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3

Investor Information

Message from the Chairman

Financial Highlights

26 42

Board of Directors

44

Shareholding Structure

Executive Committee & Management Committee

30

46

Report of the Board of Directors

Profile of Directors & Key Management

Organization Structure 60

Product Portfolio

Operating and Financial Review


100

Our people Our performance

101

Credit Rating Announcement

102 Awards Corporate Governance Report

Corporate Social Responsibility (CSR) Report

117

PR Talk

120

Audit Committee Report

Financial Statements

221 223

Accounting Manual Policy

Announcements to SGX 2008

207

121

Interested Persons Transactions Report

221

224

Audit Report of Certified Public Accountant

SAP System

General Corporate Information


Annual Report 2008

2


IN N VES S TOR IN NFORM M AT ION Thai Beverage is listed on the Singapore Exchange (SGX-ST) main board. SGX Ticker Reuters Bloomberg Google Finance

THBEV tbev.si thbev sp SIN:Y92

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

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

Thaibev’s stock performance Share price* CdiZ/HI>VcYH:I^cYZm VgZgZWVhZY^cdgYZgidXdbeVgZ l^i]I=V^7Vk¼heg^XZ#

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2008 High S$ 0.28 2008 Low S$ 0.185

Investor Relations Contact

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Investor Relations Department %#&*

Thai Beverage PLC. 14 Vibhavadi Rangsit Rd., Chomphon Chatuchak, Bangkok 10900 THAILAND

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Mr. Richard W. Jones Tel: +662 127 5035 (DIR) +662 127 5555 ext. 5035 Fax: +662 272 2280 E-mail: richard.j@thaibev.com

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

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Ariya Silakorn

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Thai Beverage Public Company Limited

3


FINANCIAL HIGHLIGHTS 6CCJ6AG:EDGI'%%I]V^7ZkZgV\ZEjWa^X8dbeVcnA^b^iZY

Restated*

2008

2007

Revenue from sales

105,257

105,108

Total revenues

Income Statement ( Mil.Baht ) 106,226

105,497

Cost of sales

76,556

73,824

Gross profit

28,701

31,283

Operating profit

14,617

16,472

EBIT

15,586

16,862

Net profit

10,606

10,943

Depreciation and amortisation EBITDA

5,022

5,267

20,608

22,129

Balance Sheet ( Mil.Baht ) Current assets

34,938

34,369

Non-current assets

45,117

48,037

Total assets

80,055

82,406

Current liabilities

22,721

19,751

Non-current liabilities Total liabilities

3,337

5,560

26,058

25,311

Shareholders' equity

53,997

57,095

Total liabilities and shareholders' equity

80,055

82,406

Liquidity Ratio Current Ratio

times

1.54

1.74

Quick Ratio

times

0.23

0.31

Average Collection Period

days

6.02

6.33

Average Inventory Period

days

138.28

140.38

Average Payable Period

days

14.37

12.90

Cash Cycle

days

129.93

133.81

Annual Report 2008

4


Restated *

2008

2007

%

27.27

29.76

EBITDA Margin

%

19.58

21.05

EBIT Margin

%

14.81

16.04

Profitability Ratio Gross Profit Margin

Operating Cash Flows to Operating Profit Ratio

%

97.09

104.10

Net Profit Margin

%

10.08

10.41

Return on Equity

%

19.09

19.64

%

13.06

12.84

Efficiency Ratios Return on Assets Return on Fixed Assets

%

25.19

22.85

times

1.30

1.23

Debt to Equity Ratio

times

0.48

0.44

Interest Bearing Debt to Equity Ratio

times

0.32

0.28

Total Assets Turnover

Leverage Ratios

Interest Bearing Debt to EBITDA Ratio

times

0.84

0.73

Interest Coverage Ratio

times

30.62

21.07

%

73.17

70.13 **

Dividend Payout Ratio

*

Restated due to the acquisition of Oishi Group Public Company Limited on September 30, 2008. Consolidated financial statements have been prepared on the basis of a business combination involving entities and businesses under common control which accounted for in a manner similar to a pooling of interests.

**

Same figures per previous report

Thai Beverage Public Company Limited

5


Sales of Baht 105.3 billion in 2008 6% Cdc6aXd]da^X

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105.1

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2008

Annual Report 2008

2007

6


Spirits: Volume IdiVa '%%-/)(,

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296

2008

Chang

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615

661

2007 Thai Beverage Public Company Limited

7


Annual Report 2008

8


MES S SAGE E F RO OM T HE CH H AIIR MA AN

Dear Shareholders, I feel many of you may be heartened by our end of year results and that ThaiBev has proven itself a solid and safe investment in these troubled times. Despite being buffeted by events beyond our control, our results have been relatively stable. By these events I am of course referring to domestic politics and the economy. We have consistently informed investors that this company is not usually directly affected by politics, but rather the economic or commercial effects of political actions. In the latter half of 2008, those effects were to take their toll on much of Thai industry including ThaiBev.

In 2008, Thailand suffered continuous political upheavals, with several actions taken by protestors leading to a loss of sentiment and a rapid downturn in the economy. The sudden and dramatic fall in tourist arrivals will likely affect beer sales for instance as beer is mostly sold on-premise: in hotels, restaurants, bars and nightclubs. Our white spirits sales are mostly off-premise-that is for home consumption-and provide us a continued source of profitability. Brown spirits continued to rise due largely to consumers trading down from imported brown spirits, but also due to the strong brand image of many of our key products. ThaiBev commenced listing procedures in Thailand last year after an invitation from the Stock Exchange of Thailand. With no capital requirements of our own, we wanted to assist the market and provide ordinary Thais with the option of investing in a well-managed, solid Thai company. Faced with opposition to the listing, we eventually decided that we would suspend the process for now. While our spirits market share is particularly resilient, our beer market share faces continued and intense competition. We want to protect our market share by being more market driven. Thus, we have worked closer with our agents and sub-agents to ensure that we have a fair and systematic process that benefits both sides.

Thai Beverage Public Company Limited

9


ThaiBev is Thailand’s largest alcoholic beverage producer. In Asia, we are, at the time of writing, roughly eighth1 largest by market capitalization, sixth by revenue and fourth in terms of net income. Shareholders who have followed the Company closely will already be aware that it is a core strategy to expand abroad and grow our position in the industry. While the economic situation is in decline, it is prudent to hold back for a while, though we are continuing to study potential acquisitions. We are looking for businesses that offer synergy with the main business, particularly in terms of distribution of the ThaiBev portfolio. However, we will take our time until we are satisfied potential acquisitions will contribute to the whole business. I have always viewed ThaiBev as a conservative venture. While we have taken considered risks on occasion, I believe that our business has thrived because we plan for the long term. Part of this planning has to include risk management. In 2007, we introduced a new strategy to include non-alcoholic drinks in the portfolio as we felt that we could diversify some risk from being solely in the alcohol industry. Naturally, we are aware of the risk of further increases in excise taxes. This is a sensitive issue where the government needs to balance revenue against the health concerns of the public. For our part, ThaiBev is very active with campaigns to encourage responsible drinking and we are demonstrably against driving whilst drunk. It is a strategic imperative that we minimize the role of alcohol in serious social problems and therefore we work actively to encourage people to play sports, take up arts and implement many other social activities that aid the wellbeing of all people. We, as a company, are integrated at so many levels with the community via our staff that we view them as inseparable. In most cases, and especially outside of Bangkok, our staff lives in the vicinity of our facilities and within the local community.

1

Annual Report 2008

Source: Reuters figures for publicly-traded companies. We compared based on US dollar equivalents.

10


We are one of Thailand’s major employers, with approximately 22,000 people under direct employment and thousands more who supply us with the agricultural products and other services that our business depends on. One of our goals is therefore to create and sustain jobs during this critical period. We therefore take a very strategic approach to our staff and the surrounding community, providing health care and sports facilities and encouraging staff to play a more active role in the community. Having such generous staff is a boon to us, and thus their health and safety are paramount. At our regional breweries and distilleries, we employ strict safety and environmental controls. It is this close-knit community of staff and local people that gives ThaiBev a strength that is a key to our success. Our ability to attract passionate and capable management has given us a competitive advantage not only in terms of refreshing our energy but in providing new ideas and innovative thinking. One such idea has been premiumisation, and this has led to new brands with better margins as well as increased profitability from refreshing older brands like Hong Thong in Thailand and Chang and Mekhong in export markets. Our comprehensive distribution network in Thailand has been enhanced by the synergy gained from the Inver House Distillers distribution network abroad and we continue to develop the logistics component of our business to facilitate the expansion of our portfolio. Over the past few years we have been asked why we don’t build the company through debt. At this time in history I am grateful for the wisdom of our financial management team for their conservative fiscal policies. Elsewhere in this annual report you will see the financial data that will help you understand the Company in more detail. I would just bring your attention to the highlights including the consolidated sales revenue, which has remained relatively flat over the previous year, while our net profit dipped slightly by 3.1%, which under the current economic climate may be considered better than expected. The Board has proposed a dividend of 73% of net profit, which will continue to make our company an attractive investment for the present.

Charoen Sirivadhanabhakdi C ha ir m a n o f th e B o a rd

Thai Beverage Public Company Limited

11


INNOVATION SUCCESS PROFESSIONALISM

INTEGRITY TRUSTWORTHINESS

RESPONSIBILITY

Annual Report 2008

12


We’re proud to be part of The Spirit of Thailand. ThaiBev remains one of Thailand’s leading manufacturers and a keystone to the Thai economy. In 2008, we paid more than Baht 60,000 million in taxes and donated more than Baht 300 million. As a representative of Thailand abroad, we support charitable causes in Singapore also. ThaiBev also garnered recognition from abroad regarding the quality of Thai products, with awards and gold medals throughout the year hailing the fine production values we hold dear. As our shareholder, you can feel proud that we are one of the most stable stocks on the Singapore Exchange and indeed on any exchange in Asia. As a solid, stable, long-term investment, ThaiBev represents The Spirit of Thailand

Mr. Thapana Sirivadhanabhakdi President and CEO

Thai Beverage Public Company Limited

13


Annual Report 2008

14


SUCCESS “ We can achieve success if we get the basics right. But first, we have to get the right basics.” Bg#I]VeVcVH^g^kVY]VcVW]V`Y^! EgZh^YZciVcY8:D

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Thai Beverage Public Company Limited

15


I]V^7Zk]Vhdc"i]Z"_dWigV^c^c\XdjghZh [dgWgZlZghl]dlZlVciidgZVX]BVhiZg7gZlZghiVcYVgY# 6[iZg^c"]djhZigV^c^c\!lZhZcYi]ZXVcY^YViZhid iV`ZBVhiZg7gZlZgXdjghZh^c:jgdeZ"jhjVaan^c<ZgbVcn! 9ZcbVg`dgi]ZJ@#I]^h^hi]ZgZVhdcl]ndjgWZZghVgZ gZXd\c^oZY^ciZgcVi^dcVaanVcYl^cVlVgYhdjgXdbeZi^idgh XVcdcanYgZVbd[!a^`Z8]Vc\WZZg¼h7ZZgIZhi^c\>chi^ijiZ L78<daYBZYVa^c'%%-!BdcYZHZaZXi^dc\daYbZYVa ^c'%%-VcY6jhigVa^V¼h6#>#7#6#\daYbZYVa^c'%%,#

Annual Report 2008

16


PROFESSIONALISM “ We have 17 European-trained Master Brewers working at ThaiBev - more than any other brewer in Thailand - because our philosophy is ‘Don’t compromise on quality ’, and this includes the quality of our human resources.” 9g#E^hVcjK^X]^ZchVci]!HZc^dgK^XZEgZh^YZci [dgDeZgVi^dchVcY I]V^7Zk¼h8]^Z[7gZlbZ^hiZg

Thai Beverage Public Company Limited

17


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Annual Report 2008

18


INNOVATION “ We created the Thai Spirits category as Mekhong is a unique blend of alcohol made from molasses, herbs and spices. It truly is the Spirit of Thailand! ” Bg#?d]cAZccdc! EgZh^YZcid[>ciZgcVi^dcVa 7ZkZgV\Z=daY^c\hA^b^iZYJH6!>cX#

Thai Beverage Public Company Limited

19


Annual Report 2008

20


RESPONSIBILITY “ We have a duty to give back to society, and a responsibility to assist others less fortunate than ourselves. But we also give because we enjoy giving.” Bg#EVja8]ddc\! K^XZEgZh^YZci[dg:miZgcVa6[[V^gh

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Thai Beverage Public Company Limited

21


INTEGRITY “ Our objective is to offer our dealers and customers the best quality service possible. That is why I ensure that all my sales staff spends time visiting each and every one of our dealers and sub-dealers monthly to listen to them and act on their needs.” Bg#JZnX]V^IVci]V"DW]Vh! HZc^dgK^XZEgZh^YZci[dgHVaZh

Annual Report 2008

22


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Thai Beverage Public Company Limited

23


Annual Report 2008

24


TRUSTWORTHINESS “Our relationship with our stakeholders is based on trust and transparency. All our stakeholders appreciate that our ratings from TRIS, Moody’s and Standard and Poor’s are a reflection of the Company’s stability, and our three consecutive IR Magazine awards, 2006-2008, reflect stakeholder acknowledgement of the transparency with which we run the Company.” Bg#H^i]^X]V^8]V^`g^Vc\`gV^! HZc^dgK^XZEgZh^YZci[dg;^cVcXZVcY6XXdjci^c\

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Thai Beverage Public Company Limited

25


SHA A REHO OLDIN NG STRUCTT URE Annual Report 2008 Thai Beverage Public Company Limited

Thai Beverage Public Company Limited Authorized share capital of Baht 29,000,000,000 with 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.

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Annual Report 2008

26


100% W

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Thai Beverage Public Company Limited

27


SHA A REH HOLDIN NG S TRUC C TU UR E Annual Report 2008 Thai Beverage Public Company Limited

Thai Beverage Public Company Limited - 100% I]V^XdbeVcna^hiZY^cH^c\VedgZHidX`:mX]Vc\Z

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Annual Report 2008

28


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Thai Beverage Public Company Limited

29


R E P OR T OF T HE B OA R D OF DIR R EC T OR S Breakdown in Shares and Types of Share

Comp p any / Location

Type of Business

Type of Share

No. of Shares Held Sha a res Issued d

(Direct/Indirect)

% of Shareholding

Paiid-- Up Capital (Baht)

1.

Beer Thai (1991) Public Company Limited 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%

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%

Spirits distillery

Common

7,500,000,000.00

750,000,000

749,999,994

100.00%

Spirits distillery

Common

900,000,000.00

90,000,000

89,999,994

100.00%

Spirits distillery

Common

700,000,000.00

70,000,000

69,999,994

100.00%

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

Spirits distillery

Common

700,000,000.00

70,000,000

69,999,994

100.00%

7.

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

Spirits distillery

Common

700,000,000.00

70,000,000

69,999,994

100.00%

8. Sura Bangyikhan Co., Ltd. 82 Moo 3, Tambon Bang Khoo Wat, Amphoe Muang, Pathum Thani 12000

Spirits distillery

Common

4,000,000,000.00

400,000,000

399,999,994

100.00%

9. Athimart Co., Ltd. 170 Moo 11, Tambon Nikhom, Amphoe Satuek, Buri Ram 31150

Spirits distillery

Common

900,000,000.00

90,000,000

89,999,994

100.00%

10 S.S. Karnsura Co., Ltd. 101 Moo 8 , Tambon Kaeng Dom,

Spirits distillery

Common

800,000,000.00

80,000,000

79,999,994

100.00%

Spirits distillery

Common

800,000,000.00

80,000,000

79,999,994

100.00%

Spirits distillery

Common

700,000,000.00

70,000,000

69,999,994

100.00%

3. Sangsom Co., Ltd. 14 Vibhavadi Rangsit Road,

Remark

Chomphon Sub-District, Chatuchak District, Bangkok 10900 4. Fuengfuanant Co., Ltd. 333 Moo 1, Tambon Tha Toom,

Amphoe Si Maha Phot, Prachin Buri 25140 5. Mongkolsamai Co., Ltd. 14 Vibhavadi Rangsit Road,

Chomphon Sub-District, Chatuchak District, Bangkok 10900

King Amphoe Sawang Wirawong, Ubon Ratchathani 34190 11. Kankwan Co., Ltd. 14 Vibhavadi Rangsit Road,

Chomphon Sub-District, Chatuchak District, Bangkok 10900 12. Theparunothai Co., Ltd. 99 Moo 4, Tambon Hat Kham, Amphoe Muang, Nong Khai 43000

Annual Report 2008

30


Com mpany / Location 13. Red Bull Distillery (1988) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Type of Business

Type of Share

No. of Shares Helld Shares Issued d

(Direct/Indire ect)

% of Shareholding

Pa aid-Up Capital (Baht)

Spirits distillery

Common

5,000,000,000.00

500,000,000

499,999,940

100.00%

Spirits distillery

Common

1,800,000,000.00

180,000,000

179,999,994

100.00%

Spirits distillery

Common

900,000,000.00

90,000,000

89,999,994

100.00%

Spirits distillery

Common

800,000,000.00

80,000,000

79,999,994

100.00%

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

Spirits distillery

Common

800,000,000.00

80,000,000

79,999,994

100.00%

18. Sura Piset Thipharat Co., Ltd. 14, Sangsom Building, Soi Yasoob 1,

Spirits distillery

Common

500,000,000.00

5,000,000

4,999,994

100.00%

Beer distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Beer distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Beer distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Beer distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Beer distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Remark

Chomphon Sub-District, Chatuchak District, Bangkok 10900 14. United Winery and Distillery Co., Ltd. 14 Sangsom Building, Soi Yasoob 1,

Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 15. Simathurakij Co., Ltd. 1 Moo 6, Tambon Ban Daen,

Amphoe Banphot Phisai, Nakhon Sawan 60180 16. Nateechai Co., Ltd. 14 Vibhavadi Rangsit Road,

Chomphon Sub-District, Chatuchak District, Bangkok 10900

Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 19. Pomthip Co., Ltd. 2194 Charoen Krung Road,

Wat Phraya Krai Sub-District, Bang Kho Laem District, Bangkok 10120 20. Pomkit Co., Ltd. 48 ,50,52 Suranaree Road,

Tambon Nai Muang , Amphoe Muang, Nakhon Ratchasima 30000 21. Pomklung Co., Ltd. 80 /13 -14 Ekathosarot Road,

Tambon Nai Muang, Amphoe Muang, Phitsanulok 65000 22. Pomchok Co., Ltd. 16/1 Moo 1, U Thong Road,

Tambon Tha Wasukri, Amphoe Muang, Ayutthaya 13000 23. Pomcharoen Co., Ltd. 135/3 Moo 4, Kanchanavithi Road,

Tambon Bang Kung, Amphoe Muang, Surat Thani 84000

Thai Beverage Public Company Limited

31


Comp p any / Location 24. Pomburapa Co., Ltd. 51/42 Moo 3, Sukhumvit Road,

Type of Business

Type of Share

No. of Shares Held

Paiid-- Up Capital ( ht) (Ba

Sha a res Issued d

(Direct/Indirect)

% of Shareholding

Remark

Beer distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Spirits distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Spirits distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

27. Num Palang Co., Ltd. 80/13 -14 Ekathosarot Road, Tambon Nai Muang, Amphoe Muang, Phitsanulok 65000

Spirits distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

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

Spirits distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

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

Spirits distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

30. Num Thurakij Co., Ltd. 51/40 - 41 Moo 3, Sukhumvit Road,

Spirits distributor

Common

10,000,000.00

1,000,000

999,994

100.00%

Beer and spirits agency

Common

1,000,000.00

100,000

99,994

100.00%

Beer and spirits agency

Common

5,000,000.00

500,000

499,994

100.00%

Spirits agency

Common

1,200,000.00

120,000

119,940

100.00%

Spirits agency

Common

5,000,000.00

500,000

499,994

100.00%

Spirits agency

Common

5,000,000.00

500,000

499,994

100.00%

Trading of fertilizer

Common

860,000,000.00

8 ,600,000

8 ,599,994

100.00%

(1)

Production and distribution of energy drink

Common

200,000,000.00

20,000,000

19,999,940

100.00%

(2)

Tambon Ban Suan, Amphoe Muang, Chon Buri 20000 25. Num Yuk Co., Ltd. 95/390 - 391 Trok Nokkhet, Rama III Road,

Chong Nonsi Sub-District, Yannawa District, Bangkok 10120 26. Num Kijjakarn Co., Ltd. 1,3,5 Trok Wat Muang, Suranaree Road,

Tambon Nai Muang, Amphoe Muang, Nakhon Ratchasima 30000

Tambon Ban Suan, Amphoe Muang, Chon Buri 20000 31. Thipchalothorn Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

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

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

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

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

Chompon Sub-District, Chatuchak District, Bangkok 10900 36. Thai Beverage Energy Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 (Registered the change of company’s name from Bionic Humas Co., Ltd. on October 17, 2008.)

37. Wrangyer Beverage (2008) Co., Ltd. 14 Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 (Registered the change of company’s name from Maharas Agri Co., Ltd.” on February 19, 2008.)

Annual Report 2008

32


Com mpany / Location 38. Thai Molasses Co., Ltd. 14 Vibhavadi Rangsit Road,

Type of Business

Type of Share

No. of Shares Helld

Pa aid-Up Capital (Baht)

Shares Issued d

(Direct/Indire ect)

% of Shareholding

Trading of molasses

Common

40,000,000.00

40,000

39,889

99.72%

Trading of feeds

Common

1,000,000.00

10,000

9,994

100.00%

Trading of supplies and procurement

Common

1,000,000.00

10,000

9,994

100.00%

Brick producer

Common

121,800,000.00

1,218 ,000

1,217,994

100.00%

Oak barrel producer

Common

300,000,000.00

30,000,000

29,999,940

100.00%

Trading of bottles

Common

123,000,000.00

1,230,000

1,229,994

100.00%

Transportation

Common

1,012,000,000.00

101,200,000

101,199,940

100.00%

Import and export spirits for trading/ international marketing

Common

300,000,000.00

30,000,000

29,999,940

100.00%

Construction

Common

20,000,000.00

20,000

19,994

100.00%

Advertising agency

Common

25,000,000.00

2,500,000

2,499,994

100.00%

Holding company

Common

HKD 1,490,000,000.00

1,490,000,000 1,490,000,000

100.00%

Beer, Drink & Soda Production

Common

1,666,666,500.00

166,666,650

166,666,590

100.00%

Trademark holding

Common

5,000,000.00

50,000

49,940

100.00%

Remark

Chompon Sub-District, Chatuchak District, Bangkok 10900 39. Feed Addition Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 (Registered the change of company’s English name from Additive Food Co., Ltd. to Feed Addition Co., Ltd. on October 1, 2008.)

40. Pan International (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 41. Charun Business 52 Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 42. Thai Cooperage Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

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

Chompon Sub-District, Chatuchak District, Bangkok 10900 (Registered the change of company’s name from Bang-na Logistics Co., Ltd. on October 1, 2008.)

44. Thai Beverage Logistics Co., Ltd. 14, Vibhavadi Rangsit Road,

(3)

Chompon Sub-District, Chatuchak District, Bangkok 10900 45. Thai Beverage Marketing Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 46. Dhanasindhi Co., Ltd. 949/6 - 8 Nakhon Chaisi Road,

Tanon Nakhon Chaisi Sub-District, Dusit District, Bangkok 10300 47. Dhospaak Co., Ltd. 195 Empire Tower, 25th Floor,

South Sathon Road, Yannawa Sub-District, Sathon District, Bangkok 10120 48. International Beverage Holdings Limited Room 901-2, Silvercord Tower 1, 30 Canton Road, Tsim Sha Tsui, Kowloon,

(4)

Hong Kong 49. Cosmos Brewery (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 50. Thai Beverage Brands Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 (Registered the change of company’s name from T.C.C. Cosmo Corporation Limited on March 25, 2008.)

Thai Beverage Public Company Limited

33


Comp p any / Location 51. Beer Chang Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

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

Chompon Sub-District, Chatuchak District, Bangkok 10900 53. Sura Piset Pattharalanna Co., Ltd. 14 Sangsom Building, Soi Yasoob 1,

Type of Business

Type of Share

No. of Shares Held

Pa aid d-Up Capital (Baht)

Sh hares Issue ed

(Direct/Indirect)

% of Shareholding

Remark k

Trademark holding and production of concentrate materials

Common

1,000,000.00

10,000

9,940

100.00%

Trademark holding and production of concentrate materials

Common

1,000,000.00

100,000

99,940

100.00%

Holding company

Common

600,000,000.00

6,000,000

5,999,994

100.00%

Production and distribution of water

Common

60,000,000.00

600,000

599,993

100.00%

(5)

Japanese restaurant business and production and distribution of food and beverage

Common

375,000,000.00

187,500,000

168 ,610,199

89.93%

(6)

Trading of spirits

Common

17,500,000.00

17,500

17,483

99.90%

(7)

Production and distribution of spirits

Common

100,000,000.00

1,000,000

1,000,000

100.00%

Production and distribution of spirits

Common

100,000,000.00

1,000,000

1,000,000

100.00%

Import of oak woods

Common

3,810,000.00

38 ,100

38 ,100

100.00%

Production and distribution of vinegar

Common

2,000,000.00

20,000

20,000

100.00%

Environmental public relations

Common

5,000,000.00

500,000

500,000

100.00%

Trading of alcoholic beverages

Common

SGD 3,000,000.00

3,000,000

3,000,000

100.00%

Trading of alcoholic beverages

Common

USD 200,000.00

1,000

1,000

100.00%

Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 54. Thai Drinks Co., Ltd. 14, Sangsom Building,

Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 (Registered the incorporation on July 15, 2008.)

55. Oishi Group Public Company Limited 9 UM Tower Building, 20 th Floor,

Ramkhamhaeng Road, Suanluang Sub-District, Suanluang District, Bangkok 10250 56. Thai Thum Distillery Co., Ltd.* 14 Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 57. Sura Piset Sahasan Co., Ltd.* 14 Sangsom Building, Soi Yasoob 1,

Vibhavadi Rangsit Road, Chompon Sub-District, Chatuchak District, Bangkok 10900 58. Sura Piset Samphan Co., Ltd.* 14 Sangsom Building, Soi Yasoob 1,

Vibhavadi Rangsit Road, Chomphon Sub-District, Chatuchak District, Bangkok 10900 59. Muangkij Co., Ltd.* 9 Dao Khanong-Chom Thong Road,

Bang Kho Sub-District, Chom Thong District, Bangkok 10150 60. Pan Alcohol Co., Ltd.* 15 Moo 14, Vibhavadi Rangsit Road,

Chompon Sub-District, Chatuchak District, Bangkok 10900 61. Vidhayathan Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,

(8)

Chompon Sub-District, Chatuchak District, Bangkok 10900 62. InterBev (Singapore) Limited No.138 Cecil Street # 05 - 02 Cecil Court,

Singapore 63. InterBev (Cambodia) Co., Ltd. No.35, Street 322, Sangkat Boeung Keng Kang 1,

Khan Chamkamon, Phnom Penh, Cambodia

Annual Report 2008

34


Com mpany / Location 64. InterBev Malaysia Sdn. Bhd. No 9 -1, Jalan USJ 1/1B,

Type of Business

Type of Share

No. of Shares Helld

Pa aid-Up Capital (Baht)

Shares Issued d

(Direct/Indire ect)

% of Shareholding

Remark

Trading of alcoholic beverages

Common

MYR 100,000.00

100,000

100,000

100.00%

Trading of alcoholic beverages

Common

USD 1.00

1,000

1,000

100.00%

Trading of alcoholic beverages

Common

HKD 15,300,000.00

15,300,000

15,300,000

100.00%

67. International Beverage Holdings (UK) Limited Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Holding company

Common

£ 68,500,000.00

68 ,500,000

68 ,500,000

100.00%

68. United Products Company Limited 56 Sukhapibal Road, Tambon Nokornchaisri, Amphoe Nokornchaisri, Nakornpathom 73120

Production and distribution of spirits

Common

350,000,000.00

3,500,000

3,429,219

97.98%

69. SPM Foods and Beverages Company Limited 79 Moo 3, Tambon Lamlukbua, Amphoe Dontoom, Nakornpathom 73150

Production and distribution of water and energy drinks, and spirits agency

Common

606,250,000.00

60,625,000

60,520,000

99.83%

(10)

70. Oishi Trading Co., Ltd. 9 Ramkhamhaeng Road,

Production and distribution of food and beverage

Common

420,000,000.00

4,200,000

3,776,869

89.93%

(11)

Japanese ramen restaurants

Common

158 ,000,000.00

1,580,000

1,420,822

89.93%

(12)

Holding company

Common

£ 9,009,407.00

900,940,700

900,940,700

100.00%

73. Inver House Distillers Limited Moffat Distillery, Airdrie ML6 8 PL, Scotland

Production and distribution of spirits

Common

£10,000,000.00

10,000,000

10,000,000

100.00%

74. Blairmhor Distillers Limited* Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Dormant

Common

£200.00

2,000

2,000

100.00%

75. Wee Beastie Limited*

Dormant

Common

£100.00

100

100

100.00%

76. Speyburn-Glenlivet Distillery Company Limited* Moffat Distillery, Airdrie ML6 8 PL, Scotland

Dormant

Common

£100.00

100

100

100.00%

77. The Knockdhu Distillery Company Limited* Moffat Distillery, Airdrie ML6 8 PL, Scotland

Dormant

Common

£100.00

100

100

100.00%

78. The Pulteney Distillery Company Limited* Moffat Distillery, Airdrie ML6 8 PL, Scotland

Dormant

Common

£2.00

2

2

100.00%

79. The Balblair Distillery Company Limited* Moffat Distillery, Airdrie ML6 8 PL, Scotland

Dormant

Common

£2.00

2

2

100.00%

80. R Carmichael & Sons Limited* Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Dormant

Common

£30,000.00

30,000

30,000

100.00%

81. J MacArthur Jr & Company Limited* Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Dormant

Common

£100.00

100

100

100.00%

Regalia Business Centre, 47620 Subang Jaya,

Selangor, Malaysia 65. International Beverage Holdings

Limited USA Inc. 60 East 42nd Street, Suite 2134, New York, NY 66. Best Spirits Company Limited Room 901-2, Silvercord Tower 1, 30 Canton Road, Tsim Sha Tsui,

(9)

Kowloon, Hong Kong

Suanluang Sub-District, Suanluang District, Bangkok,10250 71. Oishi Ramen Co., Ltd. 444, 1st Floor, Room 1 A 08 - 09,

Phayathai Road, Wang Mai Sub-District, Pathumwan District, Bangkok 10330 72. Blairmhor Limited*

Moffat Distillery, Airdrie ML6 8 PL, Scotland

Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Thai Beverage Public Company Limited

35


Comp p any / Location

Type of Business

Type of Share

No. of Shares Held

Paiid-- Up Capital ( ht) (Ba

Sha a res Issued d

(Direct/Indirect)

% of Shareholding

82. Mason & Summers Limited* 10 Foster Lane, London, EC2V 6HH, England

Dormant

Common

£10,030.00

10,030

10,030

100.00%

83. Hankey Bannister & Company Limited* Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Dormant

Common

£100.00

100

100

100.00%

84. James Catto & Company Limited* Moffat Distillery, Airdrie ML6 8 PL, Scotland

Dormant

Common

£ 50,000.00

50,000

50,000

100.00%

85. Glen Calder Blenders Limited* Moffat Distillery, Airdrie, ML6 8 PL, Scotland

Dormant

Common

£100.00

100

100

100.00%

86. Moffat & Towers Limited*

Dormant

Common

£1.00

1

100

100.00%

Off licences

Common

£495,000.00

495,000

245,000

49.49%

Trading of alcohlic beverages

Common

PLN 700,000.00

700,000

308 ,000

44.00%

Dormant

Common

EUR 24,930.00

2,493

1,247

50.02%

Remark

Moffat Distillery, Airdrie ML6 8 PL, Scotland 87. Liquorland Limited 8 Westbank Road, Belfast, BT3 9JL,

Northern Ireland 88. Inver House Polska Limited ul. Obodrzyców 34 A/1, 81- 812 Sopot,

Poland 89. Inver House Distribution SA* Avenue des Tilleuls, 62140 Marconne,

France

Remarks: *These are currently non-trading. (1)

This company’s issued shares had not been fully paid. Currently, the company’s paid up capital is Baht 690 million.

