piset Samphan Co., Ltd. # Liquor Production 14 Sangsom Building, Soi Yasoob 1, & Distribution Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Common

58. Muangkij Co., Ltd. # 9 Dao Khanong-Chom Thong Road, Bang Kho Sub-District, Chom Thong District, Bangkok 10150

Oakwood Supply

Common

59. Sint Ek Panich Co., Ltd. # 31-35 Chalermkhet 1 Road, Wat Thepsirin Sub-District, Pomprab Satru-pai,Bangkok 10100

Mining

Common

HK$ 1,470,000,000.00

1,666,666,500.00

5,000,000.00

1,000,000.00

1,000,000.00

600,000,000.00

17,500,000.00

100,000,000.00

100,000,000.00

3,810,000.00

9,000,000.00

Remark

33

Company / Location

Type of Business

Type of Share

No. of Shares Held

Paid-Up Capital (Baht)

% of

Shares Issued

(Direct/Indirect) Shareholding

Remark

60. Pan Alcohol Co., Ltd. # 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Vinegar Production Common & Distribution

2,000,000.00

20,000

20,000

100.00%

Agricultural Planting

Common

20,000,000.00

20,000

20,000

100.00%

1,470,000,000 1,470,000,000 100.00%

61. Banglen Agriculture Co., Ltd. # 31-35 Chalermkhet 1 Road, Wat Thepsirin Sub-District, Pomprab Satru-pai District, Bangkok 10100

Conservation Public Relations

Common

5,000,000

500,000

500,000

100.00%

166,666,650

100.00%

62. Vidhayathan Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900

Liquor Production & Distribution

Common

350,000,000.00

3,500,000

2,828,850

80.82%

100.00%

63. United Products Co.,Ltd. 56 Sukhapibal Road, Tambon Nokornchaisri, Amphoe Nokornchaisri, Nakornpathom 73120

Seasoning Sauce, Fruit Juice, Energy Drink, Liquor Agent

Common

100,000,000.00

1,000,000

832,000

83.20%

100.00%

64. S P M Foods and Beverages Co.,Ltd. 79 Pholdumri Road, Tambon Lamlukbua, Amphoe Dontoom, Nakornpathom 73150 65. InterBev (Singapore) Limited 3 Philip Street # 13-04 Commerce Point, Singapore

Trading of alcoholic Common beverages

SGD 3,000,000.00 3,000,000

3,000,000

100.00%

66. InterBev (Cambodia) Co.,Ltd. 140 Nehru (Street # 215) Sankat Vealvong, Khan 7 Makara, Phnom Penh Kingdom of Combodia

Trading of alcoholic Common beverages

USD 200,000.00

1,000

1,000

100.00% The “shares issued” & “no. of shares held are amended from “NA” “to” 1,000”.

67. InterBev Malaysia Sdn. Bhd. Suite 6.01, 6th Floor, Plaza See Hoy Chan, Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia

Trading of alcoholic Common beverages

MYR 100,000.00

100,000

100,000

100.00%

68. International Beverage Holdings Limited USA, Inc. 405 Lexington Avenue, 25th Floor, Suite 2532, New York, USA

Trading of alcoholic Common beverages

USD 2,600,000.00 2,600,000

2,600,000

100.00% Name Changed from “InterBev USA Inc.” as of 7 Feb 2007

69. Best Spirits Company Limited Room 901-2, Silvercord Tower 1, 30 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong

Trading of alcoholic Common beverages

HKD 15,300,000.00 15,300,000

15,300,000

100.00%

Holding Company

Common

£68,500,000.00

68,500,000

68,500,000

100.00%

70. International Beverage Holding (UK) Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland

100.00% Name Changed from “Pacific Spirits (UK) Limited” on 2 Dec 2007

Holding Company

Common

£9,009,406.7

900,940,670

900,940,670

100.00%

100.00%

71. Blairmhor Limited Moffat Distillery, Airdrie ML6 8PL, Scotland 72. Inver House Distillers Limited Moffat Distillery, Airdrie ML6 8PL, Scotland

Production and distribution of spirits

Common

£10,000,000

10,000,000

10,000,000

100.00%

50,000

10,000

100,000

6,000,000

17,500

1,000,000

1,000,000

38,100

90,000

166,666,590

49,940

9,940

99,940

5,999,994

17,483

1,000,000

1,000,000

38,100

90,000

100.00%

100.00%

100.00%

100.00%

100.00%


Annual Report 2007

Thai Beverage Public Company Limited

34

Company / Location

Type of Business

Type of Share

73. Blairmhor Distillers Limited # Moffat Distillery, Airdrie, ML6 8PL, Scotland

Dormant

Common

74. Wee Beastie Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland

Trading of alcoholic Common beverages

No. of Shares Held Shares Issued

(Direct/Indirect)

% of Shareholding

2,000

2,000

100.00%

Paid-Up Capital (Baht)

£200.00

List of Direct and Deemed Interests of Each Director As at January 21, 2008

Remark

£100.00

100

100

100.00%

Common

£100.00

100

100

100.00%

76. The Knockdhu Distillery Company Limited # Moffat Distillery, Airdrie ML6 8PL, Scotland

Dormant

Common

£100.00

100

100

100.00%

77. The Pulteney Distillery Company Limited # Moffat Distillery, Airdrie ML6 8PL, Scotland

Dormant

Common

£2.00

2

2

100.00%

78. The Balblair Distillery Company Limited # Moffat Distillery, Airdrie ML6 8PL, Scotland

Dormant

79. R. Carmichael & Sons Limited # Moffat Distillery, Airdrie, ML6 8PL, Scotland

Dormant

80. J MacArthur Junior & Company Limited # Moffat Distillery, Airdrie, ML6 8PL, Scotland

Dormant

81. Mason & Summers Limited # 10 Foster Lane, London, EC2V 6HH, England

Dormant

82. Hankey Bannister & Company Limited # Moffat Distillery, Airdrie, ML6 8PL, Scotland

Dormant

83. James Catto & Company Limited # Moffat Distillery, Airdrie ML6 8PL, Scotland

Dormant

84. Glen Calder Blenders Limited # Moffat Distillery, Airdrie, ML6 8PL, Scotland

Dormant

85. Moffat & Towers Limited # Moffat Distillery, Airdrie ML6 8PL, Scotland

Dormant

86. Liquorland Limited 8 Westbank Road, Belfast, BT3 9JL Northern Ireland

Off licences

87. Inver House Polska Limited ul. Obodrzyców 34 A/1, 81-812 Sopot, Poland

Trading of alcoholic Common beverages

88. Inver House Distribution SA # Avenue des Tilleuls, 62140 Marconne France

Dormant

Common

Common

Common

Common

Common

Common

Common

Common

Common

2.00

£30,000.00

£100.00

£10,030.00

£100.00

£50,000.00

£100.00

£1.00

£495,000

700,000.00 zl

2

30,000

100

10,030

100

50,000

100

100

495,000.00

700,000

2

30,000

100

10,030

100

50,000

100

100

245,000.00

308,000

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

49.49%

44.00%

1. Mr. Charoen Sirivadhanabhakdi

Thai Beverage Public Company Limited Good Show Holdings Limited (2) Risen Mark Enterprise Ltd. (3) Siriwana Co., Ltd. (4) Golden Capital (Singapore) Limited (5) MM Group Limited

3,156,500,000 199,999,997 25,000

12.57 50.00 50.00

MM Group Limited MM Group Limited MM Group Limited -

5,000 50,000 10,000,000 -

100 100 100 -

2. Khunying Wanna Sirivadhanabhakdi

Thai Beverage Public Company Limited Good Show Holdings Limited (2) Risen Mark Enterprise Ltd. (3) Siriwana Co., Ltd. (4) Golden Capital (Singapore) Limited (5) MM Group Limited

3,156,500,000 199,999,997 25,000

12.57 50.00 50.00

MM Group Limited MM Group Limited MM Group Limited -

5,000 50,000 10,000,000 -

100 100 100 -

3. Mr. Narong Srisa-an

Thai Beverage Public Company Limited

1

0.00

-

-

-

4. Mr. Komen Tantiwiwatthanaphan

Thai Beverage Public Company Limited

34,068,668

0.14

-

-

-

5. Mr. Puchchong Chandhanakij

Thai Beverage Public Company Limited

1

0.00

-

-

-

6. Mr. Staporn Kavitanon

-

-

-

-

-

-

7. Prof. Kanung Luchai

-

-

-

-

-

-

8. Mr. Manu Leopairote

-

-

-

-

-

-

9. Mr. Ng Tat Pun

-

-

-

-

-

-

10. Mr. Michael Lau Hwai Keong

-

-

-

-

-

-

11. Prof. Pornchai Matangkasombut

-

-

-

-

-

-

12. Gen. Dr. Choo-Chat Kambhu Na Ayudhya -

-

-

-

-

-

13. Mr. Sakthip Krairiksh

-

-

-

-

-

-

14. Mr. Vivat Tejapaibul

Thai Beverage Public Company Limited

291,541,500

1.16

-

-

-

15. Mr. Panote Sirivadhanabhakdi (1)

Thai Beverage Public Company Limited

107,000,000

0.43

-

-

-

16. Mr. Thapana Sirivadhanabhakdi

Thai Beverage Public Company Limited

107,000,000

0.43

-

-

-

17. Mr. Samut Hatthasing

Thai Beverage Public Company Limited

1

0.00

-

-

-

18. Ms. Kanoknart Rangsithienchai

Thai Beverage Public Company Limited

1

0.00

-

-

-

19. Mr. Sithichai Chaikriangkrai

Thai Beverage Public Company Limited

1

0.00

-

-

-

20. Mr. Ueychai Tantha-Obhas

-

-

-

-

-

-

21. Dr. Pisanu Vichiensanth

-

-

-

-

-

-

22. Mr. Chukiet Tangpongprush

Thai Beverage Public Company Limited

1

0.00

-

-

-

£24,450.00

2,493.00

1,247.00

50.02%

(1) (2) (3) (4) (5)

Number of Shares

Mr. Panote Sirivadhanabhakdi was appointed as the member of the Board of Directors on February 27, 2007. Good Show Holdings Limited holds 3,492,720,000 shares in Thai Beverage Public Company Limited. Risen Mark Enterprise Ltd. holds 3,193,150,000 shares in Thai Beverage Public Company Limited. Siriwana Co., Ltd. holds 2,197,200,000 shares in Thai Beverage Public Company Limited. Golden Capital (Singapore) Limited holds 608,638,000 shares in Thai Beverage Public Company Limited.

Deemed Interests

Percentage of Shareholding

Number of Shares

Remark: Common

Percentage of Shareholding

Direct Interests

Name of shareholders

75. Speyburn-Glenlivet Distillery Company Limited # Dormant Moffat Distillery, Airdrie ML6 8PL, Scotland

Remark: # These are currently non - trading

35


Annual Report 2007

Thai Beverage Public Company Limited

36

37

Top Twenty Shareholders

Statistics Of Shareholders As at March 12, 2008

No. INFORMATION ON SHARE CAPITAL Authorised share capital Issued and fully paid-up capital Class of shares Number of shares issued Voting rights

Number of Shareholders

%

Number of Shares

Number of Shares

%

1.

The Central Depository (PTE) Limited

6,325,659,920

25.19

2.

Good Show Holdings Limited

3,492,720,000

13.91

3.

Mr. Charoen Sirivadhanabhakdi

3,156,500,000

12.57

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

7.

Mr. Suchin Worawongwasu

900,000,000

3.58

%

8.

Mrs. Siriluck Maithai

338,519,080

1.35

Mr. Vivat Tejapaibul

291,541,500

1.16

Baht 29,000,000,000 Baht 25,110,025,000 Common shares with a par value of Baht 1 25,110,025,000 shares One vote per one share

Analysis of Shareholders by Size of Shareholdings Size of Shareholdings

Name of shareholders

8

6.84

8

0.00

9.

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

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

15.

Mr. Thapana Sirivadhanabhakdi

107,000,000

0.43

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

23,533,597,000

93.72

1 – 999 1,000 – 10,000

Total

The 19.69 % the Company’s shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the SGX-ST.

Total


Annual Report 2007

Thai Beverage Public Company Limited

38

Statistics of Shareholders under the Central Depository (PTE) Limited Size of Shareholdings

Number of Shareholders

1 – 999

%

Number of Shares

%

9

0.08

1,802

0.00

1,000 – 10,000

8,224

69.85

36,420,764

0.58

10,001 – 1,000,000

3,550

29.81

213,724,054

3.38

31

0.26

6,075,513,300

96.04

11,774

100.00

6,325,659,920

100.00

1,000,001 and above

Total

39

Particular of material contracts with related parties for the year 2007 consist of: Sell and Purchase Bottle Agreement between Berli Jucker Public Company Limited (a related company) who is seller and Bang-na Logistic Co., Ltd. (a wholly owned subsidiary of Thai Beverage Public Company Limited) who 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.

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 No.

Name of shareholders

(million Baht)

Number of Shares

%

2,479,016,824

39.19

1.

DBS Nominees Pte Ltd

2.

Risen Mark Enterprise Limited

833,335,000

13.17

3.

Citibank Nominees Singapore Pte Ltd

761,301,938

12.04

4.

UOB Kay Hian Pte Ltd

565,234,500

8.94

5.

DBSN Services Pte Ltd

496,837,414

7.85

6.

HSBC (Singapore) Nominees Pte Ltd

438,217,570

6.93

7.

United Overseas Bank Nominees Pte Ltd

270,171,461

4.27

8.

Golden Capital (Singapore) Limited

75,000,000

1.19

9.

Raffles Nominees Pte Ltd

51,261,451

0.81

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

6,061,115,300

95.81

Total

Land

8,145

Surplus on land revaluation

4,389

Land improvement

741

Building and improvements

10,693

Total

23,968

Current land revaluations were conducted in the year 2007 by independent professional valuers. The company leases various premises, primarily for the branch offices and warehouses. All of these leases are operating leases and not financial leases. 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.


Annual Report 2007

Thai Beverage Public Company Limited

40

41

Board of Directors

1. Mr. Charoen Sirivadhanabhakdi Chairman

1

2

3

4

Vice Chairman

7. Prof. Kanung Luchai Independent Director and Audit Committee Member

7

8

9

10

10. Mr. Michael Lau Hwai Keong Independent Director

13. Gen. Dr. Choo-Chat Kambhu Na Ayudhya Independent Director

16. Mr. Samut Hatthasing Director

11

12

13

14

3. Mr. Narong Srisa-an

Vice Chairman

Vice Chairman

5

4. Mr. Komen Tantiwiwatthanaphan

6

2. Khunying Wanna Sirivadhanabhakdi

5. Mr. Puchchong Chandhanakij

6. Mr. Staporn Kavitanon

Director

Independent Director and Audit Committee Chairman

8. Mr. Manu Leopairote

9. Mr. Ng Tat Pun

Independent Director and Audit Committee Member

11. Prof. Pornchai Matangkasombut

Independent Director and Audit Committee Member

12. Mr. Sakthip Krairiksh

Independent Director

14. Mr. Vivat Tejapaibul

Independent Director

15. Mr. Panote Sirivadhanabhakdi

Director

17. Mr. Thapana Sirivadhanabhakdi

Director

18. Ms. Kanoknart Rangsithienchai

President

Director and Executive Vice President

15

19. Mr. Sithichai Chaikriangkrai Director and Senior Vice President

20. Mr. Ueychai Tantha-Obhas

21. Dr. Pisanu Vichiensanth

Director and 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.

21

22

Mrs. Vaewmanee Soponpinij

Mr. Thidi Suwanarat

Company Secretary / Secretary to the Board

Assistant Secretary

Senior Vice President


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43

Executive Committee

Executive Committee 1. Mr. Charoen Sirivadhanabhakdi Executive Chairman

4. Mr. Komen Tantiwiwatthanaphan 3 rd Executive Vice Chairman

7. Mr. Thapana Sirivadhanabhakdi President

10. Mr. Ueychai Tantha-Obhas Senior Vice President

1

2

3

4

2. Khunying Wanna Sirivadhanabhakdi

3. Mr. Narong Srisa-an

1st Executive Vice Chairman

2 nd Executive Vice Chairman

5. Mr. Samut Hatthasing

6. Mr. Puchchong Chandhanakij

4 th Executive Vice Chairman

5 th Executive Vice Chairman

8. Ms. Kanoknart Rangsithienchai

9. Mr. Sithichai Chaikriangkrai

Executive Vice President

11. Dr. Pisanu Vichiensanth

Senior Vice President

12. Mr. Chukiet Tangpongprush

Senior Vice President

Senior Vice President

5

13. Mr. Sawat Sopa Executive Vice President

14. Mr. Saikeaw Vongpisethkul

15. Mr. Jean Lebreton

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 11

12

13

14

15

1. Mr. Thapana Sirivadhanabhakdi President Business Development

4. Mr. Sithichai Chaikriangkrai Director and Senior Vice President Finance

7. Mr. Chukiet Tangpongprush Director and Senior Vice President General Affairs

10. Mr. Jean Lebreton Senior Vice President Strategy

* Set up January 2008

2. Mr. Thapana Sirivadhanabhakdi President Sales Planning and Support

5. Mr. Ueychai Tantha-Obhas Director and Senior Vice President Marketing

8. Mr. Sawat Sopa Executive Vice President Spirit Production

3. Ms. Kanoknart Rangsithienchai Director and Executive Vice President Corporate Services

6. Dr. Pisanu Vichiensanth Director and Senior Vice President Beer Production

9. Mr. Saikeaw Vongpisethkul Senior Vice President Non-Alcohol Production


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Thai Beverage Public Company Limited

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Director Profile

45

Mr. Charoen Sirivadhanabhakdi

Mr. Narong Srisa-an

Chairman / Executive Chairman

Vice Chairman / 2nd Executive Vice Chairman

Mr. Charoen Sirivadhanabhakdi was appointed Chairman of the Board of Directors of ThaiBev in 2003. He has been the Chairman of Beer Thai (1991) Public Company Limited and the Red Bull Distillery Group of Companies since 2004; the Chairman of T.C.C. Land Co., Ltd. since 2002; the Chairman of T.C.C Capital Land Limited since 2003; the Chairman of Berli Jucker Public Company Limited since 2001 and the Chairman of T.C.C Capital Co., Ltd. since 1997. In addition, he has been the Chairman of the Executive Board of T.C.C. Holding Co., Ltd. since 1987. Mr. Charoen holds an Honorary Doctoral Degree in Agricultural Business Administration from Maejo Institute of Agricultural Technology and an Honorary Doctoral Degree in Industrial Technology from Chandrakasem Rajabhat University. Mr. Charoen has received many honors and Royal decorations, including the Knight Grand Cordon (Special Class) of the Most Exalted Order of the White Elephant, Knight Grand Cordon (Special Class) of the Most Noble Order of the Crown of Thailand, the Knight Grand Cross (First Class) of the Most Admirable Order of the Direkgunabhorn and the Grand Companion (Third Class, Higher Grade) of the Most Illustrious Order of Chula Chom Klao.

Khunying Wanna Sirivadhanabhakdi Vice Chairman / 1st Executive Vice Chairman

Khunying Wanna Sirivadhanabhakdi was appointed Vice Chairperson of the Board of Directors in 2003. She has been the Chairperson of Beer Thip Brewery (1991) Company Limited and the Sangsom Group of Companies since 2004. She has also been the Vice Chairperson of T.C.C. Capital Land Company Limited since 2003, a Vice Chairperson of Berli Jucker Public Company Limited since 2001 and the Vice Chairperson of the Executive Board of T.C.C. Company Limited since 1972. Khunying Wanna holds an Honorary Doctoral Degree in Bio-technology from Ramkhamhaeng University, an Honorary Doctoral Degree in Agricultural Business Administration from Maejo University and an Honorary Degree in Business Administration from Chiang Mai University. She is also the Vice Chairperson of the Sirivadhanabhakdi Foundation, a Director of the Siriraj Foundation and a Director of Ramathibodi Foundation. Khunying Wanna has received numerous honors and royal Thai decorations, such as the Knight Grand Cordon (Special Class) of the Most Exalted Order 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 Class, Lower Grade) of the Most Illustrious Order of Chula Chom Klao and the Knight Grand Cross (First Class) of the Most Admirable Order of the Direkgunabhorn.

Mr. Narong Srisa-an was appointed Vice Chairman of the Board of Directors in 2003. He has 44 years’ experience in the banking industry, having served in Kasikorn Bank Plc. from 1954 to 1998 as its Executive Vice Chairman. He also holds directorships in several public companies in Thailand, including Vice-Chairman of Berli Jucker Plc., Chairman of Advance Agro Plc., and Independent Director of True Corporation Plc. He holds an Honorary Master of Economics from Thammasat University.

Mr. Komen Tantiwiwatthanaphan Vice Chairman / 3rd Executive Vice Chairman

Mr. Komen Tantiwiwatthanaphan was appointed Vice Chairman of the Board of Directors and Vice President in 2003. He has had over 40 years’ experience in managing companies in the distilling industry. He has served as President of Sahasan (2529) Co., Ltd., since 1986, and as Director and Senior Vice President of Suramaharas Plc. from 1986 to 1999. He holds a High School Certificate.

Mr. Puchchong Chandhanakij Director / 5th Executive Vice Chairman

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.


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47

Mr. Michael Lau Hwai Keong Mr. Manu Leopairote

Independent Director

Independent Director and Audit Committee Member

Mr. Staporn Kavitanon Independent Director and Audit Committee Chairman

Mr. Staporn Kavitanon was appointed a Director in 2004. He has extensive experience in the management of companies with directorship and membership of Committee at various companies, such as Bangkok Bank Berhad, Kanyong Electric Plc. and Berli Jucker Plc. From 1994 to 1999, he was the Vice Chairman of Bangkok Bank Plc. He holds a Bachelor of Arts in Economics from Thammasat University and a Master of Arts in Economics from Vanderbilt University.

Prof. Kanung Luchai Independent Director and Audit Committee Member

Prof. Kanung Luchai was appointed an Independent Director in 2005. He has wide-ranging experience in the public sector and legal business, having worked as Junior and Senior Public Prosecutor in the Department of Public Prosecution from 1946 to 1971; DirectorGeneral of the Policy and Planning Department of the Ministry of Interior from 1971 to 1973. He served as the Deputy Under-Secretary of State for the Ministry of Interior from 1973 to 1974 and as the Deputy Minister of Interior from 1974 to 1975. He practised law at Bangkok International Law Offices Co., Ltd. from 1976 to 1985, and at Kanung-Prok Law Office Co., Ltd. from 1986 to 1992. He is currently a Director of Kanung & Partners Law Offices Company Limited and a Director of Kanung & Partners International Consultancy Company Limited. He is also a Director of Thailand Iron Works Plc. and Bangkok Bank Plc. In 2001, he received the Prof. Sanya Thammasak Award for being an Outstanding Lawyer from the Private Sector. He holds a Bachelor of Law from Thammasat University, and a Bachelor of Arts and Bachelor of Law from the University of Cambridge. He is also a member of the Thai Bar Association.

