Annual Report 2006 - Thai Beverage Public Company Limited

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Annual Report 2006 - Thai Beverage Public Company Limited

Investor InformationAnnual Report 2006 - Thai Beverage Public Company Limited1Thai Beverage is listed on the Singapore Exchange (SGX-ST) main board.STI tickerReutersBloombergGoogle FinanceIPO date: 30 May 2006IPO offer price: S$ 0.28Fiscal year ends: December 31External Auditor:Dividend Policy:THBEVtbev.sithbev spSIN:Y92KPMG Phoomchai Audit Ltd.not less than 50% of net profit afterdeducting all appropriated reservesThaiBev’s stock performanceThaiBev Close VolumeVol.(M shares)16001400120010008006004002000MayJuneJulyAugustSeptemberOctoberNovemberDecemberPrice (S$)0.350.30.250.20.150.12006Share price*2006 High S$ 0.305 (August 31 and September 1)2006 Low S$ 0.24 (June 8)*data from May 30, 2006 to December 29, 2006Investor Relations ContactInvestor Relations Department, Office of CorporateCommunicationsThai Beverage PLC.14 Vibhavadi Rangsit Rd., Chomphon, Chatuchak,Bangkok 10900 THAILANDMr. Richard W. JonesTel:+662 272 2295 (DIR)+662 272 2051-5 ext. 1228Fax: +662 272 2280E-mail: richard.j@thaibev.comNamfon AungsutornrungsiTel: +662 272 2051-5 ext. 1225E-mail: namfon.a@thaibev.comAriya SilakornTel: +662 272 2051-5 ext. 1222E-mail: ariya.s@thaibev.comCorporate website: www.thaibev.comIR website: www.thaibev.com/set/investor.html


2Financial HighlightsAnnual Report 2006 - Thai Beverage Public Company Limited2006 2005Million Baht Million BahtIncome StatementTotal Sales 97,798 94,903Total Revenues 97,956 95,190Cost Of Sales 69,325 65,188Gross Profit 28,473 29,715Operating Profit 15,789 16,534Earnings before interest expense and tax (EBIT) 15,946 16,822Net Profit 10,055 10,337Depreciation and Amortisation 4,652 4,432Earnings before interest expense, tax,depreciation & amortisation (EBITDA) 20,598 21,254Balance SheetCurrent Assets 33,536 36,349Non-current Assets 52,044 50,788Total Assets 85,580 87,137Current Liabilities 26,151 55,228Non-current Liabilities 6,875 195Total Liabilities 33,026 55,423Shareholders’ Equity 52,554 31,714Total Liabilities and Shareholders’ Equity 85,580 87,137


18Message from the ChairmanAnnual Report 2006 - Thai Beverage Public Company Limited


19Dear Shareholders,Thai Beverage Public Company Limited (“Company”) recognizes its mission to continuously sharpen its competitiveedge, generate value, and move forward for the best interests of shareholders, customers, and employees under goodcorporate governance.Our performance in 2006 proved that we have adhered to our cause despite volatile domestic economic conditions in thecountry, natural disasters, and unforeseen events.Year of Progress and SuccessIn 2006 the Company succeeded in its operations with total sales revenue of 97,798 million Baht, a 3.1% increase from2005. The operating profit amounted to 15,789 million Baht, and the net profit was 10,055 million Baht.The Company took two major measures to reduce its debt while increasing financial liquidity. First, 3,110,025,000common shares were sold to foreign investors and local institutional investors as a means of recapitalization. Second,the Company successfully listed on the Singapore Exchange Securities Trading Limited (“Singapore Exchange”) andbegan trading its common shares on May 30, 2006.Many events in 2006 had a bearing on the Company’s operations, including floods in upcountry areas, which affectedthe distribution of white spirits. However, the beer market remained intact because most of our consumers live in urbanareas, which remained relatively dry. The beer market expanded in the third quarter with the greater popularity of ArchaBeer. The anticipated regulatory change in the advertisement of alcohol products will affect all operators in the alcoholicbeverage industry, including the Company. The actual impact on the Company cannot be assessed until the regulationbecomes effective.In relation to our business management, the Board of Directors (“Board”) has delegated authority to certain groups in theCompany, including the Executive Board of Directors, which is responsible for the day-to-day business administrationof the group, and working committees in charge of specific tasks. These groups maintain close communication withthe Board to ensure appropriate business management, enhance the Board’s oversight efficiency, and adherence tocorporate governance. In doing so, the Company aims to generate the highest value and gain acceptance from


20shareholders, investors, stakeholders, related parties, as well as regulatory agencies. Five committees support thework of the Board, namely the Executive Board of Directors, the Audit Committee, the Remuneration Committee,the Nomination Committee, and the Risk Management Committee. These people have put in their best efforts, therebystrengthening our ability to conduct our business under good corporate governance.Market Leadership and Strength in Product DistributionOur beer and liquor products are well accepted in both local and international markets. By establishing a network of over400,000 distributors throughout Thailand as well as maintaining good relationships with distributing agents and salesrepresentatives, sales of the Company’s beer and liquor products have been on the rise.Business StrategiesOur strategies focus on product distribution and brand awareness. We will work more closely with distributors to developsales strategies in consideration on consumer needs. We have not only conducted market research to develop productsaligning with consumer needs but also conducted product research by the blending expertise of foreign liquormanufacturers with Thai liquor manufacturers. This will lead to better understanding of consumer needs, thus creatingnew products that are comparable, or superior to foreign leading liquors, thereby reducing our need to import.For long-term competitiveness and brand awareness, the Company became a sponsor of the British Everton FootballClub, whose team uniform features the Chang logo, instantly making the brand of beer well-known among soccer fansaround the world.The Company operates three beer breweries with a total capacity of 1,550 million liters per year, and 17 distilleries areunder the Company’s network with a total production capacity of 808 million liters per year. All breweries and distillerieshave been upgraded and constantly monitored to maintain local and international standards, including Thai IndustrialStandard and ISO 900:2004. Moreover, our operating facilities have achieved Hazard Analysis and Critical Control Point(HACCP) certification as well as Good Manufacturing Practice (GMP) certification from the Food & Drug Administration.All breweries won ISO 14001:2004 certification for environmental management, and their laboratories won ISO 17025certification. These accreditations reflect our commitment to the quality of products and consumer needs. In addition,these efforts raise our competitiveness in the global market.


21Social ResponsibilityApart from business performance and targets, we take our environmental responsibility seriously. All our manufacturingfacilities are required to adopt ISO 1400:2004 standards in their environmental management. In addition, we continue toprovide assistance to the needy and those affected by natural disasters, as well as supporting the efforts of governmentand private organizations in social contribution, including sports and public health.Moving Ahead with SustainabilityIt is projected that the beer and liquor markets will expand both locally and internationally. With a strong commitment tocontinually enhancing every aspect of its business, the Company will forge ahead with sustainability and stability.This annual report contains information on our business performance, credit rankings, organizational achievements,financial performance, risk management, market trends, and good corporate governance.On behalf of the Board, I would like to thank every customer and shareholder for continuously supporting the Company’sbusiness operations, and extend my appreciation to the Company’s Directors, executives and employees, who havedemonstrated full dedication to carrying out their duties. I assure you that the Company will continue to do its best undergood corporate governance for sustainable business growth.Mr. Charoen SirivadhanabhakdiChairman


22Shareholding StructureAnnual Report 2006 - Thai Beverage Public Company Limited


23 23


24Shareholding StructureAnnual Report 2006 - Thai Beverage Public Company Limited


26Report of the Board of DirectorsAnnual Report 2006 - Thai Beverage Public Company LimitedBreakdown in Shares and Types of ShareNo.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark1 Thai Beverage Public Company Limited Holding Common 25,110,025,000.00 25,110,025,000 - -14 Vibhavadi Rangsit Road, CompanyKhwaeng Chomphol, Khet Chatuchak,Bangkok 109002 Thai Alcohol PLC. Alcohol Common 800,000,000.00 160,000,000 159,999,986 100.00%31-35 Chalermkhet 1 Road, ProductionKhwaeng Wat Thepsirin, Khet Pomprab,Bangkok 101003 Sangsom Co., Ltd. Liquor Common 7,500,000,000.00 750,000,000 749,999,994 100.00%14 Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 109004 Fuengfuanant Co., Ltd. Liquor Common 900,000,000.00 90,000,000 89,999,994 100.00%333 Moo 1, Tambon Tha Toom, ProductionAmphoe Si Maha Phot,Prachin Buri 251405 Mongkolsamai Co., Ltd. Liquor Common 700,000,000.00 70,000,000 69,999,994 100.00%14 Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 109006 Thanapakdi Co., Ltd. Liquor Common 700,000,000.00 70,000,000 69,999,994 100.00%315 Moo 4, Tambon Mae Faek, ProductionAmphoe San Sai, Chiang Mai 502907 Kanchanasingkorn Co., Ltd. Liquor Common 700,000,000.00 70,000,000 69,999,994 100.00%14 Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 109008 Sura Bangyikhan Co., Ltd. Liquor Common 4,000,000,000.00 400,000,000 399,999,994 100.00%82 Moo 3, Tambon Bang Khoo Wat, ProductionAmphoe Muang, Pathum Thani 121309 Athimart Co., Ltd. Liquor Common 900,000,000.00 90,000,000 89,999,994 100.00%170 Moo 11, Tambon Nikhom, ProductionAmphoe Satuek, Buri Ram 3115010 S.S. Karnsura Co., Ltd. Liquor Common 800,000,000.00 80,000,000 79,999,994 100.00%101 Moo 8, Tambon Kaeng Dom, ProductionKing Amphoe Sawang Wirawong,Ubon Ratchathani 34190


27No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark11 Kankwan Co., Ltd. Liquor Common 800,000,000.00 80,000,000 79,999,994 100.00%14 Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090012 Theparunothai Co., Ltd. Liquor Common 700,000,000.00 70,000,000 69,999,994 100.00%99 Moo 4, Tambon Hat Kham, ProductionAmphoe Muang, Nong Khai 4300013 Red Bull Distillery (1988) Co., Ltd. Liquor Common 3,000,000,000.00 300,000,000 299,999,940 100.00%15 Moo 14, Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090014 United Winery & Distillery Co., Ltd. Liquor Common 1,800,000,000.00 180,000,000 179,999,994 100.00%14 Soi Yasoob 1, Vibhavadi Rangsit Road, ProductionKhet Chatuchak, Bangkok 1090015 Simathurakij Co., Ltd. Liquor Common 900,000,000.00 90,000,000 89,999,994 100.00%1 Moo 6, Tambon Ban Daen, ProductionAmphoe Banphot Phisai,Nakhon Sawan 6018016 Nateechai Co., Ltd. Liquor Common 800,000,000.00 80,000,000 79,999,994 100.00%14 Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090017 Luckchai Liquor Trading Co., Ltd. Liquor Common 800,000,000.00 80,000,000 79,999,994 100.00%46 Moo 1, Tambon Nong Klang Na, ProductionAmphoe Muang, Ratchaburi 7000018 Pomthip Co., Ltd. Beer Common 10,000,000.00 1,000,000 999,994 100.00%2194 Charoen Krung Road, DistributionKhwaeng Wat Phraya Krai,Khet Bang Kho Laem, Bangkok 1012019 Pomkit Co., Ltd. Beer Common 10,000,000.00 1,000,000 999,994 100.00%48,50,52 Suranaree Road, DistributionTambon Nai Muang, Amphoe Muang,Nakhon Ratchasima 3000020 Pomchok Co., Ltd. Beer Common 10,000,000.00 1,000,000 999,994 100.00%Daw. 16/1, U Thong Road,DistributionTambon Tha Wasukri, Amphoe Muang,Ayutthaya 13000


28No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark21 Pomcharoen Co., Ltd. Beer Common 10,000,000.00 1,000,000 999,994 100.00%135/3 Moo 4, Kanchanavithi Road, DistributionTambon Bang Kung, Amphoe Muang,Surat Thani 8400022 Pomklung Co., Ltd. Beer Common 10,000,000.00 1,000,000 999,994 100.00%80/13-14 Ekathosarot Road, DistributionTambon Nai Muang, Amphoe Muang,Phitsanulok 6500023 Pomburapa Co., Ltd. Beer Common 10,000,000.00 1,000,000 999,994 100.00%51/42 Moo 3, Sukhumvit Road, DistributionTambon Ban Suan, Amphoe Muang,Chon Buri 2000024 Num Yuk Co, Ltd. Liquor Common 10,000,000.00 1,000,000 999,994 100.00%95/390-391 Trok Nokkhet, DistributionRama III Road, Khwaeng Chong Nonsi,Khet Yannawa, Bangkok 1012025 Num Thurakij Co., Ltd. Liquor Common 10,000,000.00 1,000,000 999,994 100.00%51/40-41 Moo 3, Sukhumvit Road, DistributionTambon Ban Suan, Amphoe Muang,Chon Buri 2000026 Num Muang Co., Ltd. Liquor Common 10,000,000.00 1,000,000 999,994 100.00%Daw. 16/2, U Thong Road,DistributionTambon Tha Wasukri, Amphoe Muang,Ayutthaya 1300027 Num Nakorn Co., Ltd. Liquor Common 10,000,000.00 1,000,000 999,994 100.00%149/3 Chulachomklao Road, DistributionTambon Tha Kham, Amphoe Phun Phin,Surat Thani 8413028 Num Palang Co., Ltd. Liquor Common 10,000,000.00 1,000,000 999,994 100.00%1/7-8 Phraya Surasi Road, DistributionTambon Nai Muang, Amphoe Muang,Phitsanulok 6500029 Num Kijjakarn Co., Ltd. Liquor Common 10,000,000.00 1,000,000 999,994 100.00%1,3,5 Trok Wat Muang, Suranaree Road, DistributionTambon Nai Muang, Amphoe Muang,Nakhon Ratchasima 3000030 Thipchalothorn Co., Ltd. Beer and Common 1,000,000.00 100,000 99,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, LiquorKhwaeng Chomphol, Khet Chatuchak, DistributionBangkok 10900Agent


29No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark31 Krittayabun Co., Ltd. Beer and Common 5,000,000.00 500,000 499,994 100.00%14 Vibhavadi Rangsit Road, LiquorKhwaeng Chomphol, Khet Chatuchak, DistributionBangkok 10900Agent32 Surathip Co., Ltd. Liquor Common 1,200,000.00 120,000 119,940 100.00%14 Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol,AgentKhet Chatuchak, Bangkok 1090033 Sunthornpirom Co., Ltd. Liquor Common 5,000,000.00 500,000 499,994 100.00%14 Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol,AgentKhet Chatuchak, Bangkok 1090034 Piromsurang Co., Ltd. Liquor Common 5,000,000.00 500,000 499,994 100.00%14 Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol, Khet Chatuchak, AgentBangkok 1090035 Thai Beverage Marketing Co., Ltd. Liquor Import Common 300,000,000.00 30,000,000 29,999,940 100.00%40/53 Vibhavadi Rangsit Road, & Export /Khwaeng Talat Bangkhen, Khet Laksi, OverseasBangkok 10210Marketing36 Sahatipkarnkonsong Co., Ltd. Logistics Common 12,000,000.00 1,200,000 1,199,940 100.00%14 Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak,Bangkok 10900Namechanged to“Thai BeverageLogisticsCo., Ltd.” as of30 Jan. 0737 Maharas Agri Co., Ltd. Japanese Common 2,000,000.00 200,000 199,940 100.00%14 Vibhavadi Rangsit Road, RiceKhwaeng Chomphol,PlantingKhet Chatuchak, Bangkok 1090038 Thai Molasses Co., Ltd. Molasses Common 40,000,000.00 40,000 39,887 99.72%14 Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090039 Thai Cooperage Co., Ltd. Oakwood Common 300,000,000.00 30,000,000 29,999,940 100.00%15 Moo 14, Vibhavadi Rangsit Road, BarrelKhwaeng Chomphol, Khet Chatuchak, ProductionBangkok 10900


30No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark40 Dhospaak Co., Ltd. Advertising Common 25,000,000.00 2,500,000 2,499,994 100.00%195 Empire Tower, 25th Floor,Sathon Tai Road, Khwaeng Yannawa,Khet Sathon, Bangkok 1012041 Beer Thip Brewery (1991) Co., Ltd. Beer, Drink Common 6,600,000,000.00 660,000,000 659,999,940 100.00%15 Moo 14, Vibhavadi Rangsit Road, & SodaKhwaeng Chomphol, Khet Chatuchak, ProductionBangkok 1090042 Beer Thai (1991) PLC. Beer, Drink Common 5,550,000,000.00 555,000,000 554,999,985 100.00%15 Moo 14, Vibhavadi Rangsit Road, & SodaKhwaeng Chomphol, Khet Chatuchak, ProductionBangkok 1090043 Bionic Humas Co., Ltd. Fertilizer Common 10,000,000.00 100,000 99,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, SaleKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090044 Additive Food Co., Ltd. Animal Feed Common 1,000,000.00 10,000 9,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090045 Pan International (Thailand) Co., Ltd. Equipment Common 1,000,000.00 10,000 9,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, and SupplyKhwaeng Chomphol, Khet Chatuchak, DistributionBangkok 1090046 Charun Business 52 Co., Ltd. Brick Common 121,800,000.00 1,218,000 1,217,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, ProductionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090047 Dhanasindhi Co., Ltd. Construction Common 20,000,000.00 20,000 19,994 100.00%949/6-8 Nakhon Chaisi Road,Khet Dusit, Bangkok 1030048 Bang-na Logistics Co., Ltd. Bottle Common 123,000,000.00 1,230,000 1,229,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090049 Sura Piset Samphan Co., Ltd. Liquor Common 100,000,000.00 1,000,000 - -14 Vibhavadi Rangsit Road, Production &Khwaeng Chomphol, Khet Chatuchak, DistributionBangkok 10900


31No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark50 Sura Piset Sahasan Co., Ltd. Liquor Common 100,000,000.00 1,000,000 - -14 Vibhavadi Rangsit Road, Production &Khwaeng Chomphol, Khet Chatuchak, DistributionBangkok 1090051 Sura Piset Pattharalanna Co., Ltd. Liquor Common 100,000,000.00 1,000,000 - -14 Vibhavadi Rangsit Road, Production &Khwaeng Chomphol, Khet Chatuchak, DistributionBangkok 1090052 Sura Piset Thipharat Co., Ltd. Liquor Common 500,000,000.00 5,000,000 4,999,994 100.00%15 Moo 14, Vibhavadi Rangsit Road, Production &Khwaeng Chomphol, Khet Chatuchak, DistributionBangkok 1090053 Pan Alcohol Co., Ltd. Vinegar Common 2,000,000.00 20,000 - -15 Moo 14, Vibhavadi Rangsit Road, Production &Khwaeng Chomphol, Khet Chatuchak, DistributionBangkok 1090054 Muangkij Co., Ltd. Oakwood Common 3,810,000.00 38,100 - -9 Dao Khanong-Chom Thong Road, SupplyKhwaeng Bang Kho, Khet Chom Thong,Bangkok 1950055 Thai Thum Distillery Co., Ltd. Liquor Common 17,500,000.00 17,500 - -14 Vibhavadi Rangsit Road, DistributionKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090056 Sint Ek Panich Co., Ltd. Mining Common 9,000,000.00 90,000 - -31-35 Chalermkhet 1 Road,Khwaeng Wat Thepsirin, Khet Pomprab,Bangkok 1010057 Banglen Agriculture Co., Ltd. Agricultural Common 50,000,000.00 50,000 - -31-35 Chalermkhet 1 Road, PlantingKhwaeng Wat Thepsirin, Khet Pomprab,Bangkok 1010058 Vidhayathan Co., Ltd. Environmental Common 5,000,000.00 50,000 - -15 Moo 14, Vibhavadi Rangsit Road, ConservationKhwaeng Chomphol, Khet Chatuchak, PublicBangkok 10900Relations59 Archa Beer Co., Ltd. Trademark Common 1,000,000.00 100,000 99,940 100.00%4236/55 Trok Nokkhet, Rama III Road, Proprietor &Khwaeng Bang Khlo,BeerKhet Bang Kho Laem,ConcentrateBangkok 10120Production


32No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark60 T.C.C. Cosmo Corporation Ltd. Trademark Common 5,000,000.00 50,000 49,940 100.00%15 Moo 14, Vibhavadi Rangsit Road, ProprietorKhwaeng Chomphol, Khet Chatuchak,Bangkok 1090061 Cosmos Brewery (Thailand) Co., Ltd. Beer, Drink Common 1,666,666,500.00 166,666,650 166,666,590 100.00%15 Moo 14, Vibhavadi Rangsit Road, & SodaKhwaeng Chomphol, Khet Chatuchak, ProductionBangkok 1090062 Beer Chang Co., Ltd. Trademark Common 1,000,000.00 10,000 9,940 100.00%15 Moo 14, Vibhavadi Rangsit Road, Proprietor &Khwaeng Chomphol, Khet Chatuchak, BeerBangkok 10900ConcentrateProduction63 International Beverage Holdings Limited Holding Common HK$ 100,000,000.00 100,000,000 100,000,000 100.00%Room 901-2, Silvercord, Tower 1, Company30 Canton Road, Tsim Sha Tsui,Kowloon, Hong Kong64 InterBev (Singapore) Limited Trading of Common SGD 3,000,000.00 3,000,000 3,000,000 100.00%3 Philip Street # 13-04 Commerce Point, alcoholicSingaporebeverages65 InterBev Malaysia Sdn. Bhd. Trading of Common MYR 100,000.00 100,000 100,000 100.00%Suite 6.01, 6 th Floor, Plaza See Hoy Chan, alcoholicJalan Raja Chulan, 50200 Kuala Lumpur, beveragesMalaysia66 InterBev (Cambodia) Co.,Ltd. Trading of Common USD 100,000.00 N/A N/A 100.00%140 Nehru (Street # 215) alcoholicSankat Vealvong, Khan 7 Makara, beveragesPhnom Penh, Kingdom of Cambodia67 InterBev USA Inc. Trading of Common USD 1.00 10,000 1,000 100.00%405 Lexington Avenue, 25th Floor, alcoholicSuite 2532, New York, USAbeveragesNamechanged to“InternationalBeverageHoldings LimitedUSA, Inc.”as of 7 Feb. 0768 Best Spirits Company Limited Trading of Common HKD 15,300,000.00 15,300,000 15,300,000 100.00%Room 901-2, Silvercord Tower 1, alcoholic30 Canton Road, Tsim Sha Tsui, beveragesKowloon, Hong Kong


33No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark69 Pacific Spirits (UK) Ltd. Holding Common £50,000.00 50,000 50,000 100.00%Moffat Distillery, Airdrie, ML6 8PL, companiesScotlandincludinghead offices70 Blairmhor Limited Production Common £9,406.70 940,670 940,670 100.00%Moffat Distillery, Airdrie ML6 8PL,andScotlanddistributionof spirits71 Inver House Distillers Limited Production Common £1,000,000.00 1,000,000 1,000,000 100.00%Moffat Distillery, Airdrie ML6 8PL,andScotlanddistributionof spirits72 Wee Beastie Limited Trading of Common £1,000,000.00 1,000,000 1,000,000 100.00%Moffat Distillery, Airdrie, ML6 8PL, alcoholicScotlandbeverages73 Blairmhor Distillers Limited Spirits Common £200.00 2,000 2,000 100.00%Moffat Distillery, Airdrie, ML6 8PL, DistilleryScotland74 Moffat & Towers Limited Dormant Common £1.00 1 1 100.00%Moffat Distillery, Airdrie ML6 8PL,Scotland75 Glen Calder Blenders Limited Dormant Common £100.00 100 100 100.00%Moffat Distillery, Airdrie, ML6 8PL,Scotland76 Hankey Bannister & Company Limited Dormant Common £100.00 100 100 100.00%Moffat Distillery, Airdrie, ML6 8PL,Scotland77 R. Carmichael & Sons Limited Dormant Common £30,000.00 30,000 30,000 100.00%Moffat Distillery, Airdrie, ML6 8PL,Scotland78 J MacArthur Jr & Company Limited Dormant Common £100.00 100 100 100.00%Moffat Distillery, Airdrie, ML6 8PL,Scotland79 Mason & Summers Limited Dormant Common £10,030.00 10,030 10,030 100.00%10 Foster Lane, London, EC2V 6HH,England


34No.Company/LocationType ofBusinessType ofSharePaid-Up Capital(Baht)SharesIssuedNo. ofShares Held% ofShareholdingRemark80 James Catto & Company Limited Dormant Common £50,000.00 50,000 50,000 100.00%Moffat Distillery, Airdrie ML6 8PL,Scotland81 The Knockdhu Distillery Company Limited Dormant Common £100.00 100 100 100.00%Moffat Distillery, Airdrie ML6 8PL,Scotland82 Speyburn-Glenlivet Distillery Dormant Common £100.00 100 100 100.00%Company LimitedMoffat Distillery, Airdrie ML6 8PL,Scotland83 The Pulteney Distillery Company Limited Dormant Common £2.00 2 2 100.00%Moffat Distillery, Airdrie ML6 8PL,Scotland84 The Balblair Distillery Company Limited Dormant Common £2.00 2 2 100.00%Moffat Distillery, Airdrie ML6 8PL,Scotland85 Liquorland Limited Off licences Common £245,000.00 245,000 245,000 49.00%8 Westbank Road, Belfast, BT3 9JL,Northern Ireland86 Inver House Distribution SA Dormant Common £24,450.00 2,500 1,248 50.00%Avenue des Tilleuls, 62140 Marconne,France87 Inver House Polska Limited Dormant Common 700,000.00 zl N/A N/A 40.00%ul. Obodrzyców 34 A/1, 81-812 Sopot,Poland