(2)

On January 25, 2008. this company registered the increase of capital from Baht 2 million to Baht 200 million by issuing the newly issued shares of 19,800,000 shares, totalling 20,000,000 shares, with par value of Baht 10 each.

(3)

On February 28, 2009 this company registered the increase of capital from Baht 12 million to Baht 1,012 million by issuing the newly issued shares of 100,000,000 shares, totalling 101,200,000 shares, with par value of Baht 10 each. Currently, the company’s paid up capital is Baht 262 million.

(4)

On March 20, 2008 this Company registered the increase of capital from HKD 1,470 million to HKD 1,490 million by issuing the newly issued shares of 20,000,000 shares, with par value of HKD 1 each.

(5)

On December 11, 2008 this Company registered the increase of capital from Baht 1 million to Baht 60 million by issuing the newly issued shares of 590,000 shares, totalling 600,000 shares, with par value of Baht 100 each. At the end of 2008, the company paid up capital is Baht 30 million. Currently, the company’s paid up capital is fully made.

(6)

On September 30, 2008 the Company acquired 43.9% shares in this company and on November 18, 2008 the Company acquired additional 46.03% shares from making the tender offer of shares in this company, totalling 89.93%.

(7)

This company’s issued shares had not been fully paid. Currently, the company’s paid up capital is Baht 14 million.

(8)

This company’s issued shares had not been fully paid. Currently, the company’s paid up capital is Baht 2.5 million.

(9)

With the share premium of USD 2,599,999.00, in total paid-in capital of USD 2,600,000.00.

(10) On December 30, 2008 this company registered the increase of capital from Baht 6.25 million to Baht 606.25 million by issuing the newly issued shares of 60,000,000 shares, totalling 60,625,000 shares, with par value of Baht 10 each. (11) Derived from share acquisition of Oishi Group Public Company Limited on September 30, 2008 which holds 99.99% shares in this Company. (12) Derived from share acquisition of Oishi Group Public Company Limited on September 30, 2008 which holds 99.99% shares in this Company. Updates (as of March 11, 2009): (a)

On February 2, 2009 Sura Bangyikhan Co., Ltd. and other companies in Bangyikhan group acquired entire shares of Mekhong Distillery Limited. The registered capital of Mekhong Distillery Limited is Baht 500,000 consisting of 5,000 issued common shares. This company’s issued shares had not been fully made. Currently, the company’s paid up capital is Baht 125,000. Thai Beverage Public Company Limited indirectly holds 5,000 shares, representing 100%, in Mekhong Distillery Limited through the said subsidiaries. Currently, Mekhong Distillery Limited is dormant.

(b)

On February 2, 2009 Beer Chang Co., Ltd. and other companies in Beer Chang group acquired entire shares of Chang Beer International Co., Ltd. The registered capital of Chang Beer International Co., Ltd. is Baht 1,000,000 consisting of 100,000 issued common shares. Thai Beverage Public Company Limited indirectly holds 100,000 shares, representing 100%, in Chang Beer International Co., Ltd. through the said subsidiaries. Currently, Chang Beer International Co., Ltd. is dormant.

(c)

Chang Corp Co., Ltd. was incorporated on March 6, 2009. The registered capital of Chang Corp Co., Ltd. is Baht 100,000 consisting of 10,000 issued common shares. Thai Beverage Public Company Limited indirectly holds 9,996 shares, representing 99.96%, in Chang Corp Co., Ltd. through Thai Beverage Marketing Co., Ltd. Chang Corp’s issued shares had not been fully paid. Currently, its paid up capital is Baht 25,000.

(d)

Chang International Co., Ltd. was incorporated on March 6, 2009. The registered capital of Chang International Co., Ltd. is Baht 100,000 consisting of 10,000 issued common shares. Thai Beverage Public Company Limited indirectly holds 9,997 shares, representing 99.97%, in Chang International Co., Ltd. through Thai Beverage Marketing Co., Ltd. Chang International’s issued shares had not been fully paid. Currently, its paid up capital is Baht 25,000.

Annual Report 2008

36


LIST OF DIRECT AND DEEMED INTERESTS OF EACH DIRECTOR As at January 21, 2009

Name of directors(1)

Direct Interest es s

Number of Shares

Percenta a ge of Sharehollding din

1. Mr. Charoen Sirivadhanabhakdi

Thai Beverage Public Company Limited Good Show Holdings Limited (3) Risen Mark Enterprise Ltd. (4) Siriwana Co., Ltd. (5) Golden Capital (Singapore) Limited (6) MM Group Limited Maxtop Management Corp.(7)

3,156,500,000 319,999,997 25,000 -

12.57 50.00 50.00 -

2. Khunying Wanna Sirivadhanabhakdi

Thai Beverage Public Company Limited Good Show Holdings Limited (3) Risen Mark Enterprise Ltd. (4) Siriwana Co., Ltd. (5) Golden Capital (Singapore) Limited (6) MM Group Limited Maxtop Management Corp.(7)

3,156,500,000 319,999,997 25,000 -

3. Mr. Narong Srisa-an

Thai Beverage Public Company Limited

4. Mr. Komen Tantiwiwatthanaphan

Increase (decrease) during the accounting period (2)

Deemed d Interests

Numb er of N Shares Sha

Percenta ntage of Shareholding din

0

MM Group Limited MM Group Limited MM Group Limited MM Group Limited

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

100 100 100 100

12.57 50.00 50.00 -

0

MM Group Limited MM Group Limited MM Group Limited MM Group Limited

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

100 100 100 100

1

0.00

0

-

-

-

Thai Beverage Public Company Limited

34,068,668

0.14

0

-

-

-

5. Mr. Puchchong Chandhanakij

Thai Beverage Public Company Limited

1

0.00

0

-

-

-

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

241,541,500

0.96

(50,000,000)

Mr. Chompoonuch Tejapaibul(8)

-

-

15. Mr. Panote Sirivadhanabhakdi

Thai Beverage Public Company Limited

107,000,000

0.43

0

-

-

-

16. Mr. Thapana Sirivadhanabhakdi

Thai Beverage Public Company Limited

107,000,000

0.43

0

-

-

-

17. Ms. Kanoknart Rangsithienchai

Thai Beverage Public Company Limited

1

0.00

0

-

-

-

18. Mr. Sithichai Chaikriangkrai

Thai Beverage Public Company Limited

1

0.00

-

-

-

-

19. Mr. Ueychai Tantha-Obhas

-

-

-

-

-

-

-

20. Dr. Pisanu Vichiensanth

-

-

-

-

-

-

-

21. Mr. Chukiet Tangpongprush

Thai Beverage Public Company Limited

1

0.00

0

-

-

-

Remarks: (1) Mr. Samut Hatthasing resigned from the member of the Board of Directors effective on May 16, 2008. (2) This is to comply with the requirement of Public Limited Company Act B.E. 2535 (as amended) that the director holds shares or debentures of the company or an affiliate company held directly by a Board member Under his name, and shall indicate the total number of shares increasing or decreasing during a fiscal year (if any). No director holds shares in the Companyâ&#x20AC;&#x2122;s affiliate companies. The company does not have any outstanding debentures. (3) Good Show Holdings Limited holds 3,492,720,000 shares in Thai Beverage Public Company Limited. (4) Risen Mark Enterprise Ltd. holds 3,193,150,000 shares in Thai Beverage Public Company Limited. (5) Siriwana Co., Ltd. holds 2,462,200,000 shares in Thai Beverage Public Company Limited. (6) Golden Capital (Singapore) Limited holds 435,000,000 shares in Thai Beverage Public Company Limited. (7) Maxtop Management Corp. holds 261,249,000 shares in Thai Beverage Public Company Limited. (8) Ms. Chompoonuch Tejapaibul holds 50,000,000 shares in Thai Beverage Public Company Limited.

Thai Beverage Public Company Limited

37


STAT T ISTIICS OF SHAR R EH HOLD DER RS As at March 11, 2009 INFORMATION ON SHARE CAPITAL

Authorised share capital Issued and fully paid-up capital Class of shares Number of shares issued Voting rights

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 1 – 999 1,000 – 10,000 10,001 – 1,000,000 1,000,001 and above

Total

Number of Shareholders

%

Number of Shares

%

8

5.93

8

0.00

N/A

N/A

N/A

N/A

32

23.70

10, 808 ,925

0.04

95

70. 37

25,099, 216,067

99.96

135

100.00

25,110,025,000

100.00

The 18 .51 % 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.

Annual Report 2008

38


TOP TWENTY SHAREHOLDERS

No. Name of shareholders

Number of Shares

%

1. The Central Depository (PTE) Limited

5,742,139,920

22.87

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. Siriwana Co., Ltd.

2,860,720,000

11.39

6. Risen Mark Enterprise Ltd.

2,359,815,000

9.40

7. Sparkle View Development Limited

387,654,492

1.54

8. Mrs. Siriluck Maithai

338,519,080

1.35

9. Pan Glass Industry Co., Ltd.

316,000,000

1.25

10. Citibank Nominees Singapore Pte Ltd.

262,436,750

1.04

11. Mr. Vivat Tejepaibul

241,541,500

0.96

12. P.C. Commercial Co., Ltd.

240,000,000

0.95

13. Nimit Pichit Co., Ltd.

149,000,000

0.59

14. Pan Inter (1979) Co., Ltd.

135,000,000

0.54

15. Mrs. Wantanee Chevasiri

110,236,750

0.44

16. Mrs. Atinant Bijananda

107,000,000

0.43

17. Mr. Thapana Sirivadhanabhakdi

107,000,000

0.43

18. Mrs. Thapanee Techajareonvikul

107,000,000

0.43

19. Mr. Panote Sirivadhanabhakdi

107,000,000

0.43

20. Mrs. Wallapa Traisorat Total

107,000,000

0.43

23,483,783,492

93.52

Thai Beverage Public Company Limited

39


Statistics of Shareholders under the Central Depository (PTE) Limited

Size of Holdings

Number of Shareholders

%

Number of Shares

%

10

0.09

1, 810

0.00

1 – 999 1,000 – 10,000

7,707

70.71

33,760, 204

0.59

10,001 – 1,000,000

3,158

28 .97

191,487,006

3. 33

25

0. 23

5,516, 890,900

96.08

10,900

100.00

5,742,139,920

100.00

Number of Shares

%

2,577,624,984

44. 89

2. Risen Mark Enterprise Limited

833, 335,000

14.51

3. UOB Kay Hian Pte Ltd

504,547,000

8 .79

4. HSBC (Singapore) Nominees Pte Ltd

501,594,127

8 .74

5. DBSN Services Pte Ltd

461,185,640

8 .03

6. Citibank Nominees Singapore Pte Ltd

443, 853,638

7.73

108 , 367,112

1. 89

23,527, 399

0.41

1,000,001 and above

Total

Twenty Largest Shareholders under the Central Depository (PTE) Limited

No. Name of shareholders 1. DBS Nominees Pte Ltd

7. United Overseas Bank Nominees Pte Ltd 8

Raffles Nominees Pte Ltd

11, 837,000

0. 21

10. Nomura Singapore Limited

9. Merrill Lynch (Singapore) Pte Ltd

10,967,000

0.19

11. Morgan Stanley Asia (S’pore) Securities Pte Ltd

10,512,000

0.18

12. DB Nominees (S) Pte Ltd

7, 311,000

0.13

13. Macquarie Capital Securities Pte Ltd

3, 211,000

0.06

14. DBS Vickers Securities (S) Pte Ltd

3,097,000

0.05

15. Hoe Juan Jok

2,152,000

0.04

16. Lee Heng Tin

1,750,000

0.03

17. Lee Seng Hong or Shee Liang Yee Theresa

1,620,000

0.03

18 . Ng Ban Hock

1,500,000

0.03

19. Chen Chia Kuang Francis

1,462,000

0.03

20. Han Tock Lian

1, 380,000

0.02

5,510, 833,900

95.99

Total

Annual Report 2008

40


Particular of Material Contracts with the Interested Persons for the year 2008 consist of: 1. Share Sale and Purchase Agreement relating to the sale and purchase of ordinary shares of Oishi Group Public

Company Limited (“Oishi”) dated August 29, 2008 between Yodkij Business Company Limited (an associate of the company’s interested persons) who is the seller and Thai Beverage Public Company Limited who is the purchaser. The sale and purchase is for Thai Beverage Public Company Limited to acquire 82,314,537 shares representing 43.9% of the issued share capital of Oishi at the purchase price of Baht 37 per share and a total aggregate consideration of Baht 3,045.64 million. 2. Share Sale and Purchase Agreement relating to the sale and purchase of ordinary shares of Thai Alcohol Public

Company Limited (“Thai Alcohol”) dated August 29, 2008 between Damrongfah Company Limited (an associate of the company’s interested persons) who is the purchaser and Thai Beverage Public Company Limited who is the seller. The sale and purchase is for Thai Beverage Public Company Limited to dispose 160 million shares representing 100% of the issued share capital of Thai Alcohol for an aggregate consideration of Baht 1,590.95 million. The Extraordinary General Meeting of Shareholders No. 1 / 2009 held on September 29, 2008 approved the acquisition of the shares in Oishi and the disposal of the shareholding in Thai Alcohol set out above. The acquisition and disposal completed on October 30, 2008 .

Net book value of the company freehold land and building as at December 31, 2008 were as follows: (million Baht)

Land Surplus on land revaluation Land improvement Building and improvements Total

7, 867 4, 263 1,449 17,470 31,049

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, 2008 , the amount of freehold land held for planned future business operations amounted to Baht 1, 202 million which was 8 .1% of profit before income tax.

Thai Beverage Public Company Limited

41


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21


B O A R D O F D IR E C T O R S 1.

Mr. Charoen Sirivadhanabhakdi Chairman

2.

Khunying Wanna Sirivadhanabhakdi Vice Chairman

3.

Mr. Narong Srisa-an Vice Chairman

11. Prof. Pornchai Matangkasombut Independent Director

12. Mr. Sakthip Krairiksh Independent Director

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

4.

Mr. Komen Tantiwiwatthanaphan Vice Chairman

14. Mr. Vivat Tejapaibul Director

5.

Mr. Puchchong Chandhanakij Director

15. Mr. Panote Sirivadhanabhakdi Director

6.

7.

Mr. Staporn Kavitanon Independent Director and Audit Committee Chairman

16. Mr. Thapana Sirivadhanabhakdi

Prof. Kanung Luchai

17. Ms. Kanoknart Rangsithienchai

Independent Director and Audit Committee Member

8.

Mr. Manu Leopairote Independent Director and Audit Committee Member

9.

President and CEO

Director and Executive Vice President

18. Mr. Sithichai Chaikriangkrai Director and Senior Vice President

19. Mr. Ueychai Tantha-Obhas Director and Senior Vice President

Mr. Ng Tat Pun Independent Director and Audit Committee Member

10. Mr. Michael Lau Hwai Keong

20. Dr. Pisanu Vichiensanth Director and Senior Vice President

21. Mr. Chukiet Tangpongprush

Independent Director

Director and Senior Vice President

Ms. Vaewmanee Soponpinij

Mr. Thidi Suwanarat

Company Secretary / Secretary to the Board

Assistant Secretary to the Board

Thai Beverage Public Company Limited

43


EXEC C UTIVE COMMITTEE

Annual Report 2008

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

44


E X EC C U T IV V E C OM MMITTT EE 1.

Mr. Charoen Sirivadhanabhakdi

8.

Executive Chairman

2.

Khunying Wanna Sirivadhanabhakdi

9.

1 Executive Vice Chairman

Mr. Narong Srisa-an 2

4.

nd

10. Dr. Pisanu Vichiensanth Director and Senior Vice President

Executive Vice Chairman

Mr. Komen Tantiwiwatthanaphan

11. Mr. Chukiet Tangpongprush Director and Senior Vice President

rd

3 Executive Vice Chairman

5.

Mr. Puchchong Chandhanakij

12. Mr. Sawat Sopa Executive Vice President

4th Executive Vice Chairman

6.

Mr. Thapana Sirivadhanabhakdi

13. Mr. Jean Lebreton Senior Vice President

President and CEO

7.

Ms. Kanoknart Rangsithienchai

Mr. Ueychai Tantha-Obhas Director and Senior Vice President

st

3.

Mr. Sithichai Chaikriangkrai Director and Senior Vice President

14. Mr. Vichai Chaiyavaranurak Senior Vice President

Director and Executive Vice President

15. Mr. Somchai Suthikulpanich Senior Vice President

M ANA AGEMEN N T C OMMITTT EE 1.

Mr. Thapana Sirivadhanabhakdi

6.

President and CEO Marketing

2.

Ms. Kanoknart Rangsithienchai

Director and Senior Vice President General Affairs

7.

Mr. Sithichai Chaikriangkrai

8.

Mr. Ueychai Tantha-Obhas Director and Senior Vice President Sales

5.

Dr. Pisanu Vichiensanth Director and Senior Vice President Beer Production

Mr. Jean Lebreton Senior Vice President Strategy

Director and Senior Vice President Finance

4.

Mr. Sawat Sopa Executive Vice President Spirit Production

Director and Executive Vice President Corporate Services

3.

Mr. Chukiet Tangpongprush

9.

Mr. Vichai Chaiyavaranurak Senior Vice President Business Development

10. Mr. Somchai Suthikulpanich Senior Vice President Non-Alcohol Production

Thai Beverage Public Company Limited

45


DIR R E C T O R P R O F IL E

Director Profile 1 Mr. Charoen Sirivadhanabhakdi Chairman / Executive Chairman

Mr. Charoen Sirivadhanabhakdi was appointed Chairman of the Board of Directors of Thai Beverage Public Company Limited 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 TCC Land Co., Ltd. since 2002, the Chairman of Berli Jucker Public Company Limited since 2001 and the Chairman of South East Group Co., Ltd. since 1997. In addition, he has been the Chairman of TCC Holding Co., Ltd. since 1987. Mr. Charoen holds an Honorary Doctoral Degree in Agricultural Business Administration from Maejo Institute of Agricultural Technology, an Honorary Doctoral Degree in Industrial Technology from Chandrakasem Rajabhat University and an Honorary Doctoral Degree in Management from Huachiew Chalermprakiet 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 Diredgunabhorn and Knight Grand Commander (Second Class, Higher Grade) of the Most Illustrious Order of Chula Chom Klao.

Khunying Wanna Sirivadhanabhakdi Vice Chairman / 1st Executive Vice Chairman

Chairperson of TCC Capital Land Company Limited since 2003, Vice Chairperson of Berli Jucker Public Company Limited since 2001 and the Vice Chairperson of the Executive Board of T.C.C. Group since 1972. Khunying Wanna holds an Honorary Doctoral Degree of Bio-technology from Ramkhamhaeng University, an Honorary Doctoral Degree in Business Administration from Maejo Institute of Agricultural Technology, an Honorary Doctoral Degree in Business Administration from Chiang Mai University, and an Honorary Doctoral of Philosophy Degree in Social Sciences from Mae Fah Luang University. On the social activity side, she is the Vice Chairperson of the Bhumirajanagarindra Kidney Institute Foundation, a Director of the Siriraj Foundation, a Director of Ramathibodi Foundation, a Director of the Crown Prince Hospital Foundation, a Director of the Kidney Foundation of Thailand, a Director of the Elephant Reintroduction Foundation, a Director of the Commitee for Recruitment and Promotion of Voluntary Blood Donors of the Thai Red Cross Society, and a Director of the Sala Chalermkrung Foundation. Khunying Wanna has been awarded with business and social awards from several institues. She has also 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 Diredgunabhorn.

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

Annual Report 2008

46


Mr. Narong Srisa-an Vice Chairman / 2

nd

Executive Vice Chairman

Mr. Narong Srisa-an was appointed Vice Chairman of the Board of Directors in 2003. He has 44 yearsâ&#x20AC;&#x2122; experience in the banking industry, having served in Kasikorn Bank Public Company Limited from 1954 to 1998 as its Executive Vice Chairman. He also holds directorships in several public companies in Thailand, including Chairman and Executive Chairman of Oishi Group Public Company Limited, Chairman of Advance Agro Public Company Limited and Independent Director of True Corporation Public Company Limited. He holds an Honorary Master of Economics from Thammasart University.

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, Director of Robina Credit Ltd. from 1980 to 1982 and Vice President of Asia Credit Ltd. from 1975 to 1979. He also holds the position of independent director of Krisdamahanakorn Public Company Limited. He holds a Bachelor of Business Administration and a Master of Science in Accounting from California State University, Long Beach, USA.

Mr. Staporn Kavitanon Independent Director and Audit Committee Chairman

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

Mr. Komen Tantiwiwatthanaphan was appointed Vice Chairman of the Board of Directors in 2003. He has had over 40 yearsâ&#x20AC;&#x2122; 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 Public Company Limited from 1986 to 1999. He holds a High School Certificate from China.

Mr. Staporn Kavitanon was appointed a Director in 2004. He has extensive experiences in the management of companies with directorship and membership of Committees at various companies, such as Bangkok Bank Berhad, Siam Food Public Company Limited and Berli Jucker Public Company Limited. From 1994 to 1999, he was the Vice Chairman of Bangkok Bank Public Company Limited. He holds a Bachelor of Arts in Economics from Thammasart University and a Master of Arts in Economics from Vanderbilt University, USA.

Mr. Puchchong Chandhanakij

Prof. Kanung Luchai

Director / 4th Executive Vice Chairman

Independent Director and Audit Committee Member

Mr. Puchchong Chandhanakij was appointed a Director and Executive Vice Chairman in 2003. Before joining Thai Beverage Public Company Limited, he was Managing

Prof. Kanung Luchai was appointed an Independent Director in 2004. He has wide-ranging experiences in the public sector and legal business, having worked as

Thai Beverage Public Company Limited

47


Junior and Senior Public Prosecutor in the Department of Public Prosecution from 1946 to 1971 and 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 practiced 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 Public Company Limited and Bangkok Bank Public Company Limited.

Assumption University, and Bangkok University. He was the President of the Thammasart University Association from 2003 to 2004 and was the President of the Thammasart University Economics Association from 2000 to 2006.

Director Profile 2

In 2001, he received the Prof. Sanya Thammasak Award for being an Outstanding Lawyer from the Private Sector. He holds a Bachelor of Laws from Thammasart University, a B.A. Hons., LL.B. Cambridge University, United Kingdom, an Honorary Doctorate Degree of Law from Chulalongkorn University and Thammasart University, and an Honorary Doctorate Degree of Management Technology from Suranaree University of Technology. He is also a member of the Thai Bar Association.

Mr. Manu Leopairote Independent Director and Audit Committee Member

Mr. Manu Leopairote was appointed an Independent Director in 2004. He has extensive experiences in the public sector, having served as a Director, Secretary General, Inspector-General 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 2008, 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, Thammasart University,

Annual Report 2008

He holds a Bachelor of Science in Economics (Honors) from Thammasart University and a Master of Science in Economics from the University of Kentucky and the National Defense College of Thailand Class 34. He won the Asian Productivity Organization Award in 2005.

Mr. Ng Tat Pun Independent Director and Audit Committee Member

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 financial 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, Chairman of the Audit Committee, Member of the Nomination Committee of Engro Corporation Ltd., Singapore and an Independent Director, Chairman of the Board of Directors, Chairman of the Nomination Committee and Member of the Audit Committee of SP Chemicals Ltd., Singapore. Mr. Ng holds a Bachelor of Arts degree (Economics and History) from the University of Singapore.

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Mr. Michael Lau Hwai Keong Independent Director

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. From June 2000 to September 2004, he served as the Executive Vice President, International of United Overseas Bank Ltd., where he was responsible for the administration and governance of the bankâ&#x20AC;&#x2122;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) from Institute of Chartered Financial Analysis.

Prof. Pornchai Matangkasombut

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 Degree, Doctor of Medicine (M.D.) and Doctor of Philosophy (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, DirectorGeneral, 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.

Independent Director

Prof. Pornchai Matangkasombut was appointed as an Independent Director in 2006. He was the President of the Mahidol University from 1999 to 2007 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

He holds a Bachelor of Political Science from Boston University, USA and has attended the National Defense College. He also holds an Honorary Doctorate Degree from Soka University, Japan. 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.

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He is currently a Chairman of the University Council at the Rajamangala University Technology Krungthep.

Mr. Vivat Tejapaibul Director

Mr. Vivat Tejapaibul was appointed a Director in 2003. Director Profi le 3 He has over 18 yearsâ&#x20AC;&#x2122; experiences in the banking

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

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 (WorRorPorOr 399), a Certificate of Proficiency in General Surgery from the Royal College of Surgeons of Thailand and a Diploma from the Army War College (34). 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.

industry, having served in Bangkok Metropolitan Bank Public Company Limited 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 Laws from Thammasart University and a Masterâ&#x20AC;&#x2122;s Degree from Fairleigh Dickinson University, USA.

Mr. Panote Sirivadhanabhakdi Director

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

Mr. Thapana Sirivadhanabhakdi President and CEO

Mr. Thapana Sirivadhanabhakdi was appointed the President and CEO of the Company in January 2008. Prior to this appointment, he was the director and Executive Vice President of the Company from 2003

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to January 2008. In addition, he has also held several executive positions in many leading companies such as Vice Chairman of Red Bull Distillery (1988) Co., Ltd. since 2004, and Executive Director of Berli Jucker Public Company Limited since 2001. In 2004, he was appointed Executive Director of Beer Thai (1991) Public Company Limited, and Vice Chairman of Dhospaak Co., Ltd. Since 2006, he has been Vice Chairman of the Oishi Group of companies. 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 Thai Beverage subsidiary companies. He holds a Bachelor of Business Administration (Finance) and a Master of Science Administration in Finance Economics from Boston University, USA.

Mr. Sithichai Chaikriangkrai Director and Senior Vice President

Mr. Sithichai Chaikriangkrai was appointed a Director and Senior Vice President in 2003. 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 yearsâ&#x20AC;&#x2122; experience in financial positions, including the Finance and Accounting Manager of Asia Voyages & Pansea Hotel 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 Thammasart 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 Certificate of the Mini MBA Leadership Management from Kasetsart University.

Ms. Kanoknart Rangsithienchai Director and Executive Vice President

Mr. Ueychai Tantha-Obhas 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 Thammasart University and has completed the Director Accreditation Program with the Thai Institute of Directors.

Director and Senior Vice President

Mr. Ueychai Tantha-Obhas has been a Director since July 2005. Before joining Thai Beverage Public Company Limited, 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, Missouri, USA., a Master of Business Administration from Thammasart University and has completed the Advance Management Program from INSEAD, France.

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Dr. Pisanu Vichiensanth Director and Senior Vice President

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 Public Company Limited. He joined Surabangyikhan Co., Ltd. in 2000 as the head of the Human Administration and General Affairs.

Director Profile 4

Dr. Pisanu Vichiensanth has been a Director and Senior Vice President since February 2004. He has held several positions in Thai Beverage Public Company Limited, including Executive Vice President from 2000 to 2003 and Senior Vice Executive President from 2003 to 2004, at subsidiary Beer Thai (1991) Public Company Limited. He is currently the President of Beer Thai (1991) Public Company Limited. Before joining Thai Beverage Public Company Limited, 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 Thammasart 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, Germany, a Master of Technology (Second Class Honors) in Biotechnology from Massey University, a Master of Beer Brewery from the Scandinavian School of Brewing, Denmark 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 Thai Beverage Public Company Limited in 2003. Before joining, he was a lawyer

Annual Report 2008

He holds a Bachelor of Laws from Thammasart 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.

Mr. Sawat Sopa Executive 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 workmenâ&#x20AC;&#x2122;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

52


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 from Chulalongkorn University, a Master Degree of Industrial Management, Kensai Kasu Center, Japan, a Master Degree Dynamic Management International Executive, Syracuse University USA 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. Vichai Chaiyavaranurak Senior Vice President

Mr. Vichai Chaiyavaranurak was appointed a Senior Vice President on August 1, 2008. Prior to the appointment, he held many executive positions in Thai Beverage Group of Companies, including the director of Thai Beverage Logistics Co., Ltd., the director of Thai Beverage Marketing Co., Ltd., and Accounting & Finance President (Marketing Group) of Thai Beverage Public Company Limited. He holds a Bachelor of Business Administration in Finance and Banking, Thammasart University.