Mr. Manu Leopairote was appointed an Independent Director in 2004. He has extensive experience in the public sector, having served as a Director, Secretary General, Inspector and Director General from 1968 to 1999, and as the Permanent Secretary at the Ministry of Industry from 1999 to 2004. He was also the Chairman of the Petroleum Authority of Thailand from 1999 to 2004. From 1994 to present, he is the Chairman of Technonet Asia, and from 1995 to 1996, the Chairman of the International Sugar Organization Council of England. He was also part-time lecturer at the Faculty of Economics, Thammasat University, Assumption University, and Bangkok University. He was the President of the Thammasat University Association from 2002 to 2004 and was the President of the Thammasat University Economics Association from 2000 to 2006. He holds a Bachelor of Economics (Honors) from Thammasat University and a Master of Science in Economics from the University of Kentucky. He won the Asian Productivity Organization Award in 2005

Mr. Michael Lau Hwai Keong was appointed as an Independent Director in 2006. He is a Managing Director, Advisory Services of Octagon Advisors Pte. Ltd., a business and risk management consultancy company. From June 2000 to September 2004, he served as the Executive Vice President of United Overseas Bank Ltd., where he was responsible for the administration and governance of the bank’s international operations. He was an Advisor to Asia Pulp and Paper Ltd. from February 1999 to May 2000. He has held various positions at the Monetary Authority of Singapore (MAS) from February 1985 to July 1989, and from April 1991 to August 1997. His last position at the MAS was Senior Deputy Director (Development and Domestic Institutions). From August 1989 to March 1991, he was a Senior Manager (Institutional Sales) at J M Sassoon & Company, a stock broking company. He was also the Executive Vice President of the Central Depository (Pte.) Limited (CDP) from November 1997 to February 1999. He holds a Bachelor of Business Administration (First Class Honors) from the National University of Singapore and the Chartered Financial Analyst (CFA) charter.

Mr. Ng Tat Pun Independent Director and Audit Committee Member

Prof. Pornchai Matangkasombut Independent Director

Mr. Ng Tat Pun was appointed as an Independent Director in 2006. He has extensive experience in the banking and finance industry. He started his banking career with Citibank in 1971 and was a Vice President when he left in 1982. Since then, he has served in various senior positions with local and foreign ďŹ nancial institutions. From 1988 to 1997, he was the Executive Vice President of OCBC Bank, Singapore, in charge of its International Banking and Financial Institutions business. In 1998, he was appointed the Executive Director and Chief Executive Officer of OCBC Bank Malaysia. He was a Managing Director at JP Morgan Chase from 1999 to 2002 and a Managing Director and subsequently, a Senior Advisor at UBS, AG from 2003 to 2008. He is also an Independent Director of Engro Corporation Limited, Singapore and SP Chemicals Limited, Singapore. Mr. Ng holds a Bachelor of Arts degree (Economics and History) from the University of Singapore. .

Prof. Pornchai Matangkasombut was appointed as an Independent Director in 2006. He is the President of the Mahidol University and, before his appointment in 1999, was a professor at the University. He has been a member of the International Union of Immunological Societies since 1971 and a Member of the Executive Board of the International Union of Microbiological Societies from 1986 to 1990. He has won the highest level of Royal Decorations (Knight Grand Cordon of White Elephant, Special Class and Knight Grand Cordon of the Crown of Thailand, Special Class) and the Royal Thai Award of Chula Chom Klao Order (Special Third Class) and the Palmes Academiques (Commandeur) from the Government of France, the Borden Research Award in Medicine. He was also an Honorary Research Associate at Harvard University and a Visiting Professor 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.

Mr. Sakthip Krairiksh Independent Director

Mr. Sakthip Krairiksh was appointed an Independent Director in 2005. He has extensive experience in the public sector, having worked in Thai ministries. He began his career as a civil servant in 1971 at the Ministry of Interior. From 1979 to 2004, he served as a Diplomat in the Ministry of Foreign Affairs, where he held various positions, including Secretary to the Minister; Deputy Chief of Mission of the Embassy in Washington, USA; Director-General, Protocol Department; Director General, Information Department; Spokesman of the Foreign Ministry; and Ambassador to the Kingdom of Cambodia, Japan and the United States. He was an Advisor to the Prime Minister in 2004 and from 2004 to September 2007 the Permanent Secretary, Ministry of Tourism and Sports. He holds a Bachelor of Political Science from Boston University and has attended the National Defense College. He has received various royal Thai and foreign decorations, such as the Knight Grand Cordon (Special Class) of the Most Noble Order of the Crown of Thailand, the Knight Grand Cordon (Special Class) of the Most Exalted Order of the White Elephant, the Grand Companion (Second Class, Lower Grade) of the Most Illustrious Order of Chula Chom Klao, the Order of the Sacred Treasure, Gold and Silver Star and the Grand Cordon of the Order of the Rising Sun. He is currently a Chairman of the Board of the Tourism Authority of Thailand and Chairman of the University Council at the Rajamangala University of Technology Krungthep.


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49

Mr. Sithichai Chaikriangkrai Gen. Dr. Choo-Chat Kambhu Na Ayudhya

Director and Senior Vice President

Independent Director

Mr. Thapana Sirivadhanabhakdi Gen. Dr. Choo-Chat Kambhu Na Ayudhya was appointed Independent Director in 2006. He served the Royal Thai Army from 1973 to 1987 as General Surgeon of the Medical Department. From 1987 to 1991, he was Chairman of the Department of Anatomy of the Phra Mongkut College of Medicine. From 1994 to 2004, he held various positions in the Royal Thai Army, including the Director-General of the Armed Forces Research Institute of Medical Service; an Assistant Surgeon-General; Deputy Surgeon-General; Surgeon-General; and General Special Army Expert and Consultant. He is a senior surgeon and physician at the Medical Bureau to the Royal Court of Thailand. He received his Diploma in Medicine from Westf. Wilhelms Universitat zu Munster, and Doctorate in Medicine from the Georg-August Universitat zu Goettingen. He also has a Diploma from the National Defense College of Thailand and a Certificate of Proficiency in General Surgery from the Royal College of Surgeons of Thailand. He is a permanent member of the Royal College of Surgeons of Thailand and the Medical Association of Thailand. As for royal decorations, he has won the Knight Grand Commander (Special Class, Higher Grade) of the Most Illustrious Order of Chula Chom Klao and Knight Grand Cordon (Special Class) of the Most Exalted Order of the White Elephant.

Mr. Vivat Tejapaibul Director

Mr. Vivat Tejapaibul was appointed a Director in 2003. He has over 18 years’ experience in the banking industry, having served in Bangkok Metropolitan Bank Plc. in various positions from 1979 to 1998, including Secretary to the Managing Director, Deputy Director of the Trading Department, Director of Branch Administrative and Vice President. He holds a Bachelor of Law from Thammasat University and a Master’s degree from Fairleigh Dickinson University, USA.

President

Mr. Panote Sirivadhanabhakdi Director

Mr. Panote Sirivadhanabhakdi was appointed Director in February 2007. He has been Director of Beer Thai (1991) Plc. from 2000 to 2004 and Director of Beer Thip Brewery (1991) Co., Ltd. since 2004 and Director of Sura Bangyikhan Group of Companies since 2002. He holds a Bachelor of Science in Manufacturing Engineering from Boston University and a Master of Science in Analysis, Design and Management of Information System from the London School of Economics and Political Science.

Mr. Samut Hatthasing Director / 4th Executive Vice Chairman

Mr. Samut Hatthasing has been the Fourth Executive Vice Chairman since January 2008 and was the President of ThaiBev from February 2004 to December 2007. He joined the Group in 1986 and has held various marketing positions. He was also a Trading Manager of Sura Maharas Plc from 1986 to 1999. He was a Director and Executive Vice President of the Sura Bangyikhan Group of Companies from 2000 to 2003. In 1980, he was a Provincial Manager of the Surathip Group of Companies and later Marketing Manager of Surathip Co., Ltd. from 1981 to 1985. He was a Senior Manager of PTI Co., Ltd. in 1979 and a Supervisor in the Agricultural Credit Division of Thai Military Bank from 1977 to 1978. From 1967 to 1976, he served as an Assistant Branch Manager of the Bank of Agriculture and Agricultural Cooperatives. He holds a Bachelor of Economics from Thammasat University and has completed the Director Accreditation Program with the Thai Institute of Directors.

Mr. Thapana Sirivadhanabhakdi was appointed the President of the Company in January 2008. Prior to this appointment, he was the director and Executive Vice President of the Company from 2003 to January 2008. In addition, he has also held several executive positions in many leading companies such as Vice Chairman of Red Bull Distillery (1998) Co., Ltd. since 2004, and Executive Director of Berli Jucker Public Company Limited since 2001. In 2004, he was appointed Vice Chairman of Thai Alcohol Public Company Limited, Executive Director of Beer Thai (1991) Public Company Limited, and Vice Chairman of Dhospaak Co., Ltd. Since 2006, he has been Vice Chairman of Oishi Group Public Company Limited. Furthermore, since 2007, he has held other important positions, such as Director and Chairman of the Executive Committee of Univentures Public Company Limited, and Vice Chairman of Siam Food Products Public Company Limited. He has also acted as a Director of several ThaiBev subsidiary companies. He holds a Bachelor of Business Administration in Finance and a Master of Science Administration in Finance Economics from Boston University, USA.

Ms. Kanoknart Rangsithienchai Director and Executive Vice President

Ms. Kanoknart Rangsithienchai was appointed as a Director and Executive Vice President in 2003. She has extensive experience in finance and accounting. Before joining the Company, she had been the Executive Vice President of the Sangsom Group of Companies from 2000 to 2003, and the Vice President of the Office of Controller, Surathip Group of Companies from 1983 to 1999. From 1975 to 1982, she served as the Accounting Manager of the T.C.C. Group of 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.

Mr. Sithichai Chaikriangkrai was appointed a Director and Senior Vice President in 2004. He joined the T.C.C. Group in year 1990 and has also been the Chairman of Group Financial Center since 2003. He has over 23 years’ experience in financial positions, including the Finance and Accounting Manager of Asia Voyages & Pansea Hotel Co., Ltd., from 1983 to 1990; as a Financial Analyst of Goodyear (Thailand) Co., Ltd., from 1980 to 1983; and as an External Auditor in Coopers & Lybrand from 1977 to 1980. He holds a Bachelor of Accountancy (First Class Honors) from Thammasat University, and has a Diploma in Computer Management from Chulalongkorn University and completed the Director Certification Program with the Thai Institute of Directors. He also has a mini M.B.A. in Leadership Management from Kasetsart University.

Mr. Ueychai Tantha-Obhas Director and Senior Vice President

Mr. Ueychai Tantha-Obhas has been a Director since September 2005. Before joining ThaiBev, he was the Chief Executive Officer, from July 1995 to December 2002, and Managing Director of Riche Monde (Bangkok) Ltd., from January 1988 to February 1994; the Managing Director of Sarin Property Co., Ltd., from March 1994 to June 1995; and the Group Product Manager of Colgate Palmolive Co., Ltd., from September 1979 to June 1983. From May 1973 to August 1979, he held various sales and marketing positions in Karnasuta General Assembly Co., Ltd. He holds a Bachelor of Science in Accounting from St. Louis University, a Master of Business Administration from Thammasat University and is certified to have completed the Advanced Management Program from INSEAD, France.


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51

Dr. Pisanu Vichiensanth Director and Senior Vice President

Dr. Pisanu Vichiensanth has been a Director and Senior Vice President since February 2004. He has held several positions in ThaiBev, including Executive Vice President from 2000 to 2003 and Senior Vice Executive President from 2003 to 2004, at subsidiary Beer Thai (1991) Plc. He is currently the President of Beer Thai (1991) Plc. Before joining ThaiBev, he had been the Vice President of Engineering and Development (1997-2000) and Assistant Plant Executive (1994-1996) of Carlsberg Brewery (Thailand) Co., Ltd. He was a consultant at Pan Engineering Consultant Co., Ltd., from 1992 to 1994. From 1977 to 1993, he held several teaching positions, including Head of Food Science and Technology at Thammasat University and Head of Food Technology at Khon Kaen University from 1992 to 1993, and from 1989 to 1992, respectively. He lectured in food technology at Khon Kaen University from 1977 to 1990. He holds a Ph.D. in Engineering from Technical University, Berlin; a Master of Technology (Second Class Honors) in Biotechnology from Massey University; and a Bachelor of Science (Food Science) from Kasetsart University.

Mr. Chukiet Tangpongprush Director and Senior Vice President

Mr. Chukiet Tangpongprush was appointed as a Director and Senior Vice President of ThaiBev in 2003. Before joining, he was a lawyer from 1963 to 1983. From 1983 to 1986, he served first as Manager of law firm and later as Executive Director of Surathip Sansukko Co., Ltd. From 1987 to 1999, he served first as Executive Director and later as the head of the General Affairs Department of Suramaharas Plc. He joined Surabangyikhan Co., Ltd., in 2000 as the head of the Human Administration and General Affairs. He holds a Bachelor of Law from Thammasat University and the Thai Barrister at Law from the Institute of Legal Education Barrister at Law, and has 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.

Top Executive Profile Mr. Sawat Sopa

Mr. Saikeaw Vongpisethkul

Executive Vice President

Senior Vice President

Mr. Sawat Sopa was appointed Executive Vice President in 2004, responsible for liquor production and technique. He was the Managing Director of Beer Thai (1991) Co., Ltd., and Executive Vice Chairman of Red Bull Distillery (1988) Co., Ltd., from 1992 to 1995, and from 1995 to Present, respectively. From 1980 to 1992, he served as an Executive Director of the 43 Group of companies and Assistant Chief Executive Director, responsible for liquor and alcohol production. From 1964 to 1975, he served first as an engineer and later as the Chief Engineer of Siam Chem Co., Ltd. From 1963 to 1964, he served as an engineer in Bangchak Oil Refinery. Mr. Sawat sits on the boards of directors of various organizations including the Thab Neelaniti Foundation, Chulalongkorn University Association, The Petroleum & Petrochemical College, Chulalongkorn University and President of Gymnastics Association of Thailand. He has also been appointed as Special Commissioner of the Secretariat of the House of Representatives to consider draft bills on workmen’s protection, the securities and stock market and excise tax; a specialist to the Committee of the House Standing Committee on Natural Resources and Environment; and a member of the Financial Committee and Subcommittee of the Ethanol Investment Project under the Royal Ethanol Project Bureau, Ministry of Science, Technology and Environment. He holds a Bachelor degree of Science in Chemical Engineering and has completed the Director Accreditation Program with the Thai Institute of Directors. He is a Member (Fifth Class) of the Most Exalted Order of the White Elephant and a Companion (Fourth Class) of the Most Noble Order of the Crown of Thailand.

Mr. Saikeaw Vongpisethkul was appointed Senior Vice President in 2006. He has over 39 years’ experience in management as Vice President of Thai Pure Drink Co., Ltd. from 1967 to 2006. He was also an Advisor of the Association for Overseas Technical Scholarships from 1991 to 1993. He has served the Federation of Thai Industries as Logistics Committee Member and Environmental Committee Member since 1981. He holds a Bachelor of Engineering (Honors) from Chulalongkorn University.

Mr. Jean Lebreton Head of Strategy and Business Development

Mr. Lebreton worked for the Boston Consulting Group (BCG) from 1989 to 2005. He became a partner in the company in 1995. After working for BCG in France for five years, he moved to Thailand in 1994 to open the Bangkok office of BCG. After leaving BCG in 2005, Mr. Lebreton worked independently for several years before joining ThaiBev in January 2008. Mr. Lebreton has extensive experience in Asia, including several years in Shanghai, China. He has worked in many industry sectors as a consultant, including consumer goods, banking, and energy, covering topics such as market development, consumer research, re-engineering, and value management. At ThaiBev, Mr. Lebreton will work with other senior executives to develop and implement strategy and facilitate the integration of future acquisitions. Mr. Lebreton has an MBA from Wharton School of the University of Pennsylvania.


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Thai Beverage Public Company Limited

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53

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 Services - Office of Human Resources - Office of Information Technology

Strategy

Finance

Sales

Marketing

- Office of Strategic Planning

- Office of Controller

- Office of Sales Planning and Support

- Office of Marketing

- Office of Treasury - Centre of Excellence

Business Development

Non-Alcohol Production

Beer Production

Spirit Production

- Office of Business Development

- Office of Non-Alcohol Production

- Office of Beer Production

- Office of Liquor Production - Office of Technical Service and Environment - Office of Engineer

- Office of Corporate Planning & General Services

- Office of Natural Essences Production

*Effective from January 18, 2008


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Responsibilities and authorization of each Office

Office of Chairman of the Executive Board Manages and screens items to be proposed to the Chairman of the Executive Board and manages general tasks for the Chairman of the Executive Board.

Office of President Manage secretarial tasks for the President. Provide essential back-up in both administrative and strategic tasks. Coordinate with all internal units as well as external organizations both domestically and internationally. Arrange meetings of each ad hoc committee as assigned.

Office of Internal Audit Assists the Board in promoting good corporate governance; reports to the Audit Committee significant issues of risk management, internal controls and governance; provides advisory services and the resolution of issues concerning internal controls; and promotes risk management to all units’ operations.

55

Office of Liquor Production Manages and oversees operations of the three liquor groups in 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 Company.

Office of Technical Service & Environment Formulates liquor production processes and controls liquor production at 17 distilleries to meet the requirements of each type as well as the standards of the Thai Industrial Standards Institute. This includes the formulation of environmental management systems and controlling water treatment systems.

Office of Non-Alcohol Production

Office of Sales Planning and Support

Manages and oversees operations of the non-alcoholic beverages in 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 Company.

Supervises and oversees support on the sale activities by coordinating with Office of Marketing in order to ensure that the sale activities are performed according to the strategic plan.

Office of Business Development Supervises and oversees all related businesses in order to ensure the compliance to the Company business policy including giving advice and strategic planning to develop each business unit to gain a maximize value added to the Company.

Office of Marketing Office of Engineer Oversees the engineering section to support the distilleries and the Company’s affiliates to align with goals for the utmost benefit to the Group.

Office of Natural Essences Production Oversees the process of natural essences production to meet the quality set forth by the Company.

Office of Beer Production Manages and oversees the production of the three beer companies in 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.

Creates marketing, sales, advertising, public relations, product development and merchandise distribution plans in support of Group activities. Manages budgets, arranges and controls the total product distribution in compliance with goals. Analyzes and formulates marketing strategies in line with market competition.

Office of Controller Supervises and oversees the corporate functions of accounting and budgeting to ensure the compliance with generally accepted accounting principles in Thailand to present the complete, accurate and timely financial informations as well as compliance with the procedures set forth by the Board of Directors.

Office of Treasury Supervises and oversees support for treasury affairs to ensure technical and legal compliance of operations, as well as compliance with the procedures set forth by the Board of Directors.

Office of Strategic Planning To oversee and coordinate Thai Beverage Public Company Limited transformation program through the Project Management Office (PMO), centralize all M&A activities in close coordination with the finance Office, with a focus on strategic evaluation and Post Merger Integration, and leads key projects as required to define and implement the group’s strategy.


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Centre of Excellence To manage the budgeting and reporting processes, oversee the investor relation department, and identify and disseminate best practices.

Office of Human Resources Institutes international-standard human resources procedures that are capable of coordinating between the headquarters and regional offices - taking into account the value of human resources, commitment to ethics, and compliance with laws.

Office of Information Technology Responsible for information technology (IT) services, including development of advanced IT systems so that business units can access information and tools to enhance the Company’s competitiveness.

Office of General Services Oversees administrative works for both the Company and its affiliates, such as cleaning services and maintenance of office buildings, supply of office equipment and stationery, security systems and insurance for the assets. Ensures that the work complies with Company policies and regulations to efficiently support the major business and activities of the Group.

Office of Corporate Communications Supervises and is responsible for all aspects of corporate communications functions, namely public relations, internal and external communications, electronic communications as well as investor relations, to garner the utmost beneďŹ ts for the Company, particularly in regards to corporate image and the fostering of relationship to efficiently support the Company’s businesses and activities.

Office of Corporate Secretariat Arranges all Board and shareholders meetings of the Company and its group companies and oversees in compliance with Securities Laws and the Listing Manual of the Singapore Exchange as well as controls disclosure of material information to ensure compliance with laws, regulations and the Lising Manual, as well as Company policy. Provides suitable advice to all directors and key executives. Administers corporate information and analyzes Securities Laws relating to Company business. Oversees the share registration of the Company and its group companies and coordinates with related parties to the share registrar work and organizes the preparation of the annual report.

57

Office of External Affairs Oversees external affairs. Directly and indirectly creates positive relationships with business partners, leading to commercial oppotunities and supporting negotiations and business connections over the short and long terms. In addition, build relations with government and social aspects organizations as well as planning and running corporate community programmes.

Office of Legal Affairs Analyzes and advises all units of the Company on legal issues to ensure full compliance with the law and for the best interests of the Company as well as being responsible for litigation matters, juristic acts/ contracts matters, registration matters relating to partnerships/ companies, and intellectual property.


Others Chinese Herb Spirits White Spirits Brown Spirits

59 58

Niyomthai 40 Degrees

Niyomthai 35 Degrees

Niyomthai 30 Degrees

Niyomthai 28 Degrees

White Tiger 40 Degrees

White Tiger 35 Degrees

White Tiger 30 Degrees

White Tiger 28 Degrees

Paitong 35 Degrees

Paitong 30 Degrees

Ruang Khao 40 Degrees

Ruang Khao 35 Degrees

Ruang Khao 30 Degrees

Ruang Khao 28 Degrees

Ble nd 285

Blue

Crown 99

Hong Thong

Mungkorn Thong

Mekhong Superior

Mekhong

SangSom Similan

SangSom Premium

SangSom Superior

SangSom

Beer

Thai Beverage Public Company Limited Annual Report 2007

Product Portfolio

Chang Soda Water

Chang Drinking Water

Shinobu

Choo 10 New

Choo 3 New

Sua Dum

Chiang-Chun

Archa

Chang Light

Chang Draught

Chang

Archa

Chang Light

Chang Draught

Chang


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Operating and Financial Review Contents

Corporate Vision

1. Overview

“We will strive to become a leading global beverage company with focus on commercial excellence, continued premiumisation of our products, and professionalism.”

2. Corporate Vision 3. Business in Thailand 4. Overseas Business 5. Management Discussion and Analysis 6. Shareholder Returns 7. Risk Factors

Overview

Mission

Thai Beverage Public Company Limited (“ThaiBev”) was incorporated in Thailand in October 2003 in order to 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”) on May 30, 2006. The listing was the largest in Singapore in ten years, raising US$1.574 billion (or Baht 38.08 billion) and received great interest.

We will seek “partnerships” among our key stakeholders through six guiding values

The major substantial shareholder in ThaiBev is Mr. Charoen Sirivadhanabhakdi, family and associates, who own approximately 64.94% of the company’s paid-up share capital (as of December 31 2007), the rest being held 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 today 96.4% of its revenues are generated in Thailand. Since listing, ThaiBev has implemented a strategy to allow it to expand overseas. To this end, its wholly-owned subsidiary, International Beverage Holdings Limited (“IBHL”) is charged with this task. To date, IBHL has set up sales offices in 6 countries and commenced active promotion of sales to countries like the USA, UK, Australia, and others of two of ThaiBev’s products, Chang Beer and Mekhong rum. Expansion will also include whiskies made in Scotland by IBHL’s subsidiary Inver House.