35List of direct and deemed interests of each directorAs at January 21, 2007No.Name of ShareholdersDirect InterestNumber ofsharesPercentageofshareholdingDeemedInterestNumber ofsharesPercentageofshareholding1 Mr. Charoen Sirivadhanabhakdi Thai Beverage Public Company Limited 3,156,500,000 12.57 - - -Good Show Holdings Limited - - MM Group Limited 5,000 100.00Risen Mark Enterprise Ltd. - - MM Group Limited 50,000 100.00Siriwana Co., Ltd. 199,999,997 50.00 - - -Golden Capital (Singapore) Limited - - MM Group Limited 10,000,000 100.00MM Group Limited 25,000 50.00 - - -2 Khunying Wanna Sirivadhanabhakdi Thai Beverage Public Company Limited 3,156,500,000 12.57 - - -Good Show Holdings Limited - - MM Group Limited 5,000 100.00Risen Mark Enterprise Ltd. - - MM Group Limited 50,000 100.00Siriwana Co., Ltd. 199,999,997 50.00 - - -Golden Capital (Singapore) Limited - - MM Group Limited 10,000,000 100.00MM Group Limited 25,000 50.00 - - -3 Mr. Narong Srisa-an Thai Beverage Public Company Limited 1 0.00 - - -4 Mr. Komen Tantiwiwatthanaphan Thai Beverage Public Company Limited 34,068,668 0.14 - - -5 Mr. Paisal Chevasiri* Thai Beverage Public Company Limited 200,340,500 0.80 - - -6 Mr. Puchchong Chandhanakij Thai Beverage Public Company Limited 1 0.00 - - -7 Mr. Staporn Kavitanon - - - - - -8 Prof. Kanung Luchai - - - - - -9 Mr. Manu Leopairote - - - - - -10 Mr. Ng Tat Pun - - - - - -11 Mr. Michael Lau Hwai Keong - - - - - -12 Gen. Dr. Choo-Chat Khumbhu Na Ayudhya - - - - - -13 Prof. Pornchai Matangkasombut - - - - - -14 Mr. Sakthip Krairiksh - - - - - -15 Mr. Vivat Tejapaibul Thai Beverage Public Company Limited 291,541,500 1.16 - - -16 Mr. Samut Hatthasing Thai Beverage Public Company Limited 1 0.00 - - -17 Ms. Kanoknart Rangsithienchai Thai Beverage Public Company Limited 1 0.00 - - -18 Mr. Thapana Sirivadhanabhakdi Thai Beverage Public Company Limited 107,000,000 0.43 - - -19 Mr. Sithichai Chaikriangkrai Thai Beverage Public Company Limited 1 0.00 - - -20 Mr. Ueychai Tantha-Obhas - - - - - -21 Dr. Pisanu Vichiensanth - - - - - -22 Mr. Chukiet Tangpongprush Thai Beverage Public Company Limited 1 0.00 - - -*Mr. Paisal Chevasiri resigned from the Board effective from February 26, 2007


36Top Twenty ShareholdersAs at March 6, 2007PercentageNo. Name of shareholders No. of shares of shares1 The Central Depository (PTE) Limited 6,295,659,920 25.072 Good Show Holdings Limited 3,492,720,000 13.913 Mr. Charoen Sirivadhanabhakdi 3,156,500,000 12.574 Khunying Wanna Sirivadhanabhakdi 3,156,500,000 12.575 Risen Mark Enterprise Ltd. 2,359,815,000 9.46 Siriwana Co., Ltd. 2,197,200,000 8.757 Mr. Suchin Worawongwasu 900,000,000 3.588 Mrs. Siriluck Maithai 338,519,080 1.359 Mr. Vivat Tejapaibul 291,541,500 1.1610 Ms. Somrhudee Sirawongprasert 167,061,000 0.6711 Mr. Paisal Chevasiri 150,000,000 0.612 Golden Capital (Singapore) Limited 116,480,000 0.4613 Mrs. Wantanee Chevasiri 110,236,750 0.4414 Mrs. Wongchanok Chevasiri 110,236,750 0.4415 Mrs. Wallapa Trisorat 107,000,000 0.4316 Ms. Atinant Sirivadhanabhakdi 107,000,000 0.4317 Mr. Panote Sirivadhanabhakdi 107,000,000 0.4318 Ms. Thapanee Sirivadhanabhakdi 107,000,000 0.4319 Mr. Thapana Sirivadhanabhakdi 107,000,000 0.4320 Mr. Suthep Opaspanich 80,000,000 0.32Total 23,457,470,000 93.42THAI BEVERAGE PUBLIC COMPANY LIMITEDSTATISTICS OF SHAREHOLDINGS AS AT 6 MARCH 2007DISTRIBUTION OF SHAREHOLDINGSSize of Holdings No. of Shareholders % No. of Shares %1 - 999 10 0.07 1,277 0.001,000 - 10,000 9,688 71.75 42,940,796 0.6810,001 - 1,000,000 3,776 27.96 213,374,000 3.391,000,001 and above 30 0.22 6,039,343,847 95.93TOTAL 13,504 100.00 6,295,659,920 100.00


37TWENTY LARGEST SHAREHOLDERSNo. Name No. of Shares %1 DBSN Services Pte Ltd 1,221,685,943 19.412 DBS Nominees Pte Ltd 1,078,172,068 17.133 Risen Mark Enterprise Limited 833,335,000 13.244 Citibank Nominees Singapore Pte Ltd 782,419,100 12.435 UOB Kay Hian Pte Ltd 536,483,000 8.526 HSBC (Singapore) Nominees Pte Ltd 475,032,046 7.557 Morgan Stanley Asia (S’pore) Securities Pte Ltd 424,868,000 6.758 United Overseas Bank Nominees Pte Ltd 377,803,098 6.009 Raffles Nominees Pte Ltd 128,381,950 2.0410 Golden Capital (Singapore) Limited 75,000,000 1.1911 Merrill Lynch (Singapore) Pte Ltd 28,510,000 0.4512 OCBC Securities Private Ltd 18,632,000 0.3013 CLSA Singapore Pte Ltd 16,583,000 0.2614 DB Nominees (S) Pte Ltd 13,352,000 0.2115 DBS Vickers Securities (S) Pte Ltd 4,258,000 0.0716 ING Nominees (S’pore) Pte Ltd 3,942,000 0.0617 Royal Bank of Canada (Asia) Ltd 2,000,000 0.0318 Yala Pte Ltd 1,954,642 0.0319 Lee Seng Hong or Shee Liang Yee Theresa 1,620,000 0.0320 United Caoutchouc Trading Co Pte Ltd 1,600,000 0.03TOTAL 6,025,631,847 95.73


38Statistics of ShareholdersAs at March 6, 2007Information on share capitalIssued and fully paid-up capital Baht 25,110,025,000Class of shares Common shares with a par value of Baht 1Number of shares in issue 25,110,025,000Voting rightsOne vote per one shareAnalysis of Shareholders by size of ShareholdingsSize of No. of Percentage of No. of Percentage ofshareholdings shareholders shareholding shares shares1 - 999 8 6.84% 8 0.00%1,000 - 10,000 n/a n/a n/a n/a1,001 - 1,000,000 23 19.66% 6,491,469 0.03%1,000,0001 and above 86 73.50% 25,103,533,523 99.97%Total 117 100.00% 25,110,025,000 100.00%Particular of material contracts with related parties for the year 2006 consist of1. Loan agreement between Great Oriole Ltd. who is lender and Pacific Spirits UK Ltd. who is borrower. Lender andborrower have same common principal shareholder. Loan equivalent amounting to Baht 4,615.23 million as at31 December 2006 with average effective interest rate at 2.8% per annum and no security provided. Loan termis at call. The majority of principle and interest were paid on 5 February 2007 and the remaining balance will be paidwithin 30 April 2007.2. Sell and Purchase Bottle Agreement between Berli Jucker PLC.(a related company) who is seller and Bang-na LogisticCo., Ltd. (a wholly owned subsidiary of Thai Beverage PLC.) who is purchaser. The sell and purchase amounts of bottlefor the year 2006 was Baht 1,971.16 million.


39Net book value of the company freehold land and building as at 31 December 2006 are as follows.(Million Baht)Land 8,364.83Surplus on land revaluation 6,586.76Land improvement 677.30Building and improvements 10,733.93Total 26,362.82Most of Land revaluation per above are carried out during 2003 and 2004 by independent professional valuers on an openmarket basis.The company leases various premises, primarily for the branch offices and warehouses. All of these leases are operatingleases and not financial leases.As at 31 December 2006, the amount of freehold land held for planned future business operations amounted to Baht1,625.97 million which is 11.3% of profit before income tax.


40Board of DirectorsAnnual Report 2006 - Thai Beverage Public Company LimitedMr. CharoenSirivadhanabhakdiChairmanKhunying WannaSirivadhanabhakdiVice ChairmanMr. NarongSrisa-anVice ChairmanMr. KomenTantiwiwatthanaphanVice ChairmanMr. StapornKavitanonIndependent Directorand Audit CommitteeChairmanProf. KanungLuchaiIndependent Directorand Audit CommitteeMemberMr. ManuLeopairoteIndependent Directorand Audit CommitteeMemberMr. NgTat PunIndependent Directorand Audit CommitteeMemberMr. MichaelLau Hwai KeongIndependent DirectorProf. PornchaiMatangkasombutIndependent DirectorGen. Dr. Choo-ChatKambhu Na AyudhyaIndependent DirectorMr. SakthipKrairikshIndependent Director


41Mr. VivatTejapaibulDirectorMr. PuchchongChandhanakijDirectorMr. SamutHatthasingDirectorMs. KanoknartRangsithienchaiDirectorMr. ThapanaSirivadhanabhakdiDirectorMr. SithichaiChaikriangkraiDirectorDr. PisanuVichiensanthDirectorMr. UeychaiTantha-ObhasDirectorMr. ChukietTangpongprushDirectorMr. PanoteSirivadhanabhakdiDirectorMrs. Vaewmanee SoponpinijCompany Secretary / Secretary to the BoardMr. Thidi SuwanaratAssistant Secretary


42Executive Board of DirectorsAnnual Report 2006 - Thai Beverage Public Company Limited12 3 45 6 7 89 10 11 12


431. Mr. Charoen SirivadhanabhakdiExecutive Chairman2. Khunying Wanna SirivadhanabhakdiFirst Executive Vice Chairman3. Mr. Narong Srisa-anSecond Executive Vice Chairman4. Mr. Komen TantiwiwatthanaphanThird Executive Vice Chairman5. Mr. Puchchong ChandhanakijFourth Executive Vice Chairman*6. Mr. Samut HatthasingPresident7. Ms. Kanoknart RangsithienchaiDirector and Executive Vice President8. Mr. Thapana SirivadhanabhakdiDirector and Executive Vice President9. Mr. Sithichai ChaikriangkraiDirector and Senior Vice President10. Dr. Pisanu VichiensanthDirector and Senior Vice President11. Mr. Ueychai Tantha-ObhasDirector and Senior Vice President12. Mr. Chukiet TangpongprushDirector and Senior Vice PresidentMrs. Vaewmanee SoponpinijCompany Secretary / Secretary to the BoardMr. Thidi SuwanaratAssistant Secretary* Effective from March 1, 2007


44Background of Directors & Key ManagementAnnual Report 2006 - Thai Beverage Public Company LimitedMr. Charoen SirivadhanabhakdiChairman / Executive ChairmanMr. Charoen Sirivadhanabhakdi was appointed Chairman of the Board of Directors of Thai Beverage PLC. (ThaiBev) in2003. He has been the Chairman of Beer Thai (1991) PLC. and the Red Bull Distillery Group of Companies since 2004;the Chairman of T.C.C. Capital Land Company Limited since 2003 and the Chairman of Berli Jucker Plc. since 2001.In addition, he has been the Chairman of the Executive Board of T.C.C. Company Limited since 1972. Mr. Charoen holdsan Honorary Doctoral Degree in Agricultural Business Administration from Maejo University and an Honorary DoctoralDegree in Industrial Technology from Chandrakasem Rajabhat University. Mr. Charoen has received various honors androyal decorations, such as the Knight Grand Cordon (Special Class) of the Most Exalted Order of the White Elephant, theKnight Grand Cordon (First Class) of the Most Noble Order of the Crown of Thailand, the Knight Commander (SecondClass Lower Grade) of the Most Illustrious Order of Chula Chom Klao and the Knight Grand Cross (First Class) of the MostAdmirable Order of the Direkgunabhorn.Khunying Wanna SirivadhanabhakdiVice Chairman / 1 st Executive Vice ChairmanKhunying Wanna Sirivadhanabhakdi was appointed Vice Chairperson of the Board of Directors in 2003. She has been theChairperson of Beer Thip Brewery (1991) Company Limited and the Sangsom Group of companies since 2004. She hasalso been the Vice Chairperson of T.C.C. Capital Land Company Limited since 2003, a Vice Chairperson of Berli JuckerPlc. since 2001 and the Vice Chairperson of the Executive Board of T.C.C. Company Limited since 1972. KhunyingWanna holds an Honorary Doctoral Degree in Bio-technology from Ramkhamhaeng University, an Honorary DoctoralDegree in Agricultural Business Administration from Maejo University and an Honorary Degree in Business Administrationfrom Chiang Mai University. She is also the Vice Chairperson of the Sirivadhanabhakdi Foundation, a Director of the SirirajFoundation and a Director of Ramathibodi Foundation. Khunying Wanna has received numerous honors and royal Thaidecorations, 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 Companion(Third Class, Lower Grade) of the Most Illustrious Order of Chula Chom Klao and the Knight Grand Cross (First Class)of the Most Admirable Order of the Direkgunabhorn.Mr. Narong Srisa-anVice Chairman / 2 nd Executive Vice ChairmanMr. Narong Sri Sa-an was appointed Vice Chairman of the Board of Directors in 2003. He has 44 years’ experience inthe banking industry, having served in Kasikorn Bank Plc. from 1954 to 1998 as its Executive Vice Chairman. He alsoholds directorships in several public companies in Thailand, including Vice-Chairman of Berli Jucker Plc, Chairman ofAdvance Agro Plc., Chairman of Siam Food Product Plc. and Independent Director of True Corporation Plc. He holds anHonorary Master of Economics from Thammasat University.


45Mr. Komen TantiwiwatthanaphanVice Chairman / 3 rd Executive Vice ChairmanMr. Komen Tantiwiwatthanaphan was appointed Vice Chairman of the Board of Directors and Vice President in 2003.He has had over 40 years’ experience in managing companies in the distilling industry. He has served as President ofSahasan (2529) Co., Ltd., since 1986, and as Director and Senior Vice President of Suramaharas Plc. from 1986 to 1999.He holds a High School Certificate.Mr. Puchchong ChandhanakijDirector / 4 th Executive Vice Chairman*Mr. Puchchong Chandhanakij was appointed a Director and Executive Vice Chairman in 2003. Before joining ThaiBev,he had been Managing Director of LSPV Co., Ltd., from 1988 to 2003; he was Executive Director (Finance) of theT.C.C. group of companies from 1983 to 1988; the Director of Administration of Robina Credit Ltd. from 1980 to 1982;and Vice President of Asia Credit Ltd., from 1975 to 1979. He holds a Bachelor of Business Administration and a Masterof Science in Accounting from California State University, Long Beach.Mr. Staporn KavitanonIndependent Director and Audit Committee ChairmanMr. Staporn Kavitanon was appointed a Director in 2004. He has extensive experience in the management ofcompanies with directorship and membership of Committees at various companies, such as Bangkok Bank Berhad,Amata Corporation Plc., Kanyong Electric Plc. and Berli Jucker Plc. From 1994 to 1999, he was the Vice Chairman ofBangkok Bank Plc. He holds a Bachelor of Arts in Economics from Thammasat University and a Master of Arts inEconomics from Vanderbilt University.Prof. Kanung LuchaiIndependent Director and Audit Committee MemberProf. Kanung Luchai was appointed an Independent Director in 2005. He has wide-ranging experience in the publicsector and legal business, having worked as Junior and Senior Public Prosecutor in the Department of Public Prosecutionfrom 1946 to 1971; Director-General of the Policy and Planning Department of the Ministry of Interior from 1971 to1973. He served as the Deputy Under-Secretary of State for the Ministry of Interior from 1973 to 1974 and as theDeputy Minister of Interior from 1974 to 1975. He practised law at Bangkok International Law Offices Co., Ltd., from1976 to 1985, and at Kanung-Prok Law Office Co., Ltd., from 1986 to 1992. He is currently a Director of Kanung &Partners Law Offices Company Limited and a Director of Kanung & Partners International Consultancy Company Limited.He is also a Director of Thailand Iron Works Plc. and Bangkok Bank Plc. In 2001, he received the Prof. Sanya ThammasakAward for being an Outstanding Lawyer from the Private Sector. He holds a Bachelor of Law from Thammasat University,and a Bachelor of Arts and Bachelor of Law from the University of Cambridge. He is also a member of the Thai Bar Association.* Effective from March 1, 2007


46Mr. Manu LeopairoteIndependent Director and Audit Committee MemberMr. Manu Leopairote was appointed an Independent Director in 2004. He has extensive experience in the public sector,having served as a Director, Secretary General, Inspector and Director General from 1968 to 1999, and as the PermanentSecretary at the Ministry of Industry from 1999 to 2004. He was also the Chairman of the Petroleum Authority of Thailandfrom 1999 to 2004. From 1994 to 2004, he was the Chairman of Technonet Asia, and from 1995 to 1996, the Chairmanof the International Sugar Organization Council of England. He was also part-time lecturer at the Faculty of Economics,Thammasat University, Assumption University, and Bangkok University. He was the President of the ThammasatUniversity Association from 2002 to 2004 and is the President of the Thammasat University Economics Association.He holds a Bachelor of Economics (Honors) from Thammasat University and a Master of Science in Economics from theUniversity of Kentucky. He won the Asian Productivity Organization Award in 2005.Mr. Ng Tat PunIndependent Director and Audit Committee MemberMr. Ng Tat Pun was appointed as an Independent Director in 2006. He has extensive experience in the banking andfinance industry. He is a Senior Advisor to UBS AG, Singapore, and before his appointment in 2005, was a ManagingDirector of UBS AG, Singapore, from 2003 to 2005. He started his banking career at Citibank NA, Singapore, in 1971and was a Vice President when he left in 1982. Since then, he has served in various senior positions with local andforeign financial institutions. From 1988 to 1997, he was the Executive Vice President of OCBC Bank, in charge of itsInternational Banking and Financial Institutions business. In 1998, he was appointed the Executive Director and ChiefExecutive Officer of OCBC Bank Malaysia. From 1999 to 2002, he was a Managing Director at JP Morgan Chase.He is also an Independent Director of Engro Corporation Limited and SP Chemicals Ltd. He holds a Bachelor of Arts(Economics and History) from the University of Singapore.Mr. Michael Lau Hwai KeongIndependent DirectorMr. Michael Lau Hwai Keong was appointed as an Independent Director in 2006. He is a Managing Director, AdvisoryServices of Octagon Advisors Pte. Ltd., a business and risk management consultancy company. From June 2000 toSeptember 2004, he served as the Executive Vice President of United Overseas Bank Ltd., where he was responsible forthe administration and governance of the bank’s international operations. He was an Advisor to Asia Pulp and Paper Ltd.from February 1999 to May 2000. He has held various positions at the Monetary Authority of Singapore (MAS) from February1985 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 CentralDepository (Pte.) Limited (CDP) from November 1997 to February 1999. He holds a Bachelor of Business Administration(First Class Honors) from the National University of Singapore and the Chartered Financial Analyst (CFA) charter.


47Gen. Dr. Choo-Chat Khumbhu Na AyudhyaIndependent DirectorGen. Dr. Choo-Chat Khumbhu Na Ayudhya was appointed Independent Director in 2006. He served the Royal Thai Armyfrom 1973 to 1987 as General Surgeon of the Medical Department. From 1987 to 1991, he was Chairman of theDepartment of Anatomy of the Phra Mongkut College of Medicine. From 1994 to 2004, he held various positions in theRoyal Thai Army, including the Director-General of the Armed Forces Research Institute of Medical Service; an AssistantSurgeon-General; Deputy Surgeon-General; Surgeon-General; and General Special Army Expert and Consultant. He is asenior surgeon and physician at the Medical Bureau to the Royal Court of Thailand. He received his Diploma in Medicinefrom Westf. Wilhelms Universitat zu Munster, and Doctorate in Medicine from the Georg-August Universitat zuGoettingen. He also has a Diploma from the National Defense College of Thailand and a Certificate of Proficiency inGeneral Surgery from the Royal College of Surgeons of Thailand. He is a permanent member of the Royal College ofSurgeons of Thailand and the Medical Association of Thailand. As for royal decorations, he has won the Knight GrandCommander (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.Prof. Pornchai MatangkasombutIndependent DirectorProf. Pornchai Matangkasombut was appointed as an Independent Director in 2006. He is the President of the MahidolUniversity and, before his appointment in 1999, was a professor at the University. He has been a member of theInternational Union of Immunological Societies since 1971 and a Member of the Executive Board of the InternationalUnion of Microbiological Societies from 1986 to 1990. He has won the highest level of Royal Decorations (Knight GrandCordon of White Elephant, Special Class and Knight Grand Cordon of the Crown of Thailand, Special Class) and the RoyalThai Award of Chula Chom Klao Order (Special Third Class) and the Palmes Academiques (Commandeur) from theGovernment of France, the Borden Research Award in Medicine. He was also an Honorary Research Associate atHarvard University and a Visiting Professor at Osaka University and the University of Saigon. He holds a Bachelor ofArts degree and M.D. and Ph.D. from the University of Wisconsin.


48Mr. Sakthip KrairikshIndependent DirectorMr. 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 to2004, he served as a Diplomat in the Ministry of Foreign Affairs, where he held various positions, including Secretary tothe Minister; Deputy Chief of Mission of the Embassy in Washington, USA; Director-General, Protocol Department;Spokesman; and Ambassador to the Kingdom of Cambodia, Japan and the United States. He was an Advisor to thePrime Minister in 2004 and currently is Permanent Secretary, Ministry of Tourism and Sports.He holds a Bachelor of Political Science from Boston University and has attended the National Defense College. He hasreceived various royal Thai and foreign decorations, such as the Knight Grand Cordon (Special Class) of the Most NobleOrder of the Crown of Thailand, the Knight Grand Cordon (Special Class) of the Most Exalted Order of the WhiteElephant, the Grand Companion (Second Class, lower grade) of the Most Illustrious Order of Chula Chom Klao, the Orderof the Sacred Treasure, Gold and Silver Star and the Grand Cordon of the Order of the Rising Sun.Mr. Vivat TejapaibulDirectorMr. Vivat Tejapaibul was appointed a Director in 2003. He has over 18 years’ experience in the banking industry, havingserved in Bangkok Metropolitan Bank Plc. in various positions from 1979 to 1998, including Secretary to the ManagingDirector, Deputy Director of the Trading Department, Director of Branch Administrative and Vice President. He holds aBachelor of Law from Thammasat University and a Master’s degree from Fairleigh Dickinson University, USA.Mr. Panote SirivadhanabhakdiDirectorMr. Panot Sirivadhanabhakdi was appointed Director in February 2007. He has been Director of Beer thai (1991) PublicCompany Limited since 2000 and Director of Beer Thip Brewery (1991) Co., Ltd since 2004 and Director of Sura BangyikhanGroup. He holds a Bachelor of Science in Manufacturing Engineering from Boston University and a Master of Science inAnalysis, Design and Management of information System from the London school of Economics and Political Science.


49Mr. Samut HatthasingPresidentMr. Samut Hatthasing has been the Director and President of Thai Beverage PLC. since February 2004. He joined theGroup in 1986 and has held various marketing positions. He was also a Trading Manager of Suramaharas Plc. from 1986to 1999. He was a Director and Executive Vice President of the Sura Bangyikhan Group of companies from 2000 to2003. In 1980, he was formerly a Provincial Manager of the Surathip Group of companies and later Marketing Managerof Surathip Co., Ltd. from 1981 to 1985. He was a Senior Manager of PTI Co., Ltd., in 1979 and a Supervisor in theAgricultural Credit Division of Thai Military Bank from 1977 to 1978. From 1967 to 1976, he served as an AssistantBranch Manager of the Bank of Agriculture and Agricultural Cooperatives. He holds a Bachelor of Economics fromThammasat University and has completed the Director Accreditation Program with the Thai Institute of Directors.Ms. Kanoknart RangsithienchaiDirector and Executive Vice PresidentMs. Kanoknart Rangsithienchai was appointed as a Director and Executive Vice President in 2003. She has extensiveexperience in finance and accounting. Before joining the Company, she had been the Executive Vice President of theSangsom Group of companies from 2000 to 2003, and the Vice President of the Office of Controller, Surathip Group ofcompanies from 1983 to 1999. From 1975 to 1982, she served as the Accounting Manager of the T.C.C. Group ofcompanies and as an accountant at J&JHO Co., Ltd., from 1970 to 1975. She holds a Bachelor of Accounting fromThammasat University and has completed the Director Accreditation Program with the Thai Institute of Directors.Mr. Thapana SirivadhanabhakdiDirector and Executive Vice PresidentMr. Thapana Sirivadhanabhakdi was appointed a Director in 2003. He has been Vice Chairman of Red Bull Distillery(1998) Co., Ltd., since 2004, and Vice Chairman of Oishi Group Plc. since 2005. A member of the Executive Board ofBerli Jucker Plc. since 2001, he holds a Bachelor of Business Administration in Finance and a Master of ScienceAdministration in Finance Economics from Boston University, USA.