Mr. Jean Lebreton Senior Vice President

Mr. Jean Lebreton was appointed Senior Vice President in February 2008. At Thai Beverage Public Company Limited, Mr. Lebreton works with other senior executives to develop and implement strategy and facilitate the integration of future acquisitions. He worked for the Boston Consulting Group (BCG) from 1989 to 2005. After working for BCG in France for five years, he moved to Thailand in 1994 to open the Bangkok office of BCG. He became a partner in the company in 1995. After leaving BCG in 2005, Mr. Lebreton worked independently for several years before joining Thai Beverage Public Company Limited 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.

Mr. Somchai Suthikulpanich Senior Vice President

Mr. Somchai Suthikulpanich was appointed a Senior Vice President on October 1, 2008 and also holds the position of Executive Vice President, Thai Beverage Marketing Co., Ltd. He has held many top executive positions, beginning with the Managing Director of Beer Chang International Co., Ltd. in 2002. He joined Thai Beverage Public Company Limited in 2003 as the Director and Deputy Managing Director, Group of Industrial and Commerce and in 2004 as the Director and Deputy Managing Director, Thai Beverage Marketing Co., Ltd. He holds a Bachelor of Arts (Banking and Finance/ Marketing), Marshall University, USA.

Mr. Lebreton has an MBA from Wharton School of the University of Pennsylvania.

Thai Beverage Public Company Limited

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ORG GA NIZATT IO ON STT RUCTT URE Annual Report 2008 Thai Beverage Public Company Limited

Audit Committee

Board of Directors

Office of Internal Audit

Executive Committee

Office of Chairman of Executive Committee

General Affairs

President and CEO

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Annual Report 2008

54


Risk Management Committee

Nomination Committee

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International Businesses

Business Development

Non-Alcohol Production

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Thai Beverage Public Company Limited

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RES SP ONSIB BIL LITT IES A ND AUTT HORIZ Z ATIO ON OF EA AC H OF F IC CE

Responsibilities and authorization of each Office

Office of Chairman of the Executive Board

Co-ordinates and scrutinizes documentation work for presentation to the Chairman of the Executive Board and is responsible for the related secretarial tasks.

Office of the 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.

Office of Liquor Production

Manages and oversees operations of the three liquor groups in compliance with the goals and policies of the Company 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 Engineer

Oversees the engineering section to support the distilleries and the Companyâ&#x20AC;&#x2122;s affiliates to align with goals for the utmost benefit to the Group.

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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 the Company, including the promotion of the development of production and personnel skills for the sustainable benefit of the Group.

Office of Non-Alcohol Production

Manages and oversees operations of the non-alcoholic beverages in compliance with the goals and policies of the Company, including the promotion of the development of production and personnel skills for the sustainable benefit of the Company.

Office of Business Development

Supervises and oversees the operation of all related businesses under the responsibility of the Office of Business Development in compliance with the Company's policies including giving advice and strategic planning to develop the businesses in charge to gain a maximize value added to the Company.

Office of Marketing

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 Sales Planning and Supporting

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.

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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 the Company 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.

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 ofďŹ ces - 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.

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Office of Corporate Communications

Supervises and is responsible for all aspects of corporate communications functions, namely advertising and public relations, internal and external communications, electronic communications as well as investor relations, to garner the utmost benefits 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 as well as other sub-committee meetings; oversees the compliance with Securities Laws and the Listing Manual of the Singapore Exchange; Analyzes Securities Laws relating to the Company's business; prepares and keeps documents pursuant to Public Limited Company, Private Limited Company and Securities Laws as applicable; controls disclosure of material information to ensure compliance with laws, regulations and the Listing Manual, as well as the Company policy; provides appropriate advice to all directors and key executives in relation to the compliance with rules and regulations of the Securities Laws including the resolutions of shareholders, the resolutions of Board of Directors of the Company; oversees the share registration of the Company and its group of companies; coordinates with related parties on the share registrar work; and organizes the preparation of the annual report.

Office of External Affairs

Oversees external affairs. Directly and indirectly creates positive relationships with business partners, leading to commercial opportunities 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.

Thai Beverage Public Company Limited

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PRODUCT PORTFOLIO

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60


Thai Beverage Public Company Limited

61


Oishi Beverage Portfolio

Oishi Ois sshi Green Tea

Oishi Green Tea Ois

Oishi O is Green Tea

Japanese Restaurants / Kiosks

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62


Coffio C Co off Coffee

Amino Am min OK m

Oishi Ois s h Green Tea

Oishi Chilled & Frozen Foods

Sandwiches Sand

Gyoza Gyoz z

Kani

Alaska Kani Alask

63

Thai Beverage Public Company Limited


Annual Report 2008

64


Operational and Financial Review

Overview

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 listed on the Singapore Exchange (SGX) on May 30, 2006 as one of the largest listing there in 10 years. The listing raised approximately S$1.57 billion or Baht 38 billion, which we used net part of new share to pay off short-term debt and certain for working capital. ThaiBev is not only Thailand’s largest alcohol beverages producer, it is one of Southeast Asia’s largest.

Our vision for the Company is to become a leading global beverage company, focusing on commercial excellence, continued premiumisation of our products, and professionalism. Our mission is to seek “partnerships” among our key stakeholders through six guiding values: • 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, and • contribute to local communities

Strategies We must maintain our leadership in Thailand by adopting a marketing-led approach to manage both the marketing mix and control the pricing of our brands. We can do this because we work closely with our agents, training and advising them to provide customers the best service and offering a more professional service

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ourselves. This is of tremendous strategic importance as ThaiBev does not own any trade outlets – except for some limited sales through the Oishi restaurant chain – and sells by the case to agents and the modern trade, like supermarkets. In 2008, the Company spent more time working closely with agents and dealers to restructure the sales and distribution network. For instance, we now take full control of sales to the modern trade, like supermarkets and hypermarkets and ensure that our sub-agents work within their own defined sales areas to ensure greater efficiency. We will continue investing in our existing brands through integrated marketing communications and ongoing repackaging and upgrading of our brands. We want our customers to feel they are within reach of the best quality and best value products available in the market. ThaiBev uses the term premiumisation as shorthand to describe how we are expanding up-market by launching

higher-margin products in aspirational and premium segments. Examples of where we have done this already include repackaging Hong Thong for the Thai market with a more international look and feel, repackaging Mekhong and Chang for export in order to enter the premium market overseas, and the June launch of Federbräu premium beer and the August launch of Drummer Scotch whisky in Thailand. This movement upwards will lead to margin appreciation. Importantly, not only can we diversify the risk of staying only in economy products, which largely appeals to the grassroots of society, but we can drive growth in areas that we expect to become popular in future, like health drinks. As our existing facilities are both modern and widely spread throughout the country, we are in the unique position of being able to introduce new products in a relatively short time-frame with very minimal further capital expenditure required and low incremental distribution costs. We have built up a massive distribution network over the years based on the network created by our distillery and beer assets over 30 years. We continue to leverage this distribution infrastructure whenever we acquire new products or upgrade current ones to maximize sales potential. Moreover, we have always maintained an open door policy towards other manufacturers who wish to take advantage of our ready-made nationwide network. Though extensive, the portfolio up until the start of 2008 was built around a predominantly rural demand. From 2008 onwards, we intend to extend this distribution network into urban areas as we pursue entry into the premium beer and Scotch whisky segments. The Company is well aware that it must move up-market to derive higher margins. ThaiBev has already begun its first steps into foreign expansion. Initially, we established professional international management, marketing and distribution teams who have been very prudent in applying the appropriate business model to each market. Our entry into various markets has been gradual, but our sights are on long term gains built on

Passion Thai

Annual Report 2008

40 ml Mekhong

Shake all ingredients together

60 ml Pink Grapefruit Juice

and serve in a tumbler.

30 ml Passoa’ Liquor

This is a very fresh cocktail

10 ml Grenadine Syrup

to serve at all times.

10 ml Rose Syrup

Decorate with fresh fruit.

66


a well-established series of brands with a solid foundation in each market. One way in which we plan to achieve longevity is to create regional brands and develop a niche for Asian brands, especially in the USA and Europe.

The Thai Economy ThaiBev manufactures and sells consumer goods in the form of alcoholic and non-alcoholic drinks. Generally, drinks are affected by the economy in that if consumers do not have sufficient discretionary income, they might purchase less quantity, or trade downwards to less expensive items, or cut down on the number of times they go out in a month, etc. In 2008, ThaiBev felt the impact of poorer consumer confidence in the economy and an actual drop in the performance of the economy. Moreover, ThaiBev’s business is seasonal, with peaks occurring at festivals and national holidays and quieter periods occurring in the third quarter. The latter is both the monsoon season in Thailand, when many areas are flooded, and

a Buddhist religious period when Thai people often lower or cease their alcohol consumption for up to three months. Under normal circumstances, ThaiBev would recover from the poor third quarter and have a much-improved fourth quarter that outperforms all other periods of the year. However, the continuous political problems faced by the country throughout the year and the global financial crisis have take their toll on consumers’ ability and willingness to spend on non-essential items like alcohol. A factor in the rising prices affecting consumers is inflation; the Bank of Thailand estimates that core inflation in 2008 will reach approximately 2.0 - 2.5, with headline inflation reaching 6.0 to 6.5.1 (The Ministry of Commerce reported the core inflation in 2008 reached approximately 2.4, with headline inflation reaching 5.5 2 ) The Consumer Price

Index (CPI)2 rose throughout the year to 119.5 in December 2008. As most of Thai Beverage’s consumers are low income, we note that the Low Income Consumer Price Index (LICPI)3 for all commodities rose from 111.5 in January 2008 to 114.8 in December 2008, while for food and beverages it rose from 115.8 in January to 131.2 in December 2008. The Rural Consumer Price Index for all commodities rose from 116.8 in January 2008 to 120.4 in December 2008 4.

Legislation Following the passage of the Alcohol Control Act in December 2007, the final draft was approved by Parliament on February 13, 2008, and promulgated in the Royal Gazette on February 14, 2008. Much of the content of the Act was anticipated by ThaiBev and we have prepared to work within the law at every juncture. There are restrictions on sites where alcohol may not be sold, however, ThaiBev does not own outlets except for our newly acquired Oishi restaurants and thus we have never sold alcohol in temples and other religious places, hospitals, schools and educational institutions as defined by the law nor allowed our agents to sell alcohol in petrol or fuel service stations or shops in their vicinity for several years. We have never sold alcohol using vending machines.

Inflation report October 2008 http:||www.bot.or.th|English|MonetaryPolicy|Inflation|Documents|Total_E_Oct08.pdf 1

2 MOC NEWS Consumer Price Index and Core Consumer Price Index in December 2008 and year 2008 http:||www.indexpr.moc.go.th|price_present|cpi|data|index_47_e.asp?list_month=12&list_year=2551&list_region=country

Report for Consumer Price Index (Low Income) of Thailand Year 2008 (Base Year 2002) http://www.indexpr.moc.go.th/price_present/TableIndexG_region_y.asp? table_name=&province_code=5&type_code=l&check_f=i&year_base=2545&nyear=2551 4 Report for Consumer Price Index (Rural) of Thailand Year 2008 (Base Year 2002) http://www.indexpr.moc.go.th/price_present/TableIndexG_region_y.asp? table_name=&province_code=5&type_code=u&check_f=i&year_base=2545&nyear=2551 3

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Investors should keep in mind that the majority of our sales today are in rural areas for consumption off-premise:

at home that is, not at the point of purchase. 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. While the law forbids the sale of alcohol to anyone under 20 years old, it has always been difficult for those under 20 to enter drinking and entertainment establishments where alcohol is sold. We do not own entertainment establishments.

Some restrictions affect our ability to promote and market. 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. We may not offer alcoholic drinks publicly for people to try, or to impose any conditions that oblige the purchase of, alcohol. Advertising is now forbidden if it shows the drinking of alcohol and consequently the alcohol beverage industry cannot show the name or brand if it accentuates the merits of alcoholic drinks or entices people to drink. We have not produced any advertising along these lines for many years. Advertising and public relations regarding alcohol are legal, but there are exemptions subject to Ministerial Regulations. For example, adverts must be limited to information and news about social contributions without any product photos or packaging, except for the symbol or logo of the drink or company only. Hence, we can still advertise our corporate social responsibility (CSR) activities and build our corporate image in Thailand. The law does not cover advertisements that originate outside Thailand. ThaiBev is of course a shirt sponsor of Everton Football Club in the UK and this sponsorship is unaffected by these new regulations. After consideration of the Alcohol Control Act, ThaiBev believes that its marketing efforts will require more ingenuity and imagination. We are in the fortunate situation that our key strength is the size and pervasiveness of our distribution network, which is a competitive advantage.

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

Mekhong Chalis 50 ml Mekhong

The palm sugar and lemon grass

2 Tbsp. Palm Sugar

should be made into a paste to

1 Lemon Grass Stalk

add to the Mekhong chalis.

3/4 Kaffir lime leafs

Serve in old fashioned glass over

Juice of 1 Lime

crushed ice. Garnish with the thin end of lemon grass stalks and 2 kaffir leafs.

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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 provides higher revenue for the government. Investors should not confuse a tax rise with raising the tax ceiling. Excise taxes are normally raised occasionally by the Excise Department of the Ministry of Finance but may not go higher than a ceiling set by Parliament. It is therefore necessary when taxes approach the ceiling for the Cabinet to propose a rise in the ceiling and then forward this to Parliament to pass an Act making it legal. The last time the ceiling was raised across the board was several decades ago. Whereas the Cabinet approved raising the excise tax ceiling in 2007, Parliament has not yet considered the matter. Whenever the government does raise taxes, as it did on August 28, 2007, ThaiBev sales of products will decline due to a “price shock”. This may take a year or longer to recover. White spirits sales volumes in 2008 were down 4.3% compared to the same period in 2007. On January 14, 2008, the Government applied an additional amount of 1.5% onto the excise tax on all alcoholic beverages in order to pay for the new public broadcasting system. ThaiBev cautions investors who try to predict the effect of tax rises on the financial results of the Company by making elasticity of demand tables as most such tables do not take into account compensatory actions by the Company to alleviate the effects of the tax rise – for instance, releasing a new product to replace the taxed product at its old price point. Investors should be aware that tax rises are a factor of their investment in ThaiBev and can occur periodically and without warning.

Domestic business The alcoholic beverage business in Thailand is still very strong but like every other consumer-oriented business is affected by the economy. The tourism industry for instance, which admittedly currently accounts for a small part of ThaiBev’s overall business, was negatively affected generally by political uncertainty and specifically by the extended closure of Thailand’s main international airports. As a major source of national revenue declined, a large proportion of the public commenced belt-tightening. This has affected the alcohol industry, especially toward the end of 2008. During any economic downturn, we expect to see consumers switching down, meaning, moving from higher-priced drinks to lower-priced drinks and in fact that is what we have seen happening in some categories. For instance, we believe some consumers are switching down from imported spirits into our locally-made brown spirits. This segment is

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a nominal beneficiary of the downturn. There has also been some switching from our white spirits to cheaper, illegal spirits. Strategically, the Company branched out into non-alcoholic beverages at the start of 2008, wishing not only to enter a growing market segment but to diversify its risk without leaving its core drinks-oriented business. However, it is still too early to expect too much from these investment as ThaiBev is in the process of making internal changes intended to fit them into our accounting and distribution systems. The main advantages we see are the broader distribution we offer and a more modern management system.

Beer business Beer is enjoyed by consumers as a social drink and an alternative to spirits. In this respect, it has been affected by the economic downturn as consumers have had to cut down somewhat on their social activities. ThaiBev has spent time in 2008 re-organizing and restructuring our distribution and sales network to improve future efficiency. Lighter alcohol beers like Federbr채u, Chang Light, Chang Draught and Archa represent the trend towards lighter beers among the new generation; while the more mature generation, which had consumed mostly white spirits over the years, prefers our original Chang recipe. Beer has been affected in 2008 as it is a social drink consumed more often at on-premise outlets, like bars and restaurants. It is also the preferred drink of the younger generation, implying a proportionately lower income level than the consumers of brown spirits. The dramatic rise of lower alcohol beers in the past three years is reaching a zenith and we would expect a clearer equilibrium between low and high alcohol beers in 2009, with Chang remaining popular with a core group of mature consumers while lower alcohol beers like Archa, Chang Draught and Chang Light establishing themselves with a younger group. The launch of Federbr채u in mid-2008 was heralded by a high profile marketing campaign in Bangkok and other major cities. Besides bottles, Federbr채u is now also sold on draft as this is the preferred choice of consumers in the premium category. In half a year the Company has not been expecting any significant portion of the premium beer market to be appropriated from the acknowledged market leader, Heineken; however, we will continue to promote Federbr채u in 2009. Why has there been consumer movement in the past three years from the original Chang towards other beers? When Chang was first introduced, it was the only economy beer available in rural areas. This meant for many consumers, it was a choice of one beer only. As more beers have been introduced, consumers have been given a choice which is a natural phenomenon as the industry grows.

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Mekhong Delta 50 ml Mekhong

Muddle fruit, add

1/4 Fresh Mango

other ingredients,

1/4 Fresh Apple

double strain into

1 inch Fresh Chilli

cocktail glass,

Juice of 1 Lime

garnish with mango

20 ml Pomme Verte

and chilli head.

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Spirits business White spirits volumes declined year on year by 4.3%, however, revenues increased 14.9% due to the higher prices introduced by the tax rise in August 2007 and January 2008, plus a price rise introduced by the Company itself in early 2008. The white spirits business is not a growth segment and will at best remain flat for the foreseeable future. The main competition is illegal moonshine and while the economy fails to perform, we expect this non-taxed competition to be a viable but dangerous alternative for low-income earners.

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Brown spirits did comparatively better due we believe to consumers switching down from imported whiskies into our products. Supporting this has been the success of two of our brown spirits products, Hong Thong and Blend 285, which together account for the fastest growing segment of our brown spirits portfolio. In the past year, Hong Thong sales volume grew 19%, whereas Blend 285 grew 71%.

This represents our first foray into the Scotch whisky segment. This new segment is currently dominated by foreign players and we believe that we can wrest some of the market away from them due to our superior distribution system. The timing of the launch should allow us to build the brand over the next few years while foreign imports are in retreat.

The Company launched a new Scotch whisky in 2008, Drummer, which retails for about Baht 450 a bottle.

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Non Alcohollic B everages Thee L ate st Add dittion To Our Por t f olio Ran nge The decision to enter the non-alcoholic beverage was a strategic move that provides us with another strong base from which to grow in future. The reasons for believing this are threefold: firstly, our research reveals that the non-alcoholic beverage market is growing, not only in the sense of soft drinks like fruit juices and water, but also in newer segments like functional drinks. Functional drinks are fortified with an assortment of nutritional supplements, such as vitamins and minerals, and are often promoted for their health or invigorating effects. Some products, like energy drinks, are well-known in Thailand but others have yet to make an impact on Thai consumers. We believe this is a future trend to watch. Another reason to enter non-alcohol is to diversify our current portfolio so as not to be totally weighted toward one side or another of the total drinks market. This rebalancing to some extent will help us to cope with future trends or movements towards greater health consciousness in Thailand, and together with expansion abroad will allow ThaiBev to broaden its revenue base. Ultimately, entry into non-alcohol will offset the effect on the Company of future tax increases on alcoholic beverages. We have always cautioned investors that taxation is a fact of life in our industry – and in fact ThaiBev is proud of being one of the country’s largest contributors to the government’s revenues – however, we are aware that tax increases affect our alcohol beverage business temporarily and thus lowering the impact on the overall business will benefit us and our shareholders.

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Overview ThaiBev acquired 83.2% of the business of SPM Foods and Beverages Co., Ltd. (“SPM”) in November 2007. That company produces and distributes drinking water, juices and seasoning sauce. Subsequently in 2008, the Company established Thai Drinks Co., Ltd. (“Thai Drinks”) to support the improvement and expansion of drinking water business. Investors should note that at the end of 2008, Thai Drinks was not fully operational.

In January 2008, ThaiBev purchased assets used for the operation of production and sale of energy drink and ready-to-drink coffee from Wrangyer Beverage Co., Ltd. In addition, in September 2008, ThaiBev purchased shares of Oishi Group Public Company Limited (“Oishi”) an operator of Japanese restaurants that produces and distributes food and beverages. A tender offer provided ThaiBev with 89.9% of the company.

Our Products

Water and Club Soda ThaiBev has for many years produced, distributed and sold drinking water and club soda in Thailand under the Chang brand. In 2008, we sold 46.5 million liters of bottled water and 10.4 million liters of club soda. This is

a rise of 6% over 2007 for water. Our bottled water is sold in glass bottles of 500 milliliters; Polyethylene terephthalate, or PET, bottles of 500 milliliters and polycarbonate gallon containers of 18.9 liters. Club soda water is sold in glass bottles of 400 and 325 milliliters. Bottled drinking water in particular has much potential to grow in future. We considered that by increasing the range of our packaging and improving distribution, there is a positive growth path that we could follow.

Thai Drinks was established to sell and distribute drinking water, with a target of becoming one of Thailand’s leading players in this market. To do so, however, Thai Drinks is preparing to change the business model for the sales of water and club soda. Among the changes expected is the introduction of five gallon/18.5 liter containers for home delivery. Club soda will be delivered directly to restaurants, hotels and other establishments. Management has also reviewed the current water bottle sizes and is introducing a new range to meet market demands. For instance, we are introducing 600cc, 750 cc and a 1.5 liter bottles, which are expected to provide us with a better margin as raw material costs will be lower.

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Wrangyer and Black Up In January 2008, we purchased the assets used in the production of energy drinks and ready-to-drink coffee from Wrangyer Beverage Company Limited. We later changed the business name to Wrangyer Beverage (2008) Co., Ltd. This subsidiary produces and sells energy drinks under the Wrangyer brand and a ready-to-drink coffee under the brand Black Up. Wrangyer energy drinks are sold in glass bottles of 150 milliliters and Black Up in cans of 180 milliliters. Wrangyer was our first entry into the energy drink segment and Black Up into the ready-to-drink coffee segment; however Wrangyer has been sold in Thailand for over 10 years and is among the four top players in the local energydrink market. While we produce energy drinks at our Nakhon Pathom plant, which has a capacity of nearly 400 million units a year we outsource the production of Black Up coffee. Energy drinks are an interesting segment that offers the potential to grow further in Thailand. Most foreign shareholders will be unaware that energy drinks historically in Thailand have been positioned at the low end of the market and their position is incomparable with well known energy drinks sold in the West due to different market strategies. This is

an area that ThaiBev wishes to change over time. In Thailand today, energy drinks are about to become functional drinks, meaning that they are seen by us more as â&#x20AC;&#x153;water plus vitaminsâ&#x20AC;?. They are currently regulated by the Thai Food and Drugs Administration (FDA) due to the caffeine they contain and this has led to some restriction on advertising. The next step therefore has to be caffeine-free energy drinks that will allow us to promote the beneficial qualities of functional drinks more. There are several methods of producing energy drinks without caffeine, sometimes known as bio-energy drinks. Natural alternatives to caffeine are well-known and this is an avenue that we are currently pursuing. Wrangyer Beverage Co., Ltd. had revenue of Baht 491 million in 2008 and net profit of Baht 3 million. It represents 0.5% of ThaiBevâ&#x20AC;&#x2122;s total revenue and 0.03% of our net profit.

Fruit Juice SPM, which was acquired in 2007, produces high-end fruit juices among other products. We believe this line has much potential and the company has the potential to manufacture a wider range of soft drinks.

Lime and Pear Panya 2 shots Mekhong

In a mixing glass, muddle the pear,

3/4 shot freshly squeezed lime juice

ginger and sugar into a paste.

1/2 shot elderflower cordial

Add Mekhong and the rest of the

1 bar spoon of sugar

ingredients. Add ice and shake

1/4 fresh pear, cut lengthways

vigorously for 7-8 seconds.

3 thumbnail sized slices of

Strain into a rocks glass over ice.

fresh ginger root

Garnish with torn Kaffir lime leaf.

1/2 Kaffir lime leaf

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Tea and Japanese Restaurants The Oishi was acquired with the intent and purpose of entering the lucrative ready-to-drink tea business and expanding our line of soft drinks as this segment has a compound annual growth rate of 47% over the past five years. Oishi holds 71% of the segment and continues to grow. ThaiBev kept Oishi management in place after the acquisition due to the excellent job they have done in growing the company. The added value that ThaiBev can provide to Oishi is as a distributor. In this case, ThaiBev, will contribute more growth in traditional trade channels while a distribution agreement with Serm Suk was renewed for a further three years due to its distribution to channels not covered by ThaiBev. In 2008, its revenue grew 30.4% due to successful promotions and new products. Profit grew at a lower rate due to higher costs of production and advertising and promotion expenses due to an investment in a new brand of ready-to-drink coffee called Coffio. Coffio is positioned at the upper end of the market, and does not compete directly with our other product Black Up, which is positioned at the lower end of the market. The key growth drivers for Oishi non-alcoholic beverages in general came from its PET 350cc packaging and Tetra Pak 1000cc packaging in 2008 with Black Tea with Lemon its most popular drink. Future growth will come from continued promotion within retail outlets and more promotions. Oishi will add new flavors and pack sizes for green tea 2008-2009, with one liter and 250ml packages for its popular black tea, with a new pack design. The mixed berry flavored tea will soon come in a 250ml pack. In future, the Oishi outlets will be used as venues to test consumer acceptance of new ThaiBev products before they are officially launched. Oishi has 109 food outlets at 61 sites in Thailand and opened 19 new outlets in 2008. The Buffet and Shabushi outlets were the main drivers of sales growth and profit increased at a higher rate than 2007 as a result of food cost control and an additional margin from packed foods. The key drivers of growth in the food business are the Shabushi restaurants, Oishi Buffet restaurants and packed foods. In future, we can exploit these outlets further by continuing a very successful Buffet’s seasonal menu “Celebration of Nature” which offers customers a change of food available at regular periods. We also intend to introduce a tailor-made Ramen menu and a seasonal Shabushi menu that should continue to attract old and new customers. A television advertising campaign will create awareness of these menu varieties. In 2009, Oishi will also see the introduction of a new brand of franchise restaurants called Maido Okini Shokudo, a home cooking style from the Osaka region of Japan. The emphasis will be on quality and originality. In 2009, Oishi management expects to see a decrease in most raw material prices, and due to the popularity of its products it is not expecting the global financial crisis to affect its investment policy as its brand building and capital expenditure are focused on future growth. Moreover, its sources of funds are mainly from its own operations and some short term debt only. Oishi had total revenue of Baht 5,952 million in 2008 and net profit of Baht 592 million, representing 5.7% of ThaiBev revenue and 5.6% of our net profit.

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IN N TE ERN N ATIION N A L BU USINES SS

Thailand

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In last year’s annual report, ThaiBev introduced our overseas businesses. This year, we highlight how the business has progressed over 2008. Since listing, ThaiBev has implemented a strategy to allow it to expand overseas. Our wholly-owned subsidiary, International Beverage Holdings Limited (“IBHL”) is charged with this task. In 2008, IBHL had offices in six 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. Expansion will also include whiskies and other premium spirits made in Scotland by IBHL’s subsidiary Inver House Distillers Limited (“Inver House”). Offices and Subsidiaries IBHL is incorporated in Hong Kong and currently has subsidiaries in six countries: • • • • • •

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

United Kingdom India Russia

France Australia

Sweden

USA

Canada

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MILESTONES

2003

2006 2006

OCTOBER Thai Beverage was established as a holding company for the alcohol beverage business

OCTOBER MAY Thai Beverage successfully listed in the Singapore Exchange main board

Acquisition of Pacific Spirits UK (PSUK), owner of Inver House Distillers in Scotland and acquisition of Best Spirits Company Limited

Overview Our 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.

Strategy Identifying and establishing an appropriate route to market is one of IBHL’s key strategies, whether wholly owned or third party is subject to the market, what we want to achieve there and the market circumstances. Firstly, we seek out distribution partners in the target market. Then - in the case of beer – if we could sell sufficient volume, we would consider contract brewing or purchasing a brewery locally. This is because beer has a lower profit margin than spirits, and the ability to cut down on international transportation costs would greatly enhance the profitability of the product. However, investors should be aware that we are still far from achieving the kind of volumes that would make such an investment worthwhile. For now, Chang is able to sell for a higher premium as it is still considered a genuine imported beer brand in many developed markets and thus today we enjoy acceptable margins even taking into account shipping costs. 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 (IRR) of not less than 10%. In any investment, IBHL will consider value and potential synergy over price. Initially, IBHL is focusing on flagship brands – Chang beer, Mekhong (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 - plus a new super-premium gin brand to be produced in the UK and a super-premium rum brand, both to be launched in 2009. IBHL has identified key focus markets for each brand and is directing its efforts and resources at these “brand market units” (BMU's). IBHL intends to be a global player with a comprehensive portfolio of products. Annual Report 2008

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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.

Redesign of core Thai products for key export markets We aim to build a strong and unique brand presence in all our core target markets throughout the world and 2007 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 relaunched in the major developed imported beer markets including USA, UK, Western Europe and Australia with a focus on the premium segment of the imported beer market. Mekhong has also been revamped to appeal to the more discerning spirits drinkers. It will be sold through mixology and cocktail bars as well as high-end hotels and restaurants across Europe and North America with the help of its Thai-inspired collection of cocktail recipes. A recent marketing effort in New York has seen the promotion of the Mekhong brand in 150 top on- and off-trade accounts across Manhattan.

Organizational Successes Following the successful acquisition of Inver House in 2006, the synergies of the project are now becoming apparent. The integration of Inver Houseâ&#x20AC;&#x2122;s commercial team into IBHL was a challenge eased by the professionalism of both

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sides. This led to the successful launch of the new corporate brand “International Beverage” - complete with new corporate ID - to our customer base globally. Similarly, the Chang UK team was integrated into the new International Beverage team and restructured to better develop the brand in 2009. IBHL does not sell directly to consumers and does not own any retail outlets but sells to wholesalers, distributors and other dealers.

