PROSPECTUS THAI BEVERAGE PUBLIC COMPANY LIMITED ...

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Part 2 Issuing CompanyThai Beverage Public Company Limitedcould require or cost material expenditures by the Company or otherwise have a material adverseeffect on its business, financial condition, results of operations and prospects.Additionally, the Company is subject to the regulations relating to the control of alcoholicbeverage advertisement. These regulations and more stringent regulations in the future could affectthe Company’s capacity to market its products at present and in the future. The regulations of theGovernment which limit the time and place of the retail sale of alcoholic beverages or otherrestrictions which may be imposed on and apply to such retail sale may have an adverse effect on thesales of the Company’s products and may adversely affect its business, financial condition, results ofoperations and prospects.The Alcoholic Control Act, which became effective on February 14, 2008, has various majorrestrictions, including the banning of the sale and consumption of alcoholic beverages in variousplaces, such as temples, educational institutions and gas stations, prohibition on the sale of alcoholicbeverages to any person under 20 years old or any person who is drunk in the stage of loss of controlof his/her consciousness, and prohibition on the sale of alcoholic beverages in many manners, such asdiscount, given as free gift, offer for free when buying other products, offer rights to see a contest,show or offer a chance to enter a lucky draw or any other rights in consideration. The AlcoholicControl Act also contains the restriction on advertisements of alcoholic beverages in various media.These restrictions could materially adversely affect the business, financial condition, results ofoperations and prospects of the Company (please see the details of the Alcoholic Control Act inSection 3.3- Regulations).1.1.13 Compliance with, or failure to comply with, environmental laws and regulations applicableto the Company may have a material adverse effect on its business, financial condition,results of operations and prospects.The Company is subject to extensive and stringent environmental, health and safety laws andregulations governing air pollutant emissions, discharge of treated wastewater and other aspects of itsoperations. In addition, some of these laws and regulations require the Company’s productionfacilities to operate under permits that are subject to renewal or modifications. Typically, these lawsprovide for criminal and civil sanctions for violation. Violation of these laws could also result inpermit revocation and facility shutdown. Several of these laws and regulations also impose extensiverequirements relating to investigation and clean-up of contamination, and the Company may berequired to bear some or all of these costs regardless of fault.The Company has incurred, and expects to continue to incur, costs to comply withenvironmental, health and safety laws and regulations and other regulations. In addition, new stricterlaws and regulations, more stringent changes to existing laws and regulations, the discovery ofpreviously unknown contamination or the imposition of new clean-up requirements could require theCompany to incur additional costs in the future. These may require the Company to incur materialcosts and expenses beyond those currently anticipated.Any of the foregoing factors could materially adversely affect the business, financialcondition, results of operations and prospects of the Company.1.1.14 The Company faces risks associated with contamination of its products.The contamination or deterioration of the Company’s products, whether actual or alleged,deliberate or accidental, could harm its reputation and business. A risk of contamination ordeterioration exists during each stage of the production cycle, including during the production anddelivery of raw materials, the bottling and packaging of its products, the stocking and delivery of itsproducts to retailers and wholesalers and the storage and shelving of its products at the final points ofsale. Any such contamination or deterioration could result in a recall of its products and/or criminal orPart 2 Page 9
Part 2 Issuing CompanyThai Beverage Public Company Limitedcivil liability and restrict the Company’s ability to sell its products which, in turn, could have amaterial adverse effect on its business, financial condition, results of operations and prospects.In addition, from time to time, the Company may be subject to false allegations ofcontamination which could create negative publicity that could adversely affect its reputation andproduct sales, which could adversely affect its business, financial condition, results of operations andprospects.1.1.15 The Company’s business and investment plans are capital intensive and subject to anumber of risks and uncertainties.The Company’s business is in the industry that is capital intensive. The Company’s ability tointroduce new products and maintain its production capability depends on continued capital spending,including constructing its new facilities and maintaining and upgrading its existing facilities. Inaddition, the Company continually monitors developments in the beverage markets in Thailand andSoutheast Asia for opportunities to expand into new businesses. The Company’s capital expenditureswere Baht 7,302.0 million, Baht 4,038.5 million and Baht 1,696.7 million from 2005 to 2007,respectively. The Company has budgeted capital expenditures and investments of Baht 2,000.0million in 2008, Baht 2,700.0 million in 2009 and Baht 2,100.0 million in 2010 for constructing of itsnew facilities and maintaining and upgrading of its existing facilities.Historically, the Company has relied on external debt financing, equity financing andinternally generated cash flows for its capital investments. The Company expects to finance any futureexpansions of its business or improvements of its brewery and distillery plants through additionalexternal debt financing and internally generated cash flows. If the Company is unable to obtainadditional debt financing when needed on commercially acceptable terms, it may require additionalequity financing, which could be dilutive to the Company’s existing shareholders. In addition, theCompany’s inability to secure necessary financing for capital expenditures necessary to maintain orexpand its facilities could adversely affect its business, financial condition, results of operations andprospects.1.1.16 The Company must depend on some of its executives and personnel, and if the Company isunable to retain these executives and personnel or attract suitable replacements, itsbusiness could be negatively impacted.The Company is currently managed by a group of executive officers and employees, many ofwhom have many years of experience at its operating Subsidiaries and in the beverage industry andwho would be difficult to replace. As a result, the loss of these personnel, or the Company’s inabilityto recruit sufficiently qualified personnel, could materially adversely affect its business.The Company believes that its continued growth and success largely depends on its ability toretain skilled, qualified and experienced managerial, sales, marketing and production personnel and totrain its staff to produce and to sell successfully its products. If the Company is unable to attract,retain and motivate highly skilled, qualified and experienced personnel, it could lose customers andsuffer reduced profitability. Even if the Company is successful in attracting and retaining suchpersonnel, competition for such personnel may significantly increase its compensation costs andadversely affect its business, financial condition, results of operations and prospects.1.1.17 The Company’s facilities could be affected by operating hazards and natural disasters.The Company’s beer and spirits operations are subject to operating and other risks typicallyassociated with alcoholic beverage production, and its industrial alcohol operations are subject tooperating and other risks typically associated with the production, storage and transportation of highlyflammable products. Incidents of fire, mechanical failure, leaks of storage tank of hazardoussubstances, discharge or release of hazardous substances and other environmental risks, and inclementPart 2 Page 10
Page 1 and 2: (Translation)PROSPECTUSTHAI BEVERAG
Page 3 and 4: Thai Beverage Public Company Limite
Page 5 and 6: Part 1 Executive SummaryThai Bevera
Page 7 and 8: Part 1 Executive SummaryThai Bevera
Page 9 and 10: Part 2 Issuing CompanyThai Beverage
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