50Mr. Sithichai ChaikriangkraiDirector and Senior Vice PresidentMr. Sithichai Chaikriangkrai was appointed a Director and Senior Vice President in 2003. He joined the T.C.C. Group in year1990 and has also been the Chairman of Group Financial Center since 2003. He has over 23 years’ experience in financialpositions, including the Finance and Accounting Manager of Asia Voyages & Pansea Hotel Co., Ltd., from 1983 to 1990;as a Financial Analyst of Goodyear (Thailand) Co., Ltd., from 1980 to 1983; and as an External Auditor in Coopers &Lybrand from 1977 to 1980. He holds a Bachelor of Accountancy (First Class Honors) from Thammasat University, andhas a Diploma in Computer Management from Chulalongkorn University and completed the Director Certification Programwith the Thai Institute of Directors. He also has a mini M.B.A. in Leadership Management from Kasetsart University.Mr. Ueychai Tantha-ObhasDirector and Senior Vice PresidentMr. Ueychai Tantha-obhas has been a Director since September 2005. Before joining ThaiBev, he was the ChiefExecutive Officer, from July 1995 to December 2002, and Managing Director of Riche Monde (Bangkok) Ltd., fromJanuary 1988 to February 1994; the Managing Director of Sarin Property Co., Ltd., from March 1994 to June 1995;the Managing Director of Riche Monde (Thailand) Ltd., from July 1983 to December 1987; and the Group ProductManager of Colgate Palmolive Co., Ltd., from September 1979 to June 1983. From May 1973 to August 1979, he heldvarious sales and marketing positions in Karnasuta General Assembly Co., Ltd. He holds a Bachelor of Science inAccounting from St. Louis University, a Master of Business Administration from Thammasat University and is certifiedto have completed the Advanced Management Program from INSEAD, France.Dr. Pisanu VichiensanthDirector and Senior Vice PresidentDr. Pisanu Vichiensanth has been a Director and Senior Vice President since February 2004. He has held severalpositions in ThaiBev, including Executive Vice President from 2000 to 2003 and Senior Vice Executive Presidentfrom 2003 to 2004, at subsidiary Beer Thai (1991) PLC. He is the President of Beer Thai (1991) PLC. Before joiningThaiBev, 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 severalteaching positions, including Head of Food Science and Technology at Thammasat University and Head of FoodTechnology at Khon Kaen University from 1992 to 1993, and from 1989 to 1992, respectively. He lectured in foodtechnology at Khon Kaen University from 1977 to 1990. He holds a Ph.D. in Engineering from Technical University,Berlin; a Master of Technology (Second Class Honors) in Biotechnology from Massey University; and a Bachelor ofScience (Food Science) from Kasetsart University.


51Mr. Chukiet TangpongprushDirector and Senior Vice PresidentMr. Chukiet Tangpongprush was appointed as a Director and Senior Vice President of ThaiBev in 2003. Before joining,he ran his own law firm from 1963 to 1983. From 1983 to 1986, he served first as Legal Manager and later asExecutive Director of Surathip Sansukko Co., Ltd. From 1987 to 1999, he served first as Executive Director and lateras the head of the General Affairs Department of Suramaharas Plc. He joined Surabangyikhan Co., Ltd., in 2000 as thehead of the Human Administration and General Affairs. He holds a Bachelor of Law from Thammasat University and theThai Barrister at Law from the Institute of Legal Education Barrister at Law, and has completed the Director AccreditationProgram with the Thai Institute of Directors. He is also a member of the Thai Bar and of the Lawyers Council of Thailand.Mr. Sawat SopaExecutive Vice PresidentMr. Sawat Sopa was appointed Executive Vice President in 2004, responsible for liquor production and technique.He was the Managing Director of Beer Thai (1991) PLC. and Executive Vice Chairman of Red Bull Distillery (1988)Co., Ltd., from 1992 to 1995, and from 1995 to 2004, respectively. From 1980 to 1992, he served as an ExecutiveDirector of the 43 Group of companies and Assistant Chief Executive Director, responsible for liquor and alcoholproduction. 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 ofvarious organizations including the Thab Neelaniti Foundation, Chulalongkorn University Association and the Petroleum &Petrochemical College, Chulalongkorn University. He has also been appointed as Special Commissioner of the Secretariatof the House of Representatives to consider draft bills on workmen’s protection, the securities and stock market andexcise tax; a specialist to the Committee of the House Standing Committee on Natural Resources and Environment;and a member of the Financial Committee and Subcommittee of the Ethanol Investment Project under the Royal EthanolProject Bureau, Ministry of Science, Technology and Environment. He holds a Bachelor degree of Science in ChemicalEngineering 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 Orderof the Crown of Thailand.Mr. Saikeaw VongpisethkulSenior Vice PresidentMr. Saikeaw Vongpisethkul was appointed Senior Vice President in 2006. He has over 39 years’ experience inmanagement as Vice President of Thai Pure Drink Co., Ltd., from 1967 to 2006. He was also an Advisor of theAssociation for Overseas Technical Scholarships from 1991 to 1993. He has served the Federation of Thai Industriesas Logistics Committee Member and Environmental Committee Member since 1981. He holds a Bachelor of Engineering(Honors) from Chulalongkorn University.


52Organization StructureAnnual Report 2006 - Thai Beverage Public Company Limited


54Responsibility and authorization of each OfficeName ListOffice of Chairman of the Executive BoardOffice of Internal AuditOffice of Technical Service & EnvironmentOffice of EngineerOffice of Natural Essences ProductionOffice of Liquor ProductionResponsibilitiesManages and screens items to be proposed to the Chairman of theExecutive Board and manages general tasks for the Chairman of theExecutive Board.Assists the Board in promoting good corporate governance; reportsto the Audit Committee significant issues of risk management,internal controls and governance; provides advisory services and theresolution of issues concerning internal controls; and promotes riskmanagement to all units’ operations.Formulates liquor production processes and controls liquorproduction at 17 distilleries to meet the requirements of each typeas well as the standards of the Thai Industrial Standards Institute.This includes formulation of environmental management systemsand controlling water treatment systems.Oversees the engineering section to support the distilleries and theCompany’s affiliates to align with goals for the utmost benefit to theGroup.Oversees concentrate production to meet specifications and demand.Manages and oversees operations of the three liquor groups incompliance with the goals and policies of Thai Beverage PLC.,including the promotion of the development of production andpersonnel skills for the sustainable benefit of the Company.


55Name ListOffice of General AffairsOffice of Corporate Planning &Business DevelopmentOffice of MarketingResponsibilitiesOversees administrative works for both the Company and itsaffiliates, such as cleaning services and maintenance of officebuildings, supply of office equipment and stationery, securitysystems and insurance for the assets. Ensures that the workcomplies with Company policies and regulations to efficientlysupport the major business and activities of the Group.Sets the annual budget framework for the Group; monitors andanalyzes operating results as a whole to ensure compliance withthe Group’s goals;Supports all units’ operations to achieve their goals;Plans and develops business procedures to improve overallmanagement effectiveness;Investigates and researches market trends and businessdevelopments, including reporting the effects of domestic andinternational business changes on the core business.Creates marketing, sales, advertising, public relations, productdevelopment and merchandise distribution plans in support of Groupactivities. Manages budgets, arranges and controls the total productdistribution in compliance with goals. Analyzes and formulatesmarketing strategies in line with market competition.


56Name ListOffice of External AffairsOffice of Corporate CommunicationsOffice of Beer ProductionOffice of ControllerOffice of TreasuryResponsibilitiesOversees external affairs. Directly and indirectly creates positiverelationships with business partners, leading to commercialopportunities and supporting negotiations and business connectionsover the short and long terms.Supervises and is responsible for corporate communications, publicrelations, internal and external communications and electroniccommunications in compliance with Company policies, rules andregulations, to efficiently support its business and activities.Manages and oversees the production of the three beer companiesin compliance with the goals and policies of Thai Beverage PLC.,including the promotion of the development of production andpersonnel skills for the sustainable benefit of the Group.Supervises and oversees support for accounting practices andbudgetary matters to ensure technical and legal compliance ofoperations, as well as compliance with the procedures set forthby the Board of Directors.Supervises and oversees support for treasury affairs to ensuretechnical and legal compliance of operations, as well as compliancewith the procedures set forth by the Board of Directors.


57Name ListOffice of Information TechnologyOffice of Human ResourcesOffice of Corporate SecretariatOffice of Legal AffairsOffice of Research & DevelopmentResponsibilitiesResponsible for information technology (IT) services, includingdevelopment of advanced IT systems so that business units canaccess information and tools to enhance the Company’scompetitiveness.Institutes international-standard human resources procedures thatare capable of coordinating between the headquarters and regionaloffices-taking into account the value of human resources,commitment to ethics, and compliance with laws.Arranges all Board meetings of the Company, its affiliates andsubsidiaries, and controls disclosure of material information toensure compliance with laws, regulations and Listing Manual,as well as Company policy. Provides suitable advice to all directorsand key executives. Administers corporate information and analyzeslaws relating to Company business.Analyzes and advises all units of the Company on legal issues toensure full compliance with the law and for the best interestsof the Company.Monitors and analyzes environmental changes in the Thai market,relating to economic, social, regulatory and consumer behavioralchanges to enable the Company to adjust product image or launchnew brands to suit such changes and meet the Company’s goals.


58Product PortfolioAnnual Report 2006 - Thai Beverage Public Company Limited


60Operating and Financial ReviewAnnual Report 2006 - Thai Beverage Public Company LimitedContents1 Overview2 Vision & Mission3 Business in Thailand4 Overseas Business5 Management Discussion and Analysis6 Shareholder Returns7 Risk FactorsOverviewThai Beverage Public Company Limited (“ThaiBev”) was incorporated in October 2003 in an effort to consolidateThailand’s leading beer and spirits businesses owned by our Principal Shareholders and their business associates under asingle holding company. The Company was subsequently listed on the Singapore Exchange (“SGX”) on May 30, 2006.Our Initial Public Offering was a great success and was awarded “Thailand Capital Market Deals 2006” by IFR Asia inFebruary 2007.ThaiBev is majority owned by our Principal Shareholders, Mr. Charoen Sirivadhanabhakdi and family, which ownsapproximately 63% of ThaiBev’s paid-up share capital. The rest of the shares are held by private groups of shareholdersand is in public hands.We are the leading producer and distributor of beer and spirits in Thailand by sales and production volume and one of thelargest brewers and distillers in Southeast Asia. We currently generate substantially all of our revenue from sales of ourproducts in Thailand.In addition to Thailand, it is also our vision to expand internationally. In 2006, our wholly-owned subsidiary in Hong Kong,International Beverage Holdings Limited (“IBHL”), acquired Inver House Distillers Limited, a UK-based company whichowns five Scotch whisky distilleries in Scotland. IBHL is also taking the lead in our regional expansion by setting updistribution companies outside Thailand.Today, ThaiBev is Thailand’s largest private company listed on the SGX with market capitalization of S$6.8 billion (US$4.4billion) as at 29 December 2006, and offers investors a unique opportunity to invest in Thailand consumer business withsignificant growth potential regionally.


61Corporate Vision“To be the leader in beer and spiritsbusinesses in Thailand and expand internationallywith a focus on Asian markets”MissionDeliver highest quality products to our consumersWe will provide products of superior quality and value that satisfy and exceed our consumers’ expectation.Maintain our market dominance and expand into new growth areasWe will maintain our market leadership, which has given us solid business fundamentals over the years. Simultaneously,we will leverage our expertise, passion, and competitive strength to expand into new growth areas and deliver superiorreturns to our shareholders.Capitalize on innovations to reduce waste and increase efficiencyWe will continue to invest in new technology and infrastructure to further improve the production and distribution of ourproducts and reduce costs.Utmost care for society and environmentWe believe in sustainable growth as a good corporate citizen, and will devote a significant amount of our time and effortinto corporate social responsibility initiatives to ensure the highest level of environmental and safety standards in thecommunities in which we operate.Provide excellent career opportunities and security for our employeesOur people are the key drivers of our success. We will invest in our human capital through training and successionplanning for all employees.Business in ThailandDespite an increasingly competitive market, we continue to be the leading producer of beer and spirits in Thailand.In line with our strategy to maintain our market leadership position in the beer and spirits markets, we invest a significantamount of our time and energy to further strengthen our brands and enhance product loyalty with end consumers.


62As a good corporate citizen, we achieve these positive results while remaining in full-compliance with the Government’sresponsible-drinking initiatives and regulations at all times.Beer Business2006 was an exciting year for our beer business. In particular, we saw a successful recovery in our beer sales volume forthe first time since 2003. In 2006, our total beer sales volume grew 12% to 9.2 MHL from 8.2 MHL in 2005.We successfully launched two new beers, namely “Chang Light” and “Chang Draught”, to meet the rapidly growingconsumer demand for light beer. Chang Light, launched in March 2006 was launched to penetrate the standard segmentof the beer market while Chang Draught offers a lighter alternative to our classic “Chang Beer” in the mainstream segment.In response to a growing consumer preference for lighter beer, we also continued our brand building of Archa beer, alight beer first introduced to the market in July 2004. In 2006, Archa emerged as one of the fastest growing brands in ourbeer portfolio, with total sales of over 0.8 MHL, accounting for approximately 9.2% in volume terms of our total beer output.In the effort to maintain our market leadership and to ensure continuity of supply of our beer to meet the growing Thaibeer market in the years to come, we commissioned the expansion of our Kamphaengphet brewery by adding additional4.6 MHL to our production capacity in 2004. In October 2006, we successfully started “test-on-production” of the newmachinery. Today, the new 4.6 MHL production line has been completed bringing our total production capacity to 15.5MHL. Final commissioning of the project is expected to commence in October 2007, after the final calibrations phase arecompleted to meet ThaiBev’s high quality standards.Spirits Business2006 was a challenging year for spirits in many ways. The major increase in excise tax on brown spirits in September


Today, ThaiBev is Thailand’s largestprivate company listed on the SGXwith market capitalization ofS$6.8 billion (US$4.4 billion)as at 29 December 2006,and offers investors a uniqueopportunity to invest in Thailandconsumer business632005 forced all producers to pass the price increaseon to consumers. Our flagship brown spirits brand,Sangsom, saw a 48% decrease in sales volume in2006 compared to that in 2005. A prolonged rainyseason resulted in a nationwide flood affecting 49provinces across Thailand, particularly in rural areas,and this weakened our white spirits sales in 2006.In addition, increased efforts by the government onanti-drinking campaigns during Buddhist Lent alsohad a dampening effect on our sales in the thirdquarter of 2006.Nevertheless, we embraced the challenge andcontinued to invest in the quality of our productsand our brands to maintain our leadership position inthe market. As the leading producer of quality Thaispirits for many decades, we always put consumersfirst and consistently aim to produce and deliver thehighest quality products to the market.We relaunched “Hong Thong”, a popular Thaibrown spirits brand, in April 2006. Hong Thong is aquality Thai spirit blended to the exact highstandards and recipe once enjoyed by many loyalconsumers. The launch was a great success. Since


64its launch in April 2006, Hong Thong sales volume has already reached 1.6 million cases. A unique combination of strongbrand, superior product quality, improved packaging, and affordable pricing strategically positions Hong Thong well tomeet domestic demand.In addition, we launched a new brand of brown spirits, “Blend 285”, in October 2006. Blend 285 offers consumer superiorquality products at affordable price. The product features premium clues such as individual gift box, non-refillable cap(“NRF”), and westernized packaging design. The product is rapidly gaining popularity and sold 184 thousand cases injust two months after initial launch, a success which clearly demonstrates the strength of our distribution platform whichenables new products to gain deep market penetration over a short period.We continue to invest in our distilleries to ensure that our production facilities are at their best. In October 2006, we,through our wholly-owned subsidiary Sura Piset Thiparat, further expanded our production platform and acquired newdistillery assets from Sin Surang Karn Sura Co., Ltd., a Thai distillery company engaged in the production of white spiritsunder the “White Tiger” brand. The distillery, which uses Swedish equipment, is of high-quality and capable of producingboth white and brown spirits. The distillery’s strategic location in Kanchanaburi Province, will enable ThaiBev to expandour current brown spirits’ production base in Bangkok to a new geographic region in which our products are gainingpopularity. The distillery uses coal for energy, which enables ThaiBev to diversify our production energy sources awayfrom fuel oil, which is becoming increasingly more expensive.The relentless pursuit of perfection in the quality of our products is well reflected in the industry-wide recognition wehave received. In addition to winning Gold Medals at the Spain International Quality to Alcohol Beverage in 1982 and1983, Sangsom, our flagship brown spirit, recently won the Golden Award at the 25th International Golden Award Food& Beverage 2006 event held in Barcelona, Spain on 6 March 2006Industrial Alcohol BusinessWe acquired our industrial alcohol plant in 2002 to create further integration in our alcohol business. We plan to increaseour exports of industrial alcohol products to key markets such as Japan, India and the Philippines. Since September 2004,we have produced ethanol to make gasohol fuel as a substitute for 95 octane gasoline. We have increased our capacityof ethanol production to meet the expected demand for gasohol and capitalize on the Government’s policy on clean energy.In 2006, our sales volume of ethanol was 46.6 million liters compared to 20.8 million liters in 2005. However, our overallsales volume of industrial alcohol in 2006 is slightly less than that of 2005 due to a temporary production halt as a resultof unfavorable product margins in the first quarter of 2006.


65Related BusinessAs a responsible corporate citizen, we are committed to the environment and energy conservation. We convert a portionof the waste products from our breweries and distilleries into commercial products available for sale, including animalfeed, bricks and bio-fertilizers. We sell these products in Thailand and abroad. Our by-product business has reduced theannual amount of pure waste, our breweries and distilleries have to treat and dispose, which correlates to a cost savingon treatment and disposal expenses. In addition, the reduction of pure waste reduces the impact of our business on theenvironment.In 2006, we continued to invest in our glass bottle recycle terminal project, pursuant to which we completed four terminalsin 2004 and 2005, and have three additional terminals scheduled for completion in 2007. The terminals will help increaseour efficiency in recycling used glass bottles for beer and white spirits which result in a reduction of packaging costs andhelps save the environment.Our extensive distribution network is critical to our success. Although we believe our distribution network is one of themost established and far-reaching networks in Thailand, we see significant opportunities to further improve our Group’sdistribution and production platform. As our distribution and production subsidiaries have been under the same holdingcompany since October 2003, we believe we can realize significant cost savings from closer integration between thesetwo business areas. Since the formation of ThaiBev, we have centralized certain group services including procurement,marketing and logistics in order to realize cost savings. We are exploring ways to capture additional cost savings ininventory management and logistics by increasing product handling efficiency and optimizing truck deliveries. In January2007, we changed the name of our transport company, Sahatipkarnkonsong Co., Ltd., into Thai Beverage LogisticsCo., Ltd. to take on full responsibility for the development of and investment in the logistics system and infrastructurefor ThaiBev going forward.Overseas BusinessInternational Beverage Holdings Limited (“IBHL”) is 100% owned by ThaiBev and oversees our businesses outsideThailand. It is incorporated in Hong Kong and presently has subsidiaries in six countries:1. InterBev (Singapore) Limited2. InterBev Malaysia Sdn. Bhd.3. InterBev (Cambodia)4. International Beverage Holdings Limited USA, Inc.


665. Pacific Spirits (UK) and subsidiaries including Inver House Distillers Limited6. Best Spirits Company LimitedIBHL is responsible for ThaiBev’s international business. It is engaged in activities such as the production, marketing anddistribution of alcoholic beverages including ThaiBev products, Scotch whisky and Chinese wines. IBHL’s vision is to bedominant in ASEAN with a presence in China and a reach to international markets.In 2006, IBHL commenced its trading operations in Singapore, Malaysia and Cambodia. The company also establishedoffices in the USA and UK to sell ThaiBev products. On 31 Oct 06, IBHL acquired Best Spirits Company Limited, anexisting trading operation in Hong Kong distributing Chang beer and Chinese wine. At the same time, it acquired thePacific Spirits (UK) group of companies including Inver House Distillers Limited.Inver House Distillers Limited is a leading firm of Scotch whisky distillers, headquartered in Central Scotland, exporting toover 80 countries worldwide. While the company’s principal business is the distillation and sale of Scotch whisky, thecompany also produces a range of white spirits and cream liqueurs.Inver House Distillers Limited owns five malt distilleries and markets a number of multi-award winning Single malt ScotchWhiskies: Old Pulteney, Balblair, anCnoc and Speyburn. It also markets a number of Blended Scotch Whisky brandsincluding: Hankey Bannister, Inver House Green Plaid, Catto’s and McArthur’s.Looking forward to 2007, the company will focus on integrating its recent acquisitions with its current operations andestablishing routes to markets for the Group’s products internationally. The company will also be seeking suitableacquisition opportunities which could enhance its growing business in the markets where it operates.Management Discussion and AnalysisThe Company has completed the acquisition of Pacific Spirits (UK) Limited, a holding company which owns and operatesfive distilleries in Scotland and Best Spirits Company Limited, which engages in the distribution of Chang Beer andthird-party Chinese wines in Hong Kong at end of October 2006. The consolidated financial statements for the yearended 31 December 2005 has been restated to include the assets, liabilities, and operations of both acquired companiesto be the same as for the year ended 31 December 2006 for comparison.


67GroupFor the year ended 31 December 2006, total sales revenue of the Company was Baht 97,798 million, increased 3.1%or Baht 2,895 million from Baht 94,903 million in the previous year, mainly due to higher sales revenue from our beer/water business of about 10.3%, which compensated for lower sales revenue from the spirits business, which was downabout 2.6%.Gross profit was Baht 28,473 million, a decrease of Baht 1,242 million or 4.2% mainly due to the decrease in the salesrevenue from the spirits business and the higher cost of molasses, while the gross profit margin of our beer/waterbusiness was slightly higher.The higher cost of molasses was caused by dry weather in 2005, which caused thesugarcane crop, from which molasses is made, to drop considerably in 2006 and led to higher prices. Heavy rainfall in2006 should reverse this situation somewhat in 2007.Earnings before interest, tax, depreciation and amortization (EBITDA) were Baht 20,598 million, a decrease of Baht 656million or 3.1% mainly due to the decrease in the spirits business sales volume and gross profit margin while free goodsfor sales promotion of beer/water business decreased to 8% of total beer and water sales volume.Net profit was Baht 10,055 million, down by Baht 282 million or 2.7% mainly due to the reduction of the spirits businessprofit while interest expense decreased.