Corporate Vision “We will strive to become a leading global beverage company with focus on commercial excellence, continued premiumisation of our products, and professionalism.”

• • • • • •

Offer quality products for every customer segment Satisfy distributors’ needs by offering professional services 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 Trust, empower, and reward our staff to make them accountable Contribute to public and local communities

Corporate Development Strategy Our corporate development strategy will emphasize premiumisation, internationalization and professionalisation. We will discuss premiumisation and internationalization in following sections, but the professional development of our management and other human resources will play an increasing role in the success of the Company over time. Part of the impetus has been the conversion of the Company from private to public, and there are ongoing measures to allow management to embrace accountability and create an organization that is more efficient and 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 it over time.


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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 continued to grow. ThaiBev has continued to see a rise in demand for low alcohol beers and brown spirits. White spirits sales were affected by economic difficulties, but remain the key underpinning of ThaiBev’s profitability for the present.

Domestic Business Strategy ThaiBev’s strategy for the domestic market focuses on the protection of the core businesses of beer and spirits. We 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. 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 profitability over time. We have noted that the spirits market will move toward brown spirits over the long term and a more balanced portfolio will allow us to diversify the inherent risk of relying on one type of product or another over time. We also intend to continue to premiumize our current portfolio. For instance, we have already introduced gift boxes 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.

Investment in machinery picked up as seen in rising capital goods’ imports in the latter half of the year. However, construction continued to contract. Private consumption rose 1.3% year-on-year but this was lower than expected. 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 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 driven by higher transportation costs.

Core Inflation

0.8-1.3% (2007)

GDP Growth

4.3-4.8% (2007)

Exchange Rates

34.5367 Baht/US$ (2007 avg.)

Population

65.6 Million (2005)

Alcohol Consumption Beer

31.3 (liters per capita, 2006)

Spirits

10.4 (liters per capita, 2006)

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 (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 by approximately 3% per annum and the net profit margins are around 10%, making it an attractive entry point into non-alcoholic beverages for us. ThaiBev has one of the largest distribution networks in Thailand and it will have to make more strategic use of this network over time by offering it to outside organizations. First the Company needs to make it more efficient in, and 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 would be able to store more products and distribute them to surrounding regions more efficiently.

Legislation The Alcohol Control Act was passed by parliament in December 2007. A National Committee for Alcoholic Beverage Policy was set up to provide the framework of how the Act is to be implemented. The final draft of the Act was approved by parliament on February 13, 2008, and promulgated in the Royal Gazette on February 14, 2008. Many of the regulations mentioned here were expected by the Company for some time and we are already prepared to comply with the law.

The Thai Economy

Sites where alcohol may be sold and consumed are now regulated. Alcohol may not be sold or consumed in 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 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 1 end of the year as the election on December 23 approached. Private investment fell 0.8% year-on-year in 2007.

Alcohol may not be sold in petrol or fuel service stations or shops in their vicinity, nor is alcohol allowed in public parks run by the state.

1

Source: Bank of Thailand estimate

We should note that petrol stations in Thailand have not been selling alcohol in the shops on their premises for some time due to an earlier Ministerial Regulation.


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Although the Minister of Health may on occasion proclaim days and times when alcohol may not be sold, this would be in addition to existing restrictions on times when alcohol may not be sold. Normally alcohol is not sold the evening before an election, for instance. It is now forbidden to sell alcoholic drinks to anyone under 20 years old. It is also forbidden to sell alcohol using automatic vending machines, by hawking or to offer discounts to promote sales. No gifts, rewards or prizes may be provided to those purchasing alcoholic drinks or by using the redemption of things like bottle tops, for example. Companies may not offer alcoholic drinks for people to try or to impose any conditions that oblige the purchase of alcohol. Regarding advertising, it is now forbidden to advertise alcoholic beverages directly or show the drinking of alcohol. The industry cannot show the name or brand of alcoholic drinks to accentuate the merits of alcoholic drinks or entice people to drink. This has been a regulation for some time and the Company already complies with it. Advertising and public relations of alcoholic beverages are allowed per se but there are exemptions relating to 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 now be allowed, but the focus must be on meritorious activities, such as how ThaiBev provides support to society. 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.

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The Cabinet approved raising the excise tax ceiling from an ad valorem rate of 60% and a specific rate of Baht 400 per liter of pure alcohol, to an ad valorem rate of 99% and a specific rate of Baht 1,000 per liter of pure alcohol as proposed by the Minister of Finance. The objective of this ceiling rate increase is to provide flexibility 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 following the election on December 23, 2007, the Act must be re-submitted to the new parliament for its approval. On August 28, 2007, the government approved and announced new excise tax increases. The increases were on white and compound spirits and brandy. The tax increases affected ThaiBev’s white spirits and its three compound spirit brands; Mungkorn Thong, Hong Thong, Blend 285 and Chinese herbal spirits. The white spirits specific rate 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 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 ex-factory price. For brandy, the ad valorem rate increased from 40 per cent to 45 per cent of the ex-factory price, 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 for the new public broadcasting system.

Table of Excise Taxes levied on the Company’s products showing the rise in August 2007 on certain products and the addition of 1.5% across the board in January 2008

Product

Ad Valorem Rate (Ex-factory)

The law does not cover advertisements that originate outside Thailand. Investors should note that ThaiBev is a shirt sponsor of Everton Football Club in the UK and that this sponsorship will not be affected by these new regulations in Thailand. After consideration of these regulations under the Alcohol Control Act, ThaiBev believes that while there will be some effect on promotional activities, the Company’s extensive distribution network mitigates the loss of some other marketing tools. Moreover, while the restrictions on public places where alcohol may be sold and consumed are reasonable, we should note that the vast majority of ThaiBev’s products today are drunk in the home. In sum, the Alcohol Control Act is a restriction on the ability of companies to promote and position their products in the minds of consumers, but is not in itself an obstruction to sales. Nothing in the Act forbids consumers from purchasing and drinking alcohol. Certainly, there is a risk to new entrants that they may not be able to establish themselves with consumers who will be unaware of their presence if they can only advertise logos and social contributions as they will not have the distribution network in place to offer a pervasive brand presence. ThaiBev has an extensive distribution network in Thailand for alcoholic beverages which is advantageous to the sales of new products.

Taxation 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 use of short term cash. There are two methods that can be used by the Government to levy the tax; either according to the amount of alcohol per liter, called a specific rate, or based on a determined ex-factory price, called the ad valorem rate. The Excise Department may use either the specific or ad valorem rates depending on which one is the higher.

Fermented Liquor Beer Wine & Sparkling wine from grapes Local Fermented Liquor Other Distilled Liquor White spirits* Compounded spirits (Hong Thong, Mungkorn Thong, Chinese Herb)* Blended spirits (Mekhong) Special spirits Brandy* Whisky Other (Sangsom, Crown99, Blue) Absolute Alcohol used in industry used in medicine, pharmaceuticals, science other

Specific Rate Unit

55% 60% 25% 25%

Liter of pure alcohol Liter of pure alcohol Liter of pure alcohol

100 100 70 70

25% - > 50% 50% 50%

Liter of pure alcohol Liter of pure alcohol Liter of pure alcohol

70 - > 110 240 - > 280 400

40% - > 45% 50% 50%

Liter of pure alcohol Liter of pure alcohol Liter of pure alcohol

400 400 400

2% 0.10% 10%

Liter Liter Liter of pure alcohol

1 0.05 6

+ Municipal Taxes: 10% of Excise + Health Promotion Fund Contribution: 2% of Excise + Thai Public Broadcasting Service Fund Contribution: 1.5% of Excise** * New Tax Rate Applied from 28 Aug 2007, ** TPBS Funds Applied From 14 Jan 2008

Liter of pure alcohol

Bt/Unit


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Beer Business

Archa Beer was the only Thai beer to have received a Gold Medal. Back in 1998, Chang was the first Thai beer to win this award, making Thai Beverage Public Company Limited the only Thai brewer to have won AIBA Gold Medals.

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Since the introduction of Chang Beer to the masses in 1995, people in rural areas had limited choice and there was a potential to provide more products to them. In 2006 it became clear that an alternative would either have to be introduced by ThaiBev or a competitor. The re-launch of Archa Beer into the northeast and other rural areas proved the case that there is a section of society that wants a lighter alternative to Chang Beer. Along with Chang Light and Chang Draught, lighter beers are finding favor in both rural and urban areas, with the total sales volume at the end of 2007 Climbing to 956.8 million liters. Total sales of Archa Beer alone accounts for 31% of ThaiBev’s beer portfolio. Archa Beer won over more than 20 judges to claim the coveted Gold Medal in European Lager Division at the 2007 Australian International Beer Awards (AIBA). Archa Beer was cited for being “an outstanding beer that displays the correct balance of taste, aroma and appearance appropriate for the style and excellent technical merit”.

Archa Beer was the only Thai beer to have received a Gold Medal. Back in 1998, Chang Beer was the first Thai beer to win this award, making ThaiBev the only Thai brewer to have won AIBA Gold Medals. There has been phenomenal growth among the lighter beers in the portfolio on the back of a rising trend globally. ThaiBev intends to continue this success by introducing new beers at the right time at high market positions and higher margins as part of its premiumisation policy. In 2004, the Company decided to expand the capacity of its northern brewery at Kamphaengphet province. This was done as the beer market had risen to the extent that the former total capacity of the Company’s three breweries was already running at full capacity. With plans to expand production to include exports, the expansion was timed well to meet the current upsurge in demand for beer. The Baht 7.2 billion project was completed in 2007, bringing the capacity of Kamphaengphet province up to 900 million liters. Together with the two other breweries at Wang Noi and Bang

Ban in Ayutthaya province, the Company now has a total production capacity of 1,550 million liters per annum, making us one of the largest brewers in Southeast Asia. Utilization normally runs at approximately 68% of total capacity per annum. However, this sometimes increases to almost 95% utilization prior to and during peak periods as our brewing team has a policy of providing only fresh beer to consumers and therefore does not normally brew well in advance of a peak period and store the beer. At this level of utilization, and the growth of the beer industry in 2007 of 6%, ThaiBev expects full utilization in approximately six years.


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Spirits Business While approximately 52% of ThaiBev’s sales come from spirits, this product accounts for about 85% of net profit. ThaiBev’s spirits portfolio is split into two types, brown and white spirits. All the Company’s white spirits are made from molasses (a product of sugar cane) as are the majority of its brown spirits made in Thailand. Only Crown 99 and Blue are whiskies. Whereas white spirits are an economy drink, commonly consumed in rural areas and among the segment of society that performs physical labor, brown spirits are what most consumers aspire to drink.

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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 confidence has declined, the Company has seen a noticeable effect on its white spirits’ sales, which acts as a barometer of the rural economy. Sales volume of white spirits began to decline as consumers switched to half bottles or single shots. In some cases the community spirits sector in Thailand was the beneficiary. However, we know that white spirits are consumed mostly by the older generation and we do not expect the younger generation to continue this tradition forever. By nature, younger people prefer to consume brown spirits and beer, and this is the area that the Company will be concentrating more on in the future.

In October 2006, we launched Blend 285 and positioned it to provide the consumer with a superior quality product at an affordable price. The product features premium clues such as an individual gift box, non-refillable cap (“NRF”), and westernized packaging design. The product has proven popular throughout 2007 and sold 14.8 million liters, a success that clearly demonstrates the strength of our distribution platform which enables new products to gain deep market penetration over a short period of time.

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 case (i.e. a dozen bottles) increased as illustrated here:

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%)

In September 2007, we acquired United Products Company Limited (“UPC”) and SPM Foods and Beverages Company Limited (“SPM”).


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Industrial Alcohol Business UPC is primarily engaged in the manufacturing and distribution of spirits, including contract distilling. UPC has various brands in its portfolio, for example “White Bear” white sprits, “Mungkorn Taejean” white sprits, “Noble Lords” whisky, “Tumbler” whisky, etc. Its distillery is located in Nakhon Pathom province, not far from Bangkok. The total design capacity of UPC’s distillery at 50 degree alcohol content is approximately 30,000 liters per day. In 2007, UPC has been operating its distillery at approximately 35% utilization of its design capacity. This utilization comprises 90.18% white spirits and 9.82 special spirits, known as Bacardi Breezer, under the Bacardi brand. We have agreed to renew Bacardi’s current contract for another year and are now working on a longer-term contract. SPM is a company primarily engaged in the manufacture and distribution of mineral drinks, sports drinks, fruit juices and seasoning sauce. It produces OEM products under contract, for example “Gatorade” sports drink, “Fruitnette Jelly Drink,” “SPM” juice, “Furen” seasoning sauce, etc. The Company is considering the extension of the Gatorade contract to the middle of 2008. SPM’s factory is located at Nakhon Pathom province. The rationale for these acquisitions was to enable ThaiBev to obtain new customers and new brands of liquor products, in particular white liquor; to diversify our current alcohol beverage business, 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.

We acquired our industrial alcohol plant in 2002 to create further integration in our alcohol business. We are now increasing our exports of industrial alcohol products to key markets such as Japan and India. Since September 2004, we have produced ethanol to make gasohol fuel as a substitute for 95 octane gasoline. We have increased our capacity of ethanol production to meet the expected demand for gasohol and capitalize on the Government’s policy on clean energy. In 2007, our sales volume of ethanol was 42.6 million liters compared to 46.6 million liters in 2006. However, our overall sales volume of industrial alcohol in 2007 is slightly more than that of 2006 due to a temporary production halt as a result of unfavorable product margins in the first quarter of 2006. The industrial alcohol business throughout 2007 was still under pressure. The postponement of an import ban on 95 octane gasoline by the transitional government directly affected demand in the industrial alcohol business in Thailand. Most of the domestic industrial alcohol producers were stuck with high inventories forcing them to lower their prices to deplete stocks. Oil companies are enjoying good profit from gasohol due to low alcohol prices but this was not enough to motivate them to promote gasohol. Exporting industrial alcohol is the only available source of business open to ThaiBev. However, global industrial alcohol prices have been very competitive due 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 the exporting business for the remainder of this year. Domestic sales in 2007 were 36.7 million liters, which was 9.4% lower than the sales in 2006. The average price per liter of Baht 24.97 in 2006 decreased to Baht 16.14 per liter in 2007. Thai Alcohol Public Company Limited exported 22.8 million liters in 2007, mainly to Japan. There were no export sales in 2006. The Company showed a gross loss of Baht 6 million compared to a gross profit of Baht 211 million last year.

Related Businesses The Glass Bottle Purchase Agreement between Bangna Logistics Co., Ltd. (a wholly-owned subsidiary of ThaiBev) and Berli Jucker Public Company Limited. expired on April 30, 2007 and the parties entered into a new Glass Bottle Purchase Agreement dated May 24, 2007 for a period of two years and eight months (effective from May 1, 2007 to December 31, 2009).


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Overseas Business

International Beverage Holdings Limited (“IBHL” see: www. interbevgroup.com) has been established to be the international arm of Thai Beverage Public Company Limited (ThaiBev). 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.

IBHL is responsible for ThaiBev’s international business and is engaged in activities such as the production, marketing and distribution of our portfolio of alcoholic beverages including ThaiBev’s domestically-produced products and Scotch whisky.

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 necessary.

International Strategy

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 IBHL achieve its strong brand growth targets. IBHL is incorporated in Hong Kong and currently has subsidiaries in six countries, as follows:

• InterBev (Singapore) Limited • InterBev Malaysia Sdn. Bhd. • InterBev (Cambodia) Co., Ltd. • International Beverage Holdings Limited USA, Inc. • International Beverage Holdings (UK) Ltd. and subsidiaries including Inver House Distillers Limited • Best Spirits Company Limited

Business Strategy

The Company’s strategy with regard to international expansion remains consistent. The 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. We actively seek out distribution partners. Should our beverages begin to gain traction in a country, we would then consider, at least in the case of beer, either contract brewing or purchasing a brewery locally. Where we want to strengthen our presence, we are actively considering investing in existing businesses or start-up companies. Due to the need to identify projects that offer good value, any investment made would have to offer an internal rate of return in the suitable amount. In any investment, IBHL will consider value and potential synergy over price. Initially, IBHL is focusing on flagship brands – Chang beer, Mekhong rum (branded overseas with the legend: “the Spirit of Thailand”), its single malt whiskies, Balblair, Old Pulteney, Speyburn and AnCnoc and blended scotch whiskies such as Hankey Bannister. IBHL has identified key focus markets for each brand and is directing its efforts and resources at these ‘brand market units’. IBHL intends to be a global player with a comprehensive portfolio of products.


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We also believe that local partners and management are ways of moving into new markets without a steep learning curve. Key international executives are internationally sourced, and chosen for their long experience in the business. We are also assembling a strong talent pool in the areas of Sales and Marketing from candidates with wide-ranging experience across both beer and spirits. We are doing this by recruitment and through the integration of the Inver House commercial team. We are at the same time building a strong platform of marketing expertise. By employing high-quality, experienced management, IBHL intends to expand faster than it would otherwise be able to do. In some markets, strong local partners will be sought to assist us to work with local distribution networks and overcome indigent cultural and business practice hurdles.

We aim to build a strong and unique brand presence in all our core target markets throughout the world and 2007 has already seen the repackaging and successful launch of the iconic Chang Beer and Mekhong brands on the international stage. Chang Beer has been repackaged and recently launched in the major Western markets including USA, UK, Europe and Australia with a focus on the premium imported beer market. Mekhong has also been revamped to appeal to the more discerning spirits drinkers. It will be sold through high-end restaurants and cocktail bars in Europe and North America with the help of its Thai-inspired collection of cocktail recipes.

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Inver House

Recognized Quality

Inver House Distillers Limited (www.inverhouse.com) is a leading firm of Scotch whisky distillers, headquartered in Central Scotland, exporting to over 80 countries worldwide. It is held by IBHL through a holding company called International Beverage Holdings (UK) Limited. The company’s principal business is the distillation and sale of Scotch whisky.

Inver House Distillers recently received (28 th February 2008) the prestigious ‘International Distiller of the Year’ award at a glittering ceremony held in London. The Airdrie based company beat off impressive competition from exceptional companies throughout the world including Japan, Ireland, Canada, India, Sweden and the USA.

Inver House Distillers Limited owns five malt distilleries and markets a number of multi-award winning Single malt Scotch Whiskies: Old Pulteney, Balblair, anCnoc (pronounced ‘a-nock’) and Speyburn. It also distills, blends and bottles a number of Blended Scotch Whisky brands including: Hankey Bannister, Catto’s and McArthur’s, which are marketed and sold in over 78 countries.

Inver House, who in the last year has globally re-launched their Balblair Single Malt as a superpremium ‘vintage’ offering, reached the final of the ‘Icons of Whisky’ event by first beating off competition in Scotland from Glenmorangie, Bowmore and William Grant & Sons, before claiming whisky’s highest accolade over seven other global finalists. The industry-voted award is designed to highlight the company who has ‘shown the most commitment to the development of whisky at all levels’ and is highly sought after.

A successful redesign of core Thai Product for key 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 as a holding company for the alcohol beverage business

Expansion of Kamphaengphet brewery commenced

Thai Beverage successfully listed in the Singapore Exchange main board

Acquisition of distillery assets from Sin Surang Karn Sura Co., Ltd., manufacturer of White Tiger

Acquisition of United Products Co., Ltd. and SPM Foods and Beverages Co., Ltd. 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


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Major re-launch of flagship malt whisky brand Balblair (www.balblair.com), was successfully repackaged and relaunched during 2007 in our biggest-ever launch program to date for an Inver House single malt whisky. The striking new identity inspired by a 4,000 year old Pictish standing stone overlooking the distillery, 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. 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.

Inver House Distillers Limited, which was purchased by IBHL in October 2006, has benefited from a buoyant Scotch market as well as a strategic shift towards focusing more on core malt brands. As a result, pre tax profit have risen to £4.0 million, up 121% for the same period in 2006.

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79

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 IBHL’s key successes in 2007 include the successful integration of Inver House and the improvement of its business performance. IBHL was able to integrate Hong Kong-based Best Spirits Company Limited and improve its business performance. The company’s brand marketing and presentation of key brands has developed considerably and revenue is growing faster than volume due to premiumisation and better management. Finally, we have commenced operating in the USA, UK and Australia, not just an achievement in itself but a sign that the company has the potential to enter any market it finds attractive.

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, the key markets are New York City metropolitan area and California. These two major markets are expected 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, San Francisco, Honolulu, the District of Columbia and Baltimore, and Chicago. The United States’ highest consumption of alcoholic beverages occurs in New York, Pennsylvania, Florida, Illinois, Texas and California. To date, the company has established Chang in 16 states and 26 metropolitan areas, mainly focused on the East and West coasts. Consumers in the USA have been moving towards super premium imported and craft beers (unique beers made by local small or micro breweries) for several years. The drivers have been the improved economic environment, consumers seeking new, different flavors and a narrowing of the price gap between imported and craft beers, which 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

80

81

UK Launch

Australia

In May 2007, International Beverage Holdings (UK) Limited (IBHL UK), launched Chang beer into the UK after testing of the products in the market proved favorable. At present, a 330ml bottle sells in a restaurant for an average of £3.00, and is clearly positioned as a premium imported beer. In Everton FC’s stadium a 330ml can sells for £1.90 (only sold where draught is not a vailable) and a pint (568ml) of Chang draught sells for £3.00. This in the only UK venue where Chang is available on draught.

ThaiBev added Australia to its network of product sales in 2007. The Company has established a relationship with Woolworths, Australia’s largest retailer, to distribute and sell Chang Beer. This deal provides a major launch platform that will mean Chang Beer will be available nationally for Australians to enjoy. Woolworths has almost 3,000 stores nationwide and over 175,000 employees.

Europe When Chang Draught was introduced at Everton FC’s Goodison Park stadium at the end of 2006, it broke the record for the most pints sold at Goodison in the first game. It was sold and has quickly established itself as a firm fans’ favorite. Sales volume at the stadium has risen from 33,185 liters at the end of 2006 to 50,400 liters in 2007, showing a growth rate of 52%.

Chang sales in Europe, especially in the Netherlands, have seen steady growth since 2006 and after a very strong year in 2007, will see further expansion as new initiatives are implemented and joined with Mekhong rum launch activity.

Throughout the UK, Chang beer has seen some remarkable growth, with sales for the country rising 138% from the previous year.

New Markets

Strategy IBHL has launched Chang through Thai restaurants in the UK, but will then extend over time into mainstream outlets such as pubs and bars. In the case of the UK, the company has the advantage of distribution contacts through the Inver House subsidiary and is expanding throughout the country. Mekhong, The Spirit of Thailand, was launched in January 2008 and is being introduced to high-end cocktail bars and is being positioned as a premium product. The Inver House’s whiskies are receiving consistent and innovative marketing initiatives to establish them as key brands in the UK. The same strategy will be employed in other appropriate markets.

ThaiBev will continue to concentrate on its domestic market, but is now seeking opportunities abroad. While there have been entries into 19 markets to date, the Company feels that Asia in general and ASEAN in particular are interesting potential markets. One of the advantages of exports within the ASEAN Free Trade Area (AFTA) is the low duties imposed on trade within the region today. The other is the similarity of business cultures. Local spirits made from molasses or sugar cane are evident within the region as is the rising trend for beer. Vietnam and the Philippines are potential markets that need to be explored. Further afield, China and India are now fast-awakening economic giants that the Company cannot ignore. Investments overseas will be thoroughly scrutinized to ensure they are good value for money.