Human Resource Development The successes of International Beverage could never have been achieved if not for the quality of our workforce. To ensure quality, the Company takes the time to build teamwork and raise their knowledge and skill level regularly. In 2008, we held a company day to focus on team building, building our brands and to raise awareness of alcohol abuse. Moreover, we have a structured training plan in place for 2008 following on from training identified in staff appraisals. In Asia, there are two major sales teams, North Asia and ASEAN. An Asia Workshop was held to develop better cooperation between the North Asia and ASEAN teams and foster stronger links with our central marketing team. Of great pride to us was an acknowledgement of the standards we set in training last year, Inver House was awarded a certificate as an Approved Centre to offer Scottish Vocational Qualifications. As such, we hold a spirits industry vocational qualification course for our Warehouse and Distilleries Team to formalize training requirements and to meet health and safety regulations. We also have a two year Modern Apprenticeship, introduced in January 2008, in Storage and Distribution.

Information Technology One of the earliest considerations when setting up IBHL and prior to the acquisition of Inver House was the eventual integration of these subsidiaries into ThaiBev’s organisational system through technology. ThaiBev uses SAP software in Thailand and initially implementing it jointly in the UK and Hong Kong will be a critical move to provide IBHL with a best practice international-standard accounting system. The aim is eventually to bring IBHL information into the Company in the most fluent way possible. To achieve this, we will need to replace existing ERP, sales and financial applications across IBHL and expand the integration to include timely, effective and accurate information sharing with ThaiBev. The aim is to achieve synergy of applications, data and transfers as simply, effectively and efficiently as possible.

Our Markets Chang and Mekhong were officially launched in the UK in October 2007. However, in that time, the Company has seen some remarkable progress due to a series of branding campaigns to boost awareness utilizing both the Everton Football Club sponsorship and our strengthening distribution within the Thai restaurant channel - for instance, a Mystery Drinking campaign supporting promotion to 180 on-trade accounts incentivise staff to recommend Chang, and several joint ChangMekhong launch events in selected targeted outlets nationwide to raise awareness and provide celebrity exposure to both products. Australia has also emerged as one of Chang’s key export markets where we are now the Number One selling Asian beer brand, achieved by conducting the largest Chang Beer sampling activity ever by our retail partner there, Woolworth’s. In addition, a large number of high profile, flagship accounts have also been opened in Las Vegas, New York and Dubai that ably support our new premium positioning and act as a ‘shop window’ to raise brand awareness with target consumers as we extend our distribution footprint. As beer is a high volume product, Chang was able to raise its profile faster in the UK with monthly sales volume increasing 17.67% in 2008 compared to 2007, while annual sales volume increased a dramatic 24%. Investors should be aware though that a rule of thumb is that a new product will take two to three years to become established in the minds of consumers.

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Chang and Mekhong Performance Chang surprised many aficionados in the beer world when it won the Monde Selection Beer Award in 2008, but our marketing team has been careful to raise awareness through tastings in all new markets where the brand name is still relatively unknown. We have concentrated on the branding of Chang as a quality imported beer. This year we were also awarded a gold medal and an exceptional rating in the World Beer Championships where Chang bettered 31 Other Pale Lagers with an “Exceptional” Rating by the Beverage Testing Institute. Chang earned an impressive 90 points in the 2008 World Beer Championships and was awarded a gold medal in the Pale Lager Division with an “Exceptional” rating by the Beverage Testing Institute judges. One of the ways we have measured the loyalty and the extent of the international following of the brand is through our website (www.changbeer.com), which has received tremendous interest from the public with almost 65 thousand visitors since launch. Part of the interest lies in promotions (depending on the market) and the updated list of where to purchase Chang. New sites in the USA and Australia will assist Chang enthusiasts to locate their nearest outlet. We have been careful to launch Chang in prestigious establishments in the UK to enhance its premium qualities, for instance in London’s most well-known Thai restaurants such as Blue Elephant, Mango Tree and Patara among others. Chang also featured in the BBC’s Good Food Show in Birmingham. The seeding of the brand is now complete and availability is high across the Thai restaurant channel in international markets. The next steps for the brand will comprise moving into the broader beer market and building volume within both the off and on trade.

Expansion of Distribution into new Markets International Beverage implemented a comprehensive expansion plan in 2008 that targeted entry into several new markets.

The US Welcomes Chang and Mekhong The United States of America is potentially the largest and most lucrative market for International Beverage in the long term. Chang is sold in the United States as a super-premium, 100% barley malt, imported beer. International Beverage positions it as a best-selling Thai beer with an initial target of Thai and Asian fusion restaurants, with the potential to break out into the mainstream imported beer segment. Chang was formally launched in the US in June 2007. Throughout the United States, Chang is sold to over two thousand Thai and Asian Fusion Restaurants which is approximately three-quarters (75%) of the targeted 3,174 restaurants in the states where we have launched Chang Beer. Chang is now distributed in 22 states around the USA and available in several major grocery chains throughout the western USA. In Texas, Chang is now acknowledged as the best-selling Thai beer in the state. Chang was also the featured beer at the celebrations for His Majesty the King of Thailand’s birthday at the United Nations in New York. Since the July 2007 launch, Chang cased sales volume has increased approximately 134%, making Chang among the fastest growing brands of beer imported into the USA. Shipments in each quarter of 2008 exceeded the previous quarter and the same quarter in 2007 while depletions (distributor sales to retailers) have risen progressively with each succeeding quarter since launch. Following the launch of Mekhong, positioned in a unique Thai spirit category, in the United States of America in mid-2008, the Company expects that the brand will be available for sale in 16 states by the end of the first quarter in 2009. As a result of a successful Market Pressure Test conducted in New York, consumers can now enjoy Mekhong in over 100 exclusive, trend-setting bars, taverns, restaurants and night clubs across the city, where the brand is beginning to enjoy a cult following among the city’s opinion leaders.

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While the focus has been in the New York area, given its influence in the estimated US$50 billion cocktail market in the United States, the intention is to roll this activity out across other target states in the US.

Chang Goes Down Under One year on from Chang Beer’s successful launch in Australia’s Woolworths nationwide chain store and with depletions to store totalling just under 100,000 cases, International Beverage conducted a summer sampling campaign at Woolworth’s that was highly successful. Investors should note that this was the biggest ever sampling campaign

Thai Dream

Annual Report 2008

50 ml Mekhong

Muddle ginger with syrup, then

15 ml Coconut Cream

firmly shake with plenty of ice and

15 ml Fresh Lime Juice

double strain into Martini glass.

10 ml Sugar Cane Syrup

Garnish with mint spring and

4 Slices of Fresh Ginger

sprinkle with grinded coconut flesh.

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conducted by Woolworth’s in Australia and reflects their belief in, and commitment to, the Chang brand. The campaign was conducted within three of Woolworth’s branded outlets and ALH, which is Woolworth’s on-trade liquor chain with 284 branches, and promoted Chang Beer with a food promotion campaign. Our extensive consumer research revealed that once consumers taste Chang, they can be converted to include it in their beer repertoire. Chang was also the leading beverage in the chain’s ‘World Class Collection’ Christmas pack. The result of this activity has been a rise in sales volume of 47% if compared with 2007. In December 2008, the Company launched support for the summer campaign on a new website commencing with a ‘win a Chang cooler’ offer. The website data can be used to capture data in preparation for 2009 activities.

Expanding Further Afield Entry from the UK into Europe commenced well with a launch in France resulting in sales volume rising 49% from 20072008. International Beverage is in the planning process to launch in stores in 2009. Both Chang and Mekhong entered the Netherlands, Germany, Belgium, Austria and Switzerland markets in 2008. Although it is too soon to say how this market will perform in future, initial sales are higher than expected. However, a complete plan is in place for further growth in 2009. Within the Association of South East Asian Nations (ASEAN) and perhaps most especially in Singapore, the Company has restructured its distribution network and leveraged the strength of Chang Beer in the distributor’s portfolio to introduce Inver House’s anCnoc single malt Scotch whisky, initially in various on-premise outlets in Singapore. We launched Chang and Mekhong in the United Arab Emirates (UAE) in July 2008 with African and Eastern, one of only two importers and retailers of alcoholic beverages in Dubai. Chang beer is already listed in more than 45 top-tier 4 and 5 star hotels in Dubai, including the newly opened Atlantis in Palm Jumeirah, and the well-known Buddha Bar. Both Chang beer and Mekhong will be available in Qatar, with agreements for both brands at Qatar Distribution Co. (QDC), the only importer, distributor and retailer of alcohol beverages in the country. We also launched Mekhong in Sweden with a programme of events in on-trade outlets like restaurants and bars. This was very well received, particularly in the ski resorts. Our target is to achieve a Systembolaget monopoly listing during 2009. It was also launched through the BCLDB monopoly stores in British Columbia, Canada, in 2008 and through some on-premise channels. A roll out into cocktail bars across the UK and Western Europe remains a priority over the coming months. After two years of activities, the progress made has been satisfactory, with Chang Beer sales volume overseas rising 213% from 2006 to 2008, while sales value from 2006-2008 rose 296%. Mekhong over the same period (2006-2008) has seen sales volume rise 165%, while sales value has increased 729%.

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FOCUS ON... INVER HOUSE DISTILLERS The Scotch whisky distillery group plays an important strategic role in covering the upper reaches of the alcohol beverage portfolio and providing access to a broader range of markets to the whole of Thai Beverage since its acquisition in 2006. A critical issue that has emerged in 2008 is the sudden rise of single malt whisky sales in key markets such as the USA. Investors should be aware that in this industry, we have to foresee the business at least 10 years into the future, as that is the length of time it takes for a premium whisky to mature.

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To maintain the growing profitability of the Company due to single malt whiskyâ&#x20AC;&#x2122;s rising popularity, the sales of bulk supplies were modestly curtailed to allow Inver House to bottle more whisky under its own brands in the future. However, the Company is aware that it has many important strategic customers that need its continued supply and profitable relationships with bulk customers have been managed to our satisfaction. Inver House does not own any retail outlets itself and sales are made to on-premise and off-premise (also called on-trade and off-trade) outlets, either directly or through agents and distributors. The synergy of the acquisition of Inver House has been bearing fruit throughout 2008 as IBHL is able to share headquarters space in Airdrie, Scotland, with Inver House and integrate the businesses together. ThaiBev itself has formed a strong technical liaison with Inver House to exchange ideas and expertise for the benefit of both companies. One example of this liaison is the successful development of Drummer Blended Scotch Whisky, which is now sold in Thailand and Australia. The demand for Inver Houseâ&#x20AC;&#x2122;s quality products is evident in that distillery production output is at 90% of maximum capacity despite a challenging market in terms of malted barley and cask supply. A new premium packaging line is expected to be installed in 2009 that will help eke more profitability from those products.

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Annual Report 2008

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Brand Performance Whilst Inver House has a range of single malt whiskies and blended whiskies, all at various ages, we want to discuss some of the key brands here that have a critical role in Inver House’s current and future success.

Old Pulteney One of the keys to Inver House’s success since its acquisition is the fact that ThaiBev, through IBHL, has invested in its brands. Old Pulteney, for instance, is a single malt whisky that is created in Scotland’s most northerly mainland distillery in the town of Wick. It has a distinctive salty tang of the ocean that single malt connoisseurs rate highly. The 17-year-old won the “Gold: Best in Class” award and the 12-year-old won a Gold at the International Wine and Spirits Competition (IWSC) in 2008. The 21year old and 12-year-old won the “Master” award at the Scotch Whisky Masters. This brand value creation has enabled Old Pulteney cased sales volumes to rise in its key markets, compared to 2007, with volumes to the USA up 173% and in the UK up 5%. In the UK, we have managed to secure some key multiple retail off-trade listings within, for example, Sainsbury’s, Tesco, Asda, Waitrose, Oddbins and Makro. Availability now in Asda includes 234 outlets nationwide and in the case of Tesco, the number of stores stocking the brand has increased from 105 Scottish stores to 273 stores nationwide in 2008. This has delivered 116% of volume growth versus 2007. In Sweden, 12-year-old Old Pulteney is now ranked the number three single malt Scotch whisky in the market. The Old Pulteney limited edition 1990 release sold 70% of its annual target within the first few weeks after launch and won the Gold Medal at the annual Stockholm Beer and Whisky Festival. A successful week-long Old Pulteney roadshow and other promotional activities in Mexico were very well received along with anCnoc and Balblair. Cased volume growth in Central and Eastern Europe is up 71% and a relatively new market, Russia, saw cased sales volumes rise 736% in one year.

Balblair Balblair Distillery, located in the Northern Highlands of Scotland was founded in 1790 on the shores of the Dornoch Firth in the village of Edderton. The brand was repackaged and relaunched in 2007 and immediately became a sensation among the cognoscenti. Unlike most whiskies, which inform the number of years a whisky has been matured, Balblair’s label boasts the year it was made, like a fine wine. The 2008 release of Balblair 1965 was the highlight of the year and with a recommended retail price of £1,250 per bottle, Inver House has established itself in the higher reaches of whisky producers in Scotland. Balblair 1965 was distilled on March 23, 1965 and slowly matured in single American oak ex-sherry casks, then bottled in its purest form at natural color and a strength of 52.3%. To demonstrate its exclusivity only 350 bottles of this rare vintage were produced.

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Thanks largely to Inver House’s success in re-launching Balblair, and the subsequent investment in brand building, total cased sales volumes increased 11% in 2008 compared with 2007. Also, following the successful launch of 1986 and 1990 vintages, the Company was able to increase volumes to travel retail outlets, such as airports, by 245%. Balblair cased sales volume in the United Kingdom was below the number sold in 2007 by 650 cases – but here the story lies in the re-positioning of the brand as net contribution increased 29%, due to the change from high volume/low margin to limited release, premium-priced vintages. Some of the premium accounts for Balblair include Nicolas

Wine Stores, Forth Wines, Gordon and MacPhail, The Whisky Shop Group, Loch Fyne Whiskies and Royal Mile Whiskies. Balblair ’89 won the prestigious Spirit of the Fringe Award in 2008, voted for by members of the public attending Royal Mile Whiskies Fringe tasting event. France continues to be the most important European market for Balblair. After the repositioning launch in 2007, Balblair managed to keep and further strengthen his position in 2008. A French resident brand ambassador for Balblair was hired in collaboration with Groupe Quartier Francais. He will grow the brand in selected, specialist,

off-trade and on-trade accounts and facilitate partner events. The result of our activities in France in 2008 was a 29% increase in cased sales volumes.

anCnoc anCnoc is produced at Knockdhu distillery in Aberdeenshire, established in 1894. One of the stand-out anCnoc releases now available is the 16-year-old. This whisky represents the Company’s first permanent range extension. It is the only anCnoc available which has been wholly matured in American oak casks, while previous releases have been finished in Spanish sherry barrels. Another popular bottling is the 1975, which comprises spirit matured in a mixture of ex-Sherry and ex-Bourbon casks. Within the UK, we have refocused our spending on advertising and publicity activities and placed less emphasis on price promotions. This has successfully led to an increase in net contribution. It is expected that the cased sales volume will grow as the brand’s awareness grows. New listings generated for the 16-year-old within Oddbins and key specialist retailers have been very positive. In 2008, Inver House successfully negotiated entry into the Sweden’s monopoly liquor stores for 12-year-old anCnoc and this arrangement will be effective in 2009. Overall, in 2008 cased sales volume for anCnoc rose 21% over 2007 with excellent growth in all export markets, in particular Russia. In Central and East Europe in general, cased volumes were up 69%.

Speyburn Speyburn Single Highland Malt Scotch Whisky was first produced on the December 15, 1897, the diamond jubilee year of Queen Victoria. Speyburn is the only distillery to use the fresh spring water of the Granty Burn, one of the major

Thai Punch 35 ml Mekhong

Shake and strain and serve in

1 Orange & Ginger Jam

a hi-ball glass and garnish with

50 ml Cranberry Juice

orange and ginger.

Top Ginger Beer 1 Drop of Campari Bitters

Annual Report 2008

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tributaries of the River Spey. Speyburn has probably been Inver House’s most widely-known product in the USA and the successful launch of a new Speyburn bottling, called Bradan Orach in 2008 was rapidly taken up, entering over 200 new outlets in Florida alone. The 25-year-old also won the ‘Gold: Best in Class’ award at the IWSC in 2008. In line with the strategy of increasing the brand’s presence within the UK trade, new listings have been achieved in, for example, Wm Morton Wholesalers and JD Wetherspoons (Scotland). As the Central and Eastern market has risen for all our abovementioned whiskies, we also saw cased volumes of Speyburn rise 10% there in the past year.

Hankey Bannister The original Hankey Bannister partnership was formed in 1757 by Messrs Hankey and Bannister. Hankey and Bannister became established as one of the finest suppliers of wines and spirits in the UK with a customer base that boasted the Prince Regent, William IV and the Dukes of Norfolk and Queensberry. Hankey Bannister was also known to be a favourite drink of Sir Winston Churchill, Britain’s wartime Prime Minister. Exported to over 47 countries worldwide, it has a major presence in all major European markets with other key markets including South Africa, Latin America and Australia. Hankey Bannister now performs exceptionally well in the travel retail sector. The 40-year-old bottling released last year was voted World’s Best Scotch Blended Whisky at the World Whisky Awards in Spring 2008. Casks of 40-year-old Hankey Bannister were found nestled within one of its warehouses by Master Blender, Stuart Harvey, who recognised them as containing some of the world’s most coveted whiskies from forgotten Scottish distilleries. A limited release of the unique dram is now taking place, with a one-off special bottling complementing an already significant year in 2008 for Hankey Bannister – its 250th anniversary. The Middle East and South Africa now account for just under 50% of Hankey Bannister cased sales volume, with further growth anticipated in 2009. In Central and Eastern Europe, the brand saw cased volume rise 21%. The brand grew approximately 13% in volume over a one year period and outperformed its target for 2008.

Catto's Catto's blended Scotch whisky, first produced in 1861 by James Catto, a highly regarded and world famous merchant and Scotch whisky blending pioneer, is a blend of malt and grain whiskies. The brand grew approximately 18% in cased sales volume over the year, exceeding the volume target set by Inver House. In 2008, Catto’s was relaunched in off- and on-premise outlets in Chile, Ecuador, Peru and Uruguay. Cased sales volumes for Latin America rose 15% from 2007 to 2008. In Central and Eastern Europe, Catto’s cased volume rose 33%.

Duty Free Listings One of the hardest listings to achieve has always been the duty free channels at international airports. Inver House targeted these outlets globally in 2008 and here are some of their successes. James Richardson duty free has the complete anCnoc range and Balblair 1997 and 1990. These are now listed at Ben Gurion Airport, Tel Aviv, Israel. anCnoc 12-year-old; Balblair 1990 and Old Pulteney 12-year-old are now available through Heinemann duty free at Frankfurt Airport in Germany. Alpha duty free now lists anCnoc 12-year-old and Balblair 1997 at Indira Gandhi Airport in New Delhi, India, which plays host to the 2010 Commonwealth Games. Hankey Bannister 40-year-old is now available in the duty free shops at Mauritius Airport (Mauritius); Antalya Airport (Turkey). Over in the Caribbean, we have had successful launches at duty free outlets of Old Pulteney, anCnoc and Balblair in the Dominican Republic and Panama. Old Pulteney and Balblair are now being sold in St. Martin duty free.

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Management Discussion and Analysis Performance for the year ended December 31, 2008

On September 30, 2008, the Company acquired 43.9% interest of Oishi Group Public Company Limited (Oishi), a Thai company currently listed on the Stock Exchange of Thailand and sold all its shares of Thai Alcohol Public Company Limited (Thai Alcohol). Oishi is principally engaged in the Japanese restaurant business and the manufacture and distribution of food and beverages. As the same ultimate controlling shareholder of the company controlled Oishi both before and after the acquisition, the business combination has been accounted for in a manner similar to a pooling of interests and the assets, liabilities and contingent liabilities of Oishi acquired by the Company have been accounted for at book value. The Company has included the assets, liabilities, revenues and expenses of Oishi in the consolidated financial statements as if the acquisition took place at the beginning of 2007. The difference between the consideration paid by the Company and the carrying amounts of the net identifiable assets of Oishi at the date of the combination was accounted for under the balance sheet item “difference arising from common control transactions”, totalling Baht 2,079 million. Oishi operations will be reported separately in two business segments; a new segment called food and the current segment called non-alcoholic beverages. The consolidated financial statements of 2007 have been restated for comparison with 2008. The Company made a tender offer for the remaining shares of Oishi at the same purchase price paid by the Company and acquired an additional amount of about 46.0% of the shares. The difference between the consideration paid by the Company for the tender offer shares and the carrying amounts of the net identifiable assets at the date of combination was accounted for under the balance sheet item “goodwill”, totalling Baht 2,178 million. The Company now holds 89.9% of Oishi following the tender offer. For the year 2008, only 9 month operations of Industrial Alcohol business segment were shown due to the disposal of all shares of Thai Alcohol on September 30, 2008 while full year operations were shown for the year 2007. The Company has expanded the non-alcoholic beverage business by acquiring assets from a Thai company who engaged in the production and sales of energy drink and

Annual Report 2008

ready-to-drink coffee, and commenced this business in the first quarter 2008. The soda water and drinking water business will no longer be presented with the beer business but will be presented under non-alcoholic beverage business. Due to the small turnover of soda water and drinking water in the previous periods, the segmental information for the same period of 2007 was not restated to compare with that of 2008. The business segments given in our results consist of Beer, Spirits, Non-alcoholic beverages, Food and Industrial Alcohol. From January 15, 2008 onwards, all alcoholic drinks were charged 1.5% of excise tax to subsidize the Thai Public Broadcasting Service (TPBS). Currently, the Company pays excise tax, municipal tax (which is 10% of excise tax), a Health Promotion Fund contribution (which is 2% of excise tax) and now, TPBS tax (which is 1.5% of excise tax). The Company has already increased the sales price of products to cover the TPBS tax. Since January 1, 2008, the Company changed its accounting policy regarding goodwill to comply with Thai Accounting Standard (TAS) 43 (revised 2007) “Business Combination,” which is effective for accounting periods beginning on or after January 1, 2008. In the previous periods, goodwill arising from business combinations was accounted for at cost less accumulated amortization over the estimated useful life. Currently, goodwill is measured at “cost less any accumulated loss after doing an impairment test”. There was no impairment loss in the carrying value of goodwill as at December 31, 2008. The financial statements for the year 2007 have not been affected by this change in accounting policy.

Group For the year 2008, total sales revenue of the Company was Baht 105,257 million, an increase of 0.1%, or Baht 149 million, from Baht 105,108 million of the previous year, due to an increase of sales revenue from the spirits business of 12.6%, the non-alcoholic beverage business of 55.2% and the food business of 29.3% although this was accompanied by a decrease in sales revenue from the beer business of 19.1% and the industrial alcohol business of 7.6%.

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Gross profit was Baht 28,701 million, a decrease of Baht 2,583 million, or 8.3%, due to lower gross profit in beer business of 38.3% although gross profit in the spirits business rose 5.4%, while the non-alcoholic beverage business grew 29.3%, the food business grew 26.7% and the industrial alcohol business grew 1,550.0%. Earnings before interest, tax, depreciation and amortization (EBITDA) was Baht 20,607 million, a decrease of Baht 1,522 million, or 6.9%, due to decreases in the beer business of 55.3% and the food business of 14.3% while there was an increase in the spirits business of 10.9%, the non-alcoholic beverage business of 9.7% and the industrial alcohol business of 852.3%. Net profit was Baht 10,606 million, a decrease of Baht 337 million, or 3.1%, due to lower net profit in the beer business of 80.1%, the non-alcoholic beverage business of 58.4% and the food business of 17.1% although there was higher net profit in the spirits business of 9.6% and in the industrial alcohol business of 284.5%.

Beer Business For the year 2008, sales revenue was Baht 38,458 million, a decrease of Baht 9,099 million, or 19.1%, mainly due to the decrease of beer sales volume. Total sales volume of beer was 773.2 million litres, a decrease of 19.2%.

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Gross profit of Baht 6,486 million decreased by Baht 4,031 million or 38.3%, mainly due to the decrease of sales volume and higher cost of raw materials and packaging materials.

Net profit of Baht 9,659 million increased by Baht 843 million, or 9.6%, mainly due to the increase in gross profit and a decrease in interest expenses.

EBITDA of Baht 2,923 million decreased by Baht 3,614 million or 55.3%, mainly due to the decrease of gross profit although there was a decrease of sales promotion expenses.

Non-Alcoholic Beverages Business

Net Profit of Baht 338 million decreased by Baht 1,364 million or 80.1%, mainly due to the decrease of sales and the higher cost of materials although there was a decrease in interest expenses.

Spirits Business Sales revenue in the year 2008 was Baht 59,586 million, higher than the year 2007 by Baht 6,646 million, or 12.6%, mainly due to the increase in the selling price. Total sales volume of spirits was 436.8 million litres, a decrease of 2.1%. This is attributed to the white spiritsâ&#x20AC;&#x2122; sales volume declining by 4.3% to 315.3 million litres, although brown spirits sales volume increased by 3.9% to 121.5 million litres. Gross profit of Baht 20,038 million reflected an increase of Baht 1,021 million, or 5.4%, mainly due to the increase in the selling price. EBITDA of Baht 16,215 million increased by Baht 1,598 million, or 10.9%, mainly due to the increase in gross profit and a decrease of sales promotion expenses which compensated for an increase in idle cost and staff cost.

Annual Report 2008

The Company has started to report Oishi operations which consist of green tea drinks and other nonalcoholic beverages, in addition to energy drinks, readyto-drink coffee, soda and drinking water, from the third quarter 2008 onwards. Full year operations of Oishi were included in both 2008 and 2007 figures. Energy drinks and ready-to drink coffee operations commenced in the first quarter of 2008 and are included in the 2008 report only. Soda and drinking water operations were included in the non-alcoholic beverage business of 2008 only. The 2007 soda and drinking water operations were included in our beer business and were not restated due to small numbers reported. Sales revenue for the year 2008 and 2007 amounted to Baht 3,953 million and Baht 2,547 million respectively. Gross profit for the year 2008 and 2007 amounted to Baht 971 million and Baht 751 million respectively. EBITDA for the year 2008 and 2007 amounted to Baht 599 million and Baht 546 million respectively. Net profit for the year 2008 and 2007 amounted to Baht 164 million and Baht 394 million respectively.

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Food Business

Liabilities

Sales revenue in the year of 2008 was Baht 2,636 million which reflected an increase of Baht 597 million or 29.3%, mainly due to more number of branches and sales promotions.

Total liabilities as at end of December 2008 was Baht 26,058 million, increased by Baht 747 million, or 2.9%, compared with the end of 2007. This was mainly due to the issuance of short term bills of exchange amount of Baht 5,000 million.

Gross profit of Baht 1,096 million increased by Baht 231 million or 26.7%, mainly due to higher sales.

The maturity of loans are as follows:

Unit: Million Baht

Within December 2009

EBITDA of Baht 282 million decreased by Baht 47 million or 14.3%, mainly due to higher staff costs and sales promotion expenses.

14,026

During January – October 2010

3,265

Total

17,291

Shareholders’ Equity Net profit of Baht 136 million decreased by Baht 28 million, or 17.1%, mainly due to lower EBITDA as mentioned above.

Industrial Alcohol Business For the year 2008, only 9 month of operations were shown due to the disposal of the issued share capital of Thai Alcohol on September 30, 2008. Sales revenue for the year 2008 and 2007 amounted to Baht 893 million and Baht 966 million respectively. Sales volume of Ethanol was 27.1 million litres and the average sales price was Baht 16.48 per litre, which was 0.1% lower than the year 2007. Sales volume of Alcohol 95 was 31.2 million litres and the average sales price decreased from Baht 14.81 per litre in the year 2007 to Baht 14.09 per litre in 2008.

Total shareholders’ equity as at the end of December 2008 was Baht 53,997 million, a decrease of Baht 3,097 million, or 5.4% compared with the end of 2007. This was mainly due to the increase of net retained earnings; annual profit deducted by dividend payment, cannot cover the increase of difference arising from common control transactions.

Liquidity Cash and cash equivalents, as at December 31, 2008, was Baht 1,917 million. The net decrease from the beginning of the period was Baht 671 million. Details of activities are as follows: Unit: Million Baht

Gross profit of Baht 87 million increased by Baht 93 million mainly due to higher margins. EBITDA of Baht 619 million increased by Baht 554 million, or 852.3%, mainly due to gain from the disposal of issued share capital of Thai Alcohol. Net profit was Baht 310 million, an increase of Baht 478 million or 284.5%, mainly due to higher EBITDA as mentioned above.

Financial Position Assets Total assets as at end of December 2008 was Baht 80,055 million, a decrease of Baht 2,351 million, or 2.9%, compared with the end of 2007. Current assets increased by Baht 569 million, mainly due to an increase in inventories. Non-current assets decreased by Baht 2,920 million, mainly due to depreciation of property, plant and equipments.

Net cash provided by operating activities

14,191

Net cash used in investing activities

(6,317)

Net cash used in financing activities

(7,250)

Net increase in cash and cash equivalents in period Adjustment from financial statement translation

624 (1,295)

Cash and cash equivalents at beginning of period

2,588

Cash and cash equivalents at end of period

1,917

Net cash provided by operating activities of Baht 14,191 million was mainly derived from net income of Baht 10,606 million and non-cash items from depreciation and amortization of Baht 5,021 million but deducted by increasing working capital and others by Baht 1,436 million. Net cash used in investing activities of Baht 6,317 million was mainly due to acquisition of subsidiaries and investment activities in property, plant and equipments. Net cash used in financing activities of Baht 7,250 million was mainly due to dividends paid.

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Financial Ratios

Current Ratio (times) Total Debt to Equity Ratio (times) Net asset value per share (Baht)

Accounts Receivable Turnover (days) Inventory Turnover (days) Beer Business Finished Goods Spirits Business Finished Goods (Excl. Legacy Stocks)

Dec.31, 08

Dec.31, 07

1.54 0.48 2.14

1.74 0.44 2.22

Jan. â&#x20AC;&#x201C; Dec. 08 6

Jan. - Dec. 07 6

32

15

68

79

Shareholder Returns 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 investments plan and as the Board of Directors deems appropriate. For the financial year ended December 31, 2008, the Board of Directors has recommended total dividend of Baht 7,533.01 million.