68Unit: Million BahtYear 2006% to % to % to % to % to % toBeer/Water Sales Spirits Sales Alcohol Sales Related Sales Eliminate Sales Total SalesSales 46,641 100.0 51,428 100.0 1,205 100.0 7,155 100.0 (8,631) 100.0 97,798 100.0Cost of sales 35,609 76.3 33,002 64.2 995 82.6 6,365 89.0 (6,646) 77.0 69,325 70.9Gross profit 11,032 23.7 18,426 35.8 210 17.4 790 11.0 (1,985) 23.0 28,473 29.1Selling andadministrativeexpenses 6,932 14.9 7,170 13.9 177 14.7 454 6.3 (2,049) 23.7 12,684 13.0Operating profit 4,100 8.8 11,256 21.9 33 2.7 336 4.7 64 (0.7) 15,789 16.1Other income/Interest income 68 0.1 124 0.2 4 0.3 52 0.7 (91) 1.1 157 0.2EBIT 4,168 8.9 11,380 22.1 37 3.1 388 5.4 (27) 0.3 15,946 16.3Interest expenses 303 0.6 1,187 2.3 51 4.2 31 0.4 (4) 0.0 1,568 1.6Income tax 1,897 4.1 2,277 4.4 8 0.7 141 2.0 - 4,323 4.4Net Profit 1,968 4.2 7,916 15.4 (22) (1.8) 216 3.0 (23) 0.3 10,055 10.3Depreciation 2,027 4.3 2,283 4.4 126 10.5 216 3.0 - - 4,652 4.8EBITDA 6,195 13.3 13,663 26.6 163 13.5 604 8.4 (27) 0.3 20,598 21.1Year 2005% to % to % to % to % to % toBeer/Water Sales Spirits Sales Alcohol Sales Related Sales Eliminate Sales Total SalesSales 42,277 100.0 52,811 100.0 869 100.0 6,633 100.0 (7,687) 100.0 94,903 100.0Cost of sales 32,549 77.0 32,062 60.7 471 54.2 6,068 91.5 (5,962) 77.6 65,188 68.7Gross profit 9,728 23.0 20,749 39.3 398 45.8 565 8.5 (1,725) 22.4 29,715 31.3Selling andadministrativeexpenses 6,984 16.5 7,343 13.9 166 19.1 462 7.0 (1,774) 23.1 13,181 13.9Operating profit 2,744 6.5 13,406 25.4 232 26.7 103 1.6 49 (0.6) 16,534 17.4Other income/Interest income 175 0.4 128 0.2 13 1.5 26 0.4 (54) 0.7 288 0.3EBIT 2,919 6.9 13,534 25.6 245 28.2 129 1.9 (5) 0.1 16,822 17.7Interest expenses 386 0.9 1,264 2.4 42 4.8 51 0.8 (1) 0.0 1,742 1.8Income tax 1,330 3.1 3,282 6.2 52 6.0 79 1.2 - 4,743 5.0Net Profit 1,203 2.8 8,988 17.0 151 17.4 (1) (0.0) (4) 0.1 10,337 10.9Depreciation 1,919 4.5 2,288 4.3 121 13.9 104 1.6 - 4,432 4.7EBITDA 4,838 11.4 15,822 30.0 366 42.1 233 3.5 (5) 0.1 21,254 22.4


69Increase (Decrease)Beer/Water % Spirits % Alcohol % Related % Eliminate % Total %Sales 4,364 10.3 (1,383) (2.6) 336 38.7 522 7.9 (944) 12.3 2,895 3.1Cost of sales 3,060 9.4 940 2.9 524 111.3 297 4.9 (684) 11.5 4,137 6.3Gross profit 1,304 13.4 (2,323) (11.2) (188) (47.2) 225 39.8 (260) 15.1 (1,242) (4.2)Selling andadministrativeexpenses (52) (0.7) (173) (2.4) 11 6.6 (8) (1.7) (275) 15.5 (497) (3.8)Operating profit 1,356 49.4 (2,150) (16.0) (199) (85.8) 233 226.2 15 30.6 (745) (4.5)Other income/Interest income (107) (61.1) (4) (3.1) (9) (69.2) 26 100.0 (37) 68.5 (131) (45.5)EBIT 1,249 42.8 (2,154) (15.9) (208) (84.9) 259 200.8 (22) 440.0 (876) (5.2)Interest expenses (83) (21.5) (77) (6.1) 9 21.4 (20) (39.2) (3) 300.0 (174) (10.0)Income tax 567 42.6 (1,005) (30.6) (44) (84.6) 62 78.5 - (420) (8.9)Net Profit 765 63.6 (1,072) (11.9) (173) (114.6) 217 (21,700.0) (19) 475.0 (282) (2.7)Depreciation 108 5.6 (5) (0.2) 5 4.1 112 107.7 - 220 5.0EBITDA 1,357 28.0 (2,159) (13.6) (203) (55.5) 371 159.2 (22) 440.0 (656) (3.1)The Beer, Soda & Drinking Water BusinessSales revenue was Baht 46,641 million, an increase of Baht 4,364 million or 10.3% mainly due to the increase of lowalcohol beer sales volumes. Total sales volume of beer rose 12% to 923 million litres which derived from domesticsales of 916.2 million litres and export sales of 6.8 million litres. Low alcohol beer sales volume was 101.9 million litres,which increased from 2005 by 90.5 million litres. The sales volume of soda was 12.6 million litres and the sales volumeof drinking water was 42.6 million litres, a decline of 18.7% and 1.4% respectively.Gross profit of Baht 11,032 million increased by Baht 1,304 million, or 13.4%, mainly due to the increase of sales volumeand lower product costs stemming from sharing fixed costs, through higher production volumes and the lower price formalt, compensating for the higher cost of fuel oil and electricity.


71EBITDA of Baht 6,195 million increased by Baht 1,357 million or 28% mainly due to the increase of sales and grossprofit margin and the decrease in the marketing expense for free goods for sales promotion which helped to coverhigher employee expenses, freight and vehicle expenses. The free beer volume for sales promotion as a percentageof total sales volume decreased from 11.8% on average in 2005 to 8% in 2006.Net Profit of Baht 1,968 million increased by Baht 765 million or 63.6% mainly due to the increase of sales as mentionedand the decrease of interest expense caused by the reduction in the Company’s debt when it repaid short-term loansusing the IPO proceeds.The Spirits BusinessSales revenue was Baht 51,428 million, lower than in 2005 by Baht 1,383 million or 2.6% mainly due to a decreasein the sales volume of both white and brown spirits. The Company was severely affected in 2006 by the increase onexcise tax on certain types of brown spirits in September 2005. When stock of Sangsom, the Company’s flagship brand,was depleted at the end of 2005, the price of a bottle rose from Baht 150 to Baht 190 leading to a sharp drop in sales.Sangsom is over 40% of the entire brown spirit market in Thailand. Although foreign brands were affected to the same


72extent, the Company will take some time to recover. To overcome this problem, the Company re-launched a brand calledHong Thong in April 2006. While this has seen remarkable progress, it has still not compensated for the loss of sales ofSangsom by the end of 2006. However, Sangsom is seeing some recovery. The Company also launched a new brownspirit called Blend 285 in October 2006. This was well-accepted by consumers and, if current growth continues, it willbecome a significant contributor to the recovery of the brown spirits business over time.Total sales volume of spirits dropped 5.9% to 457.1 million litres which derived from domestic sales of 456.4 million litresand export sales of 0.7 million litres. White spirits sales volume of 367.5 million litres showed a decrease of 1.3%. Brownspirits sales volume of 89.6 million litres showed a decrease of 20.7% due to the abovementioned lower demand arisingfrom the sales price increase that resulted from the increase in excise tax.Gross profit of Baht 18,426 million decreased by Baht 2,323 million or 11.2%, mainly due to the decrease of salesvolume and the higher price of molasses (a raw material used in the production), fuel oil and electricity. The outlookfor molasses in 2007 is for higher production due to better crops resulting from heavy rainfall in 2006. This should leadto lower costs to the Company.EBITDA of Baht 13,663 million decreased by Baht 2,159 million or 13.6%, mainly due to the decrease of sales and grossprofit margin and higher employee expense, freight and vehicle expenses. Free brown spirits’ volume used for sales


73promotion as a percentage of domestic sales volume of brown spirits increased from 2.1% by average in 2005 to 2.7%in 2006.Net Profit of Baht 7,916 million decreased by Baht 1,072 million, or 11.9%, mainly due to the decrease of sales andgross profit margin as mentioned although the decrease of interest expense.Industrial Alcohol Business SegmentSales revenue was Baht 1,205 million reflected an increase of Baht 336 million or 38.7%, mainly due to the increase ofEthanol sales volume, which helped to partially compensate for the decrease of Alcohol 95 sales volume. Sales volume ofEthanol was 46.6 million litres, which increased by 124.1% and the average sales price was Baht 24.94 per litre, whichincreased by 42.3% over that of 2005. Overall sales volume for all industrial alcohol products in 2006 was 48.3 millionlitres, or a 9.3% decrease from 53.2 million litres in 2005.Gross profit of Baht 210 million decreased by Baht 188 million, or 47.2%, mainly due to high product cost arising fromhigher molasses prices and energy costs.EBITDA of Baht 163 million decreased by Baht 203 million or 55.5% mainly due to the decrease of gross profit marginand higher administration expenses arising from higher employee expense.


74Net Loss was Baht 22 million while net profit for 2005 wasBaht 151 million, a change of 114.6% mainly due to thedecrease of gross profit margin as mentioned and theincrease of interest expense.Related Business SegmentSales revenue was Baht 7,155 million increased byBaht 522 million or 7.9% mainly due to income fromcommercials during the live broadcast of the FIFA WorldCup 2006 in Q2, other sports marketing activities andinter-segment supply of raw materials and packagingmaterials.Gross profit of Baht 790 million increased by Baht 225million, or 39.8%, mainly due to the increase of sales andeffective cost control.EBITDA of Baht 604 million increased by Baht 371 millionor 159.2% mainly due to the increase of sales and grossprofit margin.Net Profit was Baht 216 million while net loss for 2005was Baht 1 million mainly due to the increase of salesand gross profit margin as mentioned and the decreaseof interest expense.Financial PositionAssetsTotal assets as at end of December 2006 was Baht85,580 million, a decrease of Baht 1,558 million, or 1.8%,compared with the end of 2005. Current assets decreased


75by Baht 2,814 million, mainly due to the decrease in cash and cash equivalents, prepaid excise tax, and finished goods.Non-current assets increased by Baht 1,256 million, mainly due to advance payment of royalties to spirits experts.LiabilitiesTotal liabilities as at end of December 2006 was Baht 33,026 million decreased by Baht 22,397 million, or 40.4%, mainlydue to the re-payment of loans from financial institutions with cash received from the May 2006 Initial Public Offering(IPO) and the July 2006 sale of over-allotment shares.The maturity of loans and bonds are as follows:Unit: Million BahtWithin Dec. 31, 2007 12,753Between Jan. 1, 2008 - Sep. 29, 2008 6,755Total 19,508Shareholders’ EquityTotal shareholders’ equity as at the end of December 2006 was Baht 52,554 million, an increase of Baht 20,839 million,or 65.7%, mainly due to the increase of share capital from the IPO amounting to Baht 3,110 million, and the premium oncommon shares after the IPO expense amounting to Baht 17,216 million. Net profit was Baht 10,055 million. Dividendpaid was Baht 8,042 million from profit for the year 2005 and partial for the year 2006.LiquidityCash and cash equivalents as at December 31, 2006, was Baht 1,920 million. The net decrease from the beginningof the period was Baht 1,478 million. Details of activities are as follows.Unit: Million BahtNet cash provided by operating activities 14,172Net cash used in investing activities (5,383)Net cash used in financing activities (10,244)Adjustment from financial statement translation (23)Net decrease in cash and cash equivalents in period (1,478)Cash and cash equivalents at beginning of period 3,398Cash and cash equivalents at end of period 1,920


76Net cash provided by operating activities of Baht 14,172 million was mainly derived from net income of Baht 10,055million and adjusted with non cash items, such as depreciation and amortization, of Baht 4,652 million, while workingcapital decreased by Baht 98 million and advance payment to experts amounted to Baht 2,000 million.Net cash used in investing activities of Baht 5,383 million was mainly due to the investment activities in property, plantand equipment of Baht 4,039 million.Net cash used in financing activities of Baht 10,244 million was mainly due to a dividend paid of Baht 8,042 million andthe decrease in bank overdrafts and short-term loans from financial institutions of Baht 33,405 million by repayment withmoney from the IPO and over-allotment shares of Baht 20,326 million and the increase of long-term loans and bonds byBaht 11,668 million.Financial RatiosDec. 31, 06 Dec. 31, 05Current Ratio (times) 1.28 0.66Total Debt to Equity Ratio (times) 0.63 1.75Net asset value per share (Baht) 2.21 1.44Total Debt to EBITDA (times) 0.95 1.94Funds from Operations (FFO) to Total Debt (%) 75.39 35.81


77Shareholder ReturnsDividendsThe current policy of the Board of Directors is to recommend to our shareholders a dividend of not less than 50% ofnet profits after deduction of all specified reserve. For the financial year ended 31 December 2006, the Board hasrecommended total dividend of Baht 5,524.21 million.2006 2005(Restated)Dividend for the year (Million Baht) 5,524.21 5,280.00Number of shares issued (Million shares) 25,110 22,000Interim dividend per share (Baht) 0.11 -Final dividend per share (Baht) 0.11 0.24Total dividend per share (Baht) 0.22 0.24Return on EquityReturn on Average Equity (%) 23.9% 31.6%Earnings Per ShareEarnings Per Weighted Average Ordinary Shares (Baht) 0.42 0.47


78Risk FactorsThaiBev has instituted systematic risk management for departments up to the corporate level, with a risk managementcommittee in place at each level. At the corporate level, the Corporate Risk Management Committee, consisting ofDirectors and Senior Management, is responsible for risk management throughout the Company. ThaiBev has defined riskmanagement as an integral part of planning and operations. To elaborate, each department must formulate annual plansand budgets, comprehensively addressing their risks. These risks are then collated for the Corporate Risk ManagementCommittee to define policies and periodically monitor risk management practices.At the department level, ThaiBev asks department heads to regularly assess risks, identify risk management measures,and update their work to the respective risk management committees.In addition, the Office of Internal Audit applies these identified risk factors to their annual audit plans to assess theefficiency of risk management of each department.Risks Related to Company Business1. An increase in taxes or a change in the method in which taxes are calculated may affect the demand for ourproducts, and could adversely affect our business, financial condition, results of operations and prospects.We pay excise taxes as well as municipal taxes and health promotion fund contributions on the alcoholic beverages weproduce. Increases in existing taxes or the imposition of new taxes on beer and spirits products could result in higher


79prices for consumers, which could, in turn, result in lower levels of consumption and, therefore, lower revenue fromsales. We may also have to absorb all or a portion of the impact. Each of these scenarios could adversely affect ourbusiness, financial condition, results of operations and prospects.2. Our growth prospects may be harmed if we are unable to expand into the premium segments of the beer andspirits markets.A key element of our strategy is to broaden our portfolio of brands by launching new brands to penetrate the premiumsegments of the market in order to increase our revenues. We believe that the premium market segments in Thailand forboth beer and spirits offer significant growth potential and we believe that there has been a shift from economy segmentbeers and spirits to these segments. Expanding our presence into these highly competitive segments will require us toinvest significantly in consumer marketing, brand promotion and sales and distribution development. We have limitedexperience in these segments. Any failure or inability on our part to successfully develop, promote and sell new beer orspirits brands for the standard or premium segments in Thailand would harm our prospects for growth, particularly ifdemand for these products increase and continues to erode the demand for our current portfolio of products, and couldadversely affect our business, financial condition, results of operations and prospects.We expect that the Kamphaengphet brewery expansion project will be completed in October 2007 and that it willincrease our total brewery capacity by 4,600 thousand hectoliters per annum to approximately 15,500 thousandhectoliters per annum. Our business strategy includes selling beer produced from our capacity increase in export


80markets, principally in Cambodia, Laos and other markets. We do not, however, have a history of sustained sales oflarge volumes outside Thailand and we cannot assure you we will be successful in implementing this strategy.We cannot assure you that we will be able to sell the additional beer we produce as a result of our expansion project.Our fixed costs will increase significantly as a result of this expansion and we may not be able to sell our beer products atprices that will provide us with commercially acceptable margins or that will not cause us to incur a loss. If we are unableto sell our additional beer capacity on a commercially acceptable basis, we may have to reduce our beer production,which would adversely affect the utilization of our breweries and may lower our margins. Any failure or inability on ourpart to sell the additional beer we produce would adversely affect our business, financial condition, results of operationsand prospects.3. Price increases in, and shortages of, raw materials or packaging materials could increase our production costsand disrupt our business.We do not produce most of the raw materials or the packaging materials necessary for production and sale of ourproducts and depend upon third-party suppliers. Although we seek to purchase certain of these raw materials once ayear in advance of production, we cannot assure you that these suppliers will be able to meet our requirements in full orat all. Our results of operations may be affected by the availability and pricing of raw materials and packaging materials,including molasses, malt, hops, water, glass bottles, labels, caps, and other packaging products. Some of these materialsare priced in currencies other than in Baht. Changes in global supply and demand may substantially affect the price ofthese materials and may also, along with weather conditions, government controls, exchange rates, currency controlsand other factors, affect our cost of raw materials and packaging materials. A substantial increase in the prices of thesematerials would increase our production costs, which would reduce our profit margins if we were unable to recover theseadditional production costs from our consumers. In addition, a sustained interruption in the supply of these materialscould lead to a significant increase in their prices or could impede our production processes if we were unable to findsuitable substitutes. The occurrence of any of these factors could increase our production costs and disrupt ourbusiness, which could have a material adverse effect on our business, financial conditions, results of operations andprospects.4. Our operations are subject to extensive regulation. Changes in the regulatory environment may cause us to incuradditional costs or limit our business activities.As a producer of beverage products, we are subject to production, packaging, quality, labeling and distribution standards


81in Thailand. We are also subject to regulations in countries to which we export our products, in particular regulationsrelating to packaging, quality, labeling and distribution. The operations of our production and distribution facilities aresubject to various Governmental environmental laws and workplace regulations, including laws and regulations enactedby the Ministry of Public Health, Ministry of Commerce and Ministry of Finance. Compliance with, or any violation of,current and future laws or regulations could require material expenditures by us or otherwise have a material adverseeffect on our business, financial condition, results of operations and prospects.We are subject to restrictions on advertising our beer and spirits products. These restrictions could affect our ability tomarket our existing and future products, which would have a material adverse effect on our business, financial condition,results of operations and prospects.Any future restriction on the period of time an entertainment venue is permitted to operate and sell alcohol products couldhave a material adverse effect on our business, financial condition, results of operations and prospects.5. Compliance with, or our failure to comply with, environmental laws and regulations applicable to us may have amaterial adverse effect on our business, financial condition, results of operations and prospects.We are subject to extensive and increasingly stringent environmental, health and safety laws and regulations governingair pollutant emissions, discharge of treated wastewater and other aspects of our operations. In addition, some of theselaws and regulations require our production facilities to operate under permits that are subject to renewal or modifications.Typically, these laws provide for substantial fines and potential criminal sanctions for violations. Violations of these lawscould also result in permit revocations and facility shutdowns. Several of these laws and regulations also imposeextensive requirements relating to investigation and cleanup of contamination, and we may be required to bear some orall of these costs regardless of fault.We have incurred, and expect to continue to incur costs to comply with environmental, health and safety laws andregulations. In addition, new laws and regulations, stricter enforcement of, or changes to, existing laws and regulations,the discovery of previously unknown contamination or the imposition of new clean-up requirements could require us toincur additional costs in the future. These may require us to incur material costs and expenses beyond those currentlyanticipated. Any of the foregoing factors could materially adversely affect our business, financial condition, results ofoperations and prospects.


826. Our business and our expansion plans are capital-intensive and subject to a number of risks and uncertainties.The beer industry is capital-intensive. Our ability to introduce new products and maintain our production capabilitydepends on continued capital spending, including constructing our new facilities and maintaining and upgrading ourexisting facilities. In addition, we continually monitor developments in the beverage markets in Thailand and SoutheastAsia for opportunities to expand into new businesses.Historically, we have relied on external debt financing, equity financing and internally generated cash flows for our capitalinvestments. We expect to finance any future expansions of our business or improvements of our breweries anddistilleries plant through additional indebtedness and internally generated cash flows. If we are unable to obtain additionaldebt financing when needed on commercially acceptable terms, we may require additional equity financing, which coulddilute your investment in our shares. In addition, our inability to secure necessary financing for capital expendituresnecessary to maintain or expand our facilities could adversely affect our business, financial condition, results ofoperations and prospects.7. We depend on the services of our senior executives and managerial personnel, and if we are not able to retain oursenior personnel or attract suitable replacements, our business could be negative impacted.We are currently managed by a small number of senior executive officers and employees, many of whom have manyyears of experience at our operating companies and in the beverage industry and would be difficult to replace. As aresult, the loss of some senior personnel, or our inability to recruit sufficiently qualified personnel, could materiallyadversely affect our business.We believe that our continued growth and success largely depends on our ability to retain skilled, qualified and experiencedmanagerial, sales, marketing and production personnel and to train our staff to produce and to sell successfully theproducts that we offer. If we are unable to attract, retain and motivate highly skilled, qualified and experienced personnel,we could lose customers and suffer reduced profitability. Even if we are successful in attracting and retaining suchpersonnel, competition for such employees may significantly increase our compensation costs and adversely affect ourbusiness, financial condition, results of operations and prospects.


838. Anti-monopoly legislation enacted by Thailand in 1999 may adversely affect our business, financial condition,results of operations and prospects.The Thai Trade Competition Act of 1999 (‘TCA’) prohibits various anti-competitive practices and empowers the ThaiTrade Competition Commission (‘TTCC’) to order a company that dominates a market to suspend, cease, or vary itsmarket share. In addition, under the TCA, the TTCC has the power to issue written orders to require a company that hasengaged in unfair business practices to suspend, cease, rectify or vary its business practices. The government isconsidering the standard for determining the definition of market dominance in a particular industry, to be approved bythe Cabinet. Because we are the largest beer and spirits producer in Thailand and have a leading market share inThailand for many of our products, we may, from time to time, be subject to litigation from competitors and others foralleged violations of these provisions. Consequently, the TCA and any regulations promulgated under it could have anadverse effect on our business, financial condition, results of operations and prospects.In 2006, the Risk Management Committee completed its plan for managing the above-mentioned risks, thereby loweringrisk levels, including the forward purchase of molasses, malt and hops, together with adequate and suitable inventories;additional measures for managing packaging, glass bottles, labels and caps through collaboration with business partnersin demand-supply management; and the digging of pools and investment in the brewery’s water system – therebylowering production costs from those of using ground water, and at the same time, managing the risk of the authority’spossible ban on the use of ground water as well as preventing shortage of water.The Risk Management Committee will hold at least four meetings each year to review its measures and approvecontingency budgets for risk management to ensure that all risks are responsibly managed and plans meticulouslyimplemented – thereby alleviating potential losses.


84MilestonesAnnual Report 2006 - Thai Beverage Public Company Limited


Credit Rating AnnouncementAnnual Report 2006 - Thai Beverage Public Company Limited87TRISAAupgradedthe Company rating from A+ toStableand gave aoutlookIn early 2006, the Company had a plan to locally raise funds and engaged TRIS Rating Co., Ltd (“TRIS”) to determineour domestic credit rating. TRIS initially rated the Company A+ and gave a “Stable” outlook. Later on, the Companyraised funds by offering debentures at the amount of Baht 10,000 million. At the annual review, the Company gaineddebentures outstanding at Baht 7,500 million. TRIS, therefore, upgraded the Company and its senior guaranteeddebentures rating of the Company to “AA-” from “A+” and gave the company a “Stable” outlook. The upgradereflects the Company’s strengthened capital structure after an initial public offering (IPO) in May 2006. Almost all theproceeds were used to repay the Company’s outstanding debt at the time.To gain an international credit rating in order to establish Company’s overseas credit flexibility in the financial markets,the Company engaged Standard and Poors (“S&P”) and Moody’s Investors Service Pty Limited (“Moody’s”), bothwell-recognized globally in their field. S&P assigned a “BBB” rating with a “Stable” outlook, and Moody’s rated theCompany “Baa2” again with a “Stable” outlook.(Note: The Thailand Country Rating from TRIS is “AAA”, “BBB+” from S&P and “Baa1” by Moody’s).


88AwardsAnnual Report 2006 - Thai Beverage Public Company LimitedThai BeverageWins AwardsOnward to the NumberOne spot with the sharesof Thai Beverage PLC. ...the pride of Thai businesses.Thai Beverage PLC. wins the “2006 Merit Awardfor transparency among newly-listed companies(New Issue) on the Singapore Exchange”The recognition was conferred by the SecuritiesInvestors Association of Singapore (SIAS), establishedto monitor companies’ practices to ensure stringentperformance for the maximum benefit of smallinvestors, as well as for data investigation and researchon all aspects of investment.SIAS initiated four categories of Investors’ ChoiceAwards, namely Corporate Governance, Merit (MostTransparent Company), Best Finance Journalist, andExemplary Shareholder Awards.


89IR Magazine accolade for “Best Investor Relations”In the annual IR Magazine South East Asia Conferenceand Awards sponsored by IR Magazine – a leadingpublication popularly read by investors in Singaporeand worldwide – Thai Beverage PLC. garnered the“2006 Best Investor Relations in the Singapore Marketby a Thai Company”.According to the magazine, Thai Beverage PLC. comesacross as an admirable company listed in Singaporefor its integrity and proper treatment of investors andshareholders, as well as those showing interest in itsshares, with commendable sincerity.Acclaim for “Capital Markets Deal of the Year 2006”Most recently, in February 2007, IFR Asia magazine,a regional influential capital markets magazine,recognized Thai Beverage PLC.’s highly successfulinitial public offering, pronouncing it the “ThailandCapital Markets Deal of the Year 2006”. The magazinenoted that it had given the prize to ThaiBev for its havingovercome all challenges and for sheer persistence inthe face of many challenges.