Annual Report 2007

Thai Beverage Public Company Limited

82

83

Management Discussion and Analysis The Company has completed the acquisition of a distillery named United Products Company Limited (UPC) and a non-alcohol beverage manufacturer named SPM Foods and Beverages Company Limited (SPM) by 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. The Thai Excise Tax Department, Ministry of Finance, declared an increase of the excise tax rate with immediate 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 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 the previous rate. The Company has already increased the selling price of spirits to cover the excise tax rise. The Company is planning to improve the efficiency of its distribution network and establish more effective cost control by implementing a Logistics Project. This consists of the establishment of five Regional Distribution Centers, the charter of a new side-loading fleet and the implementation of a Supply Chain Management System. Total cost of the Logistics Project will be approximately Baht 2,541 million from the fourth quarter of 2007 to 2009.

Earnings before interest, tax, depreciation and amortization (EBITDA) was Baht 21,251 million, an increase of Baht 652 million, or 3.2%, mainly due to the increase in gross profit from the spirits business. Net profit was Baht 10,383 million, an increase of Baht 328 million, or 3.3%, mainly from the spirits business.

Unit :Million Baht

YTD_2007

Beer /Water

% to Sales

Spirits

% to Sales

Sales

47,557

Cost of sales

37,040

100.0

52,940

100.0

966

100.0

77.9

33,924

64.1

972

100.6

Gross profit

10,517

22.1

19,016

35.9

(6)

(0.6)

141

expenses

6,456

13.6

7,055

13.3

140

14.5

Operating profit

4,061

8.5

11,961

22.6

(146)

(15.1)

111

0.2

237

0.4

19

2.0

4,172

8.8

12,198

23.0

(127)

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 were recorded to equity Baht 2,062.7 million and to statements of income Baht 58.9 million. From the third quarter of 2007 onwards, the reporting of business segments has been rearranged to present transactions with external customers more meaningfully. Related business segments that normally conduct most of their business within the group will no longer be presented separately as in previous periods but will be allocated to the Company core business segments which consist of Beer/Water, Spirits and Industrial Alcohol. The segmental information for the same period of 2006 has been restated for comparison with 2007.

Group

Other income / Interest income Interest expenses

Gross profit was Baht 29,668 million, an increase of Baht 1,195 million, or 4.2%, mainly due to higher margin from the spirits business.

% to Sales

Total

% to Sales

(922)

100.0

100,541

100.0

(1,063)

115.3

70,873

70.5

(15.3)

29,668

29.5

38

(4.1)

13,689

13.6

103

(11.2)

15,979

15.9

(69)

7.5

298

0.3

(13.1)

34

(3.7)

16,277

16.2 1.0

278

0.6

731

1.4

38

3.9

-

-

1,047

Income tax

2,192

4.6

2,652

5.0

3

0.3

-

-

4,847

4.8

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

Unit :Million Baht

YTD_2006

Beer /Water

% to Sales

Spirits

% to Sales

Alcohol

Sales

46,103

Cost of sales

35,944

100.0

51,576

100.0

1,205

100.0

(1,086)

78.0

33,470

64.9

994

82.5

(1,083)

Gross profit

10,159

22.0

18,106

35.1

211

17.5

(3)

% to Sales Eliminate

% to Sales

Total

% to Sales

100.0

97,798

100.0

99.7

69,325

70.9

0.3

28,473

29.1

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

70

0.2

106

0.2

6

0.5

(24)

2.2

158

0.2

4,461

9.7

11,472

22.2

39

3.2

(25)

2.3

15,947

16.3

309

0.7

1,202

2.3

62

5.1

(4)

0.4

1,569

1.6

Income tax

1,989

4.3

2,325

4.5

9

0.7

-

-

4,323

4.4

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

EBITDA

6,687

14.5

13,772

26.7

165

13.7

(25)

2.3

20,599

21.1

Selling and administrative

Other income / Interest income EBIT

In 2007, total sales revenue of the Company was Baht 100,541 million, an increase of 2.8%, or Baht 2,743 million, from Baht 97,798 million in the previous year, mainly due to the increase of sales revenue from the spirits business of about 2.6% and the beer/water business of about 3.2%

% to Sales Eliminate

Selling and administrative

EBIT

The Company has also planned to increase PET (Polyethylene Terephthalate) drinking water bottle production capacity from the current approximately 7 million litres per year to about 70 million litres per year. Total cost of the project will be approximately Baht 194 million from the fourth quarter of 2007 to the third quarter of 2008.

Alcohol

Interest expenses


Annual Report 2007

Thai Beverage Public Company Limited

84

Increase (Decrease) Sales Cost of sales Gross profit Selling and administrative expenses Operating profit Other income / Interest income EBIT Interest expenses Income tax Net Profit Depreciation & Amortization EBITDA

85

Beer /Water

%

Spirits

%

Alcohol

1,454 1,096 358

3.2 3.0 3.5

1,364 454 910

2.6 1.4 5.0

(239) (22) (217)

688 (330) 41 (289) (31) 203 (461) 138 (151)

11.9 (7.5) 58.6 (6.5) (10.0) 10.2 (21.3) 6.2 (2.3)

315 595 131 726 (471) 327 870 118 844

4.7 5.2 123.6 6.3 (39.2) 14.1 11.0 5.1 6.1

(38) (179) 13 (166) (24) (6) (136) 66 (100)

% Eliminate

%

Total

%

(19.8) (2.2) (102.8)

164 15.1 20 1.8 144 4,800.0

2,743 1,548 1,195

2.8 2.2 4.2

(21.3) (542.4) 216.7 (425.6) (38.7) (66.7) (425.0) 52.4 (60.6)

40 2,000.0 104 10,400.0 (45) (187.5) 59 236.0 4 100.0 55 261.9 59 236.0

1,005 7.9 190 1.2 140 88.6 330 2.1 (522) (33.3) 524 12.1 328 3.3 322 6.9 652 3.2

The Beer, Soda & Drinking Water Business Sales revenue of this segment was Baht 47,557 million in 2007, rising by Baht 1,454 million, or 3.2%, mainly due to an increase in beer sales volume. Total sales volume of beer was 956.8 million litres, an increase of 3.7% 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%, and the sales volume of drinking water was 43.8 million litres, an increase of 2.9%. 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.

Gross profit of Baht 19,016 million reflected an increase of Baht 910 million, or 5%, mainly due to higher margins from new sales price increases and lower raw material cost of molasses. EBITDA of Baht 14,616 million increased by Baht 844 million, or 6.1%, mainly due to the above-mentioned higher gross profit, which helped cover higher employee expenses and the increase in marketing expenses from free goods used for sales promotion. Free spirits volume used for sales promotion as a percentage of sales volume increased from 1.3% on average over the year 2006, to 1.7% in 2007. Net profit of Baht 8,815 million increased by Baht 870 million, or 11%, mainly due to higher EBITDA and lower interest expense, which covered higher depreciation cost.

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 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 came from exports, an increase of 1,032.7%, while the average sales price decreased from Baht 24.60 per litre in 2006 to Baht 14.81 per litre in 2007. The gross loss of Baht 6 million in 2007 showed a decrease of Baht 217 million, or 102.8% over gross profit 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. 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 volume for sales promotion as a percentage of total sales volume was 8.2% by average over the year 2007, close to the 8.1% achieved in 2006.

The net loss was Baht 168 million, an increase of Baht 136 million or 425% over 2006, mainly due to the decrease in sales margin and higher depreciation but lower interest expense.

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 brewery expansion project but lower interest expense.

Financial Position Assets

The Spirits Business Sales in the year 2007 amounted to Baht 52,940 million, higher than in 2006 by Baht 1,364 million, or 2.6%, mainly due to the increase of brown spirits’ sales volume and the increase in the sales price in May and August. The total sales volume of spirits was 446.3 million litres, a decrease of 6.2%. This is attributed to the white spirits’ sales volume declining by 10.3% to 329.4 million litres, though brown spirits sales increased by 8.1% to 116.9 million litres.

Total assets as at end of December 2007 was Baht 79,527 million, a decrease of Baht 6,053 million, or 7.1%, compared with the end of 2006. Current assets decreased by Baht 393 million, mainly due to the decrease in inventory of finished goods. Non-current assets decreased by Baht 5,659 million, mainly due to the sale of land and a building known as the ThaiBev Tower Project, plus the impact of land revaluation, and depreciation of property, plant and equipment.


Annual Report 2007

Thai Beverage Public Company Limited

86

Liabilities

87

Financial Ratios

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. The maturity of loans and bonds are as follows. Unit: Million Baht

Dec.31, 07

Dec.31, 06

Current Ratio (times)

1.74

1.28

Total Debt to Equity Ratio (times)

0.45

0.63

Net asset value per share (Baht)

2.19

2.21

Within December 2008

10,753

Within December 2009

5,025

Within January 2010

375

Accounts Receivable Turnover (days)

Total

16,153

Inventory Turnover (days)

Shareholders’ Equity

Jan.- Dec 07

Jan.- Dec 06

5

5

15

12

4

4

79

75

Beer/water Business Finished Goods

Total shareholders’ equity as at end of December 2007 was Baht 54,910 million, an increase of Baht 2,356 million, or 4.5% compared with the end of 2006. This was mainly due to the increase of retained earnings although the decrease of land revaluation surplus of Baht 2,062.7 million.

Raw Materials Spirits Business

Liquidity

Finished Goods (Excl. Legacy Stocks) Raw Materials

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.

12

8

Shareholder Returns Unit: Million Baht

Net cash provided by operating activities

16,444

Net cash used in investing activities

(715)

Net cash used in financing activities

(15,271)

Adjustment from financial statement translation

(189)

Net increase in cash and cash equivalents in period

269

Cash and cash equivalents at beginning of period

1,920

Cash and cash equivalents at end of period

2,189

Net cash provided by operating activities of Baht 16,444 million. This was mainly derived from net income of Baht 10,383 million and adjusted with non-cash items, such as depreciation and amortization, of Baht 4,975 million. Net cash used in investing activities of Baht 715 million was mainly due to the investment activities in property, plant and equipment, which exceeded the proceeds from sales of land and building, called the Thai Bev Tower project. Net cash used in financing activities of Baht 15,271 million was mainly due to the dividend paid of Baht 5,775 million and the repayments of bonds and loans

Dividends The current policy of the Board of Directors is to recommend to our shareholders a dividend of not less than 50% 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 total dividend of Baht 7,281.91 million.

2007

2006

2005

Dividend for the year (Million Baht) Number of shares issued (Million Shares) Interim dividend per share (Baht) Final dividend per share (Baht) Total dividend per share (Baht)

7,281.91 25,110 0.12 0.17 0.29

5,524.21 25,110 0.11 0.11 0.22

5,280.00 22,000 0.24 0.24

Pay Out Ratio (%) Return on Equity

70.13%

54.94%

51.08%

Return on Average Equity (%)

19.3%

23.9%

31.6%

Earning Per Share Earning per Weighted Average Ordinary Shares (Baht) Weighted Average number of ordinary shares for

0.41 25,110

0.42 23,785

0.47 22,000

the year (million shares)


Annual Report 2007

Thai Beverage Public Company Limited

88

89

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 company’s growth may be affected A major strategy is brand base expansion through the launch of new brands of higher prices, which will lead to greater sales revenue. It is believed that beer and spirits of higher prices in the domestic market have considerable potential for expansion, and that consumers have altered their behavior of consuming economy beer and spirits to those of higher prices. That said, business expansion into such markets is very challenging for the company because of intense competition, thereby calling for massive investments associated with marketing, brand promotion, distribution development, and product sale, and the company is relatively new to marketing of products under this group. However, without development, promotion, and sale of higher-priced products under new brands, the company may lose opportunities for growth, particularly if the demand for premium beer rises at the expense of economy products. Equally important, this may harm the company’s financial status, performance, and business opportunities.

As a rule, raw materials and container materials critical to production and distribution are sold by third-party 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, water, glass bottles, labels, caps, and other packaging products. In addition, some raw materials and container materials are sold in currencies other than the Baht, therefore making their prices susceptible to changes in foreign-exchange rates, currency controls, government controls, world-market demand-supply changes, and climate. The higher the prices of these materials, the higher the production costs. Unless such cost rises are passed on to consumers, the company’s margins will shrink. And if delivery of these materials cannot be sustained, their prices are bound to sharply rise or affect production processes. All these could raise production costs, which may harm the company’s financial status, performance, and business opportunities. To mitigate such risks, the company has purchased critical raw materials and container materials in advance. As regards foreign-exchange risks, the company is going to use suitable financial tools together with the policy prohibiting a speculation on the foreign exchange.

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 export the additional volume of beer to countries like Cambodia, Laos, and neighboring countries. However, with relatively little experience in selling consistently high volumes of beer in foreign countries, the company is unsure if it can raise its beer sales overseas. Besides, the company cannot guarantee sale of the above - mentioned additional volume of beer, which accompanies greater fixed costs. Still, the sales prices of such beer may not yield commercially acceptable profits - or yield potential losses. If so, the company may need to cut production, which will lower its capacity utilization of the brewery in question as well as its profit margin. In short, being unable to sell the above-mentioned additional volume of beer may harm the company’s financial status, performance, and business opportunities. 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.

The company’s business today is executed by a group of senior executives and management team members with extensive experiences in its beverage subsidiaries, the loss of whom without equally competent successors could hurt the company’s business. 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 product distribution. If the company cannot attract, retain, or motivate the above-mentioned personnel, or cannot find a suitable replacement for them, it is bound to lose customers and revenue. Still, should it successfully attract and retain such personnel, brain-drains are a distinct possibility, causing the company to pay these personnel elevated compensation to keep them, which may in turn 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.


Annual Report 2007

Thai Beverage Public Company Limited

90

91

Financial and Investment Risks It requires massive investment to conduct and expand the business, which is fraught with risks and uncertainties 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 plants. In addition, the company needs to constantly monitor beverage market development, both domestic and regional (Southeast Asia). While past investments relied on loan sources, recapitalization, and internal cash flows, future business capital or fund used for improving breweries and distilleries is likely to come from additional loans and internal cash flows. Should such loan sources, however, be unavailable under desirable commercial conditions, the company may need to call for recapitalization, which will dilute shareholding. If the company cannot find a proper loan source, this may harm the company’s financial status, performance, and business opportunities.

This business falls under several regulations, making it susceptible to changes in such regulations - including higher costs and business limitations In the beverage business, compliance is essential to the production, packaging, quality maintenance, labeling, and domestic distribution, apart from compliance with the regulations of importing countries. Production and distribution are subjected to several laws and regulations concerning the environment and workplace conditions issued by the Ministry of Public Health, Ministry of Commerce, and Ministry of Finance. Non-compliance or violation of these laws and regulations, now or in the future, could result in excessive expenses and harm the company’s financial status, performance, and business opportunities.

To mitigate such risks, the finance group is required to participate in every investment planning, so that it may use pertinent information for its future financial structure preparation.

The company must also comply with regulations concerning beer and spirits advertisement, which is subject to more rigorous enforcement in the future, thereby diminishing the current and future marketing capability of such products, which may harm the company’s financial status, performance, and business opportunities.

Compliance Risks

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 the company’s financial status, performance, and business opportunities.

Tax hikes or changes in tax computation methods may affect the demand for the company’s products The alcoholic beverage business calls for not only collection of excise and interior taxes, but contribution to the national fund for health promotion as well. Therefore, any tax hike or change in tax computation methods could 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 financial 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.

The Risk Management Committee has assigned relevant offices to constantly monitor and report on new laws and regulations so that business and production departments may efficiently develop marketing strategies and modify production processes to mitigate the impacts.

Compliance and exemption from compliance with environmental laws and regulations could hurt the company’s financial status, performance, and business opportunities 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 financial status, performance, and business opportunities.


Annual Report 2007

Thai Beverage Public Company Limited

92

93

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

The Risk Management Committee has assigned relevant offices to constantly monitor and report on new laws and regulations so that production departments can prepare to modify production processes and successfully comply with laws and regulations while mitigating potential impacts.

Enactment of a 1999 Thai law against trade monopoly could affect the company’s financial status, performance, and business opportunities The Trade Competition Act of 1999 prohibits practices against free trade while empowering the Trade Competition Commission to issue injunctions to dominant operators and unfair operators to refrain from, suspend, or alter 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 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. 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. 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 contingency outlays for risk management. The objective is to ensure that these risks are accounted for by company personnel and work plans prudently executed, so that if undesirable events occurred, the damage could be alleviated.

We aim to build a strong and unique brand presence in all our core target markets throughout the world and 2007 has already seen the repackaging and successful launch of the iconic Chang Beer and Mekhong brands on the international stage • Chang Beer, Thailand’s number one beer brand, has been repackaged and recently launched in the major Western markets including the USA, UK, Europe and Australia with a focus on the premium imported beer market. • Mekhong has also been revamped to appeal to the more discerning spirits drinkers. It will be sold through high-end restaurants and cocktail bars in Europe, and North America with the help of its Thai-inspired collection of cocktail recipes.

Major relaunch of flagship malt whisky brand 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 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. Inver House Distillers, which was purchased by InterBev during 2007, has benefited from a buoyant Scotch market as well as a strategic shift towards focusing more on core malt brands. As a result, pre tax profits have risen significantly from the same period in 2006.


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Our People Our Success

We believe that our people are the most crucial engine that drives our sustainable growth and future success and that human capital is one of the critical pillars of our growth strategy. We aim to develop happy, highlycommitted, and performance-driven teams instilled with social responsibility spirit. By our definition, a high performer highly contributes to the success to the organization and the well-being of society. Our people will grow together with our business in competency development and career opportunities. We have launched the Human Capital Transformation Program to align our human capital management and development with our business strategy and long-term direction. The initiatives of this program will enhance the strategic alignment of all human capital elements within the employee lifecycle: workforce planning, career deployment and management, performance management, reward management, learning and development, retention management, and workplace management.

appropriate career and development opportunities. We also develop a career and development plan for each workforce group which properly aligns with business needs and growth.

Career Opportunities The opportunities for our people are expanding with our business. With our business expansion, our people are also provided with greater career opportunities, not only within our current businesses, but in the businesses of non-alcoholic beverages as well as non-beverages across the ThaiBev Group. We are committed to providing borderless opportunities to our people. We initiate the “employee exchange program” with our strategic partners, where our people can obtain experience and knowledge from working with different organizations and different people. These are not only career opportunities, but also learning opportunities which have proven powerful to our people and our business.

Employee Segmentation Performance Management We care for different needs among our different workforces. We arrange our employees into groups which represent the nature and characteristics of job and required competencies. It enables us to develop human resource management mechanisms to match the different needs of each workforce while providing

We have recently adopted the key performance indicator (KPI) system as the key mechanism of our performance management where the expected corporate performance was cascaded down to the operating level. The system has enhanced the strategic

alignment of people performance with corporate performance as well as a performance-oriented culture. The process involved senior management and middle management in managing and driving the expected performance of the organization, the departments, and the individuals. A performance monitoring system is also applied to the implementation of key strategic initiatives, which strengthens disciplined execution.

Learning and Development We believe in providing our people with learning and development opportunities. Along with our growth strategy, our human resource development plan has been defined to reflect the required strategy for critical capabilities. Learning and development is through knowledge sharing on–the-job training and regular training session, local and international. We prepare the next generation of leaders by providing our middle management with opportunities to explore new management techniques and practical experiences in our mini-MBA program. The program was organized and designed in conjunction with Chulalongkorn University, Thailand’s top university. We successfully develop highly-qualified brew masters as well as engineers and spirit production’s technical team by providing our people with both in-house and overseas training. Our people learn from our “continuous improvement program” which allows them to initiate new ideas for

efficiency improvement. All implemented ideas were collected and maintained in databases to share and allow others to learn from them. Knowledge can be passed on throughout the organization which is the beginning of– a learning organization.

TEAM SPIRIT: THE POWER OF ONE At ThaiBev, we believe in working as a team. We recognize the power of unity and the power of our people when they share and collaborate. The organizational structure, work processes, and work assignments encourage teamwork across the organization. In short, our meaning of teamwork is equal to cross-functional teams. Our learning and development approach also emphasizes on how to develop the spirit of teamwork and how to form teams that work. One of the performance factors that we use to evaluate our people is the ability to work as a team and collaborate with others inside and outside their work units. We aim to continually cultivate team spirit as our core value. The power of one will be realized when our people work as an effective team and we will do our best to make it happen. A high-performance organization is made up of high-performing people. At ThaiBev, it is our commitment to develop happy and highly-competent people who can fulfill their career aspirations and grow their potential domestically and internationally.


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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.


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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”) listed on the Singapore Exchange (SGX) with the intention of becoming a good example of a public company with good corporate governance. We stated at that time that we would try not simply to follow the rules and regulations of the market with regard to disclosure and transparency, but would strive to exceed them. Our success can only be measured by the stakeholders who experience our services firsthand. We were proud to receive some recognition within a very short time after listing in Singapore when it was announced we had been awarded The Securities Investor Association of Singapore’s (SIAS) 2006 Merit Award for transparency among newly-listed companies (New Issue) on the Singapore Exchange. This was given to ThaiBev to declare that it was among the most transparent new listings in Singapore as the company has hosted activities to disseminate information to investors and media continuously, as well as for transparently running its business.

Thai Beverage PLC. wins the “2006 Merit Award for Transparency among newly-listed Companies (New Issue) on the Singapore Exchange”

Contrary to popular belief, the eligibility for the “Best Investor Relations in the Singapore Market”award is not restricted to companies listed on the SGX, but rather all Southeast Asian companies that had some form of investor relations activities in Singapore in that year. There were no runners-up in 2007. Acclaim for “Capital Markets Deal of the Year 2006”

Whisky Magazine for “Icons of Whisky Distiller of the Year 2008”

IR Magazine accolades for “Best Investor Relations”

Shortly after, the Company was named Best Investor Relations in the 2006 Singapore Market By a Thai Company by IR Magazine. This UK journal relating to investors relations is published worldwide. To illiustrate further that the Company had not relaxed its efforts to maintain steady communications with investors, ThaiBev was awarded Best Investor Relations in the Singapore Market By a Thai Company in 2007 also. The judging panel cited as its reason for bestowing the Best Investor Relations award on ThaiBev as: “Thai Beverage Public Company Limited has a very good person doing its investor relations, especially in terms of explaining the business, providing disclosures and being knowledgeable about the company.”