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) Dividend payout ratio (%)

Year 2008

Year 2007*

Year 2006*

7,533.01 25,110

7,281.91 25,110

5,524.21 25,110

0.12 0.18 0.30

0.12 0.17 0.29

0.11 0.11 0.22

73.17

70.13

54.94

19.09

19.32

23.86

0.41

0.41

0.42

25,110

25,110

23,785

Return on Equity Return on Average Equity (%)

Earnings Per Share Earnings per weighted average ordinary shares (Baht) Weighted average number of ordinary shares for the year (million shares)

* Same figures per previous report

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RIS SK M A N AGEME EN T S T RA AT EG GIE ES Strategic Risk ThaiBev has created and implemented several strategies designed to promote growth in the long term. One of the most important is a policy called premiumisation, which entails diversifying our portfolio into premium categories and repositioning our economy products overseas to become more profitable. In the second quarter of 2008, we launched Federbräu beer and Drummer imported Scotch whisky, both premium products that can assist grow out profitability over time. By rebalancing the portfolio upwards and marketing them abroad, such as in the USA, Europe and Australia, we diversify the risk of being in one category or in one market alone. In 2008, the acquisition of Oishi gave us access to the profitable green tea and Japanese restaurant market for the first time and the acquisition of Wrangyer gave us access to the energy drinks market.

Market Share Risk With the current global economic situation, there is little or no growth in the alcoholic beverage sector, creating considerable competition that we must mitigate if we are to avoid any impact on our financial results. Over the past year we believe there has been no real problem with our market share of the white spirits market, even though a new competitor has commenced operations, but at a time when the economic situation, since the beginning of last year, started to deteriorate and white spirits consumption declined, causing our competitors to use every method to create market share in order to survive. ThaiBev will have to carefully protect itself from losing market share in this sector. Competition in the beer segment is expected to become stronger for similar reasons as white spirits, that is, no one expects the market to grow. We therefore have to use strategy to increase our market share. Should we lose market share in the economy beer sector, this may have an effect on our future revenues and profits.

Regulatory Risk Premium customers are less sensitive to price rises due to higher taxes, and by entering foreign markets and the

non-alcoholic beverage sector we will have no effect from alcoholic beverage tax changes. ThaiBev is focusing on improving our distribution network as this is our main strength and a key success factor. Distribution together with good quality control and improved packaging can alleviate alcoholic beverage marketing restrictions under the Alcohol Control Act of 2008. Our risk management committee encouraged the Companyâ&#x20AC;&#x2122;s production facilities to meet ISO 14001 (2004) standards to meet with even the strictest environmental regulations. All three breweries now meet this standard and 16 out of 18 distilleries do. The final two distilleries are expected to meet ISO 14001 (2004) standards soon. Moreover, biogas facilities are being installed in five factories to take methane gas, which is a byproduct in alcohol production, and use it as an energy source to replace bunker fuel. This will also help to reduce environmental problems associated with the smell of methane. The five distilleries are the S.S. Karnsura distillery, in Ubon Ratchathani Province, the Athimart distillery in Buri Ram Province, the Fuengfuanant distillery in Prachinburi Province, the Kankwan distillery in Khon Kaen Province and the Nateechai distillery in Surat Thani Province. We expect the project to be completed in the third quarter of 2009. Our breweries received ISO 22000 (Food and Safety Management) certification in 2008, and the expected certification of our distilleries soon, makes ThaiBev well-prepared for the announcement of the new Product Liability Law on February 20, 2009, which allows for consumer litigation in the event of problems arising from unsafe goods. Our factories already have ISO 9001, GMP and HACCP certification. As a listed company, ThaiBev strictly adheres to all laws and regulations issued by such authorities as the Ministries of Public Health, Commerce and Finance and relevant to our business. The Risk Management Committee has requested management receive immediate reports on newly proclaimed laws and regulations. In 2008, no material suits were brought against the Company due to any of the issues mentioned above.

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Operational Risk ThaiBev purchases certain raw materials like malt and hops and packaging from abroad by using forward contracts. This helps us ensure supply and control prices. We then mitigate the foreign exchange risk by hedging, again using forward contracts. It is a Company policy not to try to make a profit on foreign currency rates. In 2008, these risk management policies were implemented with good results.

HR Risk: Preparing human resources for position changes and business growth in the future Preparing our human resources for important changes of responsibility and the expected growth of the Company

Annual Report 2008

is the heart of our success and the future of the organization. We have therefore focused on and planned for the management of human resourcesâ&#x20AC;&#x2122; development in a systematic way. High level executives have placed such importance on this that they have followed its progress closely, as if we are not able to manage this issue efficiently there will be both short and long term impacts on the whole organization. Human resource management developed in 2008 to cover the whole recruitment process from the introduction of testing potential recruits to teaching people techniques and skill sets to use when recruiting. We developed the management of performance evaluation using competency

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factors and Key Performance Indicators (KPI),

while also introducing tools for managing and monitoring performance evaluation and career planning. We have created a training roadmap for each position, conducted individual development planning (IDP) and sent staff abroad for study so they can gain the necessary experience for future progress. For those in important positions, we have conducted succession planning to ensure continued, steady, growth together with our staff.

Finance and Investment Risk ThaiBev uses its internal cash flow and loans from financial institutions to support the business. We manage interest rates through negotiation with lenders and have

no fluctuations in our interest rates today. We hedge foreign currency transactions through forward contracts. ThaiBev has good credit ratings from TRIS Rating Co., Ltd., Moodyâ&#x20AC;&#x2122;s and Standard and Poor's and this has enhanced our ability to raise funds in future.

Conclusion ThaiBevâ&#x20AC;&#x2122;s Risk Management Committee meets at least four times per year and has been systematic in managing potential risks, providing stakeholders with the confidence that there is a group of people taking responsibility for risk management. Over the past year, the Companyâ&#x20AC;&#x2122;s risk management has met with considerable success.

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OUR PEOPLE .... OUR P ER F OR M A NC E Performance Management System It has been our ultimate belief that our people are our performance. Similar to every high performance organization where people and performance are the key strategic theme, we at ThaiBev, have been developing discipline and mindset on people development and performance management. In sustaining our leading position, ensuring our potential, and realizing our values, we believe that the development of our people, our next generation of leaders is the key. The Human Capital Transformation which was initiated last year has been continued in 2008 mainly to improve our organization structure to ensure the alignment with our business strategic direction and our growth as well as all human capital management elements to ensure the whole employee life cycle will be managed effectively starting from recruitment & selection, development both on career opportunity and competency, and retention. HR policies and process have been revised to strengthen the synchronization with business pace and needs. Human performance is the goal of our human capital management and development.

Improving our performance management system in 2008 was one of our big steps in the Human Capital Transformation Program. With the new performance evaluation form and computerized tool enhanced effectiveness in our performance management system which consists of three elements: agree expectation, review & coach, and develop. The performance evaluation provides the feedback in two aspects: outcome achievement and competency assessment. With the new form and tool, the expectation is defined and agreed cascading down from the top, the performance monitoring and coaching can be done effectively through the on-going updated data. In addition, the system helped to link and maintain the data on the development approach of each individual. Our new performance management system does not only provide the management and employees efficiency in jointly managing performance but also create the new behavior and mindset of both supervisors and employees. The commitment and ownership in defining the performance target, providing feedback and identifying development activities became part of our organization.

Competency Development Organization Structure Improvement Aligning the organization structure with our business objectives, scope, and processes is very vital to our efficiency and effectiveness. We revised, defined, fine-tuned our organization structure to ensure that our business operations and new initiatives are effectively managed and run. Our revised structure reflects our new business model and our new way of doing things. Complete shared services of HR, IT and General Services were part of our new organization operating model. Efficiency and cost effectiveness is the fundamental rational. Aligning Sales Organization with our sales channels and Marketing Organization with our brand management strategy was the significant implementation which also included the â&#x20AC;&#x153;competency matchingâ&#x20AC;? process in putting the right man into the right job. The well defined organization structure also helps us better define the career path of every workforce group, development program as well as performance management system.

Annual Report 2008

Core competencies and proficiency levels were defined and developed. In addition, they are part of the new performance management system. The proficiency levels of each core competency are designed to be in line with the career level structure and required proficiency in career advancement. Employees are assessed against core competencies and required proficiency level in the new performance evaluation system. The core training curriculum was developed based on the core competencies and the proficiency levels. Therefore, employeeâ&#x20AC;&#x2122;s individual development plan (IDP) can be defined based on individual development needs and required core competencies of our organization. Our people development journey is endless. Achievement of milestone each year is strengthening our capabilities and potentials of our organization to make it the great place to work, the great place to grow and the place of great opportunity for our people.

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Credit Rating Announcement On February 24, 2009, the annual review announcement, TRIS Rating Co., Ltd. (“TRIS”) affirmed the company rating of Thai Beverage Public Company Limited (“ThaiBev”) 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 Poor's (“S&P”) and Moody's Investors Service Pty Limited (“Moody’s”), both well-recognized globally in their field. S&P affirmed the ThaiBev rating at “BBB” rating with a “Stable” outlook (as Ratings Direct by S&P announced July 14, 2008), and Moody’s affirmed the ThaiBev rating at “Baa2” with a “Stable” outlook (as Global Credit Research Credit Opinion by Moody’s announced March 28, 2008). (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 Campanies, 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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Best IR in the Singapore Market by a Thai Company

Acclaim for â&#x20AC;&#x153;Capital Markets Deal of the Year 2006â&#x20AC;?

Annual Report 2008

2006 Merit Award for Transparency among newly-listed Companies (New Issue) on the Singapore Exchange and Silver-Best Annual Report Award 2007 (Newly listed company, Singapore Corporate Awards)

Certificate of Excellence by IR Magazine 2008

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“Awards don’t make money in themselves but they build brands, which do.” Thapana Sirivadhanabhakdi, President and CEO

Throughout 2008, ThaiBev and its subsidiaries have had an exhilarating ride building up the brands of the company’s products and its own reputation, especially in regard to quality and value, which are attributes that will benefit both the Company’s continued business growth and its shareholders over the years. We view an award as a symbol of recognition of our work and we trust that such recognition will lead to future sales and better shareholder returns.

ICONS OF WHISKY AWARD 2008

For our international subsidiary, International Beverage Holdings Limited, the success gained this year in awards will likely reflect in terms of sales in future years. They have worked hard to build the brands of Inver House Distillers Limited ("Inver House Distillers") and other ThaiBev products over the past few years. A connoisseur’s periodical, Whisky Magazine, started the ball rolling this year by voting Inver House Distillers the International Distiller of the Year 2008.

“Inver House Distillers has made a bold statement in terms of the whisky, packaging and its marketing strategy. Shaking off the old fashioned Scottish image of whisky, Inver House replaced it with a modern contemporary approach without losing the heritage at its core.” Whisky Magazine

Further success followed soon after with 13 awards at the Scotch Whisky Masters on 22 May 2008.

ASIAMONEY POLL 2008

These prestigious accolades, which include several gold, silver and a coveted "Masters" Award for their single malts, were presented at a glittering awards ceremony on 21 May, adding yet more trophies to the Airdrie based company’s growing collection, which was won despite impressive competition from exceptional companies throughout the world.

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It is important to note that the Scotch Whisky Awards are given after a series of blind taste tests conducted by a panel of prestigious judges, including Spirits Business Editor Patience Gould. None of the judges therefore were influenced by prior marketing or preconceived ideas. The accolades presented to Inver House Distillers’ malts comprised eight awards for the quality of the whiskies’ tastes and five awards for the high standard of the design and packaging.

year nearly one thousand spirits from across the globe are rigorously judged and tasted by the industry’s leading international spirits experts, many of whom have flown in for the occasion from other countries.

With a reputation for a fresh and innovative approach to Scotch whisky, Inver House Distillers also won “World’s best Scotch blended whisky” for its rare Hankey Bannister 40-year-old blend at the World Whisky Awards and the top prize in August last year for Balblair 1989 at the “Spirit of Whisky Fringe”.

“More and more people are discovering the pleasure of traditional Thai food and drink as part of their travels. This has contributed to the increased global interest in Thai beer amongst consumers and is opening up new markets for Chang which is now available in markets around the world.”

The accolades that Inver House was awarded at the International Spirits Challenge 2008 comprise two coveted Gold medals, three Silver medals and six Bronze medals.

Leslie Scoular, Chang Brand Manager (International Beverage Holdings

“For Inver House Distillers to have been presented with such a high number of awards, so soon after our wins at the Scotch Whisky Masters, is enormously exciting for the whole team and is also testament to the quality of our brands.” Karen Walker, marketing manager at Inver House Distillers

Inver House Distillers became one of Scotland’s most prolific whisky industry award winners in 2008, picking up an astonishing 15 awards at the International Wine & Spirits Competition. The International Wine & Spirits Competition, held in June 2008, is unique within the industry as it is independently judged, making it one of the most highly regarded by buyers and consumers alike. Each entry is blind tasted by a panel of high profile judges from around the world and the awards are presented for the quality of the spirit. The competition’s aim is to promote the quality and excellence of the world’s best wines, spirits and liqueurs. The accolades that Inver House was presented with include the coveted Gold Best in class medals; Gold medals; Silver Best in Class medals and Silver medals. Every single product entered by Inver House Distillers collected either a Best in Class, Gold or Silver.

Limited)

It is not only our fine whiskies that have proven their worth in 2008. International Beverage has been very successful in branding Chang beer in the UK and elsewhere as a premium imported beer. As our signature beer brand, it remains Thailand’s most popular brand and is well-recognized abroad, having twice been awarded Australian International Beer Award (AIBA) medals - in 2007 it received a Silver Medal in the Lager category, adding to the Gold Medal it was awarded by the AIBA in 1998. More recently, in 2008, Chang was awarded a Gold Medal by Monde Selection Bruxelles - World Selection of Quality 2008. The Gold was given in the Beers, Water and Soft Drinks category. Established over 40 years ago, the Monde Selection is an international competition with brewers from all continents represented. The Monde Selection recognizes both the quality of the ingredients as well as brewing techniques. The highly acclaimed medal was officially presented to International Beverage at a glittering ceremony in Vienna.

“Once again the experts have spoken and the gold goes to Chang.” John Lennon, President, International Beverage Holdings Limited USA, Inc.

To add to its tally, Inver House picked up another 11 medals at the International Spirits Challenge in August 2008. The International Spirits Challenge has promoted spirits from around the world for over 13 years and each

Annual Report 2008

2008 ended with the ultimate accolade for Chang beer as our Export recipe found favor by winning the gold medal at the 2008 World Beer Championships in Chicago.

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Organized by the Beverage Testing Institute (BTI), the World Beer Championships is America’s oldest international beer competition. The BTI was founded in 1981 with the mission of producing fair and impartial wine reviews for consumers. In 1994, BTI began reviewing beers and spirits and founded the World Beer Championships and the World Spirits Championships-now named the International Review of Spirits. The independent body is recognized as one of the world’s foremost authorities on alcoholic beverages, testing thousands of wine, beer and spirits brands each year. It selects award-winning beers using a proprietary blind tasting methodology developed by America’s premier independent alcohol beverage review body. In the 2008 championships, which spanned some 60 different beer styles, Chang Beer achieved an “exceptional” rating along with the Gold Medal award.

“It takes two to make a successful partnership and (ThaiBev’s) Chang has been very loyal to Everton.” Robert Elstone, Acting Chief Executive, Everton Football Club

Whereas we discuss International Beverage’s association with Everton Football Club in the UK in our Operational and Financial Report chapter, we should also mention the success of the club in receiving the award for Best Club Sponsorship in 2008 as it is indicative of the fact that the partnership has proven to be a big success. The Northwest Football Awards 2008 Best Club Sponsorship Campaign looked at the appropriateness and "fit" between teams and their sponsorship partners. We had to show clearly defined objectives, integration with other marketing activities, short and long term campaign performance and management creativity, design and innovation in the campaign itself. The award came less than 12 months after we extended our shirt sponsorship deal. The new agreement has seen Everton develop football both on and off the pitch in Thailand. These activities are mentioned in the chapter on Corporate Social Responsibility.

“The Spirit of Thailand is embodied in a golden glass of Mekhong.” David Lind, International Beverage Marketing Manager

Though on sale outside Thailand for less than a year,

Mekhong scooped a prestigious bronze medal in the brown spirits category of the Drinks International 2008 Cocktail Challenge for its exotically named Mekhong Lime and Pear Panya, one of a specially-created series of signature Mekhong cocktails designed by Employees Only, Manhattan’s premier mixology team. More than 70 cocktails entered the 15th Drinks International Cocktail Challenge, with brown spirits proving to be the most competitive category featuring a short list of 14 cocktails.

“Effective disclosure can reflect on the good name of the business as it openly reveals management’s past, current and likely future performance.” Richard Jones, Assistant Vice President for Investor Relations

ThaiBev’s management has always been determined to set an example as a Thai company listed on the Singapore Exchange (SGX). We have pledged not merely to follow listing requirements regarding disclosure and transparency but to exceed them whenever possible. As the Investor Relations team acts as an ambassador of the Company in regular investor meetings, it is an important indication of investors’ opinion of ThaiBev whenever we are benchmarked through independent surveys. In 2008, ThaiBev’s Investor Relations team pulled off two astounding results, winning the best IR Award by a Thai Company from IR Magazine and Best IR in Thailand by AsiaMoney magazine. The IR Magazine survey questions investors in the Singapore market to evaluate the performance of Thai IR teams. To win, ThaiBev IR had to see off tremendous competition from several top-ranked Thai listed companies. As the third win in three consecutive years, we are very pleased that our efforts have proven to be above average in the eyes of our stakeholders. The AsiaMoney poll is probably the most esteemed in Asia for its size and independence, and 2008 was the first year that our Company had been ranked. A point of pride is that ThaiBev was ranked in the top three in Asia - above all other Thai companies, and higher than any Singapore company listed on the SGX. The fact that ThaiBev’s stock has outperformed most Asian stock markets in 2008 suggests that our image and performance are satisfying many of our shareholders.

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C OR R P OR ATT E GOV ER R N AN NCE R EP ORTT It is a commitment of THBEV to adhere to good corporate governance principle and to conduct our business in compliance with all rules and regulations applied to us and of course with the benefit of our stakeholders. We are proud that we are the Thai company listed on the Singapore Exchange (“SGX”) which have the best Investor Relation Unit by receiving Best IR award for three consecutive years. Most recently, in 2009, we won the Best for Investor Relations in Thailand from AsiaMoney magazine.

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 the applicable laws. The Board must exercise good business judgment and act in good faith for the best interests of the Company.

In 2008 the Board met five times, and the following table shows the details regarding the attendance to the meeting of each director up to December 31, 2008: Number of Attendances / Name 1. Mr. Charoen Sirivadhanabhakdi

Position

Total of Meetings

Chairman

5/5

2. Khunying Wanna Sirivadhanabhakdi

Vice Chairman

5/5

3. Mr. Narong Srisa-an

Vice Chairman

3/5

4. Mr. Komen Tantiwiwatthanaphan

Vice Chairman

4/5

5. Mr. Puchchong Chandhanakij

Director

5/5

6. Mr. Staporn Kavitanon

Independent Director and

5/5

Audit Committee Chairman 7. Prof. Kanung Luchai

Independent Director and

5/5

Audit Committee Member 8. Mr. Manu Leopairote

Independent Director and

5/5

Audit Committee Member 9. Mr. Ng Tat Pun

Independent Director and

5/5

Audit Committee Member 10. Mr. Michael Lau Hwai Keong

Independent Director

11. Prof. Pornchai Matangkasombut

Independent Director

5/5 4/5

12. Mr. Sakthip Krairiksh

Independent Director

5/5

13. Gen. Choo-Chat Kambhu Na Ayudhya

Independent Director

5/5

14. Mr. Vivat Tejapaibul

Director

3/5

15. Mr. Panote Sirivadhanabhakdi

Director

5/5

16. Mr. Samut Hatthasing (1)

Director

2/5

17. Mr. Thapana Sirivadhanabhakdi(2)

President and CEO

5/5

18. Ms. Kanoknart Rangsithienchai

Director

5/5

19. Mr. Sithichai Chaikriangkrai

Director

5/5

20. Mr. Ueychai Tantha-Obhas

Director

5/5

21. Dr. Pisanu Vichiensanth

Director

5/5

22. Mr. Chukiet Tangpongprush

Director

5/5

Remarks:

(1)

Mr. Samut Hatthasing resigned from the directorship on May 16, 2008.

(2)

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

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Matters Requiring Board Approval Our Board recognizes their utmost duties to administer business and oversee the Company’s operations. This includes the administration of the subsidiary companies to be in line with the Company’s core business plans to ensure that it complies with the shareholders’ resolutions in good faith and under the law and its Articles of Association. In addition, our Board ensures that the Company and its subsidiary companies comply with the SGX Listing Manual. Our Board is also responsible for the determination of visions and business strategies of the Company and oversight of Management Committee to perform their duties according to the Company’s policies and report the financial statements and general information to investors and shareholders with accuracy and sufficiency. According to the Law, the Board is required to meet not less than four times in each year. In 2008, the Board met more than such requirement in order to consider special issues. 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. All Directors received 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 twenty one directors, including eight independent directors which are more than onethird of the total number of the Board members. Each director either has long-term experience in business or attained honorary positions. Executive Committee The Board appointed an Executive Committee which consists of fifteen members, they either are the Board members or top executive officers of the Company. To enhance Company business operation, the Board granted them the authority to perform their duties. In this regard, each Executive Committee member is assigned to oversee each business unit under the supervision of the President and CEO. The Executive Committee may appoint other sub-committees to support the Board in order to ensure the good corporate governance of the Company. The Executive Committee meets once a month to enter into discussion of the Company’s business administration. However, the Executive Committee might meet more than once in the case that it is necessary to consider and approve any important or urgent matters. Apart from the oversight of the administration of THBEV, the Board also appoints executive members to hold directorship in both domestic and overseas subsidiary companies to monitor and control the business administration in the subsidiary companies for the maximum effectiveness and the best interest of the Company. The Executive Committee’s responsibilities are to: • Prepare and propose business plans, targets, operational plans, business strategies and annual budgets of the Company and its subsidiary companies to the Board of Directors of the Company; • Determine and propose business plans, budgets and management roles and responsibilities of the

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Company and its subsidiary companies to the Board of Directors of the Company for approval; • Monitor the operations of the Company and its subsidiary companies to be in line with business policy, targets, operational plans, business strategies, budgets and management roles and responsibilities as approved by the Board of Directors of the Company for the efficiency of and to facilitate business conditions; • Approve payments for investments or operations, borrowing or requesting for any facility from a financial institution, lending, including being a guarantor with respect to the normal business of the Company and its subsidiary companies as stipulated by the Board of Directors; • Approve the annual budget for annual increase or adjustment of salary and bonus payment for employees of the Company and its subsidiary companies; • Approve payments as determined by Board of Directors of the Company; • Propose the efficient organization and management structure of the Company and its subsidiary companies to the Board of Directors of the Company; • Recruit, employ, terminate employment, promote, impose disciplinary penalty, transfer, adjust salary level, adjust salary rate, and determine bonus, welfare and other benefits as well as consider all other remunerations for all levels of employees of the Company. The Executive Committee also has the authority to appoint the president or any appointee of the Company to be the authorized representative of the Company to sign related employment contracts within the budget approved by the Board of Directors of the Company;

• Supervise and approve matters relating to the operation of the Company. It may appoint or authorize any one or more persons to engage in any act on behalf of the Executive Committee as it deems appropriate such as appointment of the sub-committee to consider salary increase and bonus of executive leveled employees ranking from Vice President to Executive Vice President, appointment of any of the sub-committees that have particular knowledge and expertise to manage and monitor before proposing to the Executive Committee, provided that the Executive Committee is entitled to repeal, change or modify the scope of the authorization; and • Perform any other act as delegated by the Board of Directors of the Company. However, the abovementioned approval shall not grant or sub-grant power that cause the Executive Committee or the authorized representative being able to approve any transaction in which the Executive Committee or authorized representative, or any related person has interest or may have any conflict of interest with the Company or its subsidiary companies (as defined in the Notification of the Securities and Exchange Commission). Such approval must be proposed to the meeting of the Board of Directors of the Company and/or the meeting of shareholders, as the case may be, for the approval, as stipulated in the Articles of Association of the Company or its subsidiary companies, or any applicable laws. In 2008, the Executive Committee met sixteen times, and the following table shows the details regarding the attendance to the meeting of each member up to December 31, 2008:

• Approve the appointment of the Company’s representatives to the Board of Directors and/or the sub-committee of its subsidiary companies in order to supervise all administrative matters as approved by the Company for the efficiency and best interest;

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Number of Attendances / Name

Position

Total of Meetings

1. Mr. Charoen Sirivadhanabhakdi

Chairman of Executive Committee

15/16

2. Khunying Wanna Sirivadhanabhakdi

First Executive Vice Chairman

12/16

3. Mr. Narong Srisa-an

Second Executive Vice Chairman

14/16

4. Mr. Komen Tantiwiwatthanaphan 5. Mr. Samut Hatthasing

(1)

6. Mr. Puchchong Chandhanakij

(2)

7. Mr. Thapana Sirivadhanabhakdi

(3)

Third Executive Vice Chairman

16/16

Fourth Executive Vice Chairman

3/16

Fourth Executive Vice Chairman

15/16

President and CEO

14/16

8. Ms. Kanoknart Rangsithienchai

Director and Executive Vice President

16/16

9. Mr. Sithichai Chaikriangkrai

Director and Senior Vice President

16/16

10. Mr. Ueychai Tantha-Obhas

Director and Senior Vice President

15/16

11. Dr. Pisanu Vichiensanth

Director and Senior Vice President

15/16

12. Mr. Chukiet Tangpongprush 13. Mr. Sawat Sopa

(4)

14. Mr. Saikeaw Vongpisethkul 15. Mr. Jean Lebreton

(5)

(6)

16. Mr. Vichai Chaiyavaranurak

(7)

17. Mr. Somchai Suthikulpanich

Remarks:

(1)

(8)

Director and Senior Vice President

15/16

Executive Vice President

10/16

Senior Vice President

7/16

Senior Vice President

12/16

Senior Vice President

2/16

Senior Vice President

2/16

Mr. Samut Hatthasing resigned from the President effective on January 1, 2008 and was appointed the Fourth Executive Vice Chairman by the Executive Committee on December 25, 2007. Thereafter, he resigned from his directorship and Fourth Executive Vice Chairman on May 16, 2008 due to health problems.

(2)

Mr. Puchchong Chandhanakij was previously the Fifth Executive Vice Chairman and appointed the Fourth Executive Vice Chairman on January 27, 2009.

(3)

Mr. Thapana Sirivadhanabhakdi was previously the Executive Vice President and appointed the President and CEO on January 18, 2008.

(4)

Mr. Sawat Sopa was appointed to the Executive Committee on February 27, 2008.

(5)

Mr. Saikeaw Vongpisethkul was appointed to the Executive Committee on February 27, 2008 and resigned from the position on October 1, 2008.

(6)

Mr. Jean Lebreton was appointed to the Executive Committee on February 27, 2008.

(7)

Mr. Vichai Chaiyavaranurak was appointed to the Executive Committee on November 14, 2008.

(8)

Mr. Somchai Suthikulpanich was appointed to the Executive Committee on November 14, 2008.

Management Committee The Board of Directors approved the set up of the Management Committee (MC) and authorized the President and CEO to be in charge of all MC activities. The MC was formed in January 2008. As at December 31, 2008, the MC consists of ten members which either are directors and/or top executives namely, Mr. Thapana Sirivadhanabhakdi, Ms. Kanoknart Rangsithienchai, Mr. Sithichai Chaikriangkrai, Mr. Ueychai Tantha-Obhas, Dr. Pisanu Vichiensanth, Mr. Chukiet Tangpongprush, Mr. Sawat Sopa, Mr. Jean Lebreton, Mr. Vichai Chaiyavaranurak, and Mr. Somchai Suthikulpanich. The Chairman of the MC is Mr. Thapana Sirivadhanabhakdi, the President and CEO.

Audit Committee The Board of Directors appointed the Audit Committee which consists of four members, namely, Mr. Staporn Kavitanon, Prof. Kanung Luchai, Mr. Manu Leopairote, and Mr. Ng Tat Pun. Mr. Staporn Kavitanon is the Chairman of the Audit Committee and Mr. Somsak Sae-Kuay, Vice President of the Office of Internal Audit, is the secretary to the Committee. In this regard, Mr. Ng Tat Pun was appointed by the Board of Directors to be the leader of the Audit Committee with respect to the interested person transactions undertaken by our Group. The AC meets at least once in each quarter. Please refer to Audit Committee Report.

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Risk Management Committee The Board of Directors appointed the Risk Management Committee which consists of thirteen directors and executives. The Directors are Mr. Narong Srisa-an, Mr. Puchchong Chandhanakij, Ms. Kanoknart Rangsithienchai, Mr. Chukiet Tangpongprush, Mr. Thapana Sirivadhanabhakdi, Mr. Sithichai Chaikriangkrai, Mr. Ueychai Tantha-Obhas, Dr. Pisanu Vichiensanth. The executives are Mr. Sawat Sopa, Mr. Vichai Chaiyavaranurak, Mr. Jean Lebreton, Mr. Chalerm Pornrutchakit and Mr. Mahin Kraivixien. The Chairman of the Risk Management Committee is Mr. Narong Srisa-an, Vice Chairman of the Board. Mr. Somsak Sae-Kuay, Vice President of the Office of Internal Audit, is the Secretary to the Risk Management Committee. Among others responsibilities, the Risk Management Committee ensures the analysis of both internal and external risks, determines the acceptable level of risks for the Company and its subsidiary companies, and determines and reviews criteria of risk management as well as evaluates an emergency plan of each office to ensure that it is practical. They also consider and review; overall policies, guidelines of risk management of the Company and its subsidiary companies, risks in the operation of the Company and its subsidiary companies, including the preparation of the risk management report, warning system and preventive measures for operational risks. This includes the risk assessment of the Company and its subsidiary companies with timely review of the criteria of risk management. Nomination Committee The Board of Directors appointed the Nomination Committee which consists of Mr. Staporn Kavitanon, Mr. Manu Leopairote, and Khunying Wanna Sirivadhanabhakdi. The Chairman of the Nomination Committee is Mr. Staporn Kavitanon and Mr. Thidi Suwanarat is the Secretary to the Nomination Committee. Remuneration Committee The Board of Directors appointed the Remuneration Committee which consists of Mr. Staporn Kavitanon, Mr. Manu Leopairote, and Prof. Kanung Luchai. The Chairman of the Remuneration Committee is Mr. Staporn Kavitanon and Mr. Thidi Suwanarat is the Secretary to the Remuneration Committee.