90Corporate Governance ReportAnnual Report 2006 - Thai Beverage Public Company LimitedAs a newly-listed foreign company on the Singapore Exchange, we value our commitment to good corporate governanceand endeavor to adhere to the principles and guidelines of the Singapore Code of Corporate Governance 2005. In 2006,we were proud to receive a recognition of our efforts a “2006 Merit Award for transparency among newly-listedcompanies (New Issue) on the Singapore Exchange” from the Securities Investors Association of Singapore (SIAS)and the “Best Investor Relations in the Singapore Market” award at the IR Magazine South East Asia awards. Recently,we also received the “Thailand Capital Markets Deal of the Year Award” for 2006 from IFR Asia.The Board’s Conduct of AffairsPrinciple 1Board of DirectorsOur Board of Directors oversees the Company’s business and affairs with shareholder approval and by followingapplicable laws. The Board must exercise good business judgment and act in good faith for the best interests of theCompany.The Board met 10 times in 2006, and the following table details directors’ attendance up to December 31, 2006:Number ofAttendance/Total ofName Position Meetings1. Mr. Charoen Sirivadhanabhakdi Chairman/Executive Chairman [8/10]2. Khunying Wanna Sirivadhanabhakdi Vice Chairman/1 st Executive Vice Chairman [8/10]3. Mr. Narong Srisa-an Vice Chairman/2 nd Executive Vice Chairman [9/10]4. Mr. Komen Tantiwiwatthanaphan Vice Chairman/3 rd Executive Vice Chairman [10/10]5. Mr. Paisal Chevasiri* Vice Chairman/4 th Executive Vice Chairman [9/10]6. Mr. Puchchong Chandhanakij Director/5 th Executive Vice Chairman [10/10]7. Mr. Staporn Kavitanon Independent Director and Audit Committee Chairman [9/10]8. Prof. Kanung Luchai Independent Director and Audit Committee Member [10/10]9. Mr. Manu Leopairote Independent Director and Audit Committee Member [9/10]* Mr. Paisal Chevasiri resigned from the Board effective from February 26, 2007


91Number ofAttendance/Total ofName Position Meetings10. Mr. Ng Tat Pun (1) Independent Director and Audit Committee Member [4/10]11. Mr. Michael Lau Hwai Keong (1) Independent Director [5/10]12. Prof. Pornchai Matangkasombut (1) Independent Director [4/10]13. Gen. Dr. Choo-Chat Khumbhu Na Ayudhya (1) Independent Director [3/10]14. Mr. Sakthip Krairiksh Independent Director [6/10]15. Mr. Vivat Tejapaibul Director [10/10]16. Mr. Samut Hatthasing President [10/10]17. Ms. Kanoknart Rangsithienchai Director and Executive Vice President [10/10]18. Mr. Thapana Sirivadhanabhakdi Director and Executive Vice President [10/10]19. Mr. Sithichai Chaikriangkrai Director and Senior Vice President [9/10]20. Dr. Pisanu Vichiensanth Director and Senior Vice President [9/10]21. Mr. Ueychai Tantha-Obhas Director and Senior Vice President [9/10]22. Mr. Chukiet Tangpongprush Director and Senior Vice President [10/10]Remark (1) Mr. Ng Tat Pun, Mr. Michael Lau Hwai Keong, Prof. Pornchai Matangkasombut and Gen. Dr. Choo-ChatKhumbhu Na Ayudhya were appointed in March 2006Matters Requiring Board ApprovalOur Board is ultimately responsible for the administration of the Company’s affairs and for compliance with the law,Articles of Association of the Company and the Company’s objectives. It applies shareholders’ resolutions in good faith,vigilantly safeguarding the best interests of the Company. In addition to its general oversight of management, our Boardensures that the Company and its subsidiary companies comply with the Listing Manual of the Singapore Exchange.In brief, the Board monitors major plans and activities, and oversees control of subsidiary companies.


93In 2006, we were proudto receive recognition of ourefforts with the Merit Award forMost TransparentCompany Awardin SingaporeTrainingAll directors have passed the Director Accreditation Program (DAP) of the Institution of Directors in Thailand. We alsoencourage and support directors to understand Singapore Law and the Listing Manual applicable to our Companythrough in-house training.All directors receive a clear explanation of their roles and responsibilities at the time of their proposed appointmentto the Board.Board Composition and GuidancePrinciple 2Our Board consists of 22 directors, including eight independent directors, or more than one-third. Each director eitherhas long-term experience in business or attained honorary positions.


94Executive BoardThe Board appointed an Executive Board, which consists of 13 members; some of them are also top executive officersof the Company. The Board granted them the authority to perform their duties. To help the Board run the Companyproperly, it established four committees: the Audit Committee (AC), Risk Management Committee (RMC), NominationCommittee (NC) and Remuneration Committee (RC).Audit CommitteeThe Audit Committee members are Mr. Staporn Kavitanon, Prof. Kanung Luchai, Mr. Manu Leopairote, and Mr. Ng Tat Pun.The Chairman of the Audit Committee is Mr. Staporn Kavitanon.Risk Management CommitteeThe Risk Management Committee members are the Directors, Mr. Narong Srisa-an, Mr. Samut Hatthasing, Ms. KanoknartRangsithienchai, Mr. Thapana Sirivadhanabhakdi, Mr. Chukiet Tangpongprush, Mr. Ueychai Tantha-obhas, Mr. SithichaiChaikriangkrai, Dr. Pisanu Vichiensanth, Mr. Puchchong Chandhanakij, and the employees, Mr. Chalerm Pornrutchakit,Mr. Pichit Burapavong, Mr. Tawatchai Tangjaitrong, Mr. Mahin Kraivixien, and Mr. Thidi Suwanarat. The Chairman of theRisk Management Committee is Mr. Narong Srisa-an.Nomination CommitteeThe Nomination Committee members are Mr. Staporn Kavitanon, Mr. Manu Leopairote, and Khunying WannaSirivadhanabhakdi. The Chairman of the Nomination Committee is Mr. Staporn Kavitanon.


95Remuneration CommitteeThe Remuneration Committee members are Mr. Staporn Kavitanon, Mr. Manu Leopairote, and Prof. Kanung Luchai.The Chairman of the Remuneration Committee is Mr. Staporn Kavitanon.Normally the Executive Board meets once a month to oversee business operations, or more than once to consider andapprove any important or urgent matter.The Board also appoints executive members to hold directorships in subsidiaries to monitor the Company’s interests.The Executive Board’s responsibilities are to:• prepare and propose business plans, targets, operational plans, business strategies and annual budgets for the Boardof Directors;• determine business plans, budgets and management authorizations for approval;• monitor the operations of the Group, that they are in line with business plans, targets, operational plans, businessstrategies, budgets and management authorizations approved by our Board to facilitate corporate efficiency andappropriate to business conditions;• propose investments, borrowing or lending, including acting as a guarantor if that is in line with the normal business ofthe Group;• approve payments as determined by our Board;• determine the organization and management structure of the Group for the Board;


96• supervise and approve all employment and salary matters relating to the Company (other than matters which are withinthe purview of the RC);• approve the appointment of the Company’s representatives to the Board and/or subsidiaries’ subcommittees to ensurecompliance with the Company’s business policies, goals, plans, strategies, budget and other management powersapproved by the Board, to improve efficiency and facilitate the business;• supervise and approve operational issues; at times appointing or authorizing persons to engage specified activities onbehalf of the Executive Board, or appoint subcommittees with particular knowledge and expertise to manage andscreen work before discussion by the Executive Board, provided the Executive Board is entitled to repeal or modify thescope of such authorization; and• perform any other activity delegated by the Board.No one, including the Executive Board, is authorized to approve any transaction in which the board or the individualhas or may have a conflict of interest, or where the transactions require the approval of the Board and/or of aShareholders’meeting.Chairman and Chief Executive OfficerPrinciple 3Our Chairman and Chief Executive Officer is the same person. In support of good governance, however, our Chairmanencourages constructive relations between the Board and management, executive directors and non-executive directors.In this regard, our Company appointed an independent non-executive director to act as the Lead Independent Directorfor Interested Person Transactions.Board MembershipPrinciple 4In order to assure a transparent process for the appointment of new directors to the Board, we established theNomination Committee (NC) to review and assess candidates for directorships (including executive directorships)before making recommendations to our Board. The NC also reviews the retirement and re-election of directors ateach annual general meeting under our Articles of Association and makes recommendations to the Board.The NC consists of three directors with a majority of independent directors, including the Chairman. It adopted a charterand proposed it to the Board for approval.


97The Company also established a Remuneration Committee (RC) that makes recommendations to the Board, for it toendorse remuneration policies and guidelines, and to set the remuneration for Directors, Executive Directors, Presidents,Executive Vice Presidents and Assistant Vice Presidents.In performing their roles, our NC and RC adhere to the law and the Listing Manual applicable to our Company.Board PerformancePrinciple 5Our Board members include self-assessment in their performance, and take the result of business operations into theirconsideration.Access to InformationPrinciple 6We are committed to providing our Board members with adequate, complete, continuous and timely information beforeBoard meetings. The Board members have separate and independent access to the Company Secretary. The CompanySecretary, in consultation and cooperation with the Office of Legal Affairs, is responsible for advising the Board, throughthe Chairman, on all governance matters. This is to ensure compliance with legal and regulatory requirements. The Boardapproves the appointment and the removal of the Company Secretary. This year the Company Secretary attended allBoard meetings and Executive Board meetings.Procedure for Developing Remuneration PoliciesPrinciple 7The RC reviews matters concerning the remuneration of Board members, Presidents, Executive Vice Presidents andAssistant Vice Presidents in consultation with the Chairman of the BoardIf a member of the RC has an interest in a matter deliberated by the Committee, he or she will abstain from participatingin the review and approval process for that matter.


98Level and Mix of RemunerationPrinciple 8The components of remuneration are structured to reward both executive and non-executive directors based oncorporate and individual performance, including our two top executives. The level of remuneration reflects theirexperience and dedication. The remuneration bands rank from A to H as follows.Remuneration bands:A refers to remuneration below the equivalent of S$ 250,000B refers to remuneration between the equivalent of S$ 250,000 and S$ 499,999C refers to remuneration between the equivalent of S$ 500,000 and S$ 749,999D refers to remuneration between the equivalent of S$ 750,000 and S$ 999,999E refers to remuneration between the equivalent of S$ 1,000,000 and S$ 1,249,999F refers to remuneration between the equivalent of S$ 1,250,000 and S$ 1,499,999G refers to remuneration between the equivalent of S$ 1,500,000 and S$ 1,749,999H refers to remuneration between the equivalent of S$ 1,750,000 and S$ 1,999,999The 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.Disclosure of RemunerationPrinciple 9In year ending December 31, 2006, directors and two top executives received the following remuneration:


99Name of DirectorsRemuneration Band1. Mr. Charoen Sirivadhanabhakdi [D]2. Khunying Wanna Sirivadhanabhakdi [B]3. Mr. Narong Srisa-an [H]4. Mr. Komen Tantiwiwatthanaphan [B]5. Mr. Paisal Chevasiri* [B]6. Mr. Puchchong Chandhanakij [B]7. Mr. Staporn Kavitanon [A]8. Prof. Kanung Luchai [A]9. Mr. Manu Leopairote [A]10. Mr. Ng Tat Pun [A]11. Mr. Michael Lau Hwai Keong [A]12. Prof. Pornchai Matangkasombut [A]13. Gen. Dr. Choo-Chat Khumbhu Na Ayudhya [A]14. Mr. Sakthip Krairiksh [A]15. Mr. Vivat Tejapaibul [A]16. Mr. Samut Hatthasing [H]17. Ms. Kanoknart Rangsithienchai [D]18. Mr. Thapana Sirivadhanabhakdi [C]19. Mr. Sithichai Chaikriangkrai [C]12. Dr. Pisanu Vichiensanth [C]21. Mr. Ueychai Tantha-Obhas [C]22. Mr. Chukiet Tangpongprush [B]23. Mr. Panote Sirivadhanabhakdi** [-]* Mr. Paisal Chevasiri resigned from the Board effective from February 26, 2007** Mr. Panote Sirivadhanabhakdi was appointed to the Board effective from February 27, 2007


100Top ExecutivesRemuneration Band1. Mr. Sawat Sopa [B]2. Mr. Saikeaw Vongpisethkul* [A]* Started in December 2006(Remark: 1 S$ = Baht 24)AccountabilityPrinciple 10The Board is responsible for providing a balanced and understandable assessment of the Company’s performance, andfor providing shareholders with quarterly and annual financial reports. The financial statements for the first three quartersare released to shareholders within 45 days of the end of each quarter. The annual result is released within 60 days ofthe end of each financial year.Audit CommitteePrinciple 11The Board appointed an AC, which consists of four independent directors: three Thais and one Singaporean. Theirresponsibilities are clearly set forth in the Audit Committee Charter, for instance, assessing the adequacy andeffectiveness of the internal controls, preparing the process of financial statements and information disclosures andreviewing the compliance with applicable laws, regulations and rules of the Stock Exchange of Thailand and theSingapore Exchange. This includes internal investigations and consideration of Interested Persons Transactionsto prevent an occurrence of conflict of interests.Internal ControlsPrinciple 12Our Board values a sound management internal control system. To safeguard shareholders’ investments and theCompany’s assets, it appointed an Executive Board, each member of which oversees different departments andbusiness units to ensure the adequacy of financial, operational and compliance controls, including risk managementpolicies.


101In support of this, the Board also assigned the Office of Corporate Secretariat to oversee compliance with the law andregulations concerning public companies.Based on the information provided to it, the AC believes that the system of internal controls and risk managementis adequate.Internal AuditPrinciple 13The Company established the Office of Internal Audit to assist the Board through Audit Committee in promoting soundrisk management and good corporate governance by assessing the adequacy and effectiveness of the internal controlsfor key businesses and operations in areas described in the audit plan. Annual audit schedules ensure that theperformance of internal audit is accurate.Communication with ShareholdersPrinciple 14The Company has adopted the practice of timely disclosure, in part by establishing an Investor Relations Unit, headedby Mr. Richard W. Jones, who has more than 10 years’ experience in this area. The unit arranges quarterly briefingsfollowing 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 thepolicies and strategies of the Company so that investors have a good understanding of them. Investor Relations providestimely detailed information via the corporate website. The unit also reports to management about investors’ commentsand concerns. Contact information for the Investor Relations Unit appears in this annual report or on the investor relationssection of the corporate website http://www.thaibev.com/set/investor.html.


102Corporate Social Responsibility ReportAnnual Report - Thai Beverage Public Company LimitedIn the belief that it is our duty to play an active role in national development, to better our society, and to assist those inneed, Thai Beverage Public Company Limited (“ThaiBev”) has a long history of contribution to projects and activities todisplay our loyalty to the monarchy and improve society, education, sports, public health, safety, and dissemination of agood reputation for Thailand. The following accounts describe our major contributions in 2006:Loyalty to the MonarchyThaiBev sponsored a grand exhibition to commemorate the 60 th Anniversary of HM the King’s Accession to the Throneat Muang Thong Thani in Bangkok at a budget of Baht 30 million. It also supported celebration of the same event inBangkok and at the Royal Flora Ratchaphruek Exposition in Chiang Mai, worth about Baht 60 million. In addition, itsponsored a singing contest of The Royal Anthem among secondary schools to commemorate the 60 th Anniversary ofHM the King’s Accession to the Throne at a budget of Baht 11 million.Helping Victims of Natural DisastersThe distribution of 200,000 blankets to poor villagers in the northern region of Thailand during the cold season has beenthe Company’s flagship social contribution. Now in its seventh year, the program is worth Baht 30 million. ThaiBev alsoregularly donates money and drinking water to flood victims in various regions of the country.EducationThaiBev also spent over Baht 2 million to support community schools and other educational programs.


103SportsThaiBev continued its soccer development and training program for talented young Thai players with Everton coaches,as well as supporting the national team and local football clubs, at a budget of roughly GBP 250,000 (Baht 17.5 million)per year. ThaiBev also sponsored the Chang-Everton Cup soccer tournament for 12 schools in Ban Nam Khem,Phang-nga, southern Thailand, as part of the post-tsunami support in affected areas. This was one of the Prince ofWales’ International Business Leadership Forum tsunami support projects, worth some Baht 500,000. ThaiBev alsosupported other sports, including table-tennis, swimming, volleyball and snooker, under its sports development programat a budget of over Baht 18 million.SafetyTogether with the Highway Police Department, ThaiBev distributed 13,000 crash helmets to motorcyclists; put up“Don’t Drive Drunk” billboards around Bangkok and distributed 100,000 anti-drowsy driving car stickers to promote roadsafety and to prevent road accidents and injuries, at a budget of Baht 3 million under the ThaiBev Safe Driving Program.Public HealthThe Company built a health clinic in Kamphaengphet to serve the local community, supported by regular visits of doctorsfrom Bangkok, at a budget of Baht 18.5 million.National ReputationThaiBev adopted “Chawang”, a bull elephant at the Singapore Night Safari, and donated S$50,000 (Baht 1.25 million) tothe Singapore Wildlife Conservation Fund. It also sponsored the Singapore Exchange’s annual Bull Run charity run andcontributed S$100,000 (Baht 2.5 million) for underprivileged children and youths.


104Audit Committee ReportAnnual Report 2006 - Thai Beverage Public Company LimitedThe Audit Committee of the Board of Directors (the Committee) is comprised of four directors named below.1. Mr. Staporn Kavitanon Chairman of the Audit Committee2. Mr. Kanung Luchai Member of the Audit Committee3. Mr. Manu Leopairote Member of the Audit Committee4. Mr. Ng Tat Pun Member of the Audit CommitteeEach member of the Committee is an independent director who meets the independence, experience and otherqualification requirements of the Stock Exchange of Thailand and the Securities and Exchange Commission.The Committee has reviewed and discussed the Company’s audited financial statements with Management and KPMGPhoomchai Audit Limited, the Company’s external auditor for 2006, in order to express an opinion of the conformity onthe Company’s audited financial statements with generally accepted accounting principles. The Committee also reviewedand expressed an opinion on audit plan as well as considered results of the audit from the Company’s internal auditdivision to ensure that the internal control system is adequate and appropriate.The Committee has recommended to the Board to propose the continuous nomination of KPMG Phoomchai AuditLimited as the Company’s external auditor for the year 2007 and the remuneration to the Ordinary General Meetingof Shareholders for approval.In reliance on the reviews and discussions referred to above, the Committee has its opinion that the Company has anadequate internal control and the Company’s financial statement is fairly presented in accordance with the generallyaccepted accounting principles.Staporn KavitanonChairman of the Audit CommitteeFebruary 26, 2007


Audit Report of Certified Public AccountantTo the shareholders of Thai Beverage Public Company Limited 105I have audited the accompanying consolidated and separate balance sheets as at 31 December 2006 and 2005, and therelated statements of income, changes in shareholders’ equity and cash flows for the years then ended of Thai BeveragePublic Company Limited and its subsidiaries, and of Thai Beverage Public Company Limited, respectively. The Company’smanagement is responsible for the correctness and completeness of information presented in these financial statements.My responsibility is to express an opinion on these financial statements based on my audits.I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan andperform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating 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 2006 and 2005 and the results of operations and cash flows for the years thenended 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 InternationalFinancial Reporting Standards is not a required part of the basic financial statements under generally accepted accountingprinciples in Thailand, but it is presented in Note 33 to the notes to financial statements for information purposes only.I have not audited or reviewed such information and therefore do not express any audit opinion or review report thereon.(Nirand Lilamethwat)Certified Public AccountantRegistration No. 2316KPMG Phoomchai Audit Ltd.Bangkok 27 February 2007


106Thai Beverage Public Company Limited and its SubsidiariesBalance SheetsAs at 31 December 2006 and 2005AssetsCurrent assetsCash and cash equivalentsCurrent investmentsTrade accounts receivable, netShort-term loans to andamounts due from related partiesInventories, netOther current assetsTotal current assets Non-current assetsInvestments accounted for using the equity method Other long-term investments, netProperty, plant and equipment, netIntangible assets, netOther non-current assets, netTotal non-current assetsTotal assetsConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)6 1,919,576,970 3,397,994,012 15,622,582 18,562,8844,358,600 9,999,590 - - 7 1,317,930,493 1,463,650,900 - - 5 64,334,648 157,680,524 16,536,017,371 15,041,591,940 8 28,315,158,270 28,747,016,796 - - 9 1,914,238,542 2,572,998,766 16,988,878 9,556,739 33,535,597,523 36,349,340,588 16,568,628,831 15,069,711,563 10 135,490,042 128,781,575 69,391,025,129 68,045,384,180 11 3,753,619 4,462,473 - - 12 49,532,143,469 50,027,842,938 845,926,385 751,334,172 13 355,424,945 513,688,093 12,353,346 8,271,709 14 2,017,102,446 112,912,559 357,128,650 68,000 52,043,914,521 50,787,687,638 70,606,433,510 68,805,058,061 4 85,579,512,044 87,137,028,226 87,175,062,341 83,874,769,624


107Liabilities and shareholders’ equity Current liabilitiesBank overdrafts and short-termloans from financial institutionsTrade accounts payableShort-term guaranteed bondsCurrent portion of long-termguaranteed bondsCurrent portion of long-term loansShort-term loans from andamounts due to related partiesIncome tax payableOther current liabilitiesTotal current liabilitiesNon-current liabilitiesLong-term guaranteed bondsLong-term loans from financialinstitutionsExcess of share losses over costsof investmentsOther non-current liabilities Total non-current liabilitiesTotal liabilitiesConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)15 6,753,305,295 40,158,625,134 3,029,559,265 36,600,000,000 16 2,275,670,644 1,691,136,338 - - 15 2,200,000,000 - 2,200,000,000 - 15 2,300,000,000 - 2,300,000,000 - 15 1,500,000,000 1,086,600,000 1,500,000,000 - 5 4,837,787,398 4,164,857,315 17,457,028,757 15,610,981,855 2,180,870,323 2,528,980,543 47,791,738 97,049,614 17 4,103,314,358 5,597,963,143 394,209,562 186,751,240 26,150,948,018 55,228,162,473 26,928,589,322 52,494,782,709 15 3,000,000,000 - 3,000,000,000 - 15 3,755,000,000 - 3,755,000,000 - 10 - - 937,917,181 677,227 120,008,188 194,362,158 - 13,281,250 6,875,008,188 194,362,158 7,692,917,181 13,958,477 4 33,025,956,206 55,422,524,631 34,621,506,503 52,508,741,186 The accompanying notes are an integral part of these financial statements


108Thai Beverage Public Company Limited and its SubsidiariesBalance SheetsAs at 31 December 2006 and 2005Shareholders’ equityShare capitalAuthorised share capitalIssued and paid-up share capitalDifference arising from common control transactionsReservesShare premiumCurrency translation changesFair value changes and revaluation surpluses Retained earningsAppropriated - legal reserveUnappropriatedTotal shareholders’ equityTotal liabilities and shareholders’ equityConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)1829,000,000,000 29,000,000,000 29,000,000,000 29,000,000,000 25,110,025,000 22,000,000,000 25,110,025,000 22,000,000,000 4 (17,141,406,365) (15,630,789,676) (17,141,406,365) (15,979,264,833)1917,215,736,603 - 17,215,736,603 - (19,508,334) (5,341,471) (19,508,334) (5,341,471)6,586,263,579 6,584,735,444 6,586,263,579 6,584,735,444 19 1,700,000,000 1,110,000,000 1,700,000,000 1,110,000,000 19,102,445,355 17,655,899,298 19,102,445,355 17,655,899,298 4 52,553,555,838 31,714,503,595 52,553,555,838 31,366,028,438 85,579,512,044 87,137,028,226 87,175,062,341 83,874,769,624The accompanying notes are an integral part of these financial statements


Thai Beverage Public Company Limited and its SubsidiariesStatements of IncomeFor the years ended 31 December 2006 and 2005109RevenuesRevenue from salesInterest incomeManagement feesOther incomeShare of profits from investmentsaccounted for using the equity methodTotal revenuesExpensesCost of salesSelling and administrative expensesTotal expensesProfit before interest andincome tax expensesInterest expenseIncome tax expenseNet profitBasic earnings per shareConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)597,797,921,895 94,903,412,262 - - 56,452,361 71,522,742 858,621,337 616,562,118 - - 3,432,470,973 2,349,829,494 21 77,938,829 193,261,442 4,873,832 2,026,646 23,684,083 22,035,776 9,128,590,784 9,812,306,781 97,955,997,168 95,190,232,222 13,424,556,926 12,780,725,039 569,325,121,958 65,187,736,555 - - 22 12,684,556,582 13,180,252,286 943,322,290 722,625,339 82,009,678,540 78,367,988,841 943,322,290 722,625,339 15,946,318,628 16,822,243,381 12,481,234,636 12,058,099,700 1,568,651,172 1,741,805,230 2,253,267,473 1,775,183,024 4,322,890,312 4,743,184,044 149,318,356 150,137,320 4 10,054,777,144 10,337,254,107 10,078,648,807 10,132,779,356 4, 24 0.42 0.47 0.42 0.46 The accompanying notes are an integral part of these financial statements