As the Company’s listing in Singapore was one of the largest in terms of market cap, it was perhaps unsurprising that the listing was recognized and nominated for the IFR Asia Awards 2006. In February, 2007, IFR Asia Magazine named ThaiBev as winner of the Thailand Capital Market Deal of the year-Singapore IPO 2006, based on the firm’s initial public offering in Singapore of S$ 1.37 billion. Most recently, ThaiBev also garnered a silver medal for best annual report by a newly listed company by the Singapore Corporate Awards. The Awards are organised by the Business Times in collaboration with UBS and supported by the SGX. The Award “seeks to encourage excellent financial reporting presentation and a wider scope of disclosures beyond the minimum regulatory requirements... to create awareness of the role of both mandatory accounting standards and voluntary practices issued and recommended by the Council on Corporate Disclosure and Governance and The Institute of Certified Public Accountants of Singapore

and to increase awareness through the encouragement of social responsibility reporting that business enterprises and organisations are responsible to the community both as employers and corporate citizens.” Besides corporate governance, ThaiBev has received international recognition for the quality of the drinks it produces. It was a matter of great pride that the Company was awarded a gold medal at the Australian International Beer Awards (AIBA) 2007 for its Archa Beer. The beer won over the judges to claim the coveted Gold Medal in the European Lager Division. The Company holds the distinction of being the first Thai company to win a gold medal at AIBA, which is a globally recognized beer competition, in 1998 with Chang beer. Inver House Distillers was named ‘International Distiller of the Year’ in February 2008. The company beat off competition from exceptional companies throughout the world, including Japan, Ireland, Canada, India and Sweden and the USA. Inver House, who in the last year has globally re-launched their Balblair Single Malt as a super-premium ‘vintage’, reached the final of the ‘Icons of Whisky’ event by first beating competition in Scotland from Glenmorangie, Bowmore and William Grant & Sons, before claiming whisky’s highest accolade over seven other global finalists. The industry-voted award is designed to highlight the company who has ‘shown the most commitment to the development of whisky at all levels’ and is highly sought after. The event’s international judging panel recognised Inver House for bringing ‘dynamic, inspirational and dedicated passion’ to the world of whisky. Said one of the judges, “Inver House pioneer a creative approach to whisky and we believe that their team brings genuine passion and fresh thinking to all they do. They’ve made a very bold statement in recent times and every person on our panel strongly backed their win.”


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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: May 30, 2006 is the day that we will never forget. It was the day that our symbol “THBEV” started ticking on the main board of Singapore Exchange. THBEV conducts our business activities with a view to bring value of added to our shares and ensure benefit to our stakeholders. As time goes by, our commitment to good corporate governance remains unchanged. The adherence to the principles and guidelines of the Singapore Code of Corporate Governance 2005 stay with us. In 2007, we were proud to receive Best Investor Relations in the Singapore Market by a Thai Company in 2007 award.

The Board’s Conduct of Affairs Principle 1 Our Board of Directors oversees the Company’s business and affairs with shareholder approval in accordance with applicable laws. The Board must exercise good business judgment and act in good faith for the best interests of the Company.

Name

Position

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Chairman Vice Chairman Vice Chairman Vice Chairman Director Director Independent Director and Audit Committee Chairman Independent Director and Audit Committee Member Independent Director and Audit Committee Member Independent Director and Audit Committee Member Independent Director Independent Director Independent Director Independent Director Director Director Director President Director Director Director Director Director

Mr. Charoen Sirivadhanabhakdi Khunying Wanna Sirivadhanabhakdi Mr. Narong Srisa-an Mr. Komen Tantiwiwatthanaphan Mr. Paisal Chevasiri (1) Mr. Puchchong Chandhanakij Mr. Staporn Kavitanon Prof. Kanung Luchai Mr. Manu Leopairote Mr. Ng Tat Pun Mr. Michael Lau Hwai Keong Prof. Pornchai Matangkasombut Mr. Sakthip Krairiksh Gen. Choo-Chat Kambhu Na Ayudhya Mr. Vivat Tejapaibul Mr. Panote Sirivadhanabhakdi (2) Mr. Samut Hatthasing Mr. Thapana Sirivadhanabhakdi (3) Ms. Kanoknart Rangsithienchai Mr. Sithichai Chaikriangkrai Mr. Ueychai Tantha-Obhas Dr. Pisanu Vichiensanth Mr. Chukiet Tangpongprush

Number of Attendances / Total of Meetings

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.

9/10 9/10 9/10 10/10 1/10 10/10 7/10 10/10 9/10 6/10 9/10 8/10 7/10 9/10 4/10 6/10 8/10 9/10 10/10 10/10 8/10 9/10 10/10


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Matters Requiring Board Approval Our Board recognizes their duties to Company’s shareholders. They oversee and responsible for the administration of the Company’s affairs and thus ensure that the Company complies with the law, its Articles of Associations and objectives. In addition to its general oversight of management in compliance with shareholders’ resolutions in good faith, our Board ensures that the Company and its subsidiary companies comply with the Listing Manual of the Singapore Exchange.

some of them are also top executive officers of the Company. To enhance Company business operation, the Board granted them the authority to perform their duties. To help the Board run the Company properly, it established four committees: the Audit Committee (AC), Risk Management Committee (RMC), Nomination Committee (NC) and Remuneration Committee (RC).

The Board is required by the law to meet not less than four times a year, during 2007 the Board met more than requirement in order to consider special issues. In brief, the Board monitors major plans and activities, and oversees control of subsidiary companies.

The Board also appoints executive members to hold directorships in subsidiaries, both domestic and overseas, to monitor the Company’s interests.

Training All directors have passed the Director Accreditation Program (DAP) of the Thai Institute of Directors. Some also accredited the Director Certification Program (DCP) of the same institution. We also encourage and support directors to understand Singapore Law and the Listing Manual applicable to our Company through in-house training and information updating.

• prepare and propose business plans, targets, operational plans, business strategies and annual budgets for the Board of Directors;

All directors receive a clear explanation of their roles and responsibilities at the time of their proposed appointment to the Board.

Board Composition and Guidance Principle 2 Board of Directors Our Board consists of 22 directors, including eight independent directors, or more than one-third. Each director either has long-term experience in business or attained honorary positions. Executive Committee The Board appointed an Executive Committee (previously called “Executive Board of Directors”), which consists of 12 members from the Board members;

Normally the Executive Committee meets once a month to oversee business operations, or more than once to consider and approve any important or urgent matter.

The Executive Committee’s responsibilities are to:

• determine business plans, budgets and management authorizations for approval; • monitor the operations of the Group, that they are in line with business plans, targets, operational plans, business strategies, budgets and management authorizations approved by our Board to facilitate corporate efficiency and appropriate to business conditions; • propose investments, borrowing or lending, including acting as a guarantor if that is in line with the normal business of the Group;

103

• approve the appointment of the Company’s representatives to the Board and/or subsidiaries’ subcommittees to ensure compliance with the Company’s business policies, goals, plans, strategies, budget and other management powers approved by the Board, to improve efficiency and facilitate the business; • supervise and approve operational issues; at times appointing or authorizing persons to engage specified activities on behalf of the Executive Committee, or appoint subcommittees with particular knowledge and expertise to manage and screen work before discussion by the Executive Committee, provided the Executive Committee is entitled to repeal or modify the scope of such authorization; and • perform any other activity delegated by the Board. No one, including the Executive Committee, is authorized to approve any transaction in which the board or the individual has or may have a conflict of interest, or where the transactions require the approval of the Board and/or of a Shareholders’ meeting. During 2007, the Executive Committee met 18 times and the following table shows Executive Committee’ s attendances up to December 31, 2007: Name

Position

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Executive Chairman 1st Executive Vice Chairman 2nd Executive Vice Chairman 3rd Executive Vice Chairman 4th Executive Vice Chairman 5th Executive Vice Chairman President Executive Vice President Senior Vice President Senior Vice President Senior Vice President Senior Vice President

Mr. Charoen Sirivadhanabhakdi Khunying Wanna Sirivadhanabhakdi Mr. Narong Srisa-an Mr. Komen Tantiwiwatthanaphan Mr. Samut Hatthasing (1) Mr. Puchchong Chandhanakij Mr. Thapana Sirivadhanabhakdi (2) Ms. Kanoknart Rangsithienchai Mr. Sithichai Chaikriangkrai Mr. Ueychai Tantha-Obhas Dr. Pisanu Vichiensanth Mr. Chukiet Tangpongprush

Number of Attendances / Total of Meetings

13/18 10/18 15/18 17/18 16/18 17/18 11/18 18/18 18/18 13/18 16/18 17/18

Remark (1) Mr. Samut Hatthasing resigned from President effective on January 1, 2008. He was appointed the 4th Executive Vice Chairman by the Executive Committee on December 25, 2007. (2) Mr. Thapana Sirivadhanabhakdi was previously Executive Vice President and appointed President and CEO by the Board of

• approve payments as determined by our Board;

Directors on January 18, 2008. (3) On February 27, 2008 the Board of Directors appointed three additional Executive Committee members, who are Mr. Sawat Sopa,

• determine the organization and management structure of the Group for the Board; • supervise and approve all employment and salary matters relating to the Company (other than matters which are within the purview of the RC);

Mr. Saikeaw Vongpisethkul and Mr. Jean Lebreton.

On January 18, 2008 the Board approved the change of the composition of the Executive Committee. The Executive Committee will be elected from directors and/or other persons as the Chairman of the Executive Committee deemed appropriate and propose the nominee(s) to the Board of Directors to approve the appointment.


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Audit Committee The Audit Committee members are Mr. Staporn Kavitanon, Prof. Kanung Luchai, Mr. Manu Leopairote, and Mr. Ng Tat Pun. The Chairman of the Audit Committee is Mr. Staporn Kavitanon. The AC meets at least each quarter. Please refer to Audit Committee Report. Risk Management Committee The Risk Management Committee members are the directors, Mr. Narong Srisa-an, Mr. Samut Hatthasing, M s. Ka n o k n a r t Rangs it hienchai, Mr. Thap an a Sirivadhanabhakdi, Mr. Chukiet Tangpongprush, Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, Dr. Pisanu Vichiensanth, Mr. Puchchong Chandhanakij, and the employees, Mr. Chalerm Pornrutchakit, Mr. Pichit Burapavong, Mr. Mahin Kraivixien, and Mr. Thidi Suwanarat who is the secretary to the Committee. The Chairman of the Risk Management Committee is Mr. Narong Srisa-an. Among others responsibilities, the Risk Management Committee ensured the analysis of both internal and external risks, determined the acceptable level of risks with timely review the criteria of risk management. Nomination Committee The Nomination Committee members are Mr. Staporn Kavitanon, Mr. Manu Leopairote, and Khunying Wanna Sirivadhanabhakdi. The Chairman of the Nomination Committee is Mr. Staporn Kavitanon. Remuneration Committee The Remuneration Committee members are Mr. Staporn Kavitanon, Mr. Manu Leopairote, and Prof. Kanung Luchai. The Chairman of the Remuneration Committee is Mr. Staporn Kavitanon.

relations among the Board,Executive Committee and management.The Chairman approves the agenda for Board and Executive Committee meetings and exercise control over quality, quantity and timeless of the flow of information between management and the Board. In addition, an independent director who is a Singaporean was appointed to act as the lead independent director for Interested Persons Transactions undertake by our Group.

Our Chairman and Chief Executive Officer is the same person. Our Chairman encourages constructive

Board Performance Principle 5 Our Board members include self-assessment in their performances, and take the result of business operations into their consideration. The Board expressed opinions and asked questions in the meeting to exercise their duty of care.

If a member of the RC has an interest in a matter deliberated by the Committee, he will abstain from participating in the review and approval process for that matter.

Level and Mix of Remuneration On January 18, 2008, Mr. Thapana Sirivadhanabhakdi was appointed President and Chief Executive Officer to oversee the business operation in accordance with the new business plan of the Company.

Board Membership Principle 4 In order to assure a transparent process for the appointment of new directors to the Board, we established the Nomination Committee (NC) to review and assess candidates for directorships (including executive directorships) before making recommendations to our Board. The NC also reviews the retirement and re-election of directors at each annual general meeting under our Articles of Associations and makes recommendations to the Board. The NC consists of three directors with a majority of independent directors, including the Chairman. It adopted a charter and proposed it to the Board for approval. The Company also established a Remuneration Committee (RC) that makes recommendations to the Board, for it to endorse remuneration policies and guidelines, and to set the remuneration for Directors, Executive Directors, President, Executive Vice Presidents and Senior Vice Presidents.

Chairman and Chief Executive Officer Principle 3

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In performing their roles, our NC and RC adhere to the law and the Listing Manual applicable to our Company.

Access to Information Principle 6 We are committed to providing our Board members with adequate, complete, continuous and timely information before Board meetings. The Board members have separate and independent access to the Company Secretary. The Company Secretary, in consultation and cooperation with the Office of Legal Affairs, is responsible for advising the Board, through the Chairman, on all governance matters. In this respect, we set up a Compliance Unit, having a Compliance Manager responsible with the unit under supervision of the Company Secretary. This is to ensure compliance with legal and regulatory requirements. The Board approves the appointment and the removal of the Company Secretary. This year the Company Secretary attended all Board meetings and Executive Committee meetings.

Procedure for Developing Remuneration Policies Principle 7 The Remuneration Committee reviews matters concerning the remuneration of Board members, Presidents, Executive Vice Presidents and Senior Vice Presidents in consultation with the Chairman of the Board.

Principle 8 The components of remuneration are structured to reward both executive and non-executive directors based on corporate and individual performance, including our two top executives. The level of remuneration reflects their experience and dedication. The remuneration bands rank from A to C as follows. Remuneration Bands: “A” refers to remuneration below the equivalent of S$250,000 “B” refers to remuneration between the equivalent of S$250,000 and S$499,999 “C” refers to remuneration between the equivalent of S$500,000 and above. The Company entered into a long-term employment agreement with Dr. Pisanu Vichiensanth, who is our director, the Managing Director of Beer Thai (1991) Public Company Limited and a Senior Master Brewer.


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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 consists of four independent directors: three Thais and one Singaporean. Their responsibilities are clearly set forth in the Audit Committee Charter, for instance, assessing the adequacy and effectiveness of the internal controls, preparing the process of financial statements and information disclosures and reviewing the compliance with applicable laws, regulations and rules of the Stock Exchange of Thailand and the Singapore Exchange. This includes internal investigations and consideration of Interested Persons Transactions to prevent an occurrence of conflict of interests.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Mr. Charoen Sirivadhanabhakdi Khunying Wanna Sirivadhanabhakdi Mr. Narong Srisa-an Mr. Komen Tantiwiwatthanaphan Mr. Paisal Chevasiri (1) Mr. Puchchong Chandhanakij Mr. Staporn Kavitanon Prof. Kanung Luchai Mr. Manu Leopairote Mr. Ng Tat Pun Mr. Michael Lau Hwai Keong Prof. Pornchai Matangkasombut Mr. Sakthip Krairiksh Gen. Choo-Chat Kambhu Na Ayudhya Mr. Vivat Tejapaibul Mr. Panote Sirivadhanabhakdi (2) Mr. Samut Hatthasing Mr. Thapana Sirivadhanabhakdi Ms. Kanoknart Rangsithienchai Mr. Sithichai Chaikriangkrai Mr. Ueychai Tantha-Obhas Dr. Pisanu Vichiensanth Mr. Chukiet Tangpongprush

Top Executives 1. Mr. Sawat Sopa 2. Mr. Saikeaw Vongpisethkul*

Remuneration Band

C B C B A B A A A A A A A A A A C C C C C C B

(Remark: 1 S$ = Baht 24)

Name of Directors

B A

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,

Internal Controls Principle 12 Our Board values a sound management internal control system. To safeguard shareholders’ investments and the Company’s assets, it appointed an Executive Committee, each member of which oversees different departments and business units to ensure the adequacy of financial, operational and compliance controls, including risk management policies. In support of this, the Board also assigned the Office of the Corporate Secretariat to oversee compliance with the law and regulations concerning public companies and the issuer of securities. Based on the information provided to it, the AC believes that the system of internal controls and risk management is adequate.

2007 in replace of Mr. Paisal Chevasiri.

Internal Audit Accountability Principle 13 Principle 10 The Board is responsible for providing a balanced and understandable assessment of the Company’s performance, and for providing shareholders with quarterly and annual financial reports. The financial statements for the first three quarters are released to shareholders within 45 days of the end of each quarter. The annual result is released within 60 days of the end of each financial year. In addition, our top management also participated in quarter results briefing and telephone conference from time to time. This is to ensure the timely update to our investors.

The Company established the Office of Internal Audit to assist the Board through Audit Committee (AC) in promoting sound risk management and good corporate governance by assessing the adequacy and effectiveness of the internal controls for key businesses and operations in areas described in the audit plan.

In this respect, the AC appointed the head of the Office of Internal Audit the secretary to the AC. Annual audit schedules ensure that the performance of internal audit is accurate.

Communication with Shareholders Principle 14 Not only we make various announcements via SGX-NET to communicate with our shareholders, Mr. Richard W. Jones, head of Investor Relations Unit works closely with our top management to ensure timely disclosure. The unit arranges quarterly briefings following the disclosure of interim and full year results, so that investors may query management about financial, marketing or strategic issues. Between reporting periods, the unit regularly meets with investors to communicate the policies and strategies of the Company so that investors have a good understanding of them. Investor Relations provides timely detailed information via the corporate website. The unit also reports to management about investors’ comments and concerns. Contact information for the Investor Relations Unit appears in this annual report or on the investor relations section of the corporate website http://www.thaibev.com/set/investor.html.


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Corporate Social Responsibility Report

Thais Are Ready to Give Each Other… Thai Bev for Thai Society 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 Thai society, Thai people, and Thai spirit. This is because ThaiBev is convinced that ‘Thais never abandon other Thais’. Thais are ready to help each other, as reflected in ThaiBev’s social activities. These activities can be categorized into four aspects: education, sports, healthcare, and arts & culture. All through the years, ThaiBev has always been at the forefront in the private sector in its contribution to society. Our Corporate Social Responsibility (CSR) projects will be further strengthened as everyone at ThaiBev, from senior executives down to the junior staff, recognizes the importance of participating in public service activities. The importance of the support for the society has been impressed upon all ThaiBev staffs, and is now being disseminated throughout the country. In 2007, ThaiBev implemented several projects under our commitment to “Give back to the Thai Society”. These projects included “ThaiBev Unites to Fight the Cold”, “Drive Safely with ThaiBev”, 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 in 15 northern and northeastern provinces. The ‘Drive Safely with ThaiBev’ project, a joint project with the Royal Thai Police for the second year in a row, urged motorists to minimize road accidents and drive properly. As part of the project, safety helmets were given away to motorcyclists while copies of “Drive Safely with ThaiBev” manual were distributed to motorists in general.

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 University’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 equipment. On arts & culture, one of ThaiBev’s major projects was the renovation of mural paintings in the Buddha Saiyas Vihara, or the chapel of the Reclining Buddha, at Wat Phra Chetuphon Wimonmangkhlaram Rajwaramahawihan. The 150-year-old-plus paintings here were a prototype of the Rattanakosin Period art. The restoration took 10 years to complete and was ready for public viewing in 2007. The mural paintings, particularly the ones higher up near the ceiling thus difficult to view, were photographed and put on exhibit. Incidentally, these photographs appeared in the 2008 ThaiBev calendar. The healthcare aspects included the donation of modern medical equipment for the Chalerm Phra Kiat Sixth-cycle Birthday Anniversary of His Majesty the King Building, Phra Mongkutklao Hospital, valued at 3,000,000 baht. In addition, the much appreciated “Chang Clinic” in Kamphaengphet Province has continued to provide the people in the surrounding community with diagnosis and treatment by experienced specialists from hospitals in Bangkok and Kamphaengphet who volunteer their time at the clinic. Other healthcare activities included donation of ambulances to hospitals, donation of equipment to the mobile prostheses units of the Maha Vajiralongkorn Foundation and many other activities. The sports aspects included our active support to football, volleyball, tennis, snooker, and many other sports of interest to the Thai people, with expectations of improving the health of Thai youths, sporting skills and future victories in the international arena. ThaiBev also launched the “ThaiBev… Thai Talent” project in support of talented and gifted young Thais in various fields. These fields include music, sports, arts & cultural, and educational. Assorted forms of support are provided, such as scholarships, travel expenses to participate in tournaments or events in Thailand and abroad, as well as allowances.

ThaiBev embarked on the 8th “ThaiBev Unites to Fight the Cold” project in which 200,000 blankets worth 30 million baht were donated to villagers in 15 northern and northeastern provinces.


Annual Report 2007

Thai Beverage Public Company Limited

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Khunying Wanna Sirivadhanabhakdi, Vice Chairman of ThaiBev, dedicated the ‘SangSom’ school building to Wat Hom Kred School in Sam Phran District of Nakhon Pathom Province. Khunying Wanna (left) is shown presenting a token photo of the building to Khunying Kasama Varavarn, Secretary-General of the Basic Education Commission.

Mr. Polapatr Suvarnazorn (right, center), ThaiBev Vice President for External Affairs, presented a donation to cover the travel expenses of the Sax Chamber Orchestra, which was on its way to give concert performances in Germany and Switzerland. This troupe consisted of talented youths under the “ThaiBev… Thai Talent” project. Accepting the donation was Associate Professor Dr. Sukree Charoensook (left, center), director of the College of Musical Arts, Mahidol University.

111

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 high safety standards as certified by the Thai Industrial Standard Institute. Picture shows the happy atmosphere at the ceremony attended by hundreds of motorcyclists. ThaiBev donated 3-million-baht worth of medical equipment to the Chalerm Phra Kiat Sixth-cycle Birthday Anniversary of His Majesty the King Building, Phra Mongkutklao 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 opening of the photo exhibition was ThaiBev President, Mr. Thapana Sirivadhanabhakdi (left), the abbot of Wat Phra Chetuphon (center) and well known photographer, Mr. Nitikorn Kraivixian (right).

ThaiBev presented 2 million baht cash to the national soccer team as a way to provide moral support. ThaiBev President, Mr. Thapana Sirivadhanabhakdi (center, in yellow shirt), said the Thai national team deserved the award for its gutsy performance and determination. ThaiBev organized a joint program with Thai private sector called The PremTinsulanonda Fellowship Program, established to provide a fund to Thai students and educators who wished to pursue their studies at Johns Hopkins University’s Paul H.Nitze School of Advanced International Studies (SAIS), as well as related activities to promote Thai and US relations.


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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 His Majesty’s Royal Patronage organized the ‘Photos of the Land’, a photographic contest with four royal trophies, to celebrate the auspicious occasion of His Majesty the King’s 80th 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 under the theme “Thai People Love the King”; Her Majesty the Queen’s trophy under the theme “United in Harmony”; His Royal Highness Crown Prince Maha Vajiralongkorn’s trophy under the theme “Love the Forest, Conserving the Water”; and Her Royal Highness Princess Maha Chakri Sirindhorn’s trophy under the theme “Agriculture the Thai Way”. 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 display to the general public at Lifestyle Hall, 2nd floor, Siam Paragon shopping mall, from December 4 to 12, 2007. Last year, Thailand hosted the 24th University Summer Games – Universiade. ThaiBev, as the major sponsor, in cooperation with the Thai Sports Association under the Royal Patronage, constructed a “Thai Sports Village” to promote the uniqueness of Thai traditional sports for the appreciation of sports people and visitors from all over the world. It displayed all aspects of the Thai way of life from the perspective of sports as well as the history and uniqueness of Thai sports. The Thai Sports Village housed an exhibition of Thai sports history, the demonstration of traditional Thai sports such as loop takraw, kite flying, sword-fighting, boxing, chess, draughts,

traditional massage, and classical dances. It also included special demonstrations of kite-making, sword-fighting, and boxing lessons. In addition, ThaiBev solely, or in partnership with the public sector, the private sector and the mass media, implemented various public service activities. A significant example was its campaign to alleviate global warming – a critical issue for international organizations and nations worldwide, including Thailand. ThaiBev recognizes the importance and urgency of this issue and has drawn up policies for the corporation and affiliated companies. These include the cooperation with various organizations to implement measures against global warming. ThaiBev has also invited the media and investors to visit its plants to observe our modern production processes reflecting responsibility for society and the environment, efficient use of energy, as well as the application of alternative energy derived from the waste treatment systems. This is our corporate pride in being a responsible member of the society.