Annual Report 2008

Chairman and CEO Principle 3 Our Chairman encourages constructive relations among the Board, Executive Committee and Management Committee. The Chairman approves the agenda for Board and Executive Committee meetings, as he is the Chairman of the Executive Committee. He also supervises the disclosure of adequate and appropriate information to the management and the Board at the appropriate time. On January 18, 2008, Mr. Thapana Sirivadhanabhakdi was appointed the President and CEO to oversee the business operation and administration in accordance with the new structure of the organization of the Company.

Board Membership Principle 4 In order to assure a transparent process for the appointment of new directors to the Board, the Nomination Committee (NC) would review and assess candidates for directorships (including executive directorships) before making recommendations to our Board and/or to the Shareholdersâ&#x20AC;&#x2122; Meeting of the Company. The NC also reviews the retirement and re-election of directors to comply with our Articles of Association. The NC consists of three directors with a majority of independent directors (including the NC Chairman). It adopted a charter and proposed it to the Board for approval. The Remuneration Committee (RC) also determines remuneration policies and guidelines to set fair and reasonable remunerations of any kind to directors and executive committee members, as well as, reviews, revises, amends, or revokes such policies and guidelines to be proposed to the annual general meeting of shareholders of the Company for approval. The Committee is also in charge of the consideration and review of the remuneration of key executives and proposes to the Board of Directors of the Company. In performing their roles, our NC and RC adhere to the law and the Listing Manual applicable to our Company.

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Board Performance

Level and Mix of Remuneration

Principle 5

Principle 8

Our Board members include self-assessment in their performance, and take the result of business operations into their consideration. The Board expresses opinions and asks questions in the meeting for correct and careful consideration of proposed agenda. They exercise their duty with care to preserve benefits of the Company.

The components of remuneration are structured to reward the Directors, Executive Directors, and top executives of the Company based on the corporate and individual performance. The approval of the remuneration for the directors is proceeded with clarity and transparency to comply with laws and the Code of Corporate Governance 2005 (including the amendment). The Remuneration Committee will consider and endorse the remuneration structure prior to propose to the shareholders for approval.

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 government matters. In this respect, we set up a Compliance Unit, having a Compliance Manager responsible for this Unit under supervision of the Company Secretary. This is to ensure compliance with the legal and regulatory requirements. The Board approves the appointment and the removal of the Company Secretary. In 2008, the Company Secretary attended all Board meetings and Executive Committee meetings.

Procedure for Developing Remuneration Policies

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.

Principle 7 The Remuneration Committee (RC) is authorized by the Board to determine the remuneration of directors and/or executives in consultation with the Chairman to propose for the approval of the shareholders’ meetings. 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.

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(3)

Disclosure of Remuneration

Mr. Sawat Sopa was appointed to the Executive Committee on February 27, 2008.

(4)

Principle 9

Mr. Saikeaw Vongpisethkul was appointed to the Executive Committee on February 27, 2008 and resigned from the

As at December 31, 2008, Directors and five top executives received the following remuneration

(5)

9.1 Directors

(6)

position on October 1, 2008. Mr. Jean Lebreton was appointed to the Executive Committee on February 27, 2008.

(Remark: 1 S$ = Baht 24)

Name of Directors

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

Remuneration Band

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

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

9.2 Top Executives (Remark: 1 S$ = Baht 24)

Name of Executives

1. 2. 3. 4. 5.

Mr. Mr. Mr. Mr. Mr.

Sawat Sopa (3) Saikeaw Vongpisethkul (4) Jean Lebreton (5) Vichai Chaiyavaranurak (6) Somchai Suthikulpanich (7)

Remuneration Band

B A B A A

Remarks: (1)

Mr. Samut Hatthasing resigned from directorship on May 16,

(2)

Mr. Thapana Sirivadhanabhakdi was previously the Executive

Mr. Vichai Chaiyavaranurak was appointed to the Executive Committee on November 14, 2008.

(7)

Mr. Somchai Suthikulpanich was appointed to the Executive Committee on November 14, 2008.

Accountability Principle 10 The Board is responsible for providing a balanced and understandable assessment of the Companyâ&#x20AC;&#x2122;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, after the financial disclosure, our top management also participates in quarter results briefing and telephone conference from time to time. This is to ensure the timely update to our investors.

Audit Committee Principle 11 The Board appointed the Audit Committee (AC), which consists of four independent directors: three Thais and one Singaporean. The AC responsibilities are clearly set forth in the Audit Committee Charter for instance, assessing the adequacy and effectiveness of the internal controls of the Company and its subsidiary companies, ensuring the correctness and reliability of the preparation process and information disclosures of the Company and its subsidiary companies, and reviewing the Company and its subsidiary companies to comply with the applicable laws, regulations and rules of the Stock Exchange of Thailand and the Singapore Exchange. This includes the internal controls and consideration of Interested Persons Transactions to prevent an occurrence of conflict of interests.

2008. Vice President and appointed the President and CEO on January 18, 2008.

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112


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 Corporate Secretariat to oversee compliance with the laws concerning the limited and public companies and the Securities Laws, which are applicable to the Company. Based on the information provided to it, the Audit Committee believes that the system of internal controls and risk management of the Company is adequate.

According to the financial statements ended December 31, 2008, there was no payment made by the Company for the Non-Audit Fee to the auditor.

Communication with Shareholders Principle 14 Not only we make various announcements via SGX-NET to communicate with our shareholders, but Mr. Richard W. Jones, head of Investor Relations Unit, also 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.

Internal Audit Principle 13 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 Vice President, Office of Internal Audit, as the Secretary to the AC. Annual audit was prepared to ensure that the performance of internal audit is accurate.

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 ht tp: // w w w.thaibev.com / StoreFile /integration _files / investor.html.

The AC will propose its opinions on the appointment of the auditors of the Company and its subsidiary companies including their remuneration to the Board of Directors in order to propose to the Shareholders’ Meeting for approval. The 2008 Annual General Meeting of Shareholders held on April 28, 2008, unanimously resolved to approve the appointment of Ms. Nittaya Chetchotiros, Certified Public Accountant No. 4439 or Ms. Boonsri Chotpaiboonpun, Certified Public Accountant No. 3756, or Mr. Santi Pongjareanpit, Certified Public Accountant No. 4623 of KPMG Poomchai Audit Ltd. to be the auditor of the Company. This appointment is also complied with Rule 713(1) of the Listing Manual.

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113


Corporate Social Responsibility (CSR) report ThaiBevâ&#x20AC;&#x2122;s corporate social responsibility activities are

a strategic part of our business. We provide direct employment for approximately 22,000 people and have interdependent relationships with hundreds of thousands more people such as sugar cane farmers, sugar mill employees, dealers and agents, shipping companies, small family-run shop keepers, hypermarket employees and villagers close to our factories. We reach out to the local community with activities to strengthen our relationship. Our brewery in Kamphaeng Phet Province in the north of Thailand has a small clinic at one of the boundary walls so that it is accessible by both staff and people in the province. The Chang Clinic is visited regularly by specialist doctors from Bangkok, allowing us to provide a high standard of health care for both our employees and the people in the province. We donate artificial limbs in Kamphaeng Phet and ambulances and medical supplies to the Ministry of Public Health and hospitals nationwide. CSR activities commenced many years ago through

our founders, Khun Charoen and Khunying Wanna Sirivadhanabhakdi. As they began in the spirit of giving,

Annual Report 2008

ThaiBev has continued in the same spirit. Thailandâ&#x20AC;&#x2122;s most well-known CSR activity is the distribution of blankets each year to poor villagers during the cold season. Thailandâ&#x20AC;&#x2122;s hilly areas get very cold at times and

the people affected most are often older villagers

who are too poor to afford blankets themselves.

Over nine years, we have donated 1.8 million blankets. ThaiBev supports the Population and Community Development Association by sponsoring the development program at Sam Rong Village in Buri Ram, Northeast Thailand. The project promotes sustainable grass-roots endeavors marked by extensive villager involvement. ThaiBev is planning to support another village in Krabi, Southern Thailand, one of the badly affected areas damaged by the 2004 tsunami. As health and road safety are important priorities for the Company, we stress the need to drink moderately and sensibly. The majority of vehicle accidents are still caused by speeding and insufficient awareness of traffic rules. ThaiBev therefore distributes driver safety handbooks, which aim to teach people how to drive safely, and we give away free crash helmets because motorcyclists are

114


1

2

3

7

5 4

6 8

1. Donating to HRH Princess Bajrakitiyabha Fund for scholarship to Cornell University 2. The Chang Clinic in Kamphaeng Phet Province 3. Donating crash helmets as part of a road safety campaign 4. Mr. Ekachai Jeerakul, a beneficiary of ThaiBev support in the Thai Talent Program, is a master guitarist 5. ThaiBev supports Thai arts and culture 6. Thousands of Thai children benefit from the Chang–Everton Football Academy 7. ThaiBev Unites to Fight the Cold is a long-standing campaign to donate blankets to the poor in the cool season 8. Mr. Amarin Kraivixien (left), is already a champion golf player thanks to the support of ThaiBev’s Thai Talent Program

involved in the majority of accidents in Thailand. As part of this campaign, ThaiBev supports local police, medical foundations and authorities.

He also won many local junior golf tournaments. ThaiBev also provides music scholarships for talented students at Mahidol University’s College of Music.

In 2008, the Company launched the ThaiBev Thai Talent Program to help Thais who have the potential to excel at something they love but perhaps lack the financial support they need. The ThaiBev Thai Talent program provides the training and opportunity for young Thais to pursue their ultimate goal. Examples are Ekachai Jearakul, a talented young guitarist who with our support garnered 3rd prize in the International Guitar Competition in Magnitogorsk in 2008 and was named best player in Russian style music – quite an achievement for a Thai. Also, Amarin Kraivixien who, through the Program, was able to compete in the 2008 US, Kids Golf European Championships in Scotland where he came first in the 11 year old category.

We are concerned that Thai people do not forget their own cultural heritage, and therefore sponsor several important cultural attractions. One of these is the Joe Louis Puppet Theatre, which demonstrates Thai puppet mastery to both Thais and foreign tourists. We also support the Khon, a dance known for the exquisite decorative masks that the dancers wear. Siam Niramit is a large theatre complex in Bangkok that provides a show with a spectacular overview of Thai culture and arts. In 2008, ThaiBev reaffirmed its commitment to Thai football at the grassroots and professional level by launching both the ThaiBev Football Academy, a community football

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program in Bangkok together with integrated professional coach training programs. The ThaiBev Football Academy provides free training to over a thousand youths in Bangkok every weekend at its football ground. The Academy also includes B and C coach licensing to lift the skills of Thai football professionals to international standards, as part of the company-initiated ‘Chang….Coaching’ scheme. ThaiBev has sponsored Everton Football Club for several years. In addition to the core objectives, both Everton and ThaiBev realize that this relationship could bring much wider benefits to both parties and have a positive effect on the development of Thai football and the wider community in Thailand. In the aftermath of the 2004 Tsunami disaster, Everton immediately offered their support. Within months the club had raised over £100,000 from fans and in the summer of 2005 this money was matched by ThaiBev’s Chang brand and aided the construction of 50 brand new homes in the Everton-Chang Village and a football field in the devastated Ban Naan Khem village. The project was so successful that upon its completion, it was identified by the Prince of Wales International Business Leadership Forum as a model of regeneration. Partnerships are two way processes. Despite being our main brand awareness tool, ThaiBev was happy to remove our Chang beer from junior replica kits and training range in support of the Portman Group recommendations earlier in 2008. Mr. Thapana Sirivadhanabhakdi, President and CEO of ThaiBev noted, “We recognize that under-age drinking is an issue in the UK and as a company we are

Annual Report 2008

firmly committed to taking an active and responsible role in society. Chang Beer is fully supportive of this initiative.” Inver House Distillers Limited (“Inver House”), our award-winning group of distilleries in Scotland, is also committed to its workforce, the local community and society. Inver House focuses its efforts on the education of its workforce and the local community about responsible drinking. During Inver House’s 2008 company day, the message of responsible drinking was promoted by arranging for Lisa Nicoll to perform her one-woman play “Acceptance,” about the effects of alcohol abuse. In October 2008 during “Alcohol Awareness Week”, Inver House commissioned “Acceptance” for a performance at a local high school in Scotland. Besides this, Inver House offers a new Scottish Vocational Qualification specifically designed for the Spirits Industry. In 2008, Inver House donated £13,871 to various local charities many of which involve its employees. We have also been active in Singapore, where we are listed. We have events like the SGX-organized Bull Charge each year, by providing financial support. With a beer called Chang, or elephant in Thai, it was beholden on us to demonstrate our commitment to the preservation of elephants. We therefore offered our support to Singapore wildlife conservation by adopting Chawang, the bull elephant at the Night Safari, a popular zoo. Our donation assists the staff in research about elephants and their conservation.

116


1 Winner of HM the King’s trophy : Thais Love Their King 2 Winner of HM the Queen’s trophy : Unity 3 Winner of HRH the Crown Prince’s trophy : Forest and Water Conservation

1

4 Winner of HRH the Crown Princess’s trophy : Thai Agricultural Way of Life

2

4 3

PR Taalk k The year 2008 was an eventful one for ThaiBev and Thai society. When His Majesty turned 80 in 2007, the Photography Association of Thailand, under Royal Patronage, and ThaiBev photo jointly honored the great monarch with a special photo contest. Members of the Royal family graciously bestowed awards on the winners. • • • •

His Majesty the King bestowed a trophy to the winner of ‘Thais Love Their King’ category. Her Majesty the Queen bestowed a trophy to the winner of the ‘Unity’ category. His Royal Highness Crown Prince Maha Vajiralongkorn bestowed a trophy to the winner of the ‘Forest and Water Conservation’ category. Her Royal Highness Crown Princess Maha Chakri Sirindhorn bestowed a trophy to the winner of the ‘Thai Agricultural Way’ category.

The project committee based the categories on His Majesty’s deeds and Thais’ reverence for their monarch. The contest attracted about 3,000 entries that reflected their perspectives with narratives regarding the value of the land; people’s loyalty to the king and the kingdom; love and unity among the people, and the agricultural way of life of Thais.

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117


1 Mr. Thapana Sirivadhanabhakdi, President and CEO, presenting

blankets to those braving the cold under the ninth ‘ThaiBev Unites

to Fight the Cold’ project

2 Chang-Everton Football Academy opens its doors to Thai youths 3 Staff coaches from Everton Football Club train Thai youths 4 Students and members of the public ride their bikes in the

‘ThaiBev Combating Global Warming’ project at Kamphaeng Phet

Historical Park

5-6 Artists, celebrities, and the general public took part in the

Annual Report 2008

‘We Love Mothers Narration’ activity on August 12, 2008

118


Other activities valued and sponsored by ThaiBev reflected love and concern for Thai society or affectionate ties between mothers and children, including the ‘We Love Mothers Narration’ activity on National Mothers’ Day (August 12, 2008), in which pairs of mothers and sons or daughters gave their accounts of their impression of one another, in addition to their participation in family activities. Held at Siam Niramit Theater, this activity saw 1,000 pairs of artists, celebrities, and the general public joining the activity. Another key activity to which ThaiBev is firmly committed under its ‘Thais Are Ready to Give Each Other’ resolution is the ‘ThaiBev Unites to Fight the Cold’. This project is now in its ninth consecutive year. A total of 200,000 blankets were donated to Thais in 15 provinces of the North and Northeast each year. In the coming tenth year, a total of two million blankets will have reached needy Thais. Out of our concern regarding global warming and its future impact on the global community in future, the Company also launched an environmental campaign called ‘ThaiBev Combating Global Warming’ to reflect the world’s collective responsibility for tackling the problem. An early activity was the talk on ‘Reducing Global Warming Following in His Majesty’s Footsteps’ by Dr. Sumet Tantivejkul. As for production processes, ThaiBev launched an alternative-energy project in which bioenergy derived from production processes is converted into biogas, replacing liquid fuels. Five plants have begun their implementation, namely Buri Ram, Khon Kaen, Ubon Ratchathani, Prachin Buri, and Surat Thani. As for sports sponsorship, the foremost sport was naturally football, as seen in the establishment of the Chang-Everton Football Academy, designed to teach Thai youths football skills with cooperation from the Everton Football Club, which delegated expert staff coaches to conduct the training twice a year. This step followed the first move in which Thai youths were sent for training at the club in England. This latest activity attracted about 1,000 youths; a by-product was that Thai staff coaches mastered professional soccer techniques and tactics typical of the Everton style. In cooperation with the Football Association of Thailand, ThaiBev instituted a ‘Chang Coach Training’ project for coaches at the A, B, C license levels under the Asian Football Confederation (AFC) curriculum. Mr. Charnwit Pholcheewin, a former national soccer coach and a distinguished football personality, agreed to serve as training director under the project. ThaiBev is committed to taking part in and sponsoring useful public service activities. One can always be assured that ThaiBev’s resolution and policy of ‘Thais Are Ready to Give Each Other’ will remain in its approach to committing good deeds for the benefit of Thai society in the years to come.

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119


AUDIT COMMITTEE REPORT ANNUAL REPORT 2008 Thai Beverage Public Company Limited

The Audit Committee of Thai Beverage Public Company Limited is comprised of four independent 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

In 2008, the Audit Committee conducted 5 meetings with the Executive Management, Head of Internal Audit Office and the external auditors of the Company in relation to the meeting agenda as appropriate. The major tasks undertaken by the Audit Committee were as follows: 1. Reviewed the quarterly and annual financial statements of the Company for the fiscal year 2008 before submitting to the Board of Directors for approval to ensure their accuracy, reliability, complete and adequate disclosure of significant information and in accordance with generally accepted accounting standards. 2. Reviewed the connected transactions and the transactions that may lead to conflicts of interests to ensure their compliance with the Company’s policy and corporate governance principles with the proper transparency and disclosure. 3. Assessed the adequacy and appropriateness of the internal control system through the oversight and audits of the Internal Audit Office. 4. Approved the 2008 audit plan of the Internal Audit Office, supervised the internal audit function through the acknowledgement of its audit results and provided guidelines to the Office of Internal Audit. The Audit Committee regularly reported the outcome of each meeting to the Board of Directors. The Audit Committee is of the view that the Company’s internal control has been both adequate and appropriate to its business and found no material discrepancy. The Company’s financial statements have been prepared in accordance with generally accepted accounting standards. For the year 2009, the Audit Committee has nominated the designated auditors of KPMG Phoomchai Audit Limited as the Company’s external auditors for the year 2009 and the audit remuneration to the Board of Directors for approval of the shareholders at the Annual General Meeting.

Staporn Kavitanon Chairman of the Audit Committee February 26, 2009

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120


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 2008, and the related statements of income, changes in equity and cash flows for the year then ended of Thai Beverage Public Company Limited and its subsidiaries, and of Thai Beverage Public Company Limited, respectively. The Companyâ&#x20AC;&#x2122;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. The consolidated and separate financial statements of Thai Beverage Public Company Limited and its subsidiaries, and of Thai Beverage Public Company Limited, respectively, for the year ended 31 December 2007 were audited by another auditor whose report dated 27 February 2008 expressed an unqualified opinion on those statements. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit 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 2008 and the results of operations and cash flows for the year 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. 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 35 to the 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.

(Nittaya Chetchotiros) Certified Public Accountant Registration No. 4439

KPMG Phoomchai Audit Ltd. Bangkok 27 February 2009

Thai

Beverage

Public

Company

Limited

121


BALANCE SHEETS As at 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

Note

2008

Assets

2007

2008

2007

(Restated) (in Baht)

Current assets Cash and cash equivalents

6

1,916,991,944

2,587,796,039

Current investments

7

9,122,852

114,185,085

-

-

5, 8

1,514,403,074

1,956,547,276

-

-

5

41,437,542

4,371,057

9

29,729,437,189

28,277,662,781

10

1,726,518,933

1,428,372,765

13,657,399

8,481,487

Total current assets

34,937,911,534

34,368,935,003

3,666,032,254

3,933,662,188

Trade accounts receivable

3,964,488

9,168,240

Short-term loans to and amounts

due from related parties

Inventories Other current assets

3,648,410,367 -

3,916,012,461

-

Non-current assets 11

111,655,630

124,518,368

77,161,702,065

71,470,329,894

7

10,518,325

5,633,579

-

-

due from related parties

5

57,898,194

5,797,615

5,588,704,560

9,418,243,969

Property, plant and equipment

12

39,578,157,819

44,639,782,574

55,517,479

71,600,623

Intangible assets

13

3,178,327,451

1,007,145,861

36,299,363

16,165,989

Leasehold rights

14

111,853,986

121,927,347

Other non-current assets

15

2,068,924,619

2,132,228,836

335,191,250

344,564,250

Total non-current assets

45,117,336,024

48,037,034,180

83,177,414,717

81,320,904,725

Total assets

80,055,247,558

82,405,969,183

86,843,446,971

85,254,566,913

Investments in subsidiaries and associates Other long-term investments Long-term loans to and amounts

-

-

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

Report

2008

122


BALANCE SHEETS As at 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

Note

2008

Liabilities and shareholdersâ&#x20AC;&#x2122; equity

2007

2008

2007

(Restated)

(in Baht)

Current liabilities Bank overdrafts and short-term loans from financial institutions Trade accounts payable

16

8,701,361,743

5,998,233,815

5, 17

3,389,385,495

2,640,052,639

5,246,160,794

4,797,684,522

-

-

Current portion of long-term guaranteed bonds Current portion of long-term loans

16

-

3,000,000,000

16

5,325,000,000

1,755,000,000

- 5,325,000,000

3,000,000,000 1,755,000,000

Short-term loans from and amounts due to related parties

5, 16

126,227,153

69,686,546

3,931,773,159

2,115,288,548

Other short-term loans

7,000,000

7,000,000

-

-

Income tax payable

2,189,514,076

2,783,232,721

137,920,639

146,248,940

Other current liabilities

18

2,982,587,156

3,497,752,050

137,146,461

161,542,579

Total current liabilities

22,721,075,623

19,750,957,771

14,778,001,053

11,975,764,589

Non-current liabilities Long-term loans from financial institutions

16

3,265,000,000

5,400,000,000

3,265,000,000

5,400,000,000

Long-term loans from and amounts due to related parties

5, 16

2,221,378

270,000

8,725,000,000

6,540,500,000

Other non-current liabilities

69,617,368

160,106,627

-

117,900

Total non-current liabilities

3,336,838,746

5,560,376,627

11,990,000,000

11,940,617,900

Total liabilities

26,057,914,369

25,311,334,398

26,768,001,053

23,916,382,489

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

Beverage

Public

Company

Limited

123


BALANCE SHEETS As at 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

Note

2008

Liabilities and equity

2007

2008

2007

(Restated) (in Baht)

Equity Share capital

Authorised share capital

29,000,000,000

29,000,000,000

29,000,000,000

29,000,000,000

Issued and paid-up share capital

25,110,025,000

25,110,025,000

25,110,025,000

25,110,025,000

Difference arising from

common control transactions

Reserves

4

(19,732,229,338)

(16,201,122,879)

-

-

19

Share premium

17,215,736,603

17,215,736,603

Currency translation changes

(1,503,025,118)

(208,076,374)

Fair value changes and revaluation surpluses

4,262,802,105

4,388,935,374

17,215,736,603 -

-

17,215,736,603 -

-

Retained earnings

Appropriated - legal reserve

19

2,900,000,000

2,900,000,000

2,900,000,000

2,900,000,000

Unappropriated

25,505,762,741

22,644,726,217

14,849,684,315

16,112,422,821

Total equity attributable to equity holders of the Company

53,759,071,993

55,850,223,941

Minority interests

238,261,196

1,244,410,844

Total equity

53,997,333,189

57,094,634,785

60,075,445,918 - 60,075,445,918

61,338,184,424 61,338,184,424

Total liabilities and equity

80,055,247,558

82,405,969,183

86,843,446,971

85,254,566,913

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

Report

2008

124


STATEMENTS OF INCOME For the years ended 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

2008

Note

2007

2008

2007

(Restated)

(in Baht)

Revenues

5

Revenue from sales Management fees

105,257,338,378 105,107,854,242

-

-

-

-

2,522,777,132

2,577,305,358

Interest income

36,544,092

46,293,684

509,518,424

775,352,387

Dividends

100,029

22,189,477

5,345,108,398

18,985,153,408

Gain on sale of investment

11

525,878,633

-

216,460,581

6,044

Other income

21

379,825,875

292,199,091

13,125,293

89,521,384

Share of profits from investments

accounted for using the equity method

26,603,216

28,641,891

-

-

Total revenues 106,226,290,223 105,497,178,385 8,606,989,828 22,427,338,581 Expenses

5

Cost of sales

76,555,924,169

73,824,389,203

Selling and administrative expenses

22

14,079,091,867

14,737,703,236

Other expenses

5,280,526

73,499,244

- 1,217,013,424

1,154,217,891

-

-

Total expenses 90,640,296,562 88,635,591,683 1,217,013,424 1,154,217,891 Profit before interest and

income tax expenses

15,585,993,661

16,861,586,702

7,389,976,404

21,273,120,690

Interest expense

24

680,941,746

1,050,194,743

1,050,321,180

1,577,560,366

Income tax expense

25

4,298,961,167

4,868,398,343

320,486,480

277,248,227

Profit for the year 10,606,090,748 10,942,993,616 6,019,168,744 19,418,312,097 Attributable to: Equity holders of the Company

10,341,843,037

10,628,197,372

Minority interests

264,247,711

314,796,244

6,019,168,744

19,418,312,097

-

-

Profit for the year 10,606,090,748 10,942,993,616 6,019,168,744 19,418,312,097 Basic earnings per share

27

0.41

0.42

0.24

0.77

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

Beverage

Public

Company

Limited

125


share capital

Reserves

Retained earnings

Consolidated financial statements (Restated)

transactions

control premium

Share

common legal reserve Unappropriated

6,586,263,579

1,700,000,000 19,102,445,355

(in Baht)

surpluses

52,553,555,838

of the Company

505,629

interests

Minority

52,554,061,467

equity

Total

attributable

Total equity

revaluation Appropriated to to equity holders

changes and

Fair value

4

795,570,699

25,110,025,000 (16,345,835,666)

- 17,215,736,603

- (19,508,334)

- 6,586,263,579

-

-

1,700,000,000 19,102,445,355

-

53,349,126,537 1,017,124,023

795,570,699 1,016,618,394

54,366,250,560

1,812,189,093

-

-

-

- (2,197,328,205)

-

134,521,429

(2,062,806,776)

134,636

(2,062,672,140)

-

-

-

(188,568,040)

-

-

-

(188,568,040)

-

(188,568,040)

-

245,132,189

245,132,189

-

-

-

-

-

(188,568,040) (2,197,328,205)

-

(188,568,040) (2,197,328,205)

134,521,429

- 10,517,586,612

- 10,383,065,183

-

8,376,822,556

10,628,197,372

(2,251,374,816)

314,930,880

314,796,244

134,636

8,691,753,436

10,942,993,616

(2,251,240,180)

-

-

-

-

-

-

-

-

41,163,464

41,163,464

- -

Dividends -

-

-

-

-

-

-

-

-

-

-

-

-

-

- (5,775,305,750)

1,200,000,000 (1,200,000,000)

(5,775,305,750)

-

-

(465,469)

-

(21,326)

(5,775,771,219)

-

(21,326)

-

(100,419,402)

-

25,110,025,000 (16,201,122,879) 17,215,736,603

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

Balance at 31 December 2007

before business restructuring

(208,076,374)

-

4,388,935,374

-

- 2,900,000,000 22,644,726,217

-

55,850,223,941 1,244,410,844

(100,419,402) (128,320,728)

57,094,634,785

(228,740,130)

Dividends paid by subsidiaries

28

-

transactions

Legal reserve

subsidiary for common control

Consideration paid to shareholder of

holding

Effects of change to percentage of

-

4

-

Total recognised income and expense

Profit for the year

in equity

Net expense recognised directly

foreign operations

financial statements of

Translation loss relating to

Net surplus on property revaluation

Changes in equity for 2007

Restated balance

common control transactions

Difference arising from

(19,508,334)

changes

translation

Currency

arising from

Difference

Balance at 1 January 2007 25,110,025,000 (17,141,406,365) 17,215,736,603

Note

Issued

and paid-up

For the years ended 31 December 2008 and 2007

Statements of Changes in Equity

Thai Beverage Public Company Limited and its Subsidiaries


Retained earnings

Consolidated financial statements (Restated) Reserves

transactions

control premium

Share

common

Fair value

legal reserve Unappropriated

4,388,935,374

2,900,000,000 22,644,726,217

(in Baht)

surpluses

54,909,940,455

of the Company

42,871,512

interests

Minority

54,952,811,967

equity

Total

attributable

Total equity

revaluation Appropriated to to equity holders

changes and

4,388,935,374

-

-

2,900,000,000 22,644,726,217

-

55,850,223,941 1,244,410,844

940,283,486 1,201,539,332

57,094,634,785

2,141,822,818

11

-

-

-

-

(126,133,269)

-

-

(126,133,269)

-

(126,133,269)

-

-

- (1,294,948,744)

-

-

-

(1,294,948,744)

-

(1,294,948,744)

- -

Profit for the year

Total recognised income and expense 198,899,263

198,899,263

- -

- (1,294,948,744)

-

- (1,294,948,744)

(126,133,269)

-

(126,133,269)

-

- 10,142,943,774

- 10,142,943,774

-

8,920,761,024

10,341,843,037

(1,421,082,013)

264,247,711

264,247,711

-

9,185,008,735

10,606,090,748

(1,421,082,013)

-

-

-

-

-

-

-

- (1,059,805,649)

(1,059,805,649)

28

-

- -

(512,122,062)

- (3,053,254,586)

-

-

-

-

-

-

-

-

-

-

-

- (7,281,907,250)

-

-

(7,281,907,250)

(512,122,062)

(3,053,254,586)

(220,784)

-

-

(7,282,128,034)

(512,122,062)

(3,053,254,586)

-

- 2,900,000,000 25,505,762,741

238,261,196

(164,629,074) (210,370,926) 53,759,071,993

(375,000,000) 53,997,333,189

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

-

-

4,262,802,105

(164,629,074)