Thai Beverage Public Company Limited and its SubsidiariesStatements of Changes in Shareholders' EquityFor the years ended at 31 December 2006 and 2005Balance at 1 January 2005Changes in shareholders' equity for 2005Surplus on property revaluationUnrealised loss on investmentCurrency translation changesNet expense recognised directly in shareholders' equityNet profitTotal recognised income and expenseConsideration paid to shareholders of subsidiariesfor the common control transactionsIncrease in share capital in subsidiaries beforebusiness restructuringLegal reserveDividendsBalance at 31 December 2005Changes in shareholders' equity for 2006Surplus on property revaluationCurrency translation changesNet expense recognised directly in shareholders' equityNet profitTotal recognised income and expenseConsideration paid to shareholders of subsidiariesfor the common control transactionsIncrease in share capital in subsidiaries beforebusiness restructuringLegal reserveDividendsIssue of share capitalBalance at 31 December 2006NoteIssued andpaid-upshare capitalDifference arisingarising from commoncontrol transactions Share premiumConsolidated (2005 : Restated)Reserve Retained earningsCurrency translationchangesFair value changesand revaluationsurpluses Legal reserve UnappropriatedTotalshareholders' equity(in Baht)22,000,000,000 (6,218,164,735) _ (2,980) 6,699,299,782 2,500,000 11,270,619,942 33,754,252,00919 - - - - (114,483,767) - - (114,483,767)- - - - (80,571) - - (80,571)- (17,693,932) - (5,338,491) - - - (23,032,423)- (17,693,932) - (5,338,491) (114,564,338) - - (137,596,761)4 - 204,474,751 - - - - 10,132,779,356 10,337,254,107- 186,780,819 - (5,338,491) (114,564,338) - 10,132,779,356 10,199,657,3464 - (9,645,998,710) - - - - (9,645,998,710)4 - 46,592,950 - - - - - 46,592,950- - - - - 1,107,500,000 (1,107,500,000) -- - - - - - (2,640,000,000) (2,640,000,000)22,000,000,000 (15,630,789,676) _ (5,341,471) 6,584,735,444 1,110,000,000 17,655,899,298 31,714,503,595- - - - 1,528,135 - - 1,528,135- (8,543,855) - (14,166,863) - - - (22,710,718)- (8,543,855) - (14,166,863) 1,528,135 - - (21,182,583)- (23,871,663) - - - - 10,078,648,807 10,054,777,144- (32,415,518) - (14,166,863) 1,528,135 - 10,078,648,807 10,033,594,5614 - (1,505,240,976) - - - - - -4 - 27,039,805 - - - - - 27,039,805- - - - - 590,000,000 (590,000,000) -26 - - - - - - (8,042,102,750) (8,042,102,750)18 3,110,025,000 - 17,215,736,603 - - - - 20,325,761,60325,110,025,000 (17,141,406,365) 17,215,736,603 (19,508,334) 6,586,263,579 1,700,000,000 19,102,445,355 52,553,555,838The accompanying notes are an integral part of these financial statements


Thai Beverage Public Company Limited and its SubsidiariesStatements of Changes in Shareholders' EquityFor the years ended at 31 December 2006 and 2005Balance at 1 January 2005Changes in shareholders' equity for 2005Surplus on property revaluationUnrealised loss on investmentCurrency translation changesNet expense recognised directly in shareholders' equityNet profitTotal recognised income and expenseDifference arising from common control transactionsLegal reserveDividendsBalance at 31 December 2005Changes in shareholders' equity for 2006Surplus on property revaluationCurrency translation changesNet expense recognised directly in shareholders' equityNet profitTotal recognised income and expenseDifference arising from common control transactionsLegal reserveDividendsIssue of share capitalBalance at 31 December 2006NoteIssued andpaid-upshare capitalDifference arisingarising from commoncontrol transactions Share premiumThe CompanyReserve Retained earningsCurrency translationchangesFair value changesand revaluationsurpluses Legal reserve UnappropriatedTotalshareholders' equity(in Baht)22,000,000,000 (6,218,164,735) _ (2,980) 6,699,299,782 2,500,000 11,270,619,942 30,319,798,62219 - - - - (114,483,767) - - (114,483,767)- - - - (80,571) - - (80,571)- - - (5,338,491) - - - (5,338,491)- - - (5,338,491) (114,564,338) - - (119,902,829)- - - - - - 10,132,779,356 10,132,779,356- - - (5,338,491) (114,564,338) - 10,132,779,356 10,012,876,5274 - (6,326,646,711) - - - - (6,326,646,711)- - - - - 1,107,500,000 (1,107,500,000) -- - - - - - (2,640,000,000) (2,640,000,000)22,000,000,000 (15,979,264,833) _ (5,341,471) 6,584,735,444 1,110,000,000 17,655,899,298 31,366,028,43819 - - - - 1,528,135 - - 1,528,135- - - (14,166,863) - - - (14,166,863)- - - (14,166,863) 1,528,135 - - (12,638,728)- - - - - - 10,078,648,807 10,078,648,807- - - (14,166,863) 1,528,135 - 10,078,648,807 10,066,010,079- (1,162,141,532) - - - - - (1,162,141,532)- - - - - 590,000,000 (590,000,000) -26 - - - - - - (8,042,102,750) (8,042,102,750)18 3,110,025,000 - 17,215,736,603 - - - - 20,325,761,60325,110,025,000 (17,141,406,365) 17,215,736,603 (19,508,334) 6,586,263,579 1,700,000,000 19,102,445,355 52,553,555,838The accompanying notes are an integral part of these financial statements


112Thai Beverage Public Company Limited and its SubsidiariesStatements of Cash FlowsFor the years ended 31 December 2006 and 2005Cash flows from operating activitiesNet profit Adjustments for Depreciation and amortisationInterest incomeInterest expenseAmortisation of advance payments to a specialistAllowance for obsolete inventoriesAllowance for impairment loss on equipmentLoss on sale and disposal of property,plant and equipmentUnrealised loss on exchange rateLoss on sale of investmentAllowance for decline in value of investmentsShare of profits from investmentsaccounted for using the equity methodIncome tax expenseConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)10,054,777,144 10,337,254,107 10,078,648,807 10,132,779,356 4,652,102,246 4,432,147,625 24,071,862 7,837,319 (56,452,361) (71,522,742) (858,621,337) (616,562,118)1,568,651,172 1,741,805,230 2,253,267,473 1,775,183,024 50,000,000 70,833,333 9,375,000 13,281,250 354,960,794 179,217,640 - - - 921,096 - - 4,734,397 80,027,724 50,309 - 11,720,775 15,879,762 16,321,434 - 708,828 3,465,809 - - - (1,135,640) - - (23,684,083) (22,035,776) (9,128,590,784) (9,812,306,781)4,322,890,312 4,743,184,044 149,318,356 150,137,320 20,940,409,224 21,510,042,212 2,543,841,120 1,650,349,370 The accompanying notes are an integral part of these financial statements


113Changes in operating assets and liabilitiesTrade accounts receivableAmounts due from related partiesInventoriesOther current assetsTrade accounts payableAmounts due to related partiesOther current liabilities Other non-current liabilitiesAdvance payments to a specialistIncome taxes paidNet cash provided by operating activitiesConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)143,293,100 209,688,035 - - 36,148,778 5,031,748,818 (354,909,409) (880,381,965)76,897,733 4,538,613,438 - - 657,219,479 963,126,112 (7,432,139) (9,331,464)583,226,076 (320,059,744) - - 46,080,798 (229,335,116) 5,885,734 7,509,246 (1,637,370,959) 2,053,429,124 60,617,406 105,665,053 (3,520,637) (25,705,031) - - 28 (2,000,000,000) - (375,000,000) - (4,671,000,532) (5,164,843,709) (198,576,232) (62,476,074)14,171,383,060 28,566,704,139 1,674,426,480 811,334,166 The accompanying notes are an integral part of these financial statements


114Thai Beverage Public Company Limited and its SubsidiariesStatements of Cash FlowsFor the years ended 31 December 2006 and 2005Cash flows from investing activitiesInterest receivedDividends receivedCurrent investmentsShort-term loans to related partiesInvestments accounted for usingthe equity methodConsideration paid to shareholders of subsidiaries for the common control transactions Increase in share capital in subsidiaries before business restructuringSale of long-term investmentsPurchase of property, plant and equipmentSale of property, plant and equipmentPurchase of intangible assetsOther non-current assetsNet cash provided by (used in) investing activitiesConsolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)58,093,432 69,514,872 847,583,522 573,221,540 16,975,616 23,385,005 8,055,408,868 5,235,676,477 5,640,990 (8,469,902) - - 40,850,000 376,838,008 (1,144,799,640) 1,656,000,000 - - (509,999,340) (535,046,490)(1,505,240,976) (9,645,998,710) - (9,619,911,346)27,039,805 46,592,950 - - 26 1,111,381,960 - - (4,038,539,449) (7,302,013,424) (111,780,397) (68,425,187)50,253,932 581,007,562 58,906 - (13,060,373) (73,555,660) (6,666,764) (8,206,360)(25,023,220) 9,626,623 (4,716,900) (68,000)(5,383,010,217) (14,811,690,716) 7,125,088,255 (2,766,759,366)The accompanying notes are an integral part of these financial statements


115Cash flows from financing activities Interest paidDividends paidBank overdrafts and short-term loansfrom financial institutionsProceeds from short-term guaranteed bondsRepayment of short-term guaranteed bondsShort-term loans from related partiesProceeds from long-term guaranteed bondsProceeds from long-term loans fromfinancial insitutionsRepayment of long-term loans fromfinancial insitutionsProceeds from issue of sharesNet cash provided by (used in) financing activitiesCurrency translation changesNet increase (decrease) in cash and Consolidated The CompanyNote 2006 2005 2006 2005(Restated)(in Baht)(1,420,545,600) (1,741,800,683) (2,086,173,156) (1,731,616,587)26 (8,042,102,750) (2,640,000,000) (8,042,102,750) (2,640,000,000)(33,405,319,840) (5,223,957,520) (33,570,440,734) (1,528,565,682)4,700,000,000 - 4,700,000,000 -(2,500,000,000) - (2,500,000,000) - 629,727,420 (514,822,212) 1,815,500,000 7,856,400,0005,300,000,000 - 5,300,000,000 - 26,600,000,000 - 26,600,000,000 - (22,431,600,000) (1,320,000,000) (21,345,000,000) - 18 20,325,761,603 - 20,325,761,603 -(10,244,079,167) (11,440,580,415) (8,802,455,037) 1,956,217,731 19 (22,710,718) (23,032,423) - - cash equivalents (1,478,417,042) 2,291,400,585 (2,940,302) 792,531 Cash and cash equivalents at beginning of year 3,397,994,012 1,106,593,427 18,562,884 17,770,353 Cash and cash equivalents at end of year 6 1,919,576,970 3,397,994,012 15,622,582 18,562,884 The accompanying notes are an integral part of these financial statements


116Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005123456789101112131415161718192021222324252627282930313233ContentsGeneral informationBasis of preparation of the financial statementsSignificant accounting policiesBusiness restructuringRelated party transactions and balancesCash and cash equivalentsTrade accounts receivableInventoriesOther current assetsInvestments accounted for using the equity methodOther long-term investmentsProperty, plant and equipmentIntangible assetsOther non-current assetsInterest-bearing liabilitiesTrade accounts payableOther current liabilitiesShare capital ReservesSegmental informationOther incomeSelling and administrative expensesPersonnel expensesEarnings per sharePromotional privilegesDividendsFinancial instrumentsCommitmentsLitigationEvents after the balance sheet dateReclassification of accountsNew and revised accounting standards not yet adoptedSignificant differences between Thai GAAP and IFRS


117These notes form an integral part of the financial statements. The financial statements were authorised for issue by the directors on 27 February 2007.1. General Information Thai Beverage Public Company Limited, the “Company”, is incorporated and registered as a public company in Thailand on29 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 activities of the Company and its subsidiaries are the production, distribution and marketing of alcoholic andnon-alcoholic beverages, industrial alcohol and other by-products. Details of the Company’s subsidiaries are as follows:Country of Ownership InterestType of Business Incorporation 2006 2005Direct subsidiaries (%) (%)1. Beer Thai (1991) PCL. Beer brewery Thailand 100.00 100.002. Beer Thip Brewery (1991) Co., Ltd. Beer brewery Thailand 100.00 100.003. Sangsom Co., Ltd. Spirits distillery Thailand 100.00 100.004. Fuengfuanant Co., Ltd. Spirits distillery Thailand 100.00 100.005. Mongkolsamai Co., Ltd. Spirits distillery Thailand 100.00 100.006. Thanapakdi Co., Ltd. Spirits distillery Thailand 100.00 100.007. Kanchanasingkorn Co., Ltd. Spirits distillery Thailand 100.00 100.008. Sura Bangyikhan Co., Ltd. Spirits distillery Thailand 100.00 100.009. Athimart Co., Ltd. Spirits distillery Thailand 100.00 100.0010. S.S. Karnsura Co., Ltd. Spirits distillery Thailand 100.00 100.0011. Kankwan Co., Ltd. Spirits distillery Thailand 100.00 100.0012. Theparunothai Co., Ltd. Spirits distillery Thailand 100.00 100.0013. Red Bull Distillery (1988) Co., Ltd. Spirits distillery Thailand 100.00 100.00


118Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005Country of Ownership InterestType of Business Incorporation 2006 2005 (%) (%)14. United Winery and Distillery Co., Ltd. Spirits distillery Thailand 100.00 100.0015. Simathurakij Co., Ltd. Spirits distillery Thailand 100.00 100.0016. Nateechai Co., Ltd. Spirits distillery Thailand 100.00 100.0017. Luckchai Liquor Trading Co., Ltd. Spirits distillery Thailand 100.00 100.0018. Sura Piset Thipparat Co., Ltd.* Spirits distillery Thailand 100.00 100.0019. Thai Alcohol PCL. Alcohol distillery Thailand 100.00 100.0020. Pomthip Co., Ltd. Beer distributor Thailand 100.00 100.0021. Pomkit Co., Ltd. Beer distributor Thailand 100.00 100.0022. Pomkung Co., Ltd. Beer distributor Thailand 100.00 100.0023. Pomchok Co., Ltd. Beer distributor Thailand 100.00 100.0024. Pomcharoen Co., Ltd. Beer distributor Thailand 100.00 100.0025. Pomburapa Co., Ltd. Beer distributor Thailand 100.00 100.0026. Num Yuk Co., Ltd. Spirits distributor Thailand 100.00 100.0027. Num Kijjakarn Co., Ltd. Spirits distributor Thailand 100.00 100.0028. Num Palang Co., Ltd. Spirits distributor Thailand 100.00 100.0029. Num Muang Co., Ltd. Spirits distributor Thailand 100.00 100.0030. Num Nakorn Co., Ltd. Spirits distributor Thailand 100.00 100.0031. Num Thurakij Co., Ltd. Spirits distributor Thailand 100.00 100.0032. Thipchalothorn Co., Ltd. Beer and sprits agency Thailand 100.00 100.0033. Krittayabun Co., Ltd. Beer and sprits agency Thailand 100.00 100.0034. Surathip Co., Ltd. Spirits agency Thailand 100.00 100.0035. Sunthronpirom Co., Ltd. Spirits agency Thailand 100.00 100.0036. Piromsurang Co., Ltd. Spirits agency Thailand 100.00 100.0037. Bionic Humus Co., Ltd. Trading of fertilizer Thailand 100.00 100.0038. Maharas Agri Co., Ltd. Japanese rice farming Thailand 100.00 100.0039. Thai Molasses Co., Ltd. Trading of molasses Thailand 99.72 99.7240. Additive Food Co., Ltd. Trading of feeds Thailand41. Pan International (Thailand) Co., Ltd. Trading of equipment and supplies Thailand42. Charun Business 52 Co., Ltd. Brick producer Thailand43. Thai Cooperage Co., Ltd. Oak barrel producer Thailand44. Bang-Na Logistic Co., Ltd. Trading of bottles Thailand100.00 100.00100.00 100.00100.00 100.00100.00 100.00100.00 100.00


Country of Ownership InterestType of Business Incorporation 2006 2005 (%) (%)45. Sahatipkarnkonsong Co., Ltd. Transportation Thailand 100.00 100.0046. Thai Beverage Marketing Co., Ltd. Import and export spirits for trading/ international marketing Thailand 100.00 100.0047. Dhanasindhi Co., Ltd. Construction Thailand 100.00 100.0048. Dhospaak Co., Ltd. Advertising agency Thailand 100.00 100.0049. International Beverage Holdings Ltd. Holding company Hong Kong 100.00 100.0050. Cosmos Brewery (Thailand) Co., Ltd. ** Beer brewery Thailand 100.00 100.0051. T.C.C. Cosmo Corporation Ltd. ** Trademark holding Thailand 100.00 100.0052. Beer Chang Co., Ltd. ** Trademark holding and productionof concentrate materials Thailand 100.00 100.0053. Archa Beer Co., Ltd. ** Trademark holding and productionof concentrate materials Thailand 100.00 100.00Indirect subsidiaries(%) (%)54. Thai Thum Distillery Co., Ltd. # Trading of spirits Thailand 99.90 99.9055. Sura Piset Sahasan Co., Ltd. # Production and distribution of spirits Thailand 100.00 100.0056. Sura Piset Sampan Co., Ltd. # Production and distribution of spirits Thailand 100.00 100.0057. Sura Piset Phatra Lanna Co., Ltd. # Production and distribution of spirits Thailand 100.00 100.0058. Muangkij Co., Ltd. # Import of oak woods Thailand 100.00 100.0059. Sint Ek Panich Co., Ltd. # Mining Thailand 100.00 100.0060. Pan Alcohol Co., Ltd. # Production and distribution of vinegar Thailand 100.00 100.0061. Banglen Agriculture Co., Ltd. # Agriculture Thailand 100.00 100.0062. Vitayathan Co., Ltd. Environmental public relations Thailand 100.00 100.0063. InterBev (Singapore) Limited Trading of alcoholic beverages Singapore 100.00 100.0064. InterBev (Cambodia) Co., Ltd. Trading of alcoholic beverages Cambodia 100.00 -65. InterBev Malaysia Sdn. Bhd. Trading of alcoholic beverages Malaysia 100.00 -66. InterBev USA Inc. Trading of alcoholic beverages United States of America 100.00 -67. Best Spirits Company Limited*** Trading of alcoholic beverages Hong Kong 100.00 -68. Pacific Spirits (UK) Limited*** Holding company United Kingdom 100.00 -119


120Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005Country of Ownership InterestType of BusinessIncorporation 2006 2005Subsidiaries of indirect subsidiaries**** (%) (%)69. Blairmhor Limited Production and distribution of spirits United Kingdom 100.00 -70. Inver House Distillers Limited Production and distribution of spirits United Kingdom 100.00 -71. Blairmhor Distillers Limited Spirits distillery United Kingdom 100.00 -72. Wee Beastie Limited Trading of alcoholic beverages United Kingdom 100.00 -73. Speyburn-Glenlivet Distillery Company Limited # Dormant United Kingdom74. The Knockdhu Distillery Company Limited # Dormant United Kingdom75. The Pulteney Distillery Company Limited # Dormant United Kingdom76. The Balblair Distillery Company Limited # Dormant United Kingdom77. R. Carmichael & Sons Limited # Dormant United Kingdom78. J MacArthur Junior & Company Limited # Dormant United Kingdom79. Mason & Summers Limited # Dormant United Kingdom80. Hankey Bannister Limited # Dormant United Kingdom81. James Catto & Company Limited # Dormant United Kingdom82. Glen Calder Blenders Limited # Dormant United Kingdom83. Moffat & Towers Limited #(Formerly: Blairmhor Blender Limited) Dormant United Kingdom Associates of indirect subsidiaries*****84. Liquorland Limited Off licences United Kingdom85. Inver House Polska Limited # Spirits distillery Poland86. Inver House Distribution SA # Spirits distillery France100.00 -100.00 -100.00 -100.00 -100.00 -100.00 -100.00 -100.00 -100.00 -100.00 -100.00 -(%) (%)49.00 -40.00 -50.00 -* These subsidiaries were changed from indirect subsidiaries to direct subsidiaries in 2006. ** These subsidiaries were transferred from ultimate controlling shareholder controlled the business to the Company in 2005.*** These subsidiaries were transferred from ultimate controlling shareholder controlled the business to the Company in 2006.**** Subsidiaries of Pacific Spirits (UK) Limited***** Associates of Pacific Spirits (UK) Limited# These are currently non-trading.


2. Basis of preparation of the financial statementsThe financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation ofthe 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 interpretationsand guidelines promulgated by the Federation of Accounting Professions (“FAP”) and with generally accepted accountingprinciples in Thailand.The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to the nearest million,unless otherwise stated. They are prepared on the historical cost basis except for the following assets which are stated atfair value: land and investments in available-for-sale securities.The preparation of financial statements in conformity with TAS requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Theestimates and associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis of making the judgements about carrying amountsof assets and liabilities that are not readily apparent from other sources.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision andfuture periods, if the revision affects both current and future periods.3. Significant accounting policies(a) Basis of consolidationThe consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”) andthe Group’s interest in associates.Significant intra-group transactions between the Company and its subsidiaries are eliminated on consolidation.SubsidiariesSubsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly orindirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. The financialstatements of subsidiaries are included in the consolidated financial statements from the date that control commences untilthe date that control ceases.121AssociatesAssociates are those companies in which the Group has significant influence, but not control, over the financial and operatingpolicies. The consolidated financial statements include the Group’s share of the total recognised gains and losses ofassociates on an equity accounted basis, from the date that significant influence commences until the date that significantinfluence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is


122reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal orconstructive obligations or made payments on behalf of the associate.Business combinationsBusiness combinations involving businesses under common control have been accounted for in a manner similar to a poolingof interests, whereby the assets, liabilities and contingent liabilities transferred have been accounted for at book values. Business combinations are accounted for using the purchase method. The cost of an acquisition is measured at the fairvalue of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costsdirectly attributable to the acquisition.(b) Foreign currenciesForeign currency transactionsTransactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Thai Baht at the foreignexchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of income.Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreignexchange rates ruling at the dates of the transactions.Foreign entitiesThe assets and liabilities of foreign entities are translated to Thai Baht at the average foreign exchange rates ruling at thebalance sheet date.The revenues and expenses of foreign entities are translated to Thai Baht at rates approximating the average foreignexchange rates ruling at the dates of the transactions.Foreign exchange differences arising on translation are recognised in a separate component of equity until disposal of the investments.(c) Derivative financial instrumentsForward exchange contracts are treated as off-balance sheet items.(d) Cash and cash equivalentsCash and cash equivalents comprise cash balances, call deposits and highly liquid short-term investments. Bank overdraftsthat are repayable on demand are a component of financing activities for the purpose of the statement of cash flows.(e) Trade and other accounts receivableTrade and other accounts receivables (including balances with related parties) are stated at their invoice value less allowancefor doubtful accounts.


The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations ofcustomer payments. Bad debts are written off when incurred.(f) InventoriesInventories are stated at the lower of cost and net realisable value. Cost of raw material, packaging materials, work in progress and finished goods is calculated using the weighted averagecost formula and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes anappropriate share of overheads based on normal operating capacity.Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to completeand to make the sale.(g) InvestmentsInvestments in subsidiaries and associatesInvestments in subsidiaries in the separate financial statements of the Company are accounted for using the equity method.Investments in associates in the consolidated financial statements of the Company are accounted for using the equity method.Investments in other equity securitiesMarketable equity securities are classified as being available-for-sale and are stated at fair value, with any resultant gain orloss being recognised directly in equity. The exceptions are impairment losses, which are recognised in the statement of income.Equity securities which are not marketable are stated at cost less impairment losses.The fair value of financial instruments classified as available-for-sale is determined as the quoted bid price at the balancesheet date.Disposal of investmentsOn disposal of an investment, the difference between net disposal proceeds and the carrying amount together with theassociated cumulative gain or loss that was reported in equity is recognised in the statement of income.(h) Property, plant and equipmentOwned assetsProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for land,which is stated at its revalued amount. The revalued amount is the fair value.123


124Property that is being constructed or developed for future use is classified as property, plant and equipment and stated atcost until construction or development is complete.Leased assetsLeases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as financeleases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and thepresent value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairmentlosses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve aconstant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the statement of income.Revalued assetsRevaluations are performed by independent professional valuers with sufficient regularity. The Group’s policy requires anappraisal to be conducted every three to five years or when there are factors that might materially impact the value of theland, to ensure that the carrying amount of these assets does not differ materially from that which would be determinedusing fair values at the balance sheet date. Any increase in value, on revaluation, is credited to equity under the heading “revaluation surplus” unless it offsets a previousdecrease in value recognised in the statement of income in respect of the same asset. A decrease in value is recognised inthe statement of income to the extent it exceeds an increase previously recognised in equity in respect of the same asset.Upon disposal of a revalued asset, any related revaluation surplus is transferred from equity to retained earnings and is nottaken into account in calculating the gain or loss on disposal.Subsequent expenditureSubsequent expenditure relating to an item of property, plant and equipment is added to the carrying amount of the asset whenit is probable that the future economic benefits in excess of the originally assessed standard of performance of the existing assetwill flow to the Group. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.DepreciationDepreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part ofan item of property, plant and equipment. The estimated useful lives are as follows:Land improvement 5-20 yearsBuilding and structures 5-40 yearsBuilding improvements 5-20 yearsMachinery and equipment 4-40 yearsOak barrels 10-20 yearsFurniture, fixtures and office equipment 3-10 yearsVehicles 5-10 years


No depreciation is provided on freehold land and assets under construction.(i) Intangible assetsGoodwillGoodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s shareof the identifiable net assets acquired. Goodwill is stated at cost less accumulated amortisation and impairment loss.Other intangible assetsIntangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. AmortisationAmortisation is charged to the statement of income on a straight-line and unit of production basis over the estimated usefullives of the assets. Intangible assets are amortised from the date that they are available for use. The estimated useful livesare as follows:Trademark 10 years (straight-line method)Computer software 3-10 years (straight-line method)Broadcasting rights 4 years (unit of production method)Leasehold Lease term (straight-line method)Goodwill 20 years (straight-line method)(j) ImpairmentThe carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds itsrecoverable amount. The impairment loss is recognised in the statement of income unless it reverses a previous revaluationcredited to equity, in which case it is charged to equity.(k) Interest-bearing liabilitiesInterest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initialrecognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption valuebeing recognised in the statement of income over the period of the borrowings on an effective interest basis.(l) Trade and other accounts payableTrade and other accounts payable (including balances with related parties) are stated at cost.125


126(m) ProvisionsA provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,where appropriate, the risks specific to the liability.(n) Difference arising from common control transactionsDifference arising from common control transactions relates to the restructuring of businesses under the common control ofthe ultimate majority shareholder of the Company and arises from the difference between the cost of the combination andthe carrying amounts of net identifiable assets at the date of combination (except for businesses acquired that are not undercommon control, net identifiable assets are measured at the fair value). The Company recognises the difference arisingfrom common control transactions under shareholders’ equity until disposal of the investment.(o) RevenueRevenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts.Sale of goods and services renderedRevenue is recognised in the statement of income when the significant risks and rewards of ownership have been transferredto the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significantuncertainties regarding recovery of the consideration due, associated costs, or the probable return of goods. Service income isrecognised as services are provided.When the outcome of a contract for the rendering of services can be estimated reliably, contract revenue is recognised inthe statement of income by reference to the stage of completion of the contract activity at the balance sheet date. Whenthe outcome of the contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognisedthat are recoverable.Construction contractsWhen the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised inthe statement of income by reference to the stage of completion of the contract activity at the balance sheet date. The stageof completion is assessed the percentage of completion method, which is measured by the project engineer. When it isprobable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately as anexpense in the statement of income.Interest and dividend incomeInterest income is recognised in the statement of income as it accrues. Dividend income is recognised in the statement ofincome on the date the Company’s / the Group’s right to receive payments is established which in the case of quotedsecurities is usually the ex-dividend date.