‘Ruam Jai Phak Rak Nai Luang’ activities: the “Thais Love the King Exhibition House” – a means to communicate to the visitors


Annual Report 2007

Thai Beverage Public Company Limited

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115

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 the press conference was ThaiBev President, Mr. Thapana Sirivadhanabhakdi (Center).

ThaiBev supported the “Cosmopolitan and GM Single Party 2007” event under the theme “100 Couples Unite to Fight Global Warming”. This activity promoted global warming awareness in 200 youths who would become representatives in promoting the anti-global warming campaign.

Members of the media visited Beer Thai (1991) Public Co., Ltd., Kamphaengphet Province, to observe the brewing processes of Chang Beer and Archa Beer, on the occasion of Archa Beer winning a gold medal award at the Australian International BeeAwards (AIBA) 2007.

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 all aspects of the Thai way of living from sports perspectives, as well as demonstration and lessons on Thai sports. A certificate was granted to each participant. Presiding at the opening ceremony of the “Village” was ThaiBev President, Mr. Thapana Sirivadhabhakdi (3rd from left).

Thai and foreign investors familiarized themselves with the production processes of Chang Beer and Archa Beer at Beer Thai (1991) Public Company Limited Khamphaeng Phet Province.


Annual Report 2007

Thai Beverage Public Company Limited

116

Audit Committee Report Annual Report 2007 Thai Beverage Public Company Limited

The Audit Committee is comprised of four directors named below. 1. 2. 3. 4.

Mr. Mr. Mr. Mr.

Staporn Kavitanon Kanung Luchai Manu Leopairote Ng Tat Pun

Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee Member of the Audit Committee

Each member of the Audit Committee is an independent director who meets the independence, experience and other qualifications requirements of the Stock Exchange of Thailand and the Securities and Exchange Commission. The Audit Committee has reviewed and discussed the Company’s audited financial statements with Management and KPMG Phoomchai Audit Limited, its external auditor for 2007, to express the Audit Committee’s opinion of the 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 audit division to ensure that the internal control system is adequate and appropriate. The Audit Committee has recommended that the Board propose for consideration and approval the continued nomination of KPMG Phoomchai Audit Limited as the Company’s external auditor for 2008 and its remuneration to the Annual General Meeting of Shareholders. Based on the above-mentioned reviews and discussions, the Audit Committee views that the Company has an adequate internal control and its financial statement is fairly presented in accordance with the generally accepted accounting principles.

Staporn Kavitanon Chairman of the Audit Committee Date: February 26, 2008

117

Audit report of Certified Public Accountant To the shareholders of Thai Beverage Public Company Limited

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 Public Company Limited and its subsidiaries, and of Thai Beverage Public Company Limited, respectively. The Company’s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material 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 by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material 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 Limited, respectively, in accordance with generally accepted accounting principles. 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 from the equity method of accounting to the cost method, and are now termed ‘separate’ financial statements. Disclosure of significant differences between generally accepted accounting principles in Thailand and International Financial Reporting Standards is not a required part of the basic financial 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.

(Nirand Lilamethwat) Certified Public Accountant Registration No. 2316

KPMG Phoomchai Audit Ltd. Bangkok 27 February 2008


Annual Report 2007

Thai Beverage Public Company Limited

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119

Thai Beverage Public Company Limited and its Subsidiaries

Balance Sheets As at 31 December 2007 and 2006

Note

Consolidated

Separate

Consolidated

Separate

financial statements

financial statements

financial statements

financial statements

2007

2006

2007

Assets

Note

2006

(Restated)

2007

(Restated)

Current liabilities

Cash and cash equivalents

6

2,188,991,774

1,919,576,970

9,168,240

15,622,582

Current investments

7

7,685,085

4,358,600

-

-

5, 8

1,467,001,317

1,317,930,493

-

-

Short-term loans to and amounts

Inventories Other current assets

5

4,371,057

50,951,648

3,916,012,461

11,035,118,471

9

28,056,925,651

28,315,158,270

-

-

10

1,403,965,020

1,914,238,542

8,481,487

16,988,878

33,128,939,904

33,522,214,523

3,933,662,188

11,067,729,931

Total current assets

Bank overdrafts and short-term loans from financial institutions

15

5,998,233,815

6,753,305,295

4,797,684,522

3,029,559,266

Trade accounts payable

16

2,249,329,022

2,275,670,644

-

-

Short-term guaranteed bonds

15

-

2,200,000,000

-

2,200,000,000

15

3,000,000,000

2,300,000,000

3,000,000,000

2,300,000,000

15

1,755,000,000

1,500,000,000

1,755,000,000

1,500,000,000

5, 15

69,141,215

4,837,042,378

2,115,288,548

13,084,828,757

2,773,848,081

2,180,870,323

146,248,940

47,791,738

3,203,278,986

4,103,314,358

161,542,579

394,209,562

19,048,831,119

26,150,202,998

11,975,764,589

22,556,389,323

Current portion of long-term guaranteed bonds Current portion of long-term loans Short-term loans from and amounts due to related parties

Non-current assets Investments in subsidiaries and associates

Income tax payable 11

124,518,368

135,490,042

71,470,329,894

63,594,730,188

Other current liabilities

7

3,633,579

3,753,619

-

-

Total current liabilities

due from related parties

5

1,172,250

13,563,000

9,411,471,969

5,500,898,900

Property, plant and equipment

12

43,216,507,663

49,428,039,362

71,600,623

845,926,385

Intangible assets

13

978,770,498

354,876,536

16,165,989

12,353,346

Other non-current assets

14

2,073,413,637

2,121,574,962

351,336,250

357,128,650

46,398,015,995

52,057,297,521

81,320,904,725

70,311,037,469

Other long-term investments

2006

(in Baht)

Current assets

due from related parties

2007

Liabilities and shareholders’ equity

(in Baht)

Trade accounts receivable

2006

17

Long-term loans to and amounts

Total non-current assets

Total assets

79,526,955,899

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

85,579,512,044

85,254,566,913

81,378,767,400

Non-current liabilities Long-term guaranteed bonds

15

-

3,000,000,000

-

3,000,000,000

Long-term loans from financial institutions

15

5,400,000,000

3,755,000,000

5,400,000,000

3,755,000,000

5, 15

-

-

6,540,500,000

4,372,200,000

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

24,617,015,444

33,025,956,206

23,916,382,489

33,683,589,323

Long-term loans from related parties

Total liabilities

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

Note

Consolidated

Separate

Consolidated

Separate

financial statements

financial statements

financial statements

financial statements

2007

2006

2007

Liabilities and shareholders’ equity

Note

2006

2007

2007

(Restated)

2006

(Restated)

(in Baht)

(in Baht)

Shareholders’ equity Share capital

2006

Revenues

5

Revenue from sales

18

100,540,895,079

97,797,921,895

-

-

40,834,243

56,452,361

775,352,387

858,621,337

Authorised share capital

29,000,000,000

29,000,000,000

29,000,000,000

29,000,000,000

Interest income

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

Dividends

-

-

18,985,153,408

8,055,408,868

228,524,668

77,938,829

89,527,428

4,873,832

28,641,891

23,684,083

-

100,838,895,881

97,955,997,168

22,427,338,581

12,351,375,010

70,872,565,833

69,325,121,958

-

-

13,689,414,856

12,684,556,582

1,154,217,891

943,322,290

84,561,980,689

82,009,678,540

1,154,217,891

943,322,290

16,276,915,192

15,946,318,628

21,273,120,690

11,408,052,720

Difference arising from common control transactions Reserves

(17,141,406,365)

(17,141,406,365)

-

-

17,215,736,603

Currency translation changes

21

Share of profits from investments

19

Share premium

Other income

(208,076,374)

17,215,736,603

(19,508,334)

17,215,736,603

17,215,736,603

-

-

-

134,521,429

accounted for using the equity method Total revenues

-

Fair value changes and revaluation surpluses

4,388,935,374

6,586,263,579

Retained earnings Appropriated - legal reserve Unappropriated Total shareholders’ equity

Expenses

5

Cost of sales 19

2,900,000,000

1,700,000,000

2,900,000,000

1,700,000,000

Selling and administrative expenses

22,644,726,217

19,102,445,355

16,112,422,821

3,534,895,045

Total expenses

54,909,940,455

52,553,555,838

61,338,184,424

47,695,178,077

22

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 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

10,383,065,183

10,054,777,144

19,418,312,097

9,005,466,892

0.41

0.42

0.77

0.38

Net profit

Basic earnings per share

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

26

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


from common

paid-up

-

Dividends

for the common control transactions

-

Legal reserve Dividends

(17,141,406,365)

-

-

-

-

-

-

-

-

Dividends

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

25,110,025,000

-

Legal reserve

Balance at 31 December 2007

-

-

-

-

-

-

-

Net profit Total recognised income and expense

-

17,141,406,365

-

28

25,110,025,000

(17,141,406,365)

-

-

-

Net surplus on property revaluation

Change in shareholders’ equity for 2007

Restated balance

29

25,110,025,000

Balance at 1 January 2007 Change in accounting policy

25,110,025,000

Balance at 31 December 2006

3,110,025,000

18

28

Dividends Issue of ordinary shares

-

-

-

-

15,979,264,833

(15,979,264,833)

Legal reserve

22,000,000,000

-

22,000,000,000

share capital control transactions

from common paid-up

-

29

Note

Difference arising Issued and

Net profit

Changes in shareholders’ equity for 2006

Restated balance

Changes in accounting policy

Balance at 1 January 2006

For the years ended 31 December 2007 and 2006

Statements of Changes in Shareholders’ Equity

Thai Beverage Public Company Limited and its Subsidiaries

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

25,110,025,000

-

Total recognised income and expense

Balance at 31 December 2007

-

Net profit

-

-

-

28

(17,141,406,365)

3,110,025,000 25,110,025,000

27,039,805

(1,505,240,976)

-

-

(32,415,518)

(23,871,663)

(8,543,855)

(8,543,855)

-

(15,630,789,676)

-

Net expense recognised directly in shareholder’s equity

of foreign operations

Translation loss relating to financial statements

Net surplus on property revaluation

Change in shareholders’ equity for 2007

Balance at 31 December 2006

Issue of ordinary shares

business restructuring

Increase in share capital in subsidiaries before

18

-

Legal reserve

-

-

Total recognised income and expense

Consideration paid to shareholders of subsidiaries

-

Net profit

-

-

22,000,000,000

share capital control transactions

-

28

Note

Difference arising

Issued and

Net expense recognised directly in shareholder’s equity

of foreign operations

Translation loss relating to financial statements

Net surplus on property revaluation

Change in shareholders’ equity for 2006

Balance at 1 January 2006

For the years ended 31 December 2007 and 2006

Statements of Changes in Shareholders’ Equity

Thai Beverage Public Company Limited and its Subsidiaries

17,215,736,603

-

-

-

-

-

17,215,736,603

-

17,215,736,603

17,215,736,603

17,215,736,603

-

-

-

-

-

-

-

-

-

-

-

-

19,508,334

(19,508,334)

-

-

-

-

-

-

5,341,471

-

-

2,900,000,000

-

1,200,000,000

-

-

1,700,000,000

-

1,700,000,000

1,700,000,000

-

-

590,000,000

-

1,110,000,000

-

1,110,000,000

to legal reserve

Appropriated

-

-

22,644,726,217

(5,775,305,750)

(1,200,000,000)

10,517,586,612

10,383,065,183

134,521,429

-

134,521,429

19,102,445,355

-

-

-

(8,042,102,750)

(590,000,000)

10,078,648,807

10,078,648,807

-

-

-

17,655,899,298

Unappropriated

16,112,422,821

(5,775,305,750)

(1,200,000,000)

19,552,833,526

19,418,312,097

134,521,429

3,534,895,045

(15,567,550,310)

19,102,445,355

3,534,895,045

-

(8,042,102,750)

(590,000,000)

9,005,466,892

3,161,530,903

(14,494,368,395)

17,655,899,298

Unappropriated

Retained earnings

2,900,000,000

-

1,200,000,000

-

-

-

-

-

1,700,000,000

-

-

-

-

590,000,000

-

-

-

-

-

1,110,000,000

(134,521,429)

(134,521,429)

134,521,429

(6,451,742,150)

6,586,263,579

134,521,429

-

-

-

-

134,521,429

(6,450,214,015)

6,584,735,444

surpluses

and revaluation

Fair value changes

(in Baht)

(5,341,471)

changes

premium

Currency

Reserves

translation

-

4,388,935,374

-

-

(2,197,328,205)

-

(2,197,328,205)

-

(2,197,328,205)

6,586,263,579

-

-

-

-

-

1,528,135

-

1,528,135

-

1,528,135

Appropriated

Retained earnings

to legal reserve

Separate financial statements (Restated)

(208,076,374)

-

-

(188,568,040)

-

(188,568,040)

(188,568,040)

-

(19,508,334)

-

-

-

-

-

(14,166,863)

-

(14,166,863)

(14,166,863)

-

Share

17,215,736,603

-

-

-

-

-

-

-

17,215,736,603

17,215,736,603

-

-

-

-

-

-

-

-

-

6,584,735,444

surpluses

and revaluation

Fair value changes

(in Baht)

(5,341,471)

changes

-

translation

Share premium

Currency

Reserves

Consolidated financial statements

61,338,184,424

(5,775,305,750)

-

19,418,312,097

19,418,312,097

-

47,695,178,077

(4,858,377,761)

52,553,555,838

47,695,178,077

20,325,761,603

(8,042,102,750)

-

9,005,466,892

26,406,052,332

(4,959,976,106)

31,366,028,438

equity

Total shareholders’

54,909,940,455

(5,775,305,750)

-

8,131,690,367

10,383,065,183

(2,251,374,816)

(188,568,040)

(2,062,806,776)

52,553,555,838

20,325,761,603

27,039,805

(1,505,240,976)

(8,042,102,750)

-

10,033,594,561

10,054,777,144

(21,182,583)

(22,710,718)

1,528,135

31,714,503,595

equity

Total shareholders’


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

Note

Consolidated

Separate

Consolidated

Separate

financial statements

financial statements

financial statements

financial statements

2007

2006

2007

Note

2006

2007

2006

2007

(Restated)

(Restated)

(in Baht)

(in Baht) Changes in operating assets and liabilities

Cash flows from operating activities Net profit

10,383,065,183

10,054,777,144

19,418,312,097

9,005,466,892

Interest income Interest expense Unrealised loss on exchange rate

4,974,695,900

(40,834,243)

4,651,978,462

(56,452,361)

28,966,567

24,071,862

(775,352,387)

(858,621,337)

1,047,277,561

1,568,651,172

1,577,560,366

2,253,267,473

5,841,586

11,720,775

1,164,320

16,321,434

Allowance for obsolete inventories Allowance for impairment loss on property

-

57,800,991

35,968,778

1,293,629,337

Inventories

240,314,893

76,897,733

-

Other current assets

543,222,112

657,219,479

8,507,390

Trade accounts payable

(52,736,803)

583,226,076

-

-

(152,525,782)

45,335,778

16,230,422

5,885,734

(139,223,931)

78,444,379

Amounts due to related parties

Other non-current liabilities

(1,220,696,777) 4,841,922

(2,775,617)

117,900

-

(2,000,000,000)

-

50,000,000

9,375,000

9,375,000

145,536,197

354,960,794

-

-

Advance payments to a specialist

58,768,300

-

-

-

Income taxes paid

(4,253,594,691)

(4,671,000,532)

Net cash provided by operating activities

16,443,526,789

14,362,352,061

(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 Income tax expense

(1,444,554,668)

50,000,000

(Gain) loss on sale and disposal of property, plant and equipment and intangible assets

143,293,100

Other current liabilities

Amortisation of advance payments to a specialist

(95,274,423)

Trade accounts receivable Amounts due from related parties

Adjustments for Depreciation and amortisation

2006

(28,641,891)

(23,684,083)

-

-

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

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

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

(178,791,025) 2,488,704,230

(354,909,409) (7,432,139)

(375,000,000) (198,576,232) 1,692,253,453


Annual Report 2007

Thai Beverage Public Company Limited

126

127

Thai Beverage Public Company Limited and its Subsidiaries

Statements of Cash Flows For the years ended 31 December 2007 and 2006

Note

Consolidated

Separate

Consolidated

Separate

financial statements

financial statements

financial statements

financial statements

2007

2006

2007

Note

2006

2007

2006

2007

(Restated)

(Restated)

(in Baht)

(in Baht)

Cash flows from investing activities Interest received

Cash flows from financing activities 40,930,836

58,093,432

780,791,231

847,583,522

-

16,975,616

20,290,212,836

8,055,408,868

5,640,990

-

-

-

40,850,000

1,908,300,440

39,613,566

-

Dividends received Current investments

(3,326,485)

Loans to related parties Investments in subsidiaries and associates

(9,180,660,910)

(1,144,799,640) (509,999,340)

Consideration paid to shareholders of subsidiaries for the common control transactions

-

(1,505,240,976)

-

-

Increase in share capital in subsidiaries

Purchase of property, plant and equipment

(1,420,545,600)

(1,708,451,681)

(2,086,173,156)

Dividends paid

(5,775,305,750)

(8,042,102,750)

(5,775,305,750)

(8,042,102,750)

(1,140,914,252)

(33,405,319,840)

1,768,125,256

(33,570,440,734)

Bank overdrafts and short-term loans from financial institutions Proceeds from short-term guaranteed bonds

-

Repayment of short-term guaranteed bonds

(2,200,000,000)

Loans from related parties

(4,615,231,380)

27,039,805

-

-

Repayment of long-term guaranteed bonds

120,039

26

7,820

-

Proceeds from issuance of share capital

(1,454,554,671)

(4,231,904,150)

933,321,336

51,883,323

Purchase of intangible assets

(26,925,503)

(12,511,963)

Decrease in intangible assets

11,202,717

Other non-current assets

(1,211,354)

37,899

(24,843,220)

(9,205,674) 819,205,608

(8,595,148) (3,582,600)

(129,607,370) 58,906

(6,666,764) (4,716,900)

Net cash outflow on acquisition of

(2,300,000,000)

(253,908,978)

-

-

-

financial institutions

(5,573,979,218)

14,596,473,603

7,107,261,282

financial institutions Net cash used in financing activities

629,727,420 5,300,000,000

-

4,700,000,000

(2,200,000,000)

(2,500,000,000)

(8,776,000,000)

1,815,500,000

(2,300,000,000)

5,300,000,000

-

-

20,325,761,603

-

20,325,761,603

5,400,000,000

26,600,000,000

5,400,000,000

26,600,000,000

(3,500,000,000)

(22,431,600,000)

(3,500,000,000)

(21,345,000,000)

(15,270,805,448)

(10,244,079,167)

(17,091,632,175)

(8,802,455,037)

(188,568,040)

(22,710,718)

-

-

Net increase (decrease) in cash and 269,414,804

Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

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

(2,500,000,000)

-

Repayment of long-term loans from

cash equivalents (714,738,497)

4,700,000,000

Proceeds from long-term loans from

Currency translation changes

Net cash provided by (used in) investing activities

(1,139,354,066)

-

Decrease in property, plant and equipment

indirect subsidiaries

Interest paid

Proceeds from long-term guaranteed bonds

before business restructuring Sale of long-term investments

2006

6

(1,478,417,042)

(6,454,342)

(2,940,302)

1,919,576,970

3,397,994,012

15,622,582

18,562,884

2,188,991,774

1,919,576,970

9,168,240

15,622,582

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


Annual Report 2007

Thai Beverage Public Company Limited

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

2

Basis of preparation of the financial statements

20

Segment information

3

Significant accounting policies

21

Other income

4

Business restructuring

22

Selling and administrative expenses

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

10

Other current assets

28

Dividends

11

Investments in subsidiaries and associates

29

Changes in accounting policy

12

Property, plant and equipment

30

Financial instruments

13

Intangible assets

31

Commitments with non-related parties

14

Other non-current assets

32

Litigation

15

Interest-bearing liabilities

33

Events after the balance sheet date

16

Trade accounts payable

34

Thai Accounting Standards (TAS) not yet adopted

17

Other current liabilities

35

Reclassification of accounts

18

Share capital

36

Significant differences between Thai GAAP and IFRS

on 29 October 2003. The registered office of the Company is at 14 Vibhavadi Rangsit Road, Chomphon, Chatuchak, Bangkok.

The Company was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) in May 2006.