-

-

Balance at 31 December 2008 25,110,025,000 (19,732,229,338) 17,215,736,603 (1,503,025,118)

before business restructuring

Dividends paid by subsidiaries

Dividends

4

11

Sale of a subsidiary

transactions

subsidiary for common control

Consideration paid to equity holders of

holding

Effects of change to percentage of

-

in equity

Net expense recognised directly

foreign operations

financial statements of

Translation loss relating to

Sale of a subsidiary

Changes in equity for 2008

(208,076,374)

940,283,486

Restated balance 25,110,025,000 (16,201,122,879) 17,215,736,603

-

-

4

-

control transactions

Difference arising from common

(208,076,374)

changes

translation

Currency

arising from

Difference

Balance at 1 January 2008 25,110,025,000 (17,141,406,365) 17,215,736,603

and paid-up

share capital

Note

Issued

For the years ended 31 December 2008 and 2007

Statements of Changes in Equity

Thai Beverage Public Company Limited and its Subsidiaries


Annual

Report

2008

128

Reserves

share capital

- - - - -

Net surplus on property revaluation

Profit for the year

Total recognised income and expense

Legal reserve

Dividends -

-

-

-

-

17,215,736,603

legal reserve

Unappropriated

Appropriated to

the Company

equity holders of

attributable to

Total equity

-

-

(134,521,429)

-

(134,521,429)

134,521,429

-

1,200,000,000

-

-

-

1,700,000,000

(5,775,305,750)

(1,200,000,000)

19,552,833,526

19,418,312,097

134,521,429

3,534,895,045

(5,775,305,750)

-

19,418,312,097

19,418,312,097

-

47,695,178,077

(in Baht)

surpluses

revaluation

changes and

Fair value

Retained earnings

Separate financial statements

25,110,025,000

17,215,736,603

-

2,900,000,000

16,112,422,821

61,338,184,424

- - 25,110,025,000

Profit for the year 28

Dividends

Balance at 31 December 2008

17,215,736,603

-

-

-

-

-

2,900,000,000

-

-

14,849,684,315

(7,281,907,250)

6,019,168,744

60,075,445,918

(7,281,907,250)

6,019,168,744

1 January 2008

Balance at 31 December 2007 and

28

25,110,025,000

Balance at 1 January 2007

Share premium

and paid-up

Note

Issued

For the years ended 31 December 2008 and 2007

Statements of Changes in Equity

Thai Beverage Public Company Limited and its Subsidiaries


STATEMENTS OF CASH FLOWS For the years ended 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

Note

2008

2007

2008

2007

(Restated)

(in Baht)

Cash flows from operating activities Profit for the year

10,606,090,748

10,942,993,616

6,019,168,744

19,418,312,097

Adjustments for Depreciation and amortisation

5,021,625,110

5,267,163,561

31,410,632

Interest income

(36,544,092)

(46,293,684)

(509,518,424)

Interest expense

680,941,746

1,050,194,743

1,050,321,179

1,577,560,366

Unrealised loss on exchange rate

7,582,893

5,840,827

1,554

1,164,320

Bad debts and allowance for doubtful accounts

11,846,875

131,528,253

Amortisation of advance payments to a specialist

50,000,000

50,000,000

(Reversal of) allowance for obsolete inventories

(347,350,371)

142,052,827

-

-

Impairment loss on property

-

58,902,936

-

-

28,966,567 (775,352,387)

-

-

9,375,000

9,375,000

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

(28,315,105)

(138,540,490)

(402,075)

(63,880,601)

Gain on sale of investment

(525,878,633)

-

(216,460,581)

(6,044)

Dividends

-

-

(5,345,108,398)

(18,985,153,408)

Share of profits from investments accounted for using the equity method

(26,603,216)

(28,641,891)

Income tax expense

4,298,961,167

4,868,398,343

320,486,480

277,248,227

19,712,357,122

22,303,599,041

1,359,274,111

1,488,234,137

-

-

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

Beverage

Public

Company

Limited

129


STATEMENTS OF CASH FLOWS For the years ended 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

Note

2008

2007

2008

2007

(Restated) (in Baht)

Changes in operating assets and liabilities Trade accounts receivable

425,929,901

(342,918,800)

Amounts due from related parties

(37,143,014)

45,410,241

Inventories

(1,104,424,037)

217,460,135

Other current assets

(298,351,354)

540,229,179

Trade accounts payable

746,387,479

37,239,921

Amounts due to related parties

59,948,269

(151,816,525)

45,171,352

16,230,422

Other current liabilities

(361,028,311)

(1,209,422,289)

34,623,593

(139,223,931)

Other non-current liabilities

(59,404,210)

(15,834,161)

(117,900)

Income taxes paid

(4,892,679,811)

(4,276,918,657)

(328,814,781)

Net cash provided by operating activities

14,191,592,034

17,147,028,085

1,130,552,096

- 25,591,633 - (5,175,912) -

1,293,629,337 8,507,390 -

117,900 (178,791,025) 2,488,704,230

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

Report

2008

130


Consolidated

Separate

financial statements

financial statements

Note

2008

2007

2008

2007

(Restated)

(in Baht)

Cash flows from investing activities Interest received

36,667,611

46,449,270

540,001,954

780,791,231

Dividends received

-

-

5,431,438,980

20,290,212,836

Current investments

105,062,233

(103,326,485)

Loans to and amounts due from related parties

296,767,769

7,765,385

4,041,066,340

1,908,300,440

Investments in subsidiaries and associates

39,465,954

39,613,566

(898,999,650)

(9,065,661,600)

Long-term investments

(4,884,746)

(1,879,961)

Purchase of property, plant and equipment

(2,514,262,039)

(1,595,906,177)

(7,023,112)

Decrease in property, plant and equipment

447,714,228

1,142,935,504

1,893,458

Purchase of intangible assets

(44,683,527)

(32,589,748)

Decrease in intangible assets

50,352,369

11,202,716

-

-

Leasehold right

294,800

(43,338,000)

-

-

Other non-current assets

13,304,217

(8,790,220)

(2,000)

(3,582,600)

Net cash outflow on acquisition of subsidiaries

(6,334,248,277)

(253,930,304)

(6,253,195,840)

(114,999,310)

Net cash inflow on disposal of subsidiaries

1,590,953,318

-

1,590,953,318

-

-

-

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

(25,087,589)

(8,595,148)

7,820

Net cash provided by (used in) investing activities

(6,317,496,090)

(791,794,454)

4,421,045,859

14,596,473,603

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

Beverage

Public

Company

Limited

131


STATEMENTS OF CASH FLOWS For the years ended 31 December 2008 and 2007

Consolidated

Separate

financial statements

financial statements

Note

2008

2007

2008

2007

(Restated) (in Baht)

Cash flows from financing activities Interest paid

(730,951,187)

(1,142,353,029)

(1,106,570,730)

(1,708,451,681)

Dividends paid to equity holders of the Company

(7,281,907,250)

(5,775,305,750)

(7,281,907,250)

(5,775,305,750)

Dividends paid to minority interests

(220,784)

(465,469)

-

-

Dividends paid by subsidiary before business restructuring

(375,000,000)

(228,740,130)

-

-

Bank overdrafts and short-term loans from financial institutions

2,703,127,927

(1,158,155,126)

448,476,273

Repayment of short-term guaranteed bonds

-

(2,200,000,000)

-

(2,200,000,000)

Repayment of long-term guaranteed bonds

(3,000,000,000)

(2,300,000,000)

(3,000,000,000)

(2,300,000,000)

Loans from related parties

-

(4,615,231,380)

3,948,200,000

(8,776,000,000)

1,768,125,256

Proceeds from long-term loans from financial institutions

3,190,000,000

5,400,000,000

3,190,000,000

5,400,000,000

Repayment of long-term loans from financial institutions

(1,755,000,000)

(3,500,000,000)

(1,755,000,000)

(3,500,000,000)

Net cash used in financing activities

(7,249,951,294)

(15,520,250,884)

(5,556,801,707)

(17,091,632,175)

Net increase (decrease) in cash and

624,144,650

834,982,747

(5,203,752)

(6,454,342)

Cash and cash equivalents at beginning of year

2,587,796,039

1,941,381,331

9,168,240

15,622,582

cash equivalents

Effect of exchange rate changes on balances held in foreign currencies Cash and cash equivalents at end of year

6

(1,294,948,745)

(188,568,039)

1,916,991,944

2,587,796,039

- 3,964,488

9,168,240

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

Report

2008

132


NOTES TO THE FINANCIAL STATEMENTS For the years ended 31 December 2008 and 2007

Note Contents

Note Contents

1

General information

19

Reserves

2

Basis of preparation of the financial statements

20

Segment information

3

Significant accounting policies

21

Other income

4

Common control transactions and acquisitions

22

Selling and administrative expenses

5

Related party transactions and balances

23

Personnel expenses

6

Cash and cash equivalents

24

Interest expense

7

Other investments

25

Income tax expense

8

Trade accounts receivable

26

Promotional privileges

9

Inventories

27

Earnings per share

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

Leasehold right

32

Events after the balance sheet date

15

Other non-current assets

33

Thai Accounting Standards (TAS) not yet adopted

16

Interest-bearing liabilities

34

Reclassification of accounts

17

Trade accounts payable

35

Significant differences between Thai GAAP and IFRS

18

Other current liabilities

Thai

Beverage

Public

Company

Limited

133


These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the directors on 27 February 2009.

1. General information Thai Beverage Public Company Limited, the “Company”, is incorporated and registered as a public company in Thailand 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.

The principal businesses of the Company and its subsidiaries are the production, distribution of alcoholic and non-alcoholic beverages, industrial alcohol, semi-finished food, finished food, bread, ramen and other by-products including Japanese restaurants. Details of the Company’s subsidiaries as at 31 December 2008 and 2007 were as follows:

Ownership

Country of

interest (%)

Name of the entity

incorporation

Type of business

2008

2007

Direct subsidiaries 1. Beer Thai (1991) PCL.

Beer brewery and production

Thailand

100.00

100.00

of drinking water and

soda water

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

Beer brewery and production

Thailand

100.00

100.00

of drinking water and

soda water

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

Annual

Report

2008

134


Ownership

Country of

interest (%)

Name of the entity

Type of business

incorporation

11. Kankwan Co., Ltd.

Spirits distillery

12. Theparunothai Co., Ltd.

2008

2007

Thailand

100.00

100.00

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

16. Nateechai Co., Ltd.

Spirits distillery

Thailand

100.00

100.00

17. Luckchai Liquor Trading Co., Ltd.

Spirits distillery

Thailand

100.00

100.00

18. Sura Piset Thipparat Co., Ltd.

Spirits distillery

Thailand

100.00

100.00

19. Thai Alcohol PCL.

Alcohol distillery

Thailand

-

100.00

20. Pomthip Co., Ltd.

Beer distributor

Thailand

100.00

100.00

21. Pomkit Co., Ltd.

Beer distributor

Thailand

100.00

100.00

22. Pomkung Co., Ltd.

Beer distributor

Thailand

100.00

100.00

23. Pomchok Co., Ltd.

Beer distributor

Thailand

100.00

100.00

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

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. Thai Beverage Energy Co., Ltd.

Trading of fertilizer, bio gas and

(Formerly: Bionic Humus Co., Ltd.)

distribution of spirits

38. Wrangyer Beverage (2008) Co., Ltd.

Production and distribution of

Direct subsidiaries (continued)

(Formerly: Maharas Agri Co., Ltd.) 39. Thai Molasses Co., Ltd.

Thailand

100.00

100.00

energy drink

Thailand

100.00

100.00

Trading of molasses

Thailand

99.72

99.72

40. Feed Addition Co., Ltd.

(Formerly: Additive Food Co., Ltd.)

Trading of feeds

Thailand

100.00

100.00

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

Trading of supplies and

Thailand

100.00

100.00

procurement

Thai

Beverage

Public

Company

Limited

135


Ownership

Country of

interest (%)

Name of the entity

incorporation

Type of business

2008

2007

Direct subsidiaries (continued) 42. Charun Business 52 Co., Ltd.

Brick producer and

distribution of spirits

Thailand

100.00

100.00

43. Thai Cooperage Co., Ltd.

Oak barrel producer

Thailand

100.00

100.00

44. Thai Beverage Recycle Co., Ltd.

(Formerly: Bang-Na Logistic Co., Ltd.)

Trading of bottles

Thailand

100.00

100.00

45. Thai Beverage Logistics Co., Ltd.

Transportation

Thailand

100.00

100.00

46. Thai Beverage Marketing Co., Ltd.

Import and export spirits for

trading/ international marketing

and non-alcoholic beverages

agency

Thailand

100.00

100.00

47. Dhanasindhi Co., Ltd.

Construction

Thailand

100.00

100.00

48. Dhospaak Co., Ltd.

Advertising agency

Thailand

100.00

100.00

49. International Beverage Holdings Limited

Holding company

Hong Kong

100.00

100.00

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

Beer brewery and production

of drinking water and soda

water

Thailand

100.00

100.00

51. Thai Beverage Brands Co., Ltd.

(Formerly: T.C.C. Cosmo Corporation Ltd.)

Trademark holding

Thailand

100.00

100.00

Thailand

100.00

100.00

52. Beer Chang Co., Ltd.

Trademark holding and

production of concentrate

materials

53. Archa Beer Co., Ltd.

Trademark holding and

production of concentrate

materials

Thailand

100.00

100.00

54. Sura Piset Phatra Lanna Co., Ltd.

Holding company

Thailand

100.00

100.00

55. Thai Drinks Co., Ltd.

Production and distribution of

drinking water

56. Oishi Group PCL.

Japanese restaurant business

and production and distribution

of food and beverage

Annual

Report

2008

Thailand

Thailand

100.00 -

89.93

43.90

136


Ownership

Country of

interest (%)

Name of the entity

incorporation

Type of business

2008

2007

Indirect subsidiaries 57. Thai Thum Distillery Co., Ltd. #

Trading of spirits

Thailand

99.90

99.90

58. Sura Piset Sahasan Co., Ltd. #

Production and distribution

of spirits

Thailand

100.00

100.00

59. Sura Piset Sampan Co., Ltd. #

Production and distribution

of spirits

Thailand

100.00

100.00

60. Muangkij Co., Ltd. #

Import of oak woods

Thailand

100.00

100.00

61. Sint Ek Panich Co., Ltd. #

Mining

Thailand

-

100.00

62. Pan Alcohol Co., Ltd. #

Production and distribution

of vinegar

Thailand

100.00

100.00

63. Banglen Agriculture Co., Ltd. #

Agriculture

Thailand

-

100.00

64. Vitayathan Co., Ltd.

Environmental public relations

Thailand

100.00

100.00

65. InterBev (Singapore) Limited

Trading of alcoholic beverages

Singapore

100.00

100.00

66. InterBev (Cambodia) Co., Ltd.

Trading of alcoholic beverages

Cambodia

100.00

100.00

67. InterBev Malaysia Sdn. Bhd.

Trading of alcoholic beverages

Malaysia

100.00

100.00

68. Best Spirits Company Limited

Trading of alcoholic beverages

Hong Kong

100.00

100.00

69. International Beverage Holdings

(UK) Limited

Holding company

United Kingdom

100.00

100.00

70. United Products Co., Ltd.

Production and distribution

of spirits

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

Production and distribution

of drinking water and energy

drinks and spirits agency

72. Oishi Trading Co., Ltd.

Production and distribution of

food and beverage

Thailand

89.93

43.90

73. Oishi Ramen Co., Ltd.

Japanese ramen restaurants

Thailand

89.93

43.90

Thailand

97.98

80.82

Thailand

99.83

83.20

Subsidiaries of indirect subsidiaries* 74. International Beverage Holdings Limited

Trading of alcoholic beverages

USA, Inc. ##

United States

100.00

100.00

of America

75. Blairmhor Limited #

Holding Company

76. Inver House Distillers Limited 77. Blairmhor Distillers Limited #

United Kingdom

100.00

100.00

Production and distribution of spirits United Kingdom

100.00

100.00

Dormant

100.00

100.00

Thai

United Kingdom

Beverage

Public

Company

Limited

137


Ownership

Country of

interest (%)

Name of the entity

incorporation

Type of business

2008

2007

Subsidiaries of indirect subsidiaries*(continued) 78. Wee Beastie Limited #

Dormant

United Kingdom

100.00

100.00

79. Speyburn-Glenlivet Distillery Company

Dormant

United Kingdom

100.00

100.00

Dormant

United Kingdom

100.00

100.00

Dormant

United Kingdom

100.00

100.00

82. The Balblair Distillery Company Limited #

Dormant

United Kingdom

100.00

100.00

83. R. Carmichael & Sons Limited #

Dormant

United Kingdom

100.00

100.00

84. J MacArthur Junior & Company Limited #

Dormant

United Kingdom

100.00

100.00

85. Mason & Summers Limited #

Dormant

United Kingdom

100.00

100.00

86. Hankey Bannister Limited #

Dormant

United Kingdom

100.00

100.00

87. James Catto & Company Limited #

Dormant

United Kingdom

100.00

100.00

88. Glen Calder Blenders Limited #

Dormant

United Kingdom

100.00

100.00

89. Moffat & Towers Limited #

Dormant

United Kingdom

100.00

100.00

Limited # 80. The Knockdhu Distillery Company Limited # 81. The Pulteney Distillery Company Limited #

Associates of indirect subsidiaries** 90. Liquorland Limited

Off licences

United Kingdom

49.49

49.49

91. Inver House Polska Limited

Trading of alcoholic beverages

Poland

44.00

44.00

92. Inver House Distribution SA #

Dormant

France

50.02

50.02

* Subsidiaries of International Beverage Holdings (UK) Limited ** Associates of International Beverage Holdings (UK) Limited # These are currently non-trading. ## On 20 November 2008, International Beverage Holdings (UK) Limited acquired entire ordinary shares of International Beverage Holdings Limited USA, Inc. from International Beverage Holdings Limited.

On 2 June 2008, Sura Piset Phatra Lanna Co., Ltd., the Company’s subsidiary, acquired an additional 600,369 ordinary shares in United Product Co., Ltd., the Company’s indirect subsidiary, from existing equity holders at Baht 135 per share, totalling Baht 81 million. During 2008, S P M Foods and Beverages Co., Ltd., the Company’s indirect subsidiary, decreased its authorised share capital in two stages of 75% each and the subsequent increase of authorised share capital. The authorised share capital will be decreased first from Baht 100 million to Baht 25 million and second from Baht 25 million to Baht 6.25 million. Subsequently, the authorised share capital will be increased by Baht 600 million to Baht 606.25 million by issuing 60.625 million ordinary shares with a Baht 10 par value.

Annual

Report

2008

138


On 31 January 2008, Pan Alcohol Co., Ltd., the Company’s indirect subsidiary, entered into a memorandum of understanding to acquire the majority of the ordinary shares in Carabao Towandaeng Co., Ltd., a company engaged in the production and sales of energy drinks. Then, the Executive Board of Directors’ meeting held on 23 February 2009 unanimously approved to terminate the aforementioned memorandum.

2. Basis of preparation of the financial statements 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. 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. The Group has adopted the following new and revised Thai Accounting Standards (TAS) which were issued by the FAP during 2007 and effective for accounting periods beginning on or after 1 January 2008:

TAS 25 (revised 2007) Cash Flows Statements

TAS 29 (revised 2007)

Leases

TAS 31 (revised 2007)

Inventories

TAS 33 (revised 2007)

Borrowing Costs

TAS 35 (revised 2007)

Presentation of Financial Statements

TAS 39 (revised 2007)

Accounting Policies, Changes in Accounting Estimates and Errors

TAS 41 (revised 2007)

Interim Financial Reporting

TAS 43 (revised 2007)

Business Combinations

TAS 49 (revised 2007)

Construction Contracts

TAS 51

Intangible Assets

The adoption of these new and revised TAS does not have any material impact on the Company’s financial statements. The FAP has issued during 2008 a number of revised TAS which are only effective for financial statements beginning on or after 1 January 2009 and have not been adopted in the preparation of these financial statements. These revised TAS are disclosed in note 33. The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to the nearest million. They are prepared on the historical cost basis except as stated in the accounting 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. These

Thai

Beverage

Public

Company

Limited

139


judgements, estimates and assumptions are based on

operating policies of a company so as to obtain benefits

historical experience and various other factors, including

from its activities. The financial statements of subsidiaries

management’s assessment of the potential impact

are included in the consolidated financial statements

on the Group’s operations and financial position of the

from the date that control commences until the date that

global economic crisis. Actual results may differ from

control ceases.

these estimates. Associates The estimates and underlying assumptions are reviewed

Associates are those companies in which the Group has

on an ongoing basis. Revisions to accounting estimates

significant influence, but not control, over the financial and

are recognised in the period in which the estimate is

operating policies. The consolidated financial statements

revised, if the revision affects only that period, or in the

include the Group’s share of the total recognised gains

period of the revision and future periods, if the revision

and losses of associates on an equity accounted basis,

affects both current and future periods.

from the date that significant influence commences until the date that significant influence ceases. When the

Information about significant areas of estimation

Group’s share of losses exceeds its interest in an associate,

uncertainty and critical judgements in applying

the Group’s carrying amount is reduced to nil and

accounting policies that have the most significant effect

recognition of further losses is discontinued except to the

on the amounts recognised in the financial statements

extent that the Group has incurred legal or constructive

is included in the following notes:

obligations or made payments on behalf of the associate.

Note 4

Business combination

Business combinations

Note 31

Valuation of financial instruments

Business combinations are accounted for using the

Note 32

Lease classification

purchase method. The cost of an acquisition is measured at the fair value of the assets given, equity instruments

3. Significant accounting policies

issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the

(a) Basis of consolidation

acquisition.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the

Business combination of businesses under common con-

“Group”) and the Group’s interests in associates.

trol are accounted for using a method similar to the pooling of interest method, whereby the assets, liabilities and

Significant intra-group transactions between the Company

contingent liabilities transferred have been accounted for

and its subsidiaries are eliminated on consolidation.

at book values.

Subsidiaries

(b) Foreign currencies

Subsidiaries are those companies controlled by the

Foreign currency transactions

Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and

Annual

Report

2008

Transactions in foreign currencies are translated to Thai

140


Baht at the foreign exchange rates ruling at the dates of

(e) Trade and other accounts receivable

the transactions.

Trade and other accounts receivable (including balances with related parties) are stated at their invoice value less

Monetary assets and liabilities denominated in foreign

allowance for doubtful accounts.

currencies at the balance sheet date are translated to Thai Baht at the foreign exchange rates ruling at that

The allowance for doubtful accounts is assessed primar-

date. Foreign exchange differences arising on translation

ily on analysis of payment histories and future expecta-

are recognised in the statement of income.

tions of customer payments. Bad debts are written off when incurred.

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the

(f) Inventories

foreign exchange rates ruling at the dates of the

Inventories are stated at the lower of cost and net realis-

transactions.

able value.

Foreign entities

Cost of raw material, packaging materials, work in prog-

The assets and liabilities of foreign entities are translated

ress and finished goods is calculated using the weighted

to Thai Baht at the average foreign exchange rates ruling

average cost principle, and comprises all costs of pur-

at the balance sheet date.

chase, costs of conversion and other costs incurred in bringing the inventories to their present location and

The revenues and expenses of foreign entities are

condition. In the case of manufactured inventories and

translated to Thai Baht at rates approximating the

work-in-progress, cost includes an appropriate share of

average foreign exchange rates ruling at the dates of

overheads based on normal operating capacity.

the transactions. Net realisable value is the estimated selling price in the Foreign exchange differences arising on translation are

ordinary course of business less the estimated costs to

recognised in a separate component of equity until dis-

complete and to make the sale.

posal of the investments. (g) Investments (c) Derivative financial instruments

Investments in subsidiaries and associates

Forward exchange contracts are treated as off-balance Investments in subsidiaries and associates in the sepa-

sheet items.

rate financial statements of the Company are accounted (d) Cash and cash equivalents

for using the cost method. Investments in associates in

Cash and cash equivalents in the statements of cash

the consolidated financial statements are accounted for

flows comprise cash balances, call deposits and highly

using the equity method.

liquid short-term investments. Bank overdrafts that are repayable on demand are a component of financing

Investments in other equity securities

activities for the purpose of the statement of cash flows.

Marketable equity securities are classified as being

Thai

Beverage

Public

Company

Limited

141


available-for-sale and are stated at fair value, with

minimum lease payments at the inception of the lease,

any resultant gain or loss being recognised directly in

less accumulated depreciation and impairment losses.

equity. The exceptions are impairment losses, which

Lease payments are apportioned between the finance

are recognised in the statement of income. When these

charges and reduction of the lease liability so as to

investments are derecognised the cumulative gain or loss

achieve a constant rate of interest on the remaining

previously recognised directly in the equity is recognised

balance of the liability.

in the statement of income.

directly to the statement of income.

Equity securities which are not marketable are stated at

Revalued assets

cost less impairment losses.

Revaluations are performed by independent professional

Finance charges are charged

valuers with sufficient regularity. The Groupâ&#x20AC;&#x2122;s policy The fair value of financial instruments classified as

requires an appraisal to be conducted every three to

available-for-sale is determined as the quoted bid price

five years or when there are factors that might materially

at the balance sheet date.

impact the value of the land, to ensure that the carrying amount of these assets does not differ materially from

Disposal of investments

that which would be determined using fair values at the

On disposal of an investment, the difference between net

balance sheet date.

disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported

Any increase in value, on revaluation, is credited to

in equity is recognised in the statement of income.

equity under the heading â&#x20AC;&#x153;revaluation surplusâ&#x20AC;? unless it offsets a previous decrease in value recognised in

(h) Property, plant and equipment

the statement of income in respect of the same asset.

Owned assets

A decrease in value is recognised in the statement of

Property, plant and equipment are stated at cost less

income to the extent it exceeds an increase previously

accumulated depreciation and impairment losses except

recognised in equity in respect of the same asset. Upon

for land which is stated at its revalued amount.

disposal of a revalued asset, any related revaluation

The

revalued amount is the fair value.

surplus is transferred from equity to retained earnings and is not taken into account in calculating the gain or

Property that is being constructed or developed for

loss on disposal.

future use is classified as property, plant and equipment and stated at cost until construction or development is

Subsequent expenditure

complete.

Subsequent expenditure relating to an item of property, plant and equipment is added to the carrying amount of

Leased assets

the asset when it is probable that the future economic

Leases in terms of which the Group substantially

benefits in excess of the originally assessed standard of

assumes all the risk and rewards of ownership are

performance of the existing asset will flow to the Group.

classified as finance leases. Property, plant and equipment

All other subsequent expenditure is recognised as an

acquired by way of finance leases is capitalised at

expense in the period in which it is incurred.

the lower of its fair value and the present value of the

Annual

Report

2008

142


Depreciation

Subsequent measurement

Depreciation is charged to the statement of income on a

Goodwill is measured at cost less impairment losses. In

straight-line basis over the estimated useful lives of each

respect of equity accounted investments, the carrying

part of an item of property, plant and equipment. The

amount of goodwill is included in the carrying amount of

estimated useful lives are as follows:

the investment.

Land improvement

3-20 years

Other intangible assets

10-40 years

Other intangible assets that are acquired by the Group,

Building improvements

2-30 years

which have finite useful lives, are stated at cost less

Machinery and equipment

4-40 years

accumulated amortisation and impairment losses.

Building and constructions

Oak barrels

10-20 years

Furniture, fixtures and office equipment

3-10 years

Amortisation

Vehicles

3-10 years

Amortisation is recognised in the statement of income on a straight-line basis and unit of production basis over the

No depreciation is provided on freehold land and assets

estimated useful lives of intangible assets, from the date

under construction.

that they are available for use. The estimated useful lives are as follows:

(i) Intangible assets Goodwill

Computer software

3-10 years

Goodwill in a business combination represents the excess

(straight-line method)

of the cost of acquisition over the fair value of the Group’s

Trademarks

10 years

share of the identifiable net assets acquired. The Group

(straight-line method)

has changed its accounting policy for goodwill with effect

Broadcasting rights

4 years

from 1 January 2008 discussed in note 29.

(unit of production method)

Licences

10 years

(straight-line method)

Acquisitions prior to 1 January 2008 Goodwill represents the amount reocgnised under the Group’s previous accounting policy under which goodwill

(j) Leasehold rights

was stated at cost less accumulated amortisation and im-

Leasehold rights are stated at cost less accumulated am-

pairment losses. Goodwill carried in the balance sheet

ortisation and impairment losses.

as at 31 December 2007 was brought forward to 1 January 2008 and presented at net book value as the deemed

Amortisation is recognised in the statement of income on

cost of the goodwill by reversing the related accumulated

a straight-line basis over the agreement period.

amortisation against the cost of the goodwill. (k) Impairment Acquisitions on or after 1 January 2008

The carrying amounts of the Group’s assets are reviewed

Goodwill is stated at cost. Negative goodwill is recognised

at each balance sheet date to determine whether there

immediately in the statement of income.

is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.

Thai

Beverage

Public

Company

Limited

143


Goodwill and other intangible assets with indefinite

relates to the restructuring of businesses under the

useful lives, and intangible assets not yet available

common control of the ultimate majority equity holder

for use, are tested for impairment annually and when

of the Company and arises from the difference between

indicators of impairment are identified.

the cost of the combination and the carrying amounts of net identifiable assets at the date of combination

An impairment loss is recognised whenever the carrying

(except for businesses acquired that are not under

amount of an asset exceeds its recoverable amount.

common control, net identifiable assets are measured at

The impairment loss is recognised in the statement of

the fair value). The Company recognises the difference

income unless it reverses a previous revaluation credited

arising from common control transactions under equity

to equity, in which case it is charged to equity.

until disposal of the investment.

(l) Interest-bearing liabilities

(p) Revenue

Interest-bearing liabilities are recognised initially at fair

Revenue excludes value added taxes or other sales taxes

value less attributable transaction charges. Subsequent

and is arrived at after deduction of trade discounts.

to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and

Sale of goods and services rendered

redemption value being recognised in the statement of

Revenue is recognised in the statement of income when

income over the period of the borrowings on an effective

the significant risks and rewards of ownership have

interest basis.