(p) ExpensesOperating leasesPayments made under operating leases are recognised in the statement of income on a straight line basis over the term ofthe lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease paymentsmade. Contingent rentals are charged to the statement of income in the accounting period in which they are incurred.127Finance costsInterest expenses and similar costs are charged to the statement of income in the period in which they are incurred, exceptto the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an assetwhich necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component offinance lease payments is recognised in the statement of income using the effective interest rate method.Research and developmentResearch and development costs, including costs of developing new drinks products and package design is expensed inthe period in which it is incurred.Other income and expenses are recognised on an accrual basis.(q) Income taxIncome tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxableincome for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to taxpayable in respect of previous years.4. Business restructuringThe Company was formed in 2003 to combine the separate beverages businesses of the ultimate controlling shareholdergroup, the Siriwadhanabhakdi family, which were held as part of the operations of 89 separate companies, into a single groupof companies. Of these, 65 businesses were transferred between 2003 and 2004, four businesses were transferred during2005 and 20 businesses were transferred during 2006. Prior to the restructuring these business were under the commoncontrol of the ultimate controlling shareholder of the Company. As the same ultimate controlling shareholder controlled the businesses and operations transferred to the Company both beforeand after the recent restructuring, the consolidated financial statements have been prepared on the basis of a businesscombination involving entities and businesses under common control. Accordingly, the transfer of businesses and operationshas been accounted for in a manner similar to a pooling of interests and the assets, liabilities and contingent liabilitiestransferred have been accounted for at book values. The difference between the cost of the combination and the carrying amounts of net identifiable assets at the date ofcombination (except for businesses acquired that were not under common control, whereby net identifiable assets weremeasured at their fair value) was recorded as “Difference arising from common control transactions”, which is shown as a reduction in shareholders’ equity.


128In preparing the consolidated financial statements, those assets, liabilities, revenues and expenses that are clearly applicableto the businesses and operations transferred are included in the consolidated financial statements and are stated at theircarrying values, after adjusting for intercompany transactions and transactions with the ultimate controlling shareholder.Expenses for which the specific identification method was not practical have been allocated on a percentage of sales basis.Management believes that this is a reasonable basis of estimating what the expenses would have been on a standalone basis.In 2005, the Group entered into four transfer transactions involving entities under common control, namely the transfer ofCosmos Brewery (Thailand) Co., Ltd., T.C.C. Cosmo Corporation Ltd., Beer Chang Co., Ltd. and Archa Beer Co., Ltd. fromthe ultimate controlling shareholder, who controlled the businesses and operations of the four companies transferred to theGroup both before and after the transfer. Accordingly, the transfer of businesses and operations has been accounted for ina manner similar to a pooling of interests, as previously applied to similar transactions in 2003. As such, the Company hasprepared the consolidated financial statements as if the transfers were completed at the beginning of the earliest period presented.The result of the transfer was an increase in “Difference arising from common control transactions” of Baht 6,326.65 million.This represents the difference between consideration of Baht 9,646 million paid to the ultimate controlling shareholder ofthe Group and the carrying amounts of net identifiable assets of the four companies at the date of the transfer of Baht3,319.35 million.Subsequently, in 2006, a further 20 entities were transferred to the Group in transactions involving entities under commoncontrol, namely Pacific Spirits (UK) Limited (consisting of 15 subsidiaries and 3 associates) and Best Spirits Company Limited.The result of the transfer was an increase in “Difference arising from common control transactions” of Baht 1,162.14million. This represents the difference between consideration of Baht 1,505.24 million paid to the ultimate controllingshareholder of the Group and the carrying amounts of net identifiable assets of the two companies at the date of the transferof Baht 343.10 million.During the year 2006 and 2005, prior to being transferred to the Company, certain businesses, now subsidiaries of the Company,increased their share capital in the amount of Baht 27.04 million and Baht 46.59 million, respectively. The currency translationchange reserves of those subsidiaries amounted to Baht 8.54 million and Baht 17.69 million, respectively. The profits (losses)of such entities transferred prior to restructuring amounted to Baht (23.87) million and Baht 204.47 million, respectively.RestatementThe consolidated financial statements for the year ended 31 December 2005 have been restated as a result of 20 transactionsinvolving entities under common control, which occurred in 2006 and were accounted for in a manner similar to a poolingof interest method. The effects of the restatement on the consolidated balance sheet as at 31 December 2005 and theconsolidated statement of income for the year ended 31 December 2005 are summarised as follows:


Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005129Balance sheetTotal assetsTotal liabilitiesDifference arising from common control transactionsShareholders’ equityStatement of incomeNet profitBasic earnings per share (Baht)Consolidated2005Balance previouslyreportedEffect of therestatementBalance after restatement (in million Baht)81,211.38 5,925.65 87,137.0349,845.35 5,577.17 55,422.52(15,979.26) 348.47 (15,630.79)31,366.03 348.47 31,714.50Results previously Effect of the Results after reported restatement restatement(in million Baht)10,409.37 (72.12) 10,337.250.47 - 0.475. Related party transactions and balancesRelated parties are those parties linked to the Group and the Company by common shareholders or directors. Transactionswith related parties are conducted at prices based on market prices or, where no market prices exist, at contractually agreed prices.The pricing policies for particular types of transactions are explained further below:Pricing policiesSale of finished goodsAgreed prices which approximate market pricesPurchase of raw materialsAgreed prices which approximate market pricesPurchase of servicesContractual pricesPurchase and sale of property, plant and equipment Contractual pricesPurchase and sale of investmentsInterest income and expenseContractual pricesRate as mutually agreed by shareholders with referenceinterest rates quoted by domestic commercial banks


130Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005Transactions for the years ended 31 December 2006 and 2005 with related parties were summarised as follows:RevenuesRevenue from sales Service incomeInterest incomeOther incomeShare of profits from investments accounted forusing the equity methodExpensesPurchase of raw materials and packagingProduction service feesOverhead costsInterest expenseOther expensesDirectors’ remunerationOthersSale of investmentsSale of propertySale of plant and equipmentConsideration paid for common control transactionsPurchase of investmentsPurchase of propertyPurchase of equipment and othersConsolidated The Company2006 2005 2006 2005(in million Baht)145.84 382.22 - -32.63 9.03 3,432.47 2,349.830.02 27.45 843.88 615.8718.30 24.96 4.87 1.9223.68 22.04 9,128.59 9,812.314,800.28 4,067.74 - -1.99 10.70 - -175.23 235.86 - -109.00 103.13 885.51 356.91274.21 249.82 - -264.76 250.93 254.73 218.04- 1,108.98 - -- 474.83 - -0.66 52.02 - -1,505.24 9,646.00 - 9,619.91- - 110.00 -- 491.35 - -3.76 17.36 - 27.85


131Balances as at 31 December 2006 and 2005 with related parties were as follows:Trade accounts receivable (being part of trade accounts receivable in the balance sheets)PS Recycle Co., Ltd.Madrigal Trading Ltd.Pisetkij Co., Ltd.Oishi Trading Co., Ltd.U W D Marketing Co., Ltd.OthersTotalConsolidated The Company2006 2005 2006 20056.67(in million Baht)8.83 - -5.74 - - -3.85 6.49 - -2.57 - - -- 34.15 - -2.25 1.80 - - 21.08 51.27 _ _


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Short-Term Loans to andAmounts Due from Related PartiesSubsidiariesBeer Thai (1991) PCL.Beer Thip Brewery (1991) Co., Ltd.Sangsom Co., Ltd.Fuengfuanant Co., Ltd.Thanapakdi Co., Ltd.Mongkolsamai Co., Ltd.Kanchanasingkorn Co., Ltd.Sura Piset Thipparat Co., Ltd.Sura Bangyikhan Co., Ltd.Athimart Co., Ltd.S.S. Karnsura Co., Ltd.Kankwan Co., Ltd.Theparunothai Co., Ltd.United Winery and Distillery Co., Ltd.Red Bull Distillery (1988) Co., Ltd.Simathurakij Co., Ltd.Nateechai Co., Ltd.Luckchai Liquor Trading Co., Ltd.Thai Alcohol PCL.Thipchalothorn Co., Ltd.Krittayabun Co., Ltd.Surathip Co., Ltd.Sunthronpirom Co., Ltd.Piromsurang Co., LtdNum Yuk Co., Ltd.Num Thurakij Co., Ltd.Short-termloans to2006Amountsdue from TotalConsolidated The CompanyShort-termloans to2005Amountsdue from TotalShort-termloans to2006Amountsdue from TotalShort-termloans to2005Amountsdue from Total(in million Baht)- - - - - - 3,625.70 135.86 3,761.56 4,693.50 65.20 4,758.70- - - - - - - 145.64 145.64 - 67.31 67.31- - - - - - - 46.67 46.67 - 97.29 97.29- - - - - - - 11.74 11.74 - 15.26 15.26- - - - - - - 4.39 4.39 - 5.19 5.19- - - - - - - 3.24 3.24 - 3.73 3.73- - - - - - 412.00 6.40 418.40 1,036.00 10.87 1,046.87- - - - - - 760.20 1.82 762.02 - - -- - - - - - 1,919.00 44.85 1,963.85 2,261.80 20.83 2,282.63- - - - - - - 12.67 12.67 - 14.74 14.74- - - - - - - 12.52 12.52 - 14.41 14.41- - - - - - 329.60 14.86 344.46 666.10 18.83 684.93- - - - - - - 10.53 10.53 - 12.80 12.80- - - - - - - 6.69 6.69 - 9.04 9.04- - - - - - 2,961.80 32.33 2,994.13 2,565.80 16.16 2,581.96- - - - - - 670.00 8.74 678.74 220.00 2.59 222.59- - - - - - 694.40 11.59 705.99 575.00 13.87 588.87- - - - - - 1,160.40 10.64 1,171.04 975.40 4.80 980.20- - - - - - 680.00 13.91 693.91 60.00 2.53 62.53- - - - - - 85.30 202.47 287.77 - 130.70 130.70- - - - - - - 190.32 190.32 - 132.09 132.09- - - - - - - 71.60 71.60 - 119.79 119.79- - - - - - - 61.35 61.35 - 30.14 30.14- - - - - - - 14.00 14.00 - 28.31 28.31- - - - - - - 66.66 66.66 - 84.24 84.24- - - - - - - 30.18 30.18 - 44.04 44.04


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Short-Term Loans to andAmounts Due from Related PartiesSubsidiaries (continued)Num Muang Co., Ltd.Num Nakorn Co., Ltd.Num Palang Co., Ltd.Num Kijjakarn Co., Ltd.Pomthip Co., Ltd.Pomkit Co., Ltd.Pomkung Co., Ltd.Pomchok Co., Ltd.Pomcharoen Co., Ltd.Pomburapa Co., Ltd.Bionic Humus Co., Ltd.Maharas Agri Co., Ltd.Sahatipkarnkonsong Co., Ltd.Dhospaak Co., Ltd.Bang-Na Logistic Co., Ltd.Thai Beverage Marketing Co., Ltd.International Beverage Holdings Ltd.Total subsidiariesShort-termloans to2006Amountsdue from TotalConsolidated The CompanyShort-termloans to2005Amountsdue from TotalShort-termloans to2006Amountsdue from TotalShort-termloans to2005Amountsdue from Total(in million Baht)- - - - - - - 46.67 46.67 - 65.02 65.02- - - - - - - 24.55 24.55 - 34.01 34.01- - - - - - - 38.91 38.91 - 55.60 55.60- - - - - - - 89.36 89.36 - 119.29 119.29- - - - - - - 37.32 37.32 - 11.06 11.06- - - - - - - 106.68 106.68 - 15.96 15.96- - - - - - - 39.84 39.84 - 9.98 9.98- - - - - - - 47.81 47.81 - 10.74 10.74- - - - - - - 20.92 20.92 - 5.85 5.85- - - - - - - 35.35 35.35 - 7.80 7.80- - - - - - 23.00 0.12 23.12 17.00 0.05 17.05- - - - - - 13.30 0.06 13.36 3.80 0.02 3.82- - - - - - 50.00 - 50.00 120.00 - 120.00- - - - - - - - - 185.50 0.02 185.52- - - - - - - - - 310.00 1.32 311.32- - - - - - - - - 50.00 0.21 50.21- - - - - - 1,483.77 8.29 1,492.06 - - -_ _ _ _ _ _ 14,868.47 1,667.55 16,536.02 13,739.90 1,301.69 15,041.59


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Short-Term Loans to andAmounts Due from Related PartiesRelated companiesPlastic Agachon Co., Ltd.The Suphanburi Sugar Industry Co., Ltd.The Cholburi Sugar Corp. Ltd.The Mae Wang Sugar Industry Co., Ltd.The Uttaradit Sugar Industry Co., Ltd.Surasate (2005) Co., Ltd.Padermchai Co., Ltd.TCC ARGO Co., Ltd.Pisetkij Co., Ltd.Thai Glass Industries Co., Ltd.Thai Charoen Insurance PCL.Southeast Assurance (2000) Co., Ltd.New Noble Property And Loan FundDynamic Assets Property and Loan FundBest Spirits (China) Co., Ltd.T.C.C. Ningbo Best Spirits Co., Ltd.Sukhothai Marketing Co., Ltd.OthersTotal related companiesTotalShort-termloans to2006Amountsdue from TotalConsolidated The CompanyShort-termloans to2005Amountsdue from TotalShort-termloans to2006Amountsdue from TotalShort-termloans to2005Amountsdue from Total(in million Baht)- - - 40.85 3.10 43.95 - - - - - -- 12.03 12.03 - 10.50 10.50 - - - - - -- 7.97 7.97 - 7.93 7.93 - - - - - -- 6.52 6.52 - 3.86 3.86 - - - - - -- 6.67 6.67 - 7.03 7.03 - - - - - -- - - - 38.50 38.50 - - - - - -- 0.01 0.01 - 21.75 21.75 - - - - - -- 1.96 1.96 - 3.25 3.25 - - - - - -- 6.87 6.87 - 1.22 1.22 - - - - - -- 1.46 1.46 - 0.44 0.44 - - - - - -- 1.81 1.81 - 1.21 1.21 - - - - - -- 1.75 1.75 - 0.06 0.06 - - - - - -- 3.55 3.55 - 0.30 0.30 - - - - - -- 13.04 13.04 - - - - - - - - -- - - - 2.56 2.56 - - - - - -- - - - 13.30 13.30 - - - - - -- - - - 1.18 1.18 - - - - - -- 0.69 0.69 - 0.64 0.64 - - - - - -_ 64.33 64.33 40.85 116.83 157.68 _ _ _ _ _ __ 64.33 64.33 40.85 116.83 157.68 14,868.47 1,667.55 16,536.02 13,739.90 1,301.69 15,041.59


Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005135Movements during the years on short-term loans to related parties were as follows:At 1 JanuaryIncrease DecreaseAt 31 DecemberConsolidated The Company2006 2005 2006 2005 (in million Baht)40.85 417.69 13,739.90 15,395.90- 6,483.15 13,572.80 15,588.28(40.85) (6,859.99) (12,444.23) (17,244.28)_ 40.85 14,868.47 13,739.90Trade accounts payable(being part of trade accounts payable in the balance sheets)Berli Jucker PCL.Thai Beverage Can Ltd.Pisetkij Co., Ltd.PS Recycle Co., Ltd.The Suphanburi Sugar Industry Co., Ltd.Yunnan Yunlinquan Liquor Co., Ltd.OthersTotal Consolidated The Company2006 2005 2006 2005(in million Baht)553.92 273.74 - -126.04 97.00 - -59.58 58.78 - -74.11 75.98 - -3.35 - - -- 8.15 - - 2.31 7.47 - - 819.31 521.12 _ _


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Short-Term Loans from andAmounts Due to Related PartiesSubsidiariesBeer Thip Brewery (1991) Co., Ltd.Sangsom Co., Ltd.Fuengfuanant Co., Ltd.Thanapakdi Co., Ltd.Mongkolsamai Co., Ltd.Athimart Co., Ltd.S.S. Karnsura Co., Ltd.Theparunothai Co., Ltd.United Winery and Distillery Co., Ltd.Thipchalothorn Co., Ltd.Krittayabun Co., Ltd.Surathip Co., Ltd.Sunthronpirom Co., Ltd.Piromsurang Co., LtdNum Yuk Co., Ltd.Num Thurakij Co., Ltd.Num Muang Co., Ltd.Num Nakorn Co., Ltd.Num Palang Co., Ltd.Num Kijjakarn Co., Ltd.Thai Molasses Co., Ltd.Thai Cooperage Co., Ltd.Cosmos Brewery (Thailand) Co., Ltd.Pomthip Co., Ltd.Pomkit Co., Ltd.Short-termloans to2006Amountsdue from TotalConsolidated The CompanyShort-termloans to2005Amountsdue from TotalShort-termloans to2006Amountsdue from TotalShort-termloans to2005Amountsdue from Total(in million Baht)- - - - - - 3,489.00 17.78 3,506.78 990.00 3.08 993.08- - - - - - 1,052.00 4.58 1,056.58 2,263.00 9.05 2,272.05- - - - - - 200.00 0.80 200.80 140.00 0.55 140.55- - - - - - 130.00 0.28 130.28 20.00 0.03 20.03- - - - - - 92.00 0.08 92.08 135.00 0.57 135.57- - - - - - 193.40 0.59 193.99 180.00 0.71 180.71- - - - - - 396.00 1.46 397.46 329.60 1.40 331.00- - - - - - 286.00 1.14 287.14 311.00 0.95 311.95- - - - - - 394.00 2.01 396.01 212.00 0.90 212.90- - - - - - 686.00 2.36 688.36 - - -- - - - - - 473.40 3.57 476.97 710.00 3.03 713.03- - - - - - 594.30 2.68 596.98 916.00 3.56 919.56- - - - - - 1,201.30 5.66 1,206.96 1,053.80 4.23 1,058.03- - - - - - 772.50 3.78 776.28 795.00 3.19 798.19- - - - - - 120.00 0.33 120.33 352.00 0.37 352.37- - - - - - 175.30 0.66 175.96 284.00 0.74 284.74- - - - - - 170.00 0.87 170.87 530.60 1.19 531.79- - - - - - 125.80 0.30 126.10 171.50 0.41 171.91- - - - - - 94.70 0.05 94.75 236.00 0.54 236.54- - - - - - 1,248.95 5.48 1,254.43 1,211.10 4.30 1,215.40- - - - - - 83.00 0.10 83.10 60.00 0.07 60.07- - - - - - 176.50 0.80 177.30 9.50 0.04 9.54- - - - - - 2,097.00 10.69 2,107.69 2,050.00 7.08 2,057.08- - - - - - 444.80 2.09 446.89 388.00 1.35 389.35- - - - - - 1,603.10 6.88 1,609.98 255.00 0.46 255.46


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Short-Term Loans from andAmounts Due to Related PartiesSubsidiaries (continued)Pomkung Co., Ltd.Pomchok Co., Ltd.Pomcharoen Co., Ltd.Pomburapa Co., Ltd.Additive Food Co., Ltd.Beer Chang Co., Ltd.Archa Beer Co., Ltd.Pan International(Thailand) Co., Ltd.Dhospaak Co., Ltd.International Beverage Holdings Ltd.Total subsidiariesRelated companiesT.C.C. Technology Co., Ltd.South East Capital Co., Ltd.T.C.C. Property Development Co., Ltd.Plaza Athenee Hotel (Thailand) Co., Ltd.Thai Charoen Insurance PCL.Southeast Assurance (2000) Co., Ltd.Queen’s Park Hotel Group Co., Ltd.Indara Insurance Public Co., Ltd.Mae Ping Hotel (1988) LimitedGreat Oriole LimitedOthersTotal related companiesTotalShort-termloans to2006Amountsdue from TotalConsolidated The CompanyShort-termloans to2005Amountsdue from TotalShort-termloans to2006Amountsdue from TotalShort-termloans to2005Amountsdue from Total(in million Baht)- - - - - - 310.45 1.50 311.95 205.00 0.63 205.63- - - - - - 573.00 2.16 575.16 567.20 2.15 569.35- - - - - - 123.30 0.72 124.02 20.00 0.01 20.01- - - - - - 496.30 2.16 498.46 281.30 0.83 282.13- - - - - - 25.00 0.13 2 25.13 - -- - - - - - 100.00 0.51 100.51 128.00 0.49 128.49- - - - - - 20.00 0.10 20.10 - - -- - - - - - 55.00 0.42 55.42 50.00 0.27 50.27- - - - - - 40.00 12.76 52.76 - 6.22 6.22- - - - - - 0.32 0.32 - - - -_ _ _ _ _ _ 17,356.10 93.44 17,449.54 15,540.60 60.76 15,601.36- 9.90 9.90 - 6.17 6.17 - 5.56 5.56 - 0.34 0.34- 16.61 16.61 - 13.32 13.32 - 1.75 1.75 - 2.60 2.60- - - - 6.38 6.38 - - - - 6.38 6.38- 10.89 10.89 - 0.32 0.32 - - - - - -- - - - 6.24 6.24 - - - - - -- 41.32 41.32 - 0.69 0.69 - - - - - -- 6.67 6.67 - 0.03 0.03 - - - - - -- 3.53 3.53 - - - - - - - - -- 1.49 1.49 - - - - - - - - -4,615.23 128.62 4,743.85 4,015.39 115.04 4,130.43 - - - - - -- 3.53 3.53 - 1.28 1.28 - 0.18 0.18 _ 0.30 0.304,615.23 222.56 4,837.79 4,015.39 149.47 4,164.86 _ 7.49 7.49 _ 9.62 9.624,615.23 222.56 4,837.79 4,015.39 149.47 4,164.86 17,356.10 100.93 17,457.03 15,540.60 70.38 15,610.98


138Movements during the years on short-term loans from related parties were as follows:At 1 JanuaryIncrease DecreaseAt 31 December6. Cash and cash equivalentsCash on handCash at banksTotal7. Trade accounts receivable, netTrade accounts receivable from related partiesTrade accounts receivable from other partiesLess allowance for doubtful accountsTotalWithin credit termsOverdue:Less than 3 months3 - 6 months6 - 12 monthsOver 12 monthsLess allowance for doubtful accountsNetNoteThe normal credit term granted by the Group is 7 - 150 days.5Consolidated The Company2006 2005 2006 2005 (in million Baht)4,015.39 4,505.21 15,540.60 7,684.20630.35 46.21 21,391.94 22,795.80(30.51) (536.03) (19,576.44) (14,939.40)4,615.23 4,015.39 17,356.10 15,540.60Consolidated The Company2006 2005 2006 2005 (in million Baht)32.55 22.51 0.02 0.021,887.03 3,375.48 15.60 18.541,919.58 3,397.99 15.62 18.56Consolidated The Company2006 2005 2006 2005 (in million Baht)21.08 51.27 - -1,320.74 1,431.11 - -(23.89) (18.73) - -1,317.93 1,463.65 _ _ Consolidated The Company2006 2005 2006 2005 (in million Baht)957.98 1,123.96 - -343.07 242.86 - -17.15 39.33 - -18.42 39.06 - -5.20 37.17 - -1,341.82 1,482.38 - -(23.89) (18.73) - -1,317.93 1,463.65 _ _