Ownership Country of Name of the entity

Type of business

incorporation

1. Beer Thai (1991) PCL.

Beer brewery

2. Beer Thip Brewery (1991) Co., Ltd.

interest (%) 2007

2006

Thailand

100.00

100.00

Beer brewery

Thailand

100.00

100.00

3. Sangsom Co., Ltd.

Spirits distillery

Thailand

100.00

100.00

4. Fuengfuanant Co., Ltd.

Spirits distillery

Thailand

100.00

100.00

5. Mongkolsamai Co., Ltd.

Spirits distillery

Thailand

100.00

100.00

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

Direct subsidiaries


Annual Report 2007

Thai Beverage Public Company Limited

130

131

Ownership Country of Name of the entity

Type of business

incorporation

16. Nateechai Co., Ltd.

Spirits distillery

17. Luckchai Liquor Trading Co., Ltd.

Ownership

interest (%)

Country of Type of business

incorporation

49. International Beverage Holdings Ltd.

Holding company

100.00

50. Cosmos Brewery (Thailand) Co., Ltd.

100.00

100.00

Thailand

100.00

100.00

Beer distributor

Thailand

100.00

100.00

production of concentrate

21. Pomkit Co., Ltd.

Beer distributor

Thailand

100.00

100.00

materials

22. Pomkung Co., Ltd.

Beer distributor

Thailand

100.00

100.00

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

25. Pomburapa Co., Ltd.

Beer distributor

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

28. Num Palang Co., Ltd.

Spirits distributor

Thailand

100.00

100.00

29. Num Muang Co., Ltd.

Spirits distributor

Thailand

100.00

100.00

30. Num Nakorn Co., Ltd.

Spirits distributor

Thailand

100.00

100.00

31. Num Thurakij Co., Ltd.

Spirits distributor

Thailand

100.00

100.00

32. Thipchalothorn Co., Ltd.

Beer and sprits agency

Thailand

100.00

100.00

33. Krittayabun Co., Ltd.

Beer and sprits agency

Thailand

100.00

100.00

2007

2006

Thailand

100.00

100.00

Spirits distillery

Thailand

100.00

18. Sura Piset Thipparat Co., Ltd.

Spirits distillery

Thailand

19. Thai Alcohol PCL.

Alcohol distillery

20. Pomthip Co., Ltd.

Name of the entity

2007

2006

Hong Kong

100.00

100.00

Beer brewery

Thailand

100.00

100.00

51. T.C.C. Cosmo Corporation Ltd.

Trademark holding

Thailand

100.00

100.00

52. Beer Chang Co., Ltd.

Trademark holding and

Thailand

100.00

100.00

materials

Thailand

100.00

100.00

Holding company

Thailand

100.00

100.00

55. Thai Thum Distillery Co., Ltd. #

Trading of spirits

Thailand

99.90

99.90

56. Sura Piset Sahasan Co., Ltd. #

Production and distribution Thailand

100.00

100.00

of spirits

Thailand

100.00

100.00

58. Muangkij Co., Ltd. #

Import of oak woods

Thailand

100.00

100.00

59. Sint Ek Panich Co., Ltd. #

Mining

Thailand

100.00

100.00

60. Pan Alcohol Co., Ltd. #

Production and distribution of vinegar

Thailand

100.00

100.00

61. Banglen Agriculture Co., Ltd. #

Agriculture

Thailand

100.00

100.00

62. Vitayathan Co., Ltd.

Environmental public relations

Thailand

100.00

100.00

63. InterBev (Singapore) Limited

Trading of alcoholic beverages

Singapore

100.00

100.00

64. InterBev (Cambodia) Co., Ltd.

Trading of alcoholic beverages

Cambodia

100.00

100.00

65. InterBev Malaysia Sdn. Bhd.

Trading of alcoholic beverages

Malaysia

100.00

100.00

53. Archa Beer Co., Ltd.

54. Sura Piset Phatra Lanna Co., Ltd. ##

Trademark holding and

Indirect subsidiaries

of spirits 57. Sura Piset Sampan Co., Ltd. #

Production and distribution

34. Surathip Co., Ltd.

Spirits agency

Thailand

100.00

100.00

35. Sunthronpirom Co., Ltd.

Spirits agency

Thailand

100.00

100.00

36. Piromsurang Co., Ltd.

Spirits agency

Thailand

100.00

100.00

37. Bionic Humus Co., Ltd.

Trading of fertilizer

Thailand

100.00

100.00

38. Maharas Agri Co., Ltd.

Japanese rice farming

Thailand

100.00

100.00

39. Thai Molasses Co., Ltd.

Trading of molasses

Thailand

99.72

99.72

40. Additive Food Co., Ltd.

Trading of feeds

Thailand

100.00

100.00

41. Pan International (Thailand) Co., Ltd.

Trading of supplies and procurement

Thailand

100.00

100.00

42. Charun Business 52 Co., Ltd.

Brick producer

Thailand

100.00

100.00

43. Thai Cooperage Co., Ltd.

Oak barrel producer

Thailand

100.00

100.00

44. Bang-Na Logistic Co., Ltd.

Trading of bottles

Thailand

100.00

100.00

Transportation

Thailand

100.00

100.00

trading/ international marketing Thailand

100.00

100.00

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

66. International Beverage Holdings Limited

45. Thai Beverage Logistics Co., Ltd.

(Formerly: Sahatipkarnkonsong Co., Ltd.) 46. Thai Beverage Marketing Co., Ltd.

interest (%)

USA, Inc. (Formerly: InterBev USA Inc.) 67. Best Spirits Company Limited

United States Trading of alcoholic beverages

of America

100.00

100.00

Trading of alcoholic beverages

Hong Kong

100.00

100.00

Holding company

United Kingdom

100.00

100.00

Thailand

80.82

-

Thailand

83.20

-

68. International Beverage Holdings

(UK) Limited (Formerly: PaciďŹ c Spirits (UK) Limited) 69. United Products Co., Ltd.

Import and export spirits for

Production and distribution of spirits

70. S P M Foods and Beverages Co., Ltd.

Production and distribution


Annual Report 2007

Thai Beverage Public Company Limited

132

Ownership Country of Name of the entity

Type of business

incorporation

133

2. Basis of preparation of the financial statements

interest (%) 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

72. Inver House Distillers Limited

Production and distribution of spirits

United Kingdom

100.00

100.00

73. Blairmhor Distillers Limited #

Dormant

United Kingdom

100.00

100.00

74. Wee Beastie Limited

Production and distribution of alcoholic beverages

United Kingdom

100.00

100.00

Dormant

United Kingdom

100.00

100.00

Dormant

United Kingdom

100.00

100.00

77. The Pulteney Distillery Company Limited #

Dormant

United Kingdom

100.00

100.00

78. The Balblair Distillery Company Limited #

Dormant

United Kingdom

100.00

100.00

79. R. Carmichael & Sons Limited #

Dormant

United Kingdom

100.00

100.00

80. J MacArthur Junior & Company Limited #

Dormant

United Kingdom

100.00

100.00

81. Mason & Summers Limited #

Dormant

United Kingdom

100.00

100.00

82. Hankey Bannister Limited #

Dormant

United Kingdom

100.00

100.00

83. James Catto & Company Limited #

Dormant

United Kingdom

100.00

100.00

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 prepared in accordance with Thai Accounting Standards (“TAS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) and with generally accepted accounting principles in Thailand.

During 2007, the FAP issued the following revised TAS relevant to the Group’s operations and effective for accounting periods beginning on or after 1 January 2007:

75. Speyburn-Glenlivet Distillery

Company Limited # 76. The Knockdhu Distillery

Company Limited #

TAS 44 (revised 2007) Consolidated and Separate Financial Statements TAS 45 (revised 2007) Investments in Associates

The adoption of these revised TAS has resulted in a change in the Company’s accounting policy for interests in subsidiaries and associates in the separate financial statements of the Company. The effects of this change are disclosed in note 29.

In addition to the above revised TAS, the FAP has issued during 2007 a number of other new and revised TAS which are only effective for financial statements beginning on or after 1 January 2008 and have not been adopted in the preparation of these financial statements. These new and revised TAS are disclosed in note 34.

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** 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

88. Inver House Distribution SA #

Dormant

France

50.02

50.02

policies.

The preparation of financial statements in conformity with TAS requires management to make judgements, estimates 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

3. Significant accounting policies

135

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 carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group

short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the 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 Business combinations involving businesses under common control have been accounted for in a manner similar to a

Trade and other accounts receivables (including balances with related parties) are stated at their invoice value less allowance for doubtful accounts.

pooling of interests, whereby the assets, liabilities and contingent liabilities transferred have been accounted for at book values.

Business combinations are accounted for using the purchase method. The cost of an acquisition is measured at the

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.

fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

(f) Inventories Inventories are stated at the lower of cost and net realisable value.

(b) Foreign currencies Foreign currency transactions

Cost of raw material, packaging materials, work in progress and finished goods is calculated using the weighted average cost principle, and comprises all costs of purchase, costs of conversion and other costs incurred in bringing

Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions.

the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of overheads based on normal operating capacity.

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

Vehicles

3-10

years

Property that is being constructed or developed for future use is classified as property, plant and equipment and stated 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 (o) Revenue

useful lives are as follows:

Revenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts. Goodwill Computer software Trademark Broadcasting rights Leasehold

20 years

(straight-line method)

3-10 years

(straight-line method)

Sale of goods and services rendered

10 years

(straight-line method)

Revenue is recognised in the statement of income when the significant risks and rewards of ownership have been

(unit of production method)

transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or

(straight-line method)

there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return

4 years

Lease term

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

of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest

141

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 Name of the entity

Country of

incorporation

Nature of relationships

28. Num Palang Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

29. Num Muang Co., Ltd.

Thailand

30. Num Nakorn Co., Ltd.

Name of the entity

incorporation

Nature of relationships

64. InterBev (Cambodia) Co., Ltd.

Cambodia

Indirect subsidiary, 100% shareholding

Direct subsidiary, 100% shareholding

65. InterBev Malaysia Sdn. Bhd.

Malaysia

Indirect subsidiary, 100% shareholding

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.)

32. Thipchalothorn Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

67. Best Spirits Company Limited

33. Krittayabun Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

68. International Beverage Holdings (UK) Limited

34. Surathip Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

35. Sunthronpirom Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

36. Piromsurang Co., Ltd.

Thailand

37. Bionic Humus Co., Ltd.

of America

Indirect subsidiary, 100% shareholding

Hong Kong

Indirect subsidiary, 100% shareholding

United Kingdom

Indirect subsidiary, 100% shareholding

69. United Products Co., Ltd.

Thailand

Indirect subsidiary, 80.82% shareholding

Direct subsidiary, 100% shareholding

70. S P M Foods and Beverages Co., Ltd.

Thailand

Indirect subsidiary, 83.20% shareholding

Thailand

Direct subsidiary, 100% shareholding

71. Blairmhor Limited

United Kingdom

Subsidiary of indirect subsidiary,

38. Maharas Agri Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

39. Thai Molasses Co., Ltd.

Thailand

Direct subsidiary, 99.72% shareholding

40. Additive Food Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

41. Pan International (Thailand) Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

42. Charun Business 52 Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

43. Thai Cooperage Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

44. Bang-Na Logistic Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

45. Thai Beverage Logistics Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

46. Thai Beverage Marketing Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

47. Dhanasindhi Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

48. Dhospaak Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

49. International Beverage Holdings Ltd.

Hong Kong

Direct subsidiary, 100% shareholding

50. Cosmos Brewery (Thailand) Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

51. T.C.C. Cosmo Corporation Ltd.

Thailand

Direct subsidiary, 100% shareholding

52. Beer Chang Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

53. Archa Beer Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

54. Sura Piset Phatra Lanna Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

55. Thai Thum Distillery Co., Ltd.

Thailand

Indirect subsidiary, 99.90% shareholding

56. Sura Piset Sahasan Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

57. Sura Piset Sampan Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

58. Muangkij Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

59. Sint Ek Panich Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

60. Pan Alcohol Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

61. Banglen Agriculture Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

62. Vitayathan Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

63. InterBev (Singapore) Limited

Singapore

Indirect subsidiary, 100% shareholding

(Formerly: Pacific Spirits (UK) Limited)

100% shareholding 72. Inver House Distillers Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

73. Blairmhor Distillers Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

74. Wee Beastie Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

75. Speyburn-Glenlivet Distillery Company Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

76. The Knockdhu Distillery Company Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

77. The Pulteney Distillery Company Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

78. The Balblair Distillery Company Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

79. R. Carmichael & Sons Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

80. J MacArthur Junior & Company Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

81. Mason & Summers Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

82. Hankey Bannister Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

83. James Catto & Company Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding

84. Glen Calder Blenders Limited

United Kingdom

Subsidiary of indirect subsidiary, 100% shareholding


Annual Report 2007

Thai Beverage Public Company Limited

144

145

Country of Name of the entity

85. Moffat & Towers Limited

Country of

incorporation

Nature of relationships

United Kingdom

Subsidiary of indirect subsidiary,

Name of the entity

102. T.C.C. Technology Co., Ltd.

incorporation

Nature of relationships

Thailand

Directors and controlling shareholders hold substantial shares indirectly

100% shareholding 86. Liquorland Limited

United Kingdom

Associates of indirect subsidiary,

103. T.C.C. Capital Land Limited

Thailand

substantial shares indirectly

49.90% shareholding 87. Inver House Polska Limited

Poland

Associates of indirect subsidiary,

104. Great Oriole Limited

40.00% shareholding 88. Inver House Distribution SA

France

Associates of indirect subsidiary,

105. Madrigal Trading Limited

50.00% shareholding 89. Pisetkij Co., Ltd.

Thailand

Thailand

Thailand

93. New Noble Property and Loan Fund

Thailand

Thailand

Have common controlling shareholders

British Virgin

Directors and shareholders are the directors

Islands

of subsidiary

106. Thai Glass Industries PCL.

Thailand

Directors and controlling shareholders hold substantial shares indirectly

107. Bang-Na Glass Co., Ltd.

Thailand

108. Plaza Athenee Hotel (Thailand) Co., Ltd.

Thailand

are the directors and hold substantial shares

substantial shares indirectly

indirectly

Directors and controlling shareholders

investment fund Thailand

Directors and controlling shareholders

Directors and controlling shareholders hold

109. TCC Hotel Collection Co., Ltd.

Thailand

Directors and controlling shareholders hold substantial shares indirectly

are the principal unit holder of this real estate

94. The Maewang Sugar Industry Co., Ltd.

Directors and controlling shareholders hold substantial shares indirectly

Directors and controlling shareholders are relatives of controlling person

92. The Southeast Insurance (2000) Co., Ltd.

Islands

Directors and controlling shareholders hold substantial shares indirectly

91. PS Recycle Co., Ltd.

British Virgin

Directors and controlling shareholders hold substantial shares indirectly

90. Oishi Trading Co., Ltd.

Directors and controlling shareholders hold

110. Siam Realty Co., Ltd.

Thailand

Directors and controlling shareholders hold substantial shares indirectly

Directors and controlling shareholders hold substantial shares indirectly

95. The Chonburi Sugar Corp. Ltd.

Thailand

Directors and controlling shareholders hold substantial shares indirectly

96. The Utaradit Sugar Industry Co., Ltd.

Thailand

Directors and controlling shareholders hold Transactions

Pricing policies

substantial shares indirectly

Sale of finished goods

Agreed prices which approximate market prices

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

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

Directors and controlling shareholders hold

Interest income and expense

Rate as mutually agreed by shareholders with reference

substantial shares indirectly 97. The Suphanburi Sugar Industry Co., Ltd.

98. Dynamic Assets Property and Loan Fund

99. Berli Jucker PCL.

100. Thai Beverage Can Co., Ltd.

Thailand

Thailand

Thailand

Thailand

Directors and controlling shareholders hold

50% shares 101. South East Capital Co., Ltd.

Thailand

The pricing policies for particular types of transactions are explained further below:

Directors and controlling shareholders hold substantial shares indirectly

interest rates quoted by domestic commercial banks


Annual Report 2007

Thai Beverage Public Company Limited

146

Significant transactions for the years ended 31 December 2007 and 2006 with related parties were summarised

147

Balances as at 31 December 2007 and 2006 with related parties were as follows:

as follows: Consolidated

Separate

financial statements

financial statements

2007

2006

2007

Trade accounts receivable from related parties

2006

(in million Baht) Subsidiaries

Consolidated

Separate

financial statements

financial statements

2007

2006

2007

2006

Management fees

-

-

2,577

3,432

Dividends

-

-

18,985

8,055

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

14

21

-

-

144

146

-

-

14

33

-

-

4,826

4,800

-

-

Overhead costs

225

177

-

-

Sales of property, plant and equipment

819

1

819

-

32

4

-

-

Other income

104

18

64

-

Other expenses

296

274

73

37

29

24

-

-

-

1,505

-

-

66

109

-

-

264

265

262

255

Other related parties Revenue from sales Service income Purchases of raw materials and packaging

Purchases of property, plant and equipment

Share of profits from investments accounted for using the equity method Consideration paid for common control transactions Interest expense

Directors’ remuneration

(in million Baht) Other related companies

Total


-

Sura Piset Thipparat Co., Ltd. Thai Alcohol PCL. Pomthip Co., Ltd. Pomkit Co., Ltd. Pomkung Co., Ltd. Pomchok Co., Ltd. Pomcharoen Co., Ltd. Pomburapa Co., Ltd. Num Yuk Co., Ltd. Num Kijjakarn Co., Ltd.

-

Bionic Humus Co., Ltd. Maharas Agri Co., Ltd.

-

T.C.C. Cosmo Corp., Ltd. Sura Piset Phatra Lanna Co., Ltd. Total subsidiaries

-

The Utaradit Sugar Industry Co., Ltd. The Suphanburi Sugar Industry Co., Ltd. Others Total related companies Total

-

The Chonburi Sugar Corp. Ltd.

-

New Noble Property And Loan Fund The Maewang Sugar Industry Co., Ltd.

-

Pisetkij Co., Ltd.

Related companies

-

International Beverage Holdings Ltd.

(Formerly: Sahatipkarnkonsong Co., Ltd.

-

-

Piromsurang Co., Ltd

Thai Beverage Logistics Co., Ltd.

-

Sunthronpirom Co., Ltd.

-

Thipchalothorn Co., Ltd.

-

-

Num Thurakij Co., Ltd.

-

-

Num Nakorn Co., Ltd.

Surathip Co., Ltd.

-

Num Muang Co., Ltd.

Krittayabun Co., Ltd.

-

loans to

Num Palang Co., Ltd.

Subsidiaries (continued)

amounts due from related parties

Short-term

-

Short-term loans to and

-

-

Kankwan Co., Ltd.

Luckchai Liquor Trading Co., Ltd.

-

S.S. Karnsura Co., Ltd.

Nateechai Co., Ltd.

-

Athimart Co., Ltd.

-

-

Sura Bangyikhan Co., Ltd.

Simathurakij Co., Ltd.

-

Kanchanasingkorn Co., Ltd.

-

-

Thanapakdi Co., Ltd.

United Winery and Distillery Co., Ltd.

-

Mongkolsamai Co., Ltd.

-

-

Fuengfuanant Co., Ltd.

-

-

Sangsom Co., Ltd.

Red Bull Distillery (1988) Co., Ltd.

-

Beer Thip Brewery (1991) Co., Ltd.

Theparunothai Co., Ltd.

-

loans to

Short-term

Beer Thai (1991) PCL.

Subsidiaries

amounts due from related parties

Short-term loans to and

2007

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Total

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

loans to

Short-term

4

4

2

-

-

-

-

-

2

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

4

4

2

-

-

-

-

-

2

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Total

51 51

-

8

-

12

7

8

6

3

7

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

Amounts

2006

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

loans to

Short-term

2006

Amounts

Consolidated financial statements

Amounts

2007

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

Amounts

Consolidated financial statements

loans to

51

51

8

12

7

8

6

3

7

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2007

3,548

-

-

-

-

-

368

-

-

-

-

-

-

-

-

-

368

2

-

1

-

-

-

1

3

17

42

38

7

5

9

8

due from

Amounts

2007

21

12

7

5

9

7

16

9

7

3

7

3

5

1

9

3

4

3

3

8

3

1

1

2

6

26

54

due from

Amounts

-

3,548

-

3

12

67

-

-

-

-

-

-

120

-

-

-

-

loans to

Short-term

-

85

-

-

-

-

-

-

124

-

431

219

519

-

-

-

-

-

-

-

182

-

-

-

-

-

1,786

(in million Baht)

Total

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(in million Baht)

Total

Short-term

-

-

-

-

-

-

-

-

244

760

197

477

70

-

2,477

-

314

-

-

1,494

348

-

-

-

-

-

1,539

loans to

3,916

-

-

-

-

-

-

-

-

3,916

2

3

13

67

-

-

1

3

17

42

158

7

5

9

8

Total

9,367

-

-

-

-

-

-

-

-

9,367

-

-

1,276

50

13

23

-

-

-

-

85

-

-

-

-

loans to

Short-term

Separate financial statements

21

97

7

5

9

7

16

9

131

3

438

222

524

1

9

3

4

3

3

8

185

1

1

2

6

26

1,840

Total

Short-term

Separate financial statements 2006

1,668

-

-

-

-

-

-

-

-

1,668

-

-

8

-

-

-

14

61

72

190

203

30

25

47

39

due from

Amounts

2006

89

67

35

21

48

40

107

37

14

2

11

12

9

7

32

10

14

12

13

45

6

4

3

12

47

146

136

due from

Amounts

11,035

-

-

-

-

-

-

-

-

11,035

-

-

1,284

50

13

23

14

61

72

190

288

30

25

47

39

Total

89

67

35

21

48

40

107

37

258

762

208

489

79

7

2,509

10

328

12

13

1,539

354

4

3

12

47

146

1,675

Total


Total

Dynamic Assets Property and Loan Fund

Related companies

Total subsidiaries

Sura Piset Phatra Lanna Co., Ltd.

International Beverage Holdings Ltd.

Num Yuk Co., Ltd.

Thai Alcohol PCL.

Sura Piset Thipparat Co., Ltd.

Luckchai Liquor Trading Co., Ltd.

Nateechai Co., Ltd.

Simathurakij Co., Ltd.

Red Bull Distillery (1988) Co., Ltd.

Kankwan Co., Ltd.

Sura Bangyikhan Co., Ltd.

Kanchanasingkorn Co., Ltd.

Thanapakdi Co., Ltd.

Beer Thai (1991) PCL.

Subsidiaries

amounts due from related parties

Long-term loans to and

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

loans to

Long-term

2007

1

1

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

Amounts

1

1

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Total

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

loans to

Long-term

2006

14

14

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

Amounts

Consolidated financial statements

14

14

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9,411

-

9,411

340

196

155

1,145

600

859

61

96

565

106

785

286

7

4,210

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

due from

loans to

(in million Baht)

Total

2007

Amounts

Long-term

9,411

-

9,411

340

196

155

1,145

600

859

61

96

565

106

785

286

7

4,210

Total

5,501

-

5,501

-

208

-

436

-

963

217

600

485

16

425

64

-

2,087

loans to

Long-term

Separate financial statements 2006

-

-

-

-

5,501

-

-

5,501

-

208

-

-

963

-

-

217

-

436

600

-

485

-

16

-

425

-

64

2,087

-

-

Total

due from

Amounts

Thai Beverage Public Company Limited

151

Summary of loans to related parties Consolidated Separate

financial statements financial statements

2007

2007

2006

2006

Total short-term loans to related parties

At 1 January 9,367 8,430

Increase 1,070 3,396

Decrease (6,889) (2,459)

At 31 December 3,548 9,367

At 1 January 41

-

Decrease (41) -

At 31 December -

At 1 January 41 9,367 8,430

Increase 1,070 3,396

Decrease (6,889) (2,459)

At 31 December 3,548 9,367

(41) -

2007 2006

(in million Baht)

Short-term loans 3,548 9,367

Long-term loans 9,411 5,501

Total loans to related parties 12,959 14,868

Movements during the years ended 31 December 2007 and 2006 of loans to related parties were as follows:

Loans to related parties Consolidated Separate

financial statements financial statements

2007 2006

(in million Baht)

Short-term loans

Subsidiaries

Other related parties


-

Num Thurakij Co., Ltd. Krittayabun Co., Ltd. Surathip Co., Ltd. Sunthronpirom Co., Ltd. Piromsurang Co., Ltd.

-

Num Nakorn Co., Ltd.

-

-

819

Num Muang Co., Ltd.

680

-

-

Num Palang Co., Ltd.

-

-

5

Num Kijjakarn Co., Ltd.

14

-

Others

Num Yuk Co., Ltd.

-

-

-

Pomburapa Co., Ltd.

60

-

10

Pomcharoen Co., Ltd.

Pisetkij Co., Ltd.

-

-

-

-

Pomchok Co., Ltd.

74

Pomkung Co., Ltd.

46

-

PS Recycle Co., Ltd.

Pomkit Co., Ltd.

-

-

-

Pomthip Co., Ltd.

126

-

139

United Winery and Distillery Co., Ltd.

Thai Beverage Can Ltd.

-

-

Theparunothai Co., Ltd.

-

-

554

S.S. Karnsura Co., Ltd.

471

-

Berli Jucker PCL.

Athimart Co., Ltd.

Other related companies

-

(in million Baht)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2006

Thanapakdi Co., Ltd.

2007

Mongkolsamai Co., Ltd.

financial statements

-

financial statements

-

Separate

-

Consolidated

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

64

81

10

189

65

100

-

-

406

-

-

-

25

29

80

39

193

-

50

45

-

-

-

-

129

(in million Baht)

loans from

Short-term

5,501

-

9,411

Fuengfuanant Co., Ltd.

-

-

-

(773)

-

At 31 December (776)

-

-

-

-

-

Decrease

Sangsom Co., Ltd.