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

(m) Trade and other accounts payable

goods or there are significant uncertainties regarding

Trade and other accounts payable (including balances

recovery of the consideration due, associated costs

with related parties) are stated at cost.

or the probable return of goods. Service income is recognised as services are provided.

(n) Provisions A provision is recognised in the balance sheet when the

When the outcome of a contract for the rendering of

Group has a present legal or constructive obligation as a

services can be estimated reliably, contract revenue is

result of a past event, and it is probable that an outflow of

recognised in the statement of income by reference to the

economic benefits will be required to settle the obligation

stage of completion of the contract activity at the balance

and a reliable estimate can be made of the amount of

sheet date. When the outcome of the contract cannot

the obligation. If the effect is material, provisions are

be estimated reliably, revenue is recognised only to the

determined by discounting the expected future cash flows

extent of the expenses recognised that are recoverable.

at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the

Construction contracts

risks specific to the liability.

When the outcome of a construction contract can be estimated reliably, contract revenue and expenses are

(o) Difference arising from common

recognised in the statement of income by reference to

control transactions

the stage of completion of the contract activity at the

Difference arising from common control transactions

balance sheet date. The stage of completion is assessed

Annual

Report

2008

144


the percentage of completion method, which is measured

Other income and expenses are recognised on an

by the project engineer. When it is probable that total

accrual basis.

contract costs will exceed total contract revenue, the expected loss is recognised immediately as an expense

(r) Income tax

in the statement of income.

Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the

Interest and dividend income

taxable income for the year, using tax rates enacted at

Interest income is recognised in the statement of income

the balance sheet date and applicable to the reporting

as it accrues. Dividend income is recognised in the

period, and any adjustment to tax payable in respect of

statement of income on the date the Groupâ&#x20AC;&#x2122;s right to

previous years.

receive payments is established which in the case of marketable securities is usually the ex-dividend date.

4. Common control transactions and acquisitions

(q) Expenses

Common control transactions

Operating leases Payments made under operating leases are recognised

The Company was formed in 2003 to combine the

in the statement of income on a straight line basis over

separate beverages businesses of the ultimate controlling

the term of the lease. Lease incentives received are

equity holder group, the Siriwadhanabhakdi family,

recognised in the statement of income as an integral part

which were held as part of the operations of 89 separate

of the total lease payments made. Contingent rentals are

companies, into a single group of companies between

charged to the statement of income for the accounting

2003 and 2006. Prior to the restructuring these business

period in which they are incurred.

were under the common control of the ultimate controlling equity holder of the Company.

Finance costs Interest expenses and similar costs are charged to the

As the same ultimate controlling equity holder controlled

statement of income for the period in which they are

the businesses and operations transferred to the Company

incurred, except to the extent that they are capitalised

both before and after the recent restructuring, the

as

acquisition,

consolidated financial statements have been prepared on

construction or production of an asset which necessarily

the basis of a business combination involving entities

takes a substantial period of time to be prepared for

and businesses under common control. Accordingly, the

its intended use or sale. The interest component of finance

transfer of businesses and operations has been accounted

lease payments is recognised in the statement of income

for in a manner similar to a pooling of interests and the

using the effective interest rate method.

assets, liabilities and contingent liabilities transferred have

being

directly

attributable

to

the

been accounted for at book values. Research and development Research and development costs, including costs of

On 30 September 2008, the Company acquired 43.9%

developing new beverage products and package design are

interest in Oishi Group Public Company Limited and its

expensed in the accounting period in which they are

subsidiaries, â&#x20AC;&#x153;Oishiâ&#x20AC;?, from a company affiliated with

incurred.

the controlling equity holders of the Company, under a

Thai

Beverage

Public

Company

Limited

145


common ultimate controlling equity holder. As the

operations of Oishi had been acquired at the beginning

same ultimate controlling equity holder controlled Oishi

of 2007.

both before and after the acquisition, the consolidated financial statements have been prepared on the basis

The difference of Baht 2,079 million between the

of a business combination involving an entity under

consideration of Baht 3,053 million to be paid by the

common control.

Company for the acquisition of the 43.9% interest in Oishi and the carrying amount of the net identifiable

The consolidated balance sheets have been prepared to

assets of Oishi at the date of the transaction and

present assets and liabilities of Oishi as if the acquisition

attributable to the Companyâ&#x20AC;&#x2122;s equity interest of Baht 974

had taken place at the beginning of 2007. Therefore,

million is included in â&#x20AC;&#x153;Difference arising from common

the consolidated financial statements for the year ended

control transactionsâ&#x20AC;?.

31 December 2007 have been revised to include the

assets, liabilities and operations of Oishi acquired during

Restatement

2008.

The assets and liabilities acquired have been

The consolidated financial statements for the years

stated at their carrying values, after adjusting for

ended 31 December 2007 and 2006 have been restated

intercompany transactions and transactions with the

accordingly. The effects of the restatement on the

ultimate controlling equity holder. The consolidated

consolidated balance sheets as at 31 December 2007 and

statements of income and cash flows include the results

2006, and the consolidated statement of income for the

of operations and cash flows as if the businesses and

year ended 31 December 2007 are summarized as follows:

Consolidated

Balance

previously

the

Balance

reported

restatement

restated

Effect of

(in million Baht)

2007 Balance sheet Total assets

79,527

2,879

82,406

Total liabilities

24,574

737

25,311

Difference arising from common control transactions

(17,141)

940

(16,201)

Minority interests

43

1,201

1,244

Equity

54,953

2,142

57,095

2006 Balance sheet Total assets

85,579

2,485

88,064

Total liabilities

33,025

673

33,698

Difference arising from common control transactions

(17,141)

795

(16,346)

Minority interests

1

1,016

1,017

Equity

52,554

1,812

54,366

Annual

Report

2008

146


Consolidated

Balance

previously

the

Balance

reported

restatement

restated

Effect of

(in million Baht)

2007

Statement of income Profit for the year

10,385

558

10,943

Basic earnings per share (Baht)

0.41

0.01

0.42

Acquisitions On 18 November 2008, the Company paid for 86,295,662 ordinary shares in Oishi representing 46.03% interest in Oishi for the remaining shares in accordance with the Notification of the Securities and Exchange Commission to make a tender offer by paying Baht 3,199.94 million in cash for the shares which included directly attributable expenses of Baht 7 million.

The acquireeâ&#x20AC;&#x2122;s net assets at the acquisition date comprised the followings:

(in million Baht)

Cash and cash equivalents

287

Trade accounts receivable

191

Inventories

133

Property, plant and equipment

670

Intangible assets

67

Other assets

53

Trade accounts payable

(244)

Other liabilities

(135)

Net identifiable assets and liabilities

1,022

Goodwill on acquisition

2,178

Consideration paid

3,200

Cash acquired

(287)

Net cash outflow

2,913

5. Related party transactions and balances Related parties are 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 prices or, where no market price exists, at contractually agreed prices. Relationships with related parties that control or jointly control the Company or are being controlled or jointly controlled by the Company or have transactions with the Group were as follows:

Thai

Beverage

Public

Company

Limited

147


Country of

Name of the entity

incorporation

nationality

Nature of relationships

1. Beer Thai (1991) PCL.

Thailand

Direct subsidiary, 100% shareholding

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

Thailand

Direct subsidiary, 100% shareholding

3. Sangsom Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

4. Fuengfuanant Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

5. Mongkolsamai Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

6. Thanapakdi Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

7. Kanchanasingkorn Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

8. Sura Bangyikhan Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

9. Athimart Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

10. S.S. Karnsura Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

11. Kankwan Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

12. Theparunothai Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

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

Thailand

Direct subsidiary, 100% shareholding

14. United Winery and Distillery Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

15. Simathurakij Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

16. Nateechai Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

17. Luckchai Liquor Trading Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

18. Sura Piset Thipparat Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

19. Pomthip Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

20. Pomkit Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

21. Pomkung Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

22. Pomchok Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

23. Pomcharoen Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

24. Pomburapa Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

25. Num Yuk Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

26. Num Kijjakarn Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

27. Num Palang Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

28. Num Muang Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

29. Num Nakorn Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

30. Num Thurakij Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

31. Thipchalothorn Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

32. Krittayabun Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

33. Surathip Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

34. Sunthronpirom Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

35. Piromsurang Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

Annual

Report

2008

148


Country of

Name of the entity

incorporation

nationality

Nature of relationships

36. Thai Beverage Energy Co., Ltd.

(Formerly: Bionic Humus Co., Ltd.)

Thailand

Direct subsidiary, 100% shareholding

37. Wrangyer Beverage (2008) Co., Ltd.

(Formerly: Maharas Agri Co., Ltd.)

Thailand

Direct subsidiary, 100% shareholding

38. Thai Molasses Co., Ltd.

Thailand

Direct subsidiary, 99.72% shareholding

39. Feed Addition Co., Ltd.

(Formerly: Additive Food Co., Ltd.)

Thailand

Direct subsidiary, 100% shareholding

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

Thailand

Direct subsidiary, 100% shareholding

41. Charun Business 52 Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

42. Thai Cooperage Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

43. Thai Beverage Recycle Co., Ltd.

(Formerly: Bang-Na Logistic Co., Ltd.)

Thailand

Direct subsidiary, 100% shareholding

44. Thai Beverage Logistics Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

45. Thai Beverage Marketing Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

46. Dhanasindhi Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

47. Dhospaak Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

48. International Beverage Holdings Limited

Hong Kong

Direct subsidiary, 100% shareholding

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

Thailand

Direct subsidiary, 100% shareholding

50. Thai Beverage Brands

(Formerly: T.C.C. Cosmo Corporation Ltd.)

Thailand

Direct subsidiary, 100% shareholding

51. Beer Chang Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

52. Archa Beer Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

53. Sura Piset Phatra Lanna Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

54. Thai Drinks Co., Ltd.

Thailand

Direct subsidiary, 100% shareholding

55. Oishi Group PCL.

Thailand

Direct subsidiary, 89.93% shareholding

56. Thai Thum Distillery Co., Ltd.

Thailand

Indirect subsidiary, 99.90% shareholding

57. Sura Piset Sahasan Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

58. Sura Piset Sampan Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

59. Muangkij Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

60. Pan Alcohol Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

61. Vitayathan Co., Ltd.

Thailand

Indirect subsidiary, 100% shareholding

62. InterBev (Singapore) Limited

Singapore

Indirect subsidiary, 100% shareholding

63. InterBev (Cambodia) Co., Ltd.

Cambodia

Indirect subsidiary, 100% shareholding

64. InterBev Malaysia Sdn. Bhd.

Malaysia

Indirect subsidiary, 100% shareholding

65. Best Spirits Company Limited

Hong Kong

Indirect subsidiary, 100% shareholding

Thai

Beverage

Public

Company

Limited

149


Country of

Name of the entity

incorporation

nationality

66. International Beverage Holdings (UK) Limited

United Kingdom Indirect subsidiary, 100% shareholding

67. United Products Co., Ltd.

Thailand

Indirect subsidiary, 97.98% shareholding

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

Thailand

Indirect subsidiary, 99.83% shareholding

69. Oishi Trading Co., Ltd.

Thailand

Indirect subsidiary, 89.93% shareholding

70. Oishi Ramen Co., Ltd.

Thailand

Indirect subsidiary, 89.93% shareholding

71. International Beverage Holdings Limited

United States

Subsidiary of indirect subsidiary,

USA, Inc.

of America

100% shareholding

72. Blairmhor Limited

United Kingdom Subsidiary of indirect subsidiary,

73. Inver House Distillers Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

75. Wee Beastie Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

74. Blairmhor Distillers Limited

Nature of relationships

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

100% shareholding

76. Speyburn-Glenlivet Distillery Company Limited United Kingdom

Subsidiary of indirect subsidiary,

77. The Knockdhu Distillery Company Limited

United Kingdom Subsidiary of indirect subsidiary,

78. The Pulteney Distillery Company Limited

Report

2008

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

Annual

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

85. Glen Calder Blenders Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

84. James Catto & Company Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

83. Hankey Bannister Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

82. Mason & Summers Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

81. J MacArthur Junior & Company Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

80. R. Carmichael & Sons Limited

100% shareholding

United Kingdom Subsidiary of indirect subsidiary,

79. The Balblair Distillery Company Limited

100% shareholding

100% shareholding

150


Country of

Name of the entity

incorporation

nationality

86. Moffat & Towers Limited

United Kingdom Subsidiary of indirect subsidiary,

87. Liquorland Limited

Nature of relationships

100% shareholding

United Kingdom Associates of indirect subsidiary,

49.90% shareholding

88. Inver House Polska Limited

Associates of indirect subsidiary,

Poland

44.00% shareholding

89. Inver House Distribution SA

Associates of indirect subsidiary,

France

50.02% shareholding

90. Thai Alcohol PCL.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

91. Sint EK Panich Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

92. Banglen Agriculture Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

93. Pisetkij Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

94. The Maewang Sugar Industry Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

95. The Chonburi Sugar Corp. Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

96. The Utaradit Sugar Industry Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

97. The Suphanburi Sugar Industry Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

98. The Southeast Insurance Co., Ltd.

Directors and controlling equity holders hold

Thailand

(Formerly: The Southeast Insurance

substantial shares indirectly

(2000) Co., Ltd.) 99. Southeast Capital Co., Ltd.

Thailand

Directors and controlling equity holders hold

substantial shares indirectly

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

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

101. TCC Capital Land Limited

Directors and controlling equity holders hold

Thailand

(Formerly: T.C.C. Capital Land Limited)

substantial shares indirectly

102. Thai Glass Industries PCL.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

Thai

Beverage

Public

Company

Limited

151


Country of

Name of the entity

incorporation

nationality

103. Bang-Na Glass Co., Ltd.

Thailand

Nature of relationships

Directors and controlling equity holders hold

substantial shares indirectly

104. TCC Hotel Collection Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

105. Siam Realty Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

106. Terragro Fertilizer Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

107. Dhipaya Sugar (1999) Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

108. BJC Industrial and Trading Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

109. North Park Real Estate Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

110. TCC PD 11 Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

111. Thippatana Arcade Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

112. Siam Food Products PCL.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

113. BJC Healthcare Co., Ltd.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

114. New Noble Property and Loan Fund

Directors and controlling equity holders

Thailand

are the principal unit holder of this real

estate investment fund

115. Dynamic Assets Property and Loan Fund

Directors and controlling equity holders

Thailand

are the principal unit holder of this real

estate investment fund

116. Best Fortune Property and Loan Fund

Directors and controlling equity holders

Thailand

are the principal unit holder of this real

estate inves tment fund

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

Directors and controlling equity holders

Thailand

are the directors and hold substantial

shares indirectly

Annual

Report

2008

152


Country of

Name of the entity

incorporation

nationality

118. North Park Golf And Sport Club Co., Ltd.

Thailand

Nature of relationships

Directors and controlling equity holders are

directors and hold substantial shares indirectly

119. Berli Jucker PCL.

Directors and controlling equity holders hold

Thailand

substantial shares indirectly

120. Thai Beverage Can Co., Ltd.

Directors and controlling equity holders

Thailand

hold 50% shares

121. Great Oriole Limited

British Virgin

Have common controlling equity holders

Islands

122. Madrigal Trading Limited

British Virgin

Directors and equity holders are

Islands

the directors of subsidiary

123. Kluey Kluey Co., Ltd.

Thailand

Director of direct subsidiary is director

of Kluey Kluey Co., Ltd.

124. O.G.T. Co., Ltd.

Director of subsidiary is relative of

Thailand

Director of O.G.T. Co., Ltd.

125. PS Recycle Co., Ltd.

Directors and controlling equity holders are

Thailand

relatives of controlling person

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

Transactions

Pricing policies

Sale of finished goods

Agreed prices which approximate market prices

Rendering of services

Contractual prices

Purchase of goods/raw materials

Agreed prices which approximate market prices

Receiving of services

Contractual prices

Purchase and sale of property, plant and equipment

Contractual prices

Purchase and sale of investments

Contractual prices

Interest income and expense

Rate as mutually agreed by shareholders with

reference interest rates quoted by domestic

commercial banks

Thai

Beverage

Public

Company

Limited

153


Significant transactions for the years ended 31 December 2008 and 2007 with related parties were as follows:

Consolidated

Separate

financial statements

financial statements

2008

2007

2008

2007

(in million Baht)

Subsidiaries Management fees

-

-

2,523

2,577

Dividends

-

-

5,345

18,985

Purchases of investments

-

-

-

9,180

Interest income

-

-

506

773

Interest expense

-

-

549

732

Other income

-

-

4

9

Other expenses

-

-

101

67

Other related parties

Sales of goods

604

471

-

-

Rendering of services

13

14

-

-

Purchases of raw materials and packaging

5,386

4,827

-

-

Overhead costs

181

225

-

-

Sales of property, plant and equipment

5

1,027

-

819

Purchases of property, plant and equipment

3

32

Sales of investment (See Note 11 to the

- -

financial statements)

1,591

-

Interest expense

-

66

-

-

Other income

682

173

217

64

Other expenses

410

305

81

73

Share of profits from investments accounted for using the equity method

27

29

1,591 -

-

-

Directorsâ&#x20AC;&#x2122; remuneration

Annual

Report

2008

294

276

278

262

154


Balances as at 31 December 2008 and 2007 with related parties were as follows:

Trade accounts receivable from related parties

Consolidated

Separate

financial statements

financial statements

2008

2007

2008

2007

(in million Baht)

Other related companies Thai Alcohol PCL.

53

-

-

-

O.G.T. Co., Ltd.

52

49

-

-

PS Recycle Co., Ltd.

6

3

-

-

Pisetkij Co., Ltd.

2

3

-

-

Others

3

5

-

-

Total

116

60

-

-

Thai

Beverage

Public

Company

Limited

155


loans to

Short-term due from

Total

loans to

Amounts Short-term

2008

2007

due from

loans to

(in million Baht)

Total

Amounts Short-term

Consolidated financial statements

due from

Total

loans to

Amounts Short-term

2008

Separate financial statements 2007

due from

Total

Amounts

-

-

- - - - - - - - - - - - - - - - - - - -

- - - - - -

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.

Kankwan Co., Ltd.

Theparunothai Co., Ltd.

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. -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Beer Thip Brewery (1991) Co., Ltd.

-

-

Beer Thai (1991) PCL.

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

255

-

-

-

-

-

-

-

-

418

-

243

-

-

-

-

-

-

614

-

-

-

-

160

-

1,452

10

26

15

5

3

8

7

9

9

-

2

2

2

3

1

12

3

3

3

3

12

1

1

1

2

7

13

34

10

26

270

5

3

8

7

9

9

-

2

420

2

246

1

12

3

3

3

3

626

1

1

1

2

167

13

1,486

-

-

85

-

-

-

-

-

-

124

-

431

219

519

-

-

-

-

-

-

-

182

-

-

-

-

-

1,786

8

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

8

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

Subsidiaries

amounts due from related parties

Short-term loans to and


loans to

Short-term due from

Total

loans to

Amounts Short-term

2008

2007

due from

loans to

(in million Baht)

Total

Amounts Short-term

Consolidated financial statements

due from

Total

loans to

Amounts Short-term

2008

Separate financial statements

due from

Total

Amounts

2007

- - - - - - - - -

Num Nakorn Co., Ltd.

Num Thurakij Co., Ltd.

Thipchalothorn Co., Ltd.

Krittayabun Co., Ltd.

Surathip Co., Ltd.

Sunthronpirom Co., Ltd.

Piromsurang Co., Ltd.

Thai Beverage Logistics Co., Ltd.

International Beverage Holdings Limited -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9

-

-

-

-

-

-

-

-

-

-

2

2

13

38

31

8

6

11

-

9

2

2

13

38

31

8

6

11

12

67

-

-

-

-

120

-

-

-

1

-

1

3

17

42

38

7

5

9

13

67

1

3

17

42

158

7

5

9

-

- -

- -

- -

- -

- -

-

-

-

-

-

-

-

-

3

2

-

2

3

- -

Total subsidiaries -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,336

-

185

-

312

2

1

1

3,648

2

186

1

3,548

-

-

-

368

-

-

-

3,916

-

-

-

- - - - - - -

Thai Alcohol PCL.

Berli Jucker Public Co., Ltd.

Best Wishes Co., Ltd.

Pisetkij Co., Ltd.

Others

Total related companies

Total

41

41

3

1

2

2

33

41

41

3

1

2

2

33

-

-

-

-

-

-

-

4

4

2

2

-

-

-

4

4

2

2

-

-

-

3,336

-

-

-

-

-

-

312

-

-

-

-

-

-

3,648

-

-

-

-

-

-

3,548

-

-

-

-

-

-

368

-

-

-

-

-

-

3,916

-

-

-

-

-

-

Related companies

-

Dhospaak Co., Ltd.

-

Thai Beverage Marketing Co., Ltd.

(Formerly: Bang-Na Logistic Co., Ltd.)

Thai Beverage Recycle Co., Ltd.

Sura Piset Phatra Lanna Co., Ltd.

Co., Ltd.)

(Formerly: T.C.C. Cosmo Corporation

Thai Beverage Brands Co., Ltd.

-

Num Muang Co., Ltd.

Subsidiaries (continued)

amounts due from related parties

Short-term loans to and


loans to

Long-term due from

Total

Amounts loans to

Long-term

2008

due from

loans to

(in million Baht)

Total

Long-term

2007

Amounts

Consolidated financial statements

due from

Total

Amounts loans to

Long-term

2008

Separate financial statements 2007

due from

Total

Amounts

- - - - - - - - - - - - - - - - -

Thanapakdi Co., Ltd.

Kanchanasingkorn Co., Ltd.

Sura Bangyikhan Co., Ltd.

Kankwan Co., Ltd.

Red Bull Distillery (1988) Co., Ltd.

Simathurakij Co., Ltd.

Nateechai Co., Ltd.

Luckchai Liquor Trading Co., Ltd.

Sura Piset Thipparat Co., Ltd.

Thai Alcohol Public Co., Ltd.

Num Yuk Co., Ltd.

Wrangyer Beverage (2008) Co., Ltd.

Thai Beverage Recycle Co., Ltd.

International Beverage Holdings Ltd.

Thai Beverage Brands Co., Ltd.

Sura Piset Phatra Lanna Co., Ltd.

Total subsidiaries -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,578

425

14

-

290

209

111

-

540

-

88

109

804

-

168

-

-

2,820

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,578

425

14

-

290

209

111

-

540

-

88

109

804

-

168

-

-

2,820

9,411

340

-

196

-

-

155

1,145

600

859

61

96

565

106

785

286

7

4,210

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

9,411

340

-

196

-

-

155

1,145

600

859

61

96

565

106

785

286

7

4,210

- - - - - - - -

North Park Real Estate Co., Ltd.

Best Fortune Property and Loan Fund

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

TCC PD 11 Co., Ltd.

Kluey Kluey Co., Ltd.

Others

Total related companies

Total

58

58

12

-

3

8

9

26

58

58

12

-

3

8

9

26

-

-

-

-

-

-

-

-

6

6

2

4

-

-

-

-

6

6

2

4

-

-

-

-

5,578

-

-

-

-

-

-

-

11

11

-

-

-

8

-

3

5,589

11

-

-

-

8

-

3

9,411

-

-

-

-

-

-

-

7

7

-

-

-

7

-

-

9,418

7

-

-

-

7

-

-

Related companies

-

Beer Thai (1991) PCL.

Subsidiaries

amounts due from related parties

Long-term loans to and


Summary of loans to related parties

Consolidated

Separate

financial statements

financial statements

2008

2007

2008

2007

(in million Baht)

Short-term loans

-

-

3,336

3,548

Long-term loans

-

-

5,578

9,411

Total loans to related parties

-

-

8,914

12,959

Movements during the years ended 31 December 2008 and 2007 of loans to related parties were as follows:

Loans to related parties

Consolidated

Separate

financial statements

financial statements

2008

2007

2008

2007

(in million Baht)

Short-term loans Subsidiaries At 1 January

-

-

3,548

9,367

Increase

-

-

1,129

1,070

Decrease

-

-

(1,341)

(6,889)

At 31 December

-

-

3,336

3,548

Long-term loans Subsidiaries At 1 January

-

-

9,411

5,501

Increase

-

-

877

4,686

Decrease

-

-

(4,710)

At 31 December

-

-

5,578

Thai

Beverage

Public

Company

Limited

(776) 9,411

159


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

Consolidated

Separate

financial statements

financial statements

2008

2007

2008

2007

(in million Baht)

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

99

10

9,237

13,126

Singapore Dollars (SGD)

-

-

-

208

Total

99

10

9,237

13,334

Trade accounts payable - related parties

Consolidated

Separate

financial statements

financial statements

2008

2007

2008

2007

(in million Baht)

Other related companies Berli Jucker PCL.

740

471

-

-

Thai Beverage Can Ltd.

137

139

-

-

PS Recycle Co., Ltd.

12

46

-

-

Pisetkij Co., Ltd.

12

10

-

-

Others

17

14

-

-

Total

918

680

-

-

Annual

Report

2008

160


loans from

amounts due to related parties due to

Total

loans from

Amounts Short-term

2007

due to

loans from

(in million Baht)

Total

Amounts Short-term

Consolidated financial statements 2008

Separate financial statements

due to

Total

loans from

Amounts Short-term

2008

due to

Total

Amounts

2007

- - - - - - - - - - - - - - - - - - - - - - - - - -

Sangsom Co., Ltd.

Fuengfuanant Co., Ltd.

Mongkolsamai Co., Ltd.

Thanapakdi Co., Ltd.

Kanchanasingkorn Co., Ltd.

Athimart Co., Ltd.

S.S. Karnsura Co., Ltd.

Kankwan Co., Ltd.

Theparunothai Co., Ltd.

United Winery and Distillery Co., Ltd.

Pomthip Co., Ltd.

Pomkit Co., Ltd.

Pomkung Co., Ltd.

Pomchok Co., Ltd.

Pomcharoen Co., Ltd.

Pomburapa 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.

Sunthronpirom Co., Ltd.

Piromsurang Co., Ltd. -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

32

-

132

308

94

228

224

330

160

672

-

-

-

-

-

-

184

166

203

213

118

-

28

-

57

-

387

1

1

1

1

1

1

1

1

-

4

1

-

2

1

1

1

1

1

1

1

1

1

1

1

1

1

16

33

1

133

309

95

229

225

331

160

676

1

-

2

1

1

1

185

167

204

214

119

1

29

1

58

1

403

64

81

10

189

-

65

100

-

-

406

-

-

25

29

80

39

193

-

-

50

45

-

-

-

-

-

129

1

1

5

9

-

-

-

-

-

2

1

1

2

2

4

2

2

1

-

-

-

-

-

-

-

-

12

65

82

15

198

-

65

100

-

-

408

1

1

27

31

84

41

195

1

-

50

45

-

-

-

-

-

141

(Formerly: Bionic Humus Co., Ltd.) -

-

-

-

-

-

106

-

106

121

-

121

Thai Beverage Energy Co., Ltd.

-

Beer Thip Brewery (1991) Co., Ltd.

Subsidiaries

Short-term

Short-term loans from and


loans from

amounts due to related parties due to

Total

loans from

Amounts Short-term

2008

2007

due to

loans from

(in million Baht)

Total

Amounts Short-term

Consolidated financial statements

due to

Total

loans from

Amounts Short-term

2008

Separate financial statements

due to

Total

Amounts

2007

-

-

-

-

-

-

60

-

60

22

-

22

- -

Charun Business 52 Co., Ltd. -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3

10

35

-

-

1 3

11

35

-

-

-

-

-

-

-

-

-

- - - - - - -

Dhospaak Co., Ltd.

International Beverage Holdings Limited

Cosmos Brewery (Thailand) Co., Ltd.

Beer Chang Co., Ltd.

Archa Beer Co., Ltd.

Thai Drinks Co., Ltd.

Total subsidiaries -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,803

28

-

-

-

-

25

-

-

114

-

-

1

1

-

67

-

-

3,917

28

-

1

1

-

92

-

-

30

2,040

-

35

-

177

-

-

150

-

65

-

-

1

3

1

14

1

30

2,105

-

35

1

180

1

14

151

- - - - -

Plaza Athenee Hotel (Thailand) Co., Ltd.

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

Southeast Capital Co., Ltd.

Berli Jucker PCL.

TCC Hotel Collection Co., Ltd. 5

7

12

13

15

53

5

7

12

13

15

53

-

-

-

-

-

-

-

10

-

14

11

10

-

10

-

14

11

10

-

-

-

-

-

-

1

-

2

12

-

-

1

-

2

12

-

-

-

-

-

-

-

-

1

-

2

7

-

-

-

1

-

2

7

-

- -

Total related companies

Total

2

126

126

19

2

126

126

19

-

-

-

-

70

70

5

20

70

70

5

20

3,803

-

-

-

129

15

-

-

3,932

15

-

-

2,040

-

-

-

75

10

-

-

2,115

10

-

-

subsidiaries.

Short-term loans from and amounts due to related parties of the Group and the Company as at 31 December 2008 and 2007 were denominated entirely in Thai Baht and other functional currencies of foreign

-

-

Others

(2000) Co., Ltd.)

(Formerly: The Southeast Insurance

The Southeast Insurance Co., Ltd.

-

Thai Alcohol PCL.

Related companies

-

-

Thai Beverage Marketing Co., Ltd.

(Formerly: Bang-Na Logistic Co., Ltd.)

Thai Beverage Recycle Co., Ltd.

-

(Formerly: Additive Food Co., Ltd.)

Pan International (Thailand) Co., Ltd.

Feed Addition Co., Ltd.

Thai Molasses Co., Ltd.

Subsidiaries (continued)

Short-term

Short-term loans from and


loans from

amounts due to related parties due to

Total

Amounts loans from

Long-term due to

loans from

(in million Baht)

Total

Long-term

2007

Amounts

Consolidated financial statements 2008

Separate financial statements

due to

Total

Amounts loans from

Long-term

2008

due to

Total

Amounts

2007

- - - - - - - - - - -

Kankwan Co., Ltd.

Theparunothai Co., Ltd.

United Winery and Distillery Co., Ltd.

Pomthip Co., Ltd.

Pomkit Co., Ltd.

Pomkung Co., Ltd.

Pomchok Co., Ltd.

Pomcharoen Co., Ltd.

Pomburapa Co., Ltd.

Num Thurakij Co., Ltd.

Num Muang Co., Ltd.

- - -

Surathip Co., Ltd.

Sunthronpirom Co., Ltd.

Piromsurang Co., Ltd.

Thai Molasses Co., Ltd. -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-