964

-

4,686

-

-

-

-

-

Increase

-

5,310

Beer Thip Brewery (1991) Co., Ltd.

5,501

Subsidiaries

Trade accounts payable - related parties Total

-

due to

-

Amounts

At 1 January

loans from

Subsidiaries

Short-term

1

1

5

9

-

-

-

-

2

-

1

1

2

2

4

2

2

1

-

-

-

-

-

-

12

due to

Amounts

Long-term loans

Total

65

82

15

198

65

100

-

-

408

-

1

1

27

31

84

41

195

1

50

45

-

-

-

-

141

Total

674

1,012

594

474

175

126

170

95

1,249

120

333

123

323

311

1,395

305

50

286

396

193

130

92

200

1,052

964

loans from

Short-term

4

6

3

3

1

-

1

-

5

-

2

1

2

1

7

2

2

1

2

1

-

-

1

5

18

due to

Amounts

2006

678

1,018

597

477

176

126

171

95

1,254

120

335

124

325

312

1,402

307

52

287

398

194

130

92

201

1,057

982

Total

152

due to

(in million Baht)

Amounts

2006

loans from

2006

2007

Short-term

2007

2006

amounts due to related parties

2007

Short-term loans from and

financial statements

2007

financial statements

2006

Separate

2007

Total Consolidated Separate financial statements

Loans to related parties

Consolidated financial statements

Annual Report 2007


Total

Total related companies

Others

Great Oriole Limited

Plaza Athenee Hotel (Thailand) Co., Ltd.

(Formerly: Queen’s Park Hotel Group Co., Ltd.

TCC Hotel Collection Co., Ltd.

T.C.C. Technology Co., Ltd.

South East Capital Co., Ltd.

The Southeast Insurance (2000) Co., Ltd.

Related companies

Total subsidiaries

Archa Beer Co., Ltd.

Beer Chang Co., Ltd.

Cosmos Brewery (Thailand) Co., Ltd.

International Beverage Holdings Ltd.

Dhospaak Co., Ltd.

Thai Beverage Marketing Co., Ltd.

Bang-Na Logistic Co., Ltd.

Thai Cooperage Co., Ltd.

Pan International (Thailand) Co., Ltd.

Additive Food Co., Ltd.

Thai Molasses Co., Ltd.

Bionic Humus Co., Ltd.

Subsidiaries (continued)

amounts due to related parties

Short-term loans from and

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

loans from

Short-term

2007

69

69

5

-

10

10

11

14

19

-

-

-

-

-

-

-

-

-

-

-

-

-

due to

Amounts

69

69

5

-

10

10

11

14

19

-

-

-

-

-

-

-

-

-

-

-

4,615

4,615

-

4,615

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

loans from

Total

Short-term

2006

222

222

7

129

11

7

10

17

41

-

-

-

-

-

-

-

-

-

-

-

-

-

due to

Amounts

Consolidated financial statements

loans from

4,837

4,837

7

4,744

11

7

10

17

41

-

-

-

-

-

-

-

-

-

-

-

-

-

2,040

-

-

-

-

-

-

-

-

2,040

35

-

177

-

-

150

30

-

-

-

22

121

(in million Baht)

Total

Short-term

2007

75

10

-

-

-

1

7

2

-

65

-

1

3

1

14

1

-

-

-

-

-

-

due to

Amounts

2,115

10

-

-

-

1

7

2

-

2,105

35

1

180

1

14

151

30

-

-

-

22

121

Total

12,984

-

-

-

-

-

-

-

-

12,984

20

100

1,690

-

30

-

-

161

55

25

61

-

loans from

Short-term

Separate financial statements 2006

101

7

-

-

-

-

5

2

13,085

7

-

-

-

-

5

2

-

-

20

-

13,078

101

1

94

1,701

-

43

11

-

13

-

-

-

162

55

25

1

-

-

61

-

-

Total

due to

Amounts

Thai Beverage Public Company Limited

155

The currency denomination of short-term loans from and amounts due to related parties as at 31 December was as follows:

currencies of foreign subsidiaries

United States Dollars (USD) Total

Consolidated Separate

financial statements financial statements

2007

69

2007

2006

(in million Baht)

Thai Baht (THB) and other functional 4,621

2006

2007 2006

2,115 13,085

216

-

69 4,837 2,115 13,085

Long-term loans from related parties Consolidated Separate

financial statements financial statements

2007 2006

(in million Baht)

Subsidiaries

Beer Thip Brewery (1991) Co., Ltd. 2,910 2,525

Fuengfuanant Co., Ltd. 90

-

Mongkolsamai Co., Ltd. 104

-

Theparunothai Co., Ltd. 133

-

United Winery and Distillery Co., Ltd. 210 344

Pomthip Co., Ltd. 329 140

Pomkit Co., Ltd. 682 208

Pomkung Co., Ltd. 309

-

Pomchok Co., Ltd. 426 250

Pomcharoen Co., Ltd. 115

-

Pomburapa Co., Ltd. 284 163

Krittayabun Co., Ltd. 101

-

Sunthronpirom Co., Ltd. 178 189

Piromsurang Co., Ltd. 78 99

Thai Molasses Co., Ltd. 22

Pan International (Thailand) Co., Ltd. 10

-

Thai Cooperage Co., Ltd. 71 15

Charun Business 52 Co., Ltd. 10

-

Thai Beverage Marketing Co., Ltd. 50

-

Dhospaak Co., Ltd. 10 10

Cosmos Brewery (Thailand) Co., Ltd. 320 407

Beer Chang Co., Ltd. 107

-

Archa Beer Co., Ltd. 13

-

Total 6,540 4,372


Annual Report 2007

Thai Beverage Public Company Limited

156

157

Summary of loans from related parties Consolidated

Separate

financial statements

financial statements

2007

2006

2007

Consolidated

Separate

financial statements

financial statements

2007

2006

2007

2006

(in million Baht)

2006

Long-term loans

(in million Baht) 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

-

-

At 31 December

-

-

Movements during the years ended 31 December 2007 and 2006 of loans from related parties were as follows:

(275) 6,540

(65) 4,372

Significant agreements with related parties

Loans from related parties Consolidated

Separate

financial statements

financial statements

2007

2006

2007

Supporting service agreement

2006

The Company entered into the supporting service agreement with subsidiaries for the supporting service such as 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

Increase

-

-

459

3,638

Decrease

-

-

(11,403)

(3,462)

At 31 December

-

-

2,040

12,984

principal revenue.

Up to date, supporting service fee rate was adjusted to 1% of the principal revenue. Service fee rate was adjusted for 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 Increase Decrease At 31 December

4,615

4,015

-

-

-

630

-

-

(30)

-

-

party, for the providing ongoing support and maintenance of the systems and infrastructure and is committed to pay

-

-

system, hardware and software rental fee and service fee on monthly basis throughout the contract period for

(4,615) -

4,615

Application service provisioning agreement The Company entered into the application service provisioning agreement with T.C.C. Technology Co., Ltd., a related

five years. Total short-term loans from related parties At 1 January Increase Decrease At 31 December

4,615

4,015

12,984

12,808

-

630

459

3,638

The Group entered into the procurement agreement with Pan International (Thailand) Company Limited, the Company’s

(11,403)

(3,462)

subsidiary, for necessary purchase and procurement services to the Group. The Group is committed to pay procurement

2,040

12,984

fee at 1% of the value of goods and services purchased under such agreement.

(4,615) -

(30) 4,615

Procurement agreement


Annual Report 2007

Thai Beverage Public Company Limited

158

Molasses purchase agreement

159

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

2007

received, payments, responsibility, weight, sample analysis on molasses, and quality control, etc. These were mutually

2006

2007

2006

(in million Baht)

agreed by the parties. Thai Baht (THB) and other functional currencies of foreign subsidiaries

Glass bottle purchase and sale agreement Bang-Na Logistic Co., Ltd., the Company’s subsidiary, entered into the glass bottle purchase and sale agreement with Berli Jucker Public Company Limited, a related party, to purchase various types of new glass bottles in order to sell to 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.

United States Dollars (USD) Euro (EUR) Total

2,015

1,899

9

16

174

15

-

-

-

6

-

-

2,189

1,920

9

16

7. Other investments

License agreement - Three subsidiaries entered into license agreements with Beer Chang Co., Ltd. and Archa Beer Co., Ltd., related companies, in order to receive the rights and obligations in drinking water, soda water, beer, draft beer and lager beer

Consolidated

Separate

financial statements

financial statements

2007

under the trade names of “CHANG” and “ARCHA”. Subsidiaries are committed to pay fee at a rate of 2% based on net sale at price distributing at the factory (excluding VAT) after deducting the excise tax and health promotion fund.

2006

2007

2006

(in million Baht) Current investments Short-term deposits at financial institutions

8

4

-

-

8

8

-

-

(4)

(4)

-

-

4

4

-

-

12

8

-

-

- 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 Less allowance for decline in value of investments Net

6. Cash and cash equivalents

Total Consolidated

Separate

financial statements

financial statements

2007

2006

8. Trade accounts receivable

2007

2006

(in million Baht) 33

33

-

-

Cash at banks - current accounts

1,203

1,186

1

1

Cash at banks - savings accounts

786

412

8

15

Highly liquid short-term investments

167

289

-

-

2,189

1,920

9

16

Cash on hand

Total

Note

Consolidated

Separate

financial statements

financial statements

2007

2006

2007

2006

(in million Baht) Related parties Other parties

Less allowance for doubtful accounts Total Bad and doubtful debts expenses for the year

5

14

21

-

-

1,608

1,321

-

-

1,622

1,342

-

-

-

-

(155)

(24)

1,467

1,318

-

-

20

35

-

-


Annual Report 2007

Thai Beverage Public Company Limited

160

161

9. Inventories

Aging analyses for trade accounts receivable were as follows:

Consolidated

Separate

financial statements

financial statements

2007

2006

2007

2006

Consolidated

Separate

financial statements

financial statements

2007

(in million Baht)

18

-

-

4

3

-

-

14

21

-

-

Other parties Within credit terms

979

940

14,659

-

-

Work in progress

3,769

3,423

-

-

Raw materials

1,938

1,390

-

-

593

582

-

-

8,310

8,161

-

-

Spare parts

455

489

-

-

-

-

Others

290

251

-

-

28,842

28,955

-

-

-

-

-

-

Packaging materials Maturing spirits

Overdue: Less than 3 months

2006

13,487

Finished goods 10

Overdue: Less than 3 months

2007

(in million Baht)

Related parties Within credit terms

2006

Less allowance for obsolete inventories

(785)

(640)

353

340

-

-

3-6 months

64

17

-

-

6-12 months

72

19

-

-

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).

-

-

Over 12 months

Less allowance for doubtful accounts

(155)

(24)

Net

1,453

1,297

-

-

Total

1,467

1,318

-

-

Net

28,057

10. Other current assets

The normal credit term granted by the Group ranges from 7 days to 180 days.

Consolidated

Separate

financial statements

financial statements

2007

The currency denomination of trade accounts receivable as at 31 December was as follows:

Separate

financial statements

financial statements

2006

2007

2006

(in million Baht) Thai Baht (THB) and other functional currencies of foreign subsidiaries

1,259

-

-

90

24

-

-

Australian Dollar (AUD)

1

-

-

-

Euro (EUR)

-

30

-

-

Others

-

5

-

-

1,467

1,318

-

-

Total

2007

2006

Prepaid excise tax

583

688

-

-

Refundable VAT

207

381

3

9

Prepaid property tax

154

152

-

-

Refundable excise tax

135

102

-

-

Prepaid expenses

103

56

4

1

92

374

-

-

148

179

1

7

1,422

1,932

8

17

-

-

8

17

Deposits 1,376

United States Dollars (USD)

2006

(in million Baht)

Consolidated

2007

28,315

Others

Less allowance for doubtful accounts Net

(18) 1,404

(18) 1,914


currencies of foreign subsidiaries

United States Dollars (USD)

Total

At 1 January

Share of profits of investments - equity method

Acquisitions

Disposals

Recovery of investments

Translation differences on consolidation

At 31 December Consolidated Separate

financial statements financial statements

2007

2007

(33)

124

2006

2006

135 129 63,595 63,085

29 24

-

9,180 510

-

(18)

2007 2006

(in million Baht)

Thai Baht (THB) and other functional

1,403 1,913 8 17

1 1

-

1,404 1,914 8 17

11. Investments in subsidiaries and associates Consolidated Separate

financial statements financial statements

2007 2006

(in million Baht)

-

(7) -

135 71,470 63,595

(1,305) -

44.00 50.02

Inver House Polska Limited Inver House Distribution SA

79

2

8

69

2006

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Beer Thip Brewery (1991) Co., Ltd. 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.

2007

(%)

100.00

100.00

2007

56

1

4

51

124

-

-

124

(in million Baht)

2006

800

900

4,000

700

700

700

900

7,500

6,600

5,550

2007

800

900

4,000

700

700

700

900

7,500

6,600

5,550

2006

Paid-up capital

2006

800

900

4,000

700

700

700

900

7,500

12,500

12,500

800

900

4,000

700

700

700

900

7,500

12,500

12,500

(in million Baht)

2007

Cost method

135

-

-

135

2006

Equity method

Separate financial statements (Restated)

23

1

4

18

2007

Cost method

17

398

273

628

85

57

-

307

750

2,277

2,259

2007

-

-

17

2006

129

109

60

32

25

25

104

840

1,089

821

2006

Dividend income

-

-

-

-

2007

Dividend income

162

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

2006

Ownership interest

79

2

8

69

100.00

50.02

44.00

49.49

2007

Beer Thai (1991) PCL.

Direct subsidiaries

Total

49.49

Liquorland Limited

Held by subsidiaries of indirect subsidiaries

Associates

(%)

2006

Paid-up capital

The currency denomination of other current assets as at 31 December was as follows:

2007

Ownership interest

Consolidated financial statements

Investments in subsidiaries and associates as at 31 December 2007 and 2006, and dividend income from those investments for the years then ended were as follows:

Annual Report 2007 Thai Beverage Public Company Limited

163


100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Red Bull Distillery (1988) Co., Ltd. United Winery and Distillery Co., Ltd. Simathurakij Co., Ltd. Nateechai Co., Ltd. Luckchai Liquor Trading Co., Ltd. Sura Piset Thipparat Co., Ltd. Thai Alcohol PCL. Pomthip Co., Ltd. Pomkit Co., Ltd. Pomkung Co., Ltd. Pomchok Co., Ltd. Pomcharoen Co., Ltd. Pomburapa Co., Ltd. Num Yuk Co., Ltd. Num Kijjakarn Co., Ltd. Num Palang Co., Ltd. Num Muang Co., Ltd. Num Nakorn Co., Ltd. Num Thurakij Co., Ltd. Thipchalothorn Co., Ltd. Krittayabun Co., Ltd. Surathip Co., Ltd.

100.00 100.00 99.72 100.00 100.00 100.00 100.00 100.00

Bionic Humus Co., Ltd. Maharas Agri Co., Ltd. Thai Molasses Co., Ltd. Additive Food Co., Ltd. Pan International (Thailand) Co., Ltd. Charun Business 52 Co., Ltd. Thai Cooperage Co., Ltd. Bang-Na Logistic Co., Ltd.

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Dhanasindhi Co., Ltd. Dhospaak Co., Ltd. International Beverage Holdings Ltd. Cosmos Brewery (Thailand) Co., Ltd. T.C.C. Cosmo Corp., Ltd. Beer Chang Co., Ltd. Archa beer Co., Ltd. Sura Piset Phatra Lanna Co., Ltd. Total

100.00

Thai Beverage Marketing Co., Ltd.

(Formerly: Sahatipkarnkonsong Co., Ltd.)

100.00

100.00

Piromsurang Co., Ltd.

Thai Beverage Logistics Co., Ltd.

100.00

2007

Sunthronpirom Co., Ltd.

Direct subsidiaries (continued)

100.00

Theparunothai Co., Ltd.

(%)

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

2006

(%)

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

99.72

100.00

100.00

100.00

100.00

2006

Ownership interest

100.00

Kankwan Co., Ltd.

Direct subsidiaries (continued)

2007

Ownership interest

1

5

1

10

10

10

10

10

10

10

10

10

10

10

10

800

500

800

800

900

1,800

3,000

700

800

2006

50,917

600

1

1

5

1,667

6,760

25

20

300

12

123

300

122

1

1

40

2

350

5

5

2007

41,752

-

1

1

5

1,667

535

25

20

300

12

123

300

122

1

1

40

2

10

5

5

2006

Paid-up capital

2006

7

27

3

10

10

10

10

10

10

10

10

10

10

10

10

1,374

510

766

800

889

1,800

5,000

700

800

2006

71,470

615

130

4,301

39

4,212

6,760

61

24

300

12

134

296

84

34

32

35

2

354

24

25

63,595

-

130

4,301

39

5,150

535

61

24

300

12

134

300

84

54

38

35

2

14

24

25

(in million Baht)

2007

Cost method

7

27

3

10

10

10

10

10

10

10

10

10

10

10

10

1,666

510

800

800

900

1,800

3,000

700

800

(in million Baht)

2007

Cost method

Separate financial statements (Restated)

1

5

1

10

10

10

10

10

10

10

10

10

10

10

10

800

500

800

800

900

1,800

5,000

700

800

2007

Paid-up capital

Separate financial statements (Restated)

413

234

233

196

119

267

170

604

247

93

18,985

-

72

277

5

672

-

20

27

100

118

75

28

-

60

42

165

-

-

711

1,075

2007

-

155

74

116

100

120

-

24

38

23

67

-

95

122

2006

8,055

-

1

96

-

257

-

-

8

7

23

30

8

-

19

12

63

-

-

350

437

2006

Dividend income

649

359

573

413

238

528

387

1,424

858

382

26

534

275

570

292

66

-

35

157

138

70

-

190

340

2007

Dividend income

Annual Report 2007 Thai Beverage Public Company Limited

164 165


-

Disposals

-

Transfers Disposals

-

Transfers Disposals

-

on consolidation At 31 December 2007

Total

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

revaluation

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

558

-

-

-

81

477

-

(1)

224

53

201

-

-

-

-

6,425

26,440

(28)

(63)

(8)

(19)

(16)

3,666

22,881

-

(48)

86

3,171

19,672

5.97

9

5.82

121

(in million Baht)

equipment

6

792

5,654

(2)

(4)

(261)

733

5,188

5.97

4

5.82

33

improvement improvements

1,501

(8)

-

-

134

1,375

-

-

-

134

1,241

-

-

-

-

Oak barrels

432

-

(8)

11

83

346

-

(9)

(34)

76

313

-

-

-

-

equipment

and office

fixtures and

Machinery and

659

-

(9)

12

-

-

-

60

596

Building

Total

2,788

(17)

(5)

-

-

-

-

26

2,784

-

(11)

(35)

-

80

562

equipment

land

Land

43,569

(46)

(85)

2,191

-

-

-

199

41,310

-

-

-

-

31

2,753

Consolidated financial statements

17,118

(62)

(12)

719

-

-

-

85

16,388

-

(92)

5,439

-

1,073

34,890

Oak barrels

surplus on

1,299

(1)

-

145

-

-

-

1

1,154

(4)

(7)

796

-

201

15,402

(in million Baht)

equipment

Furniture

12,534

(1)

(545)

(2)

(59)

(2,794)

731

357

14,847

-

(2)

434

-

2

720

improvement improvements

Land

4,389

-

(135)

-

-

(2,794)

731

-

6,587

-

(1)

(1)

-

-

3

424

14,421

-

3

-

6,585

revaluation

and office

fixtures

and

and

land

Land

Furniture Machinery

Building

Land surplus on

Consolidated financial statements

2,515

-

(21)

(1)

167

2,370

-

(22)

(15)

314

2,093

-

-

-

-

Vehicles

2,695

-

(26)

(1)

-

-

-

23

2,699

-

(25)

(21)

-

29

2,716

Vehicles

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

in progress

Construction

425

-

(210)

(3,064)

-

-

-

946

2,753

-

(1)

(6,613)

-

2,199

7,168

in progress

Construction

37,871

(55)

(100)

-

4,923

33,103

(2)

(84)

-

4,481

28,708

5.97

13

5.82

154

Total

81,087

(127)

(892)

-

(59)

(2,794)

731

1,697

82,531

(4)

(139)

-

3

4,039

78,632

Total

166

Translation differences

-

Depreciation charge for the year

1 January 2007

At 31 December 2006 and

on consolidation

-

-

Translation differences

Depreciation charge for the year

-

-

-

-

Cost

8,145

At 1 January 2006

Accumulated depreciation

during 2007 (% per annum)

Rate of interest capitalised

during 2007 (note 24)

Finance costs capitalised

during 2006 (% per annum)

Rate of interest capitalised

during 2006 (note 24)

Finance costs capitalised

Finance costs capitalised

At 31 December 2007

on consolidation

(1)

(410)

Disposals Translation differences

(2)

Transfers

(59)

-

Reversal of revaluation Loss on revaluation

-

357

8,260

Surplus on revaluation

Additions

1 January 2007

At 31 December 2006 and

on consolidation

-

-

Transfers

Translation differences

-

424

7,836

Surplus on revaluation

Additions

At 1 January 2006

Cost/revaluation

Cost

12. Property, plant and equipment

Annual Report 2007 Thai Beverage Public Company Limited

167


8,145

-

8,145

8,260

-

8,260

land

4,389

-

4,389

6,587

-

6,587

revaluation

12,534

-

12,534

14,847

-

14,847

Total

and

741

-

741

677

-

677

10,693

-

10,693

10,734

-

10,734

improvement improvements

Land

Building

17,129

-

17,129

18,429

-

18,429

(in million Baht)

equipment

and

Machinery

1,287

-

1,287

1,409

-

1,409

Oak barrels

227

-

227

250

-

250

equipment

and ofďŹ ce

ďŹ xtures

Furniture

180

9

171

329

11

318

Vehicles

Total

49,417 11 49,428 43,207 9 43,216

in progress

2,753

2,753 425

425

Construction

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).

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

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).

Total at 31 December 2007

Assets under finance leases

Owned assets

Total at 31 December 2006

Assets under finance leases

Owned assets

Net book value

Cost

Land surplus on

Consolidated financial statements Annual Report 2007 Thai Beverage Public Company Limited

168 169

Separated financial statements

Cost

At 1 January 2006

1 January 2007

Additions

Disposals

At 31 December 2006 and

411 134 545 68 24 121 758

Additions 27

100 127

Disposals (11) (11)

411 134 545 95 24 210 874

5

1 6

(1)

At 31 December 2007

1 January 2007

(411)

surplus on

Land Furniture, fixtures

land and office

revaluation Total

(134)

2007

equipment

(545)

Vehicles Construction in progress Total

(in million Baht)

Cost/revaluation

2006

(210) (756)

Accumulated depreciation

At 31 December 2006 and

Net book value

100 23 1 124

At 1 January 2006 5 2

7

Depreciation charge for the year 17 4

21

22 6

28

Depreciation charge for the year 19 5

24

At 31 December 2007 41 11

52

At 31 December 2006 411 134 545 73 18 210 846

At 31 December 2007 59 12 1 72

Depreciation of plant and equipment for the years ended 31 December was as follows:

Consolidated Separate