8. InventoriesRaw materialsPackaging materialsMaturing spiritsWork in progress Finished goods- at cost- at net realisable valueSpare partsOthersTotalConsolidated The Company2006 2005 2006 20051,379.46(in million Baht)921.61 - -523.61 516.43 - -8,160.89 7,065.93 - -3,406.65 3,243.37 - -13,235.05 15,958.20 - -880.66 279.86 - -488.81 540.25 - -240.03 221.37 - -28,315.16 28,747.02 _ _139As at 31 December 2005, certain finished goods of subsidiaries with a carrying amount of Baht 4,054.76 million werepledged as security for short-term loans from financial institutions and a long-term loan as disclosed in Note 15.9. Other current assetsPrepaid excise taxRefundable VATDepositsPrepaid property taxRefundable excise taxPrepaid expenses Prepaid income taxWithholding taxAdvanced paymentsAdvanced payments for constructionOthersLess allowance for doubtful accountsNetConsolidated The Company2006 2005 2006 2005687.75(in million Baht)1,553.55 - -380.58 260.80 8.95 8.06374.23 103.35 0.19 0.09151.77 148.44 - -102.51 168.35 - -55.75 133.11 0.84 0.7551.87 33.63 - -30.52 43.32 - -37.14 44.23 7.01 -9.56 74.74 - -50.66 23.50 - 0.661,932.34 2,587.02 16.99 9.56(18.10) (14.02) _ _1,914.24 2,573.00 16.99 9.56


10 Investments Accounted for Using the equity methodThe Company 2006 2005(in million Baht)140 Net book value at 1 January 68,045.38 59,761.28Purchase of investments 110.00 9,619.91Increase in share capital in subsidiariesAdjustment of difference arising from 400.00 535.05common control transactions (Note 4) (1,162.14) (6,326.65)Share of net profits of investments - equity method 9,128.59 9,812.30Dividend income (8,055.41) (5,235.68)Surplus on assets revaluation 1.53 (114.48)Excess of share of losses over costs of investments 937.24 (0.93)Unrealised loss on investment in securities of subsidiary - (0.08)Currency translation changes (14.17) (5.34)Net book value at 31 DecemberDisclosed as: 69,391.02 68,045.38The Company (in million Baht) Investments accounted for using the equity method 69,391.02 68,045.38Excess of share of losses over costs of investments (937.92) (0.67) Total 68,453.10 68,044.71


Investments accounted for using the equity method for consolidated financial statements as at 31 December 2006 and 2005, and dividend income from those investments during the years ended onthose dates, were as follows:ConsolidatedOwnership interest Paid-up capital Cost method Equity method Dividend income2006 2005 2006 2005 2006 2005 2006 2005 2006 2005AssociatesHeld by subsidiaries of indirect subsidiariesLiquorland LimitedInver House Polska LimitedInver House Distribution SA(%)(in million Baht)49.90 49.90 69.06 69.06 51.35 51.35 135.49 128.78 16.97 23.3940.00 40.00 8.50 8.50 3.75 3.75 - - - -50.00 50.00 1.70 1.70 0.85 0.85 - - - -Investments accounted for using the equity method for the separate financial statements as at 31 December 2006 and 2005, and dividend income from those investments during the years ended onthose dates, were as follows:Direct subsidiariesBeer Thai (1991) PCL.Beer Thip Brewery (1991) Co., Ltd.Cosmos Brewery (Thailand) Co., Ltd.Thai Alcohol PCL.Sangsom Co., Ltd.Red Bull Distillery (1988) Co., Ltd.United Winery and Distillery Co., Ltd.Sura Bangyikhan Co., Ltd.Fuengfuanant Co., Ltd.Athimart Co., Ltd.S.S. Karnsura Co., Ltd.Kankwan Co., Ltd.ConsolidatedOwnership interest Paid-up capital Cost method Equity method Dividend income2006 2005 2006 2005 2006 2005 2006 2005 2006 2005(%)(in million Baht)100.00 100.00 5,550.00 5,550.00 12,500.00 12,500.00 9,156.18 8,944.94 821.40 666.00100.00 100.00 6,600.00 6,600.00 12,500.00 12,500.00 9,185.50 8,894.18 1,089.00 660.00100.00 100.00 1,666.67 1,666.67 5,150.00 5,150.00 3,431.43 3,308.38 256.67 -100.00 100.00 800.00 800.00 1,665.60 1,665.60 2,200.96 2,333.72 120.00 80.00100.00 100.00 7,500.00 7,500.00 7,500.00 7,500.00 10,846.15 11,473.56 840.00 562.50100.00 100.00 3,000.00 3,000.00 3,000.00 3,000.00 3,286.78 3,478.71 - 30.00100.00 100.00 1,800.00 1,800.00 1,800.00 1,800.00 2,046.13 2,025.71 66.60 21.60100.00 100.00 4,000.00 4,000.00 4,000.00 4,000.00 6,161.19 5,952.10 60.00 80.00100.00 100.00 900.00 900.00 900.00 900.00 1,314.15 1,301.14 104.40 112.50100.00 100.00 900.00 900.00 900.00 900.00 1,262.76 1,258.97 108.90 135.00100.00 100.00 800.00 800.00 800.00 800.00 1,281.26 1,259.23 128.80 120.00100.00 100.00 800.00 800.00 800.00 800.00 1,171.72 1,150.26 122.40 160.00


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Direct subsidiaries (continued)Theparunothai Co., Ltd.Thanapakdi Co., Ltd.Mongkolsamai Co., Ltd.Simathurakij Co., Ltd.Kanchanasingkorn Co., Ltd.Luckchai Liquor Trading Co., Ltd.Nateechai Co., Ltd.Thipchalothorn Co., Ltd.Krittayabun Co., Ltd.Surathip Co., Ltd.Sunthronpirom Co., Ltd.Piromsurang Co., Ltd.T.C.C. Cosmo Corporation Ltd.Pomthip Co., Ltd.Pomkit Co., Ltd.Pomkung Co., Ltd.Pomchok Co., Ltd.Pomcharoen Co., Ltd.Pomburapra Co., Ltd.Num Yuk Co., Ltd.Num Kijjakarn Co., Ltd.Num Palang Co., Ltd.Num Muang Co., Ltd.Num Nakorn Co., Ltd.Num Thurakij Co., Ltd.Beer Chang Co., Ltd.Archa beer Co., Ltd.Maharas Agri Co., Ltd.Pan International (Thailand) Co., Ltd.Additive Food Co., Ltd.Charun Business 52 Co., Ltd.ConsolidatedOwnership interest Paid-up capital Cost method Equity method Dividend income2006 2005 2006 2005 2006 2005 2006 2005 2006 2005(%) (in million Baht)100.00 100.00 700.00 700.00 700.00 700.00 1,038.06 1,017.71 95.20 105.00100.00 100.00 700.00 700.00 700.00 700.00 845.82 834.72 24.50 -100.00 100.00 700.00 700.00 700.00 700.00 808.88 843.81 24.50 -100.00 100.00 900.00 900.00 900.00 900.00 1,157.70 1,134.23 22.50 54.00100.00 100.00 700.00 700.00 700.00 700.00 968.10 973.97 32.20 52.50100.00 100.00 800.00 800.00 800.00 800.00 1,413.04 1,386.02 24.00 40.00100.00 100.00 800.00 800.00 800.00 800.00 1,211.23 1,171.43 37.60 100.00100.00 100.00 1.00 1.00 2.59 2.59 165.43 345.36 232.79 149.99100.00 100.00 5.00 5.00 26.6 26.65 187.23 229.73 234.50 55.00100.00 100.00 1.20 1.20 6.84 6.84 673.10 630.62 413.31 191.90100.00 100.00 5.00 5.00 24.75 24.75 1,017.77 892.94 436.99 400.00100.00 100.00 5.00 5.00 23.80 23.80 707.51 690.79 350.00 300.00100.00 100.00 5.00 5.00 38.95 38.95 9.19 6.07 0.06 -100.00 100.00 10.00 10.00 10.00 10.00 221.84 143.36 100.00 70.00100.00 100.00 10.00 10.00 10.00 10.00 323.88 40.10 116.00 130.00100.00 100.00 10.00 10.00 10.00 10.00 205.04 96.32 74.00 50.00100.00 100.00 10.00 10.00 10.00 10.00 410.52 224.82 155.00 100.00100.00 100.00 10.00 10.00 10.00 10.00 27.35 7.96 - 25.00100.00 100.00 10.00 10.00 10.00 10.00 294.18 158.90 93.00 60.00100.00 100.00 10.00 10.00 10.00 10.00 723.48 671.04 247.04 200.00100.00 100.00 10.00 10.00 10.00 10.00 1,228.42 1,102.28 604.00 200.00100.00 100.00 10.00 10.00 10.00 10.00 394.86 387.43 170.33 30.00100.00 100.00 10.00 10.00 10.00 10.00 507.27 498.89 267.00 50.00100.00 100.00 10.00 10.00 10.00 10.00 198.94 202.45 119.04 20.00100.00 100.00 10.00 10.00 10.00 10.00 385.11 390.48 196.31 60.00100.00 100.00 1.00 1.00 4,301.04 4,301.04 187.32 166.87 95.55 -100.00 100.00 1.00 1.00 129.92 129.92 34.26 4.95 1.60 -100.00 100.00 2.00 2.00 2.00 2.00 - - - -100.00 100.00 1.00 1.00 53.62 53.62 73.71 59.28 18.86 21.98100.00 100.00 1.00 1.00 38.11 38.11 41.38 31.04 12.41 6.00100.00 100.00 121.80 121.80 84.53 84.53 103.56 102.27 - -


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 2005Direct subsidiaries (Continued)Bionic Humus Co., Ltd.Thai Molasses Co., Ltd.Sahatipkarnkonsong Co., Ltd.Thai Cooperage Co., Ltd.Dhanasindhi Co., Ltd.Bang-Na Logistic Co., Ltd.Thai Beverage Marketing Co, Ltd.Dhospaak Co., Ltd.International Beverage Holdings LimitedSura Piset Thipparat Co., Ltd.TotalConsolidatedOwnership interest Paid-up capital Cost method Equity method Dividend income2006 2005 2006 2005 2006 2005 2006 2005 2006 2005(%) (in million Baht)100.00 100.00 10.00 10.00 14.36 14.36 5.56 12.76 - 3.5099.72 99.72 40.00 40.00 35.41 35.41 117.67 88.35 62.70 47.86100.00 100.00 12.00 12.00 12.00 12.00 85.10 60.12 22.80 9.60100.00 100.00 300.00 300.00 300.00 300.00 553.70 515.10 7.80 -100.00 100.00 20.00 20.00 23.89 23.89 32.14 32.52 8.40 -100.00 100.00 123.00 123.00 134.07 134.07 196.57 169.47 29.75 30.75100.00 100.00 300.00 300.00 300.00 300.00 931.04 840.95 7.50 45.00100.00 100.00 25.00 25.00 61.50 61.50 61.22 15.10 - -100.00 100.00 535.10 535.10 535.10 535.10 - 484.27 - -100.00 - 500.00 - 510.00 - 499.63 - - -63,594.73 63,084.73 69,391.02 68,045.38 8,055.41 5,235.68


144Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 200511. Other Long-Term InvestmentsNon-marketable equity securitiesLess allowance for decline in value of investmentsNetConsolidated The Company2006 2005 2006 2005 (in million Baht)8.07 8.78 - -(4.32) (4.32) - -3.75 4.46 _ _In 2005, three subsidiaries sold their investments in non-marketable equity securities with total cost of Baht 1,108.06 millionreceiving with a profit of Baht 0.92 million.


Thai Beverage Public Company Limited and its Subsidiaries Notes to The Financial Statements.For the years ended 31 December 2006 and 200512. Property, Plant and EquipmentCost/valuationAt 1 January 2005AdditionsTransfersDisposalsAt 31 December 2005AdditionsTransfersDisposalsAt 31 December 2006Accumulated depreciationAt 1 January 2005Depreciation charge for the yearTransfersDisposalsAt 31 December 2005Depreciation charge for the yearTransfersDisposalsAt 31 December 2006Net book valueAt 31 December 2005At 31 December 2006CostLandsurplus onlandrevaluationLandimprovementConsolidatedBuilding and Machinery andimprovements equipment Oak barrelsFurniturefixturesand officeequipmentTotal Vehicles(in million Baht)Constructionin progress Total7,856.60 6,699.71 14,556.31 719.20 15,361.49 34,031.61 2,782.31 447.87 2,698.08 1,479.71 72,076.58560.54 20.35 580.89 0.06 28.54 153.66 5.80 74.37 50.77 6,428.27 7,322.36- - - 0.83 150.68 796.59 - 50.90 (2.46) (739.04) 257.50(475.84) (134.83) (610.67) - (138.75) (91.70) (35.19) (11.75) (30.88) (0.88) (919.82)7,941.30 6,585.23 14,526.53 720.09 15,401.96 34,890.16 2,752.92 561.39 2,715.51 7,168.06 78,736.62423.65 3.16 426.81 1.95 200.19 1,069.89 30.79 83.63 29.43 2,199.01 4,041.70- - - 434.07 795.84 5,438.83 0.18 (35.11) (20.84) (6,612.97) -(0.12) (1.63) (1.75) (1.96) (10.54) (92.01) (0.22) (11.11) (25.23) (0.49) (143.31)8,364.83 6,586.76 14,951.59 1,154.15 16,387.45 41,306.87 2,783.67 598.80 2,698.87 2,753.61 82,635.01- - - 155.76 4,489.27 16,657.91 1,115.50 271.81 1,758.90 - 24,449.15- - - 45.40 724.89 3,008.67 133.32 65.13 359.76 - 4,337.17- - - - - 64.44 - (15.44) (3.51) - 45.49- - - - (26.35) (58.37) (7.99) (8.35) (21.97) - (123.03)_ _ _ 201.16 5,187.81 19,672.65 1,240.83 313.15 2,093.18 - 28,708.78- - - 52.97 732.51 3,171.31 134.05 75.69 314.25 - 4,480.78- - - 224.14 (260.99) 85.79 0.18 (34.45) (14.67) - -- - - (1.42) (5.81) (48.23) (0.05) (9.23) (21.95) - (86.69)_ _ _ 476.85 5,653.52 22,881.52 1,375.01 345.16 2,370.81 - 33,102.877,941.30 6,585.23 14,526.53 518.93 10,214.15 15,217.51 1,512.09 248.24 622.33 7,168.06 50,027.848,364.83 6,586.76 14,951.59 677.30 10,733.93 18,425.35 1,408.66 253.64 328.06 2,753.61 49,532.14


146Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005As at 31 December 2006 the historical cost of fully depreciated plant and equipment, which were still in use amounted toBaht 3,025.90 million (2005: Baht 2,253.62 million).As at 31 December 2006 the net book value of property, plant and equipment of certain subsidiary companies, used assecurity under the Negative Pledge agreement, as disclosed in Note 15, totaled Baht 34,530.16 million (2005: Baht31,658.05 million).As at 31 December 2006 the carrying amount of idle land, which is held for planned future business operations amounted to Baht 1,625.97 million (2005: Baht 1,735.21 million).The CompanyCost/valuationAt 1 January 2005AdditionsDisposalsAt 31 December 2005AdditionsDisposalsAt 31 December 2006CostLandsurplus onlandrevaluationTotalFurniturefixturesand officeequipment(in Million Baht)VehiclesConstructionin progress410.90 134.52 545.42 4.65 - 121.90 671.97- - - 63.06 24.18 - 87.24- - - - - (0.98) (0.98)410.90 134.52 545.42 67.71 24.18 120.92 758.23- - - 27.12 0.02 99.93 127.07- - - (0.17) - (10.89) (11.06)410.90 134.52 545.42 94.66 24.20 209.96 874.24TotalAccumulated depreciationAt 1 January 2005Depreciation charge for the yearAt 31 December 2005Depreciation charge for the yearDisposalsAt 31 December 2006Net book valueAt 31 December 2005At 31 December 2006- - - 0.28 - - 0.28- - - 5.00 1.62 - 6.62_ _ _ 5.28 1.62 _ 6.90- - - 16.64 4.84 - 21.48- - - (0.07) - - (0.07)_ _ _ 21.85 6.46 _ 28.31410.90 134.52 545.42 62.43 22.56 120.92 751.33410.90 134.52 545.42 72.81 17.74 209.96 845.93


In 2006 and 2005, the Company and subsidiaries recognized revaluation land as disclosed in Note 19.Depreciation of plant and equipment for the years ended 31 December, consisted of:Consolidated The Company2006 2005 2006 2005Included in cost of production2,879.58(in million Baht)2,378.45 - -Included in selling and administrative expenses 1,601.20 1,958.72 21.48 6.62Total4,480.78 4,337.17 21.48 6.62Borrowing costs for the years ended 31 December capitalized as part of asset cost, consisted of:Consolidated The Company 2006 2005 2006 2005 (in million Baht)Interest expense154.33 82.71 - -13. Intangible assets147CostAt 1 January 2005AdditionsTransferAt 31 December 2005AdditionsAt 31 December 2006Accumulated depreciationAt 1 January 2005Amortisation charge for the yearTransfersAt 31 December 2005Amortisation charge for the yearAt 31 December 2006Net book valueAt 31 December 2005At 31 December 2006TrademarkLeaseholdConsolidatedComputer Broadcastingsoftware rights Goodwill Total(in Million Baht)304.86 1.04 4.28 101.96 426.11 838.251.82 0.12 11.69 59.93 - 73.56- - 0.32 - - 0.32306.68 1.16 16.29 161.89 426.11 912.133.43 0.70 8.93 - - 13.06310.11 1.86 25.22 161.89 426.11 925.19158.01 0.13 0.58 19.83 140.19 318.7424.67 0.18 1.57 18.53 34.73 79.68- - 0.02 - - 0.02182.68 0.31 2.17 38.36 174.92 398.4424.93 0.26 3.87 123.53 18.74 171.33207.61 0.57 6.04 161.89 193.66 569.77124.00 0.85 14.12 123.53 251.19 513.69102.50 1.29 19.18 _ 232.45 355.42


148Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 200514. Other non-current assetsAdvance payments to a specialistStainless steel platesDeposits OthersLess Allowance for impairment of assetsNetNote28 CostAt 1 January 2005AdditionsAt 31 December 2005AdditionsAt 31 December 2006Accumulated amortisationAt 1 January 2005Amortisation charge for the yearAt 31 December 2005Amortisation charge for the yearAt 31 December 2006Net book valueAt 31 December 2005At 31 December 2006The CompanyComputer software (in million Baht) 1.368.209.566.6716.230.071.221.292.593.888.2712.35Consolidated The Company2006 2005 2006 2005 (in million Baht)1,879.16 - 352.34 -71.44 33.27 - -57.92 67.29 4.72 -13.94 18.60 0.07 0.07 2,022.46 119.16 357.13 0.07(5.36) (6.25) - -2,017.10 112.91 357.13 0.07


14915. Interest-bearing liabilitiesCurrentBank overdrafts- Guaranteed- UnsecuredShort-term loans from financial institutions- Secured- Guaranteed/Negative pledge- UnsecuredShort-term guaranteed bonds- Guaranteed/Negative pledgeCurrent portion of long-term guaranteed bonds- Guaranteed/Negative pledgeCurrent portion of long-term loans- Secured- Guaranteed/Negative pledgNon-currentLong-term guaranteed bondsConsolidated The Company2006 2005 2006 2005(in million Baht) 1,516.42 858.63 - - 366.89 - 29.56 - 1,883.31 858.63 29.56 - - 2,700.00 - - - 36,600.00 - 36,600.00 4,870.00 - 3,000.00 -4,870.00 39,300.00 3,000.00 36,600.00 2,200.00 - 2,200.00 - 2,300.00 - 2,300.00 - - 1,086.60 - - 1,500.00 - 1,500.00 - 12,753.31 41,245.23 9,029.56 36,600.00- Guaranteed/Negative pledge Long-term loans from financial institutions 3,000.00 - 3,000.00 -- Guaranteed/Negative pledge 3,755.00 - 3,755.00 - 6,755.00 - 6,755.00 -Total 19,508.31 41,245.23 15,784.56 36,600.00


150Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005 The periods to maturity of interest-bearing liabilities as at 31 December were as follows:Consolidated The Company2006 2005 2006 2005 (in million Baht)Within one year12,753.31 41,245.23 9,029.56 36,600.00After one year but within five years6,755.00 - 6,755.00 -Total19,508.31 41,245.23 15,784.56 36,600.00The interest rate exposure of the borrowings as at 31 Decemberwas as follows:2006 2005Range Weighted Range Weighted(%)Bank overdrafts6.00 - 10.75 7.16 6.00 - 7.00 6.00Short-term loans from financial institutions5.27 - 5.45 5.41 3.75 - 5.00 4.74Short-term guaranteed bonds5.40 5.40 - -Long-term guaranteed bonds and current portion 5.55 - 5.75 5.66 - -Long-term loan and current portion5.70 - 5.75 5.73 5.00 5.00The currency denomination of interest-bearing liabilities was as follows:Thai Baht (THB)Great Britain Pound (GBP)TotalAs at 31 December 2006 the Group had unutilized credit facilities totalling Baht 17,789.94 million (2005: Baht 14,851.74 million).Consolidated The Company2006 2005 2006 2005 (in million Baht)18,652.17 40,386.76 15,784.56 36,600.00856.14 858.47 - -19,508.31 41,245.23 15,784.56 36,600.00


The principal features of the borrowings are as follows:(a) Bank overdrafts are repayable on demand. As at 31 December 2006, the Group has a total overdraft facilities amountingto Baht 3,705.39 million (2005: Baht 3,595.55 million) which is partially guaranteed by 5 subsidiaries.(b) Short-term loans from financial institutions as at 31 December 2006, the Group has short-term loan facilities fromseveral financial institutions totalling Baht 20,820 million, with money market rate quoted by bank. The Group utilized thosefacilities in term of promissory notes issued by the Group to several domestic commercial banks totalling Baht 4,870 million(2005: Baht 39,300 million)Short-term loans from financial institutions as at December 2005 amounted to Baht 36,600 million were guaranteed by 4 subsidiaries together with Negative Pledge agreement by 17 subsidiaries, whereby these subsidiaries agree not to sell,transfer, mortgage, pledge, encumber or grant any preferential right in relation to their land, buildings, plant and machinery,during any period that the Company has not yet repaid these loans and/or is still liable to the banks under these promissorynotes, unless written consent from the banks is received. As at 31 December 2005 the net book value of assets used assecurity under the negative pledge are disclosed in Note 12. The remaining short-term loans from financial institutions aresecured certain inventories of subsidiaries. The carrying amount of inventories that have been pledged as security is disclosedin Note 8. In 2006, such short-term loans were repaid and its collaterals were redeemed.(c) On 22 February 2006 the Company issued guaranteed bonds totalling Baht 10,000 million with a full co-guarantee byfour subsidiaries and negative pledge undertaken by the Company whereby 17 subsidiaries agree not to sell, transfer,mortgage, pledge, encumber or grant any preferential right in relation to their land, buildings, plants and machinery. The Company is required to maintain a consolidated debt (interest-bearing debt) to equity (excluding unrealised foreignexchange gain or loss) ratio of not more than 2.5 to 1 based on the annual consolidated financial statements prepared inaccordance with generally accepted accounting standards in Thailand. The bonds have the following payment terms:Amount Fixed interest rate Maturity(in million Baht) (% per annum)First tranche 2,500 4.95 22 August 2006Second tranche 2,200 5.40 22 February 2007Third tranche 2,300 5.55 22 August 2007Fourth tranche 3,000 5.75 22 February 2008The principal is to be redeemed at maturity. Interest is payable semi-annually commencing on 22 August 2006. As at 31December 2006 the net book value of assets used as security under the negative pledge are disclosed in Note 12.The proceeds from the issuance of the bonds were utilised in the repayment of short-term loans from financial institutions.151


(d) Long-term loan and its current portion in the consolidated balance sheet as at 31 December 2005 was obtained froma domestic commercial bank by a subsidiary and is to be repaid monthly in 23 installments, Baht 110 million for the first 22installments and Baht 96.60 million for the last installment, which commenced in December 2004. Interest is payable monthly at152 a fixed rate of 4% per annum for the first year and MLR-1.75% per annum afterwards. This loan is secured by certaininventories of subsidiaries. As at 31 December 2005 the carrying amount of those inventories is disclosed in Note 8. In October 2006, the last installment of such loan was repaid and its secured inventories were redeemed.During March 2006, the Company entered into new loan agreements with 8 commercial banks to obtain long-termborrowings totalling Baht 26,600 million in order to repay short-term loans. Of this, the principal of Baht 23,600 million has a grace period of 2 years and is to be repaid in 36 monthly installments, Baht 654.22 million each for the first 35installments and Baht 702.20 million for the last installment, from 28 April 2008 to 31 March 2011 with interest at thefixed rates of 5.75% and 6.00% per annum for the first and the second years, respectively, and MLR-1.5% to MLR-1.75%per annum from the third year onwards, payable monthly, commencing in March 2006. The remaining principal of Baht3,000 million is to be repaid in eight quarterly installments, Baht 375 million each, from 28 June 2006 to 28 March 2008with a fixed interest rate of 5.70% per annum, payable quarterly, commencing in June 2006.The borrowings are fully co-guaranteed by 4 subsidiaries with a negative pledge made by 17 subsidiaries whereby thesesubsidiaries agree not to sell, transfer, mortgage, pledge, encumber or grant any preferential right in relation to their land,buildings, plant and machinery. The net book values of assets used as security under the negative pledge are disclosed inNote 12.The loans were fully drawn during 28 and 29 March 2006 and were immediately utilised for the repayment of short-term loans.On 30 May 2006 and 5 July 2006, the Company partially repaid long-term loans with accrued interest to 7 financialinstitutions amounting to Baht 15,959.20 million and Baht 4,376.31 million, respectively.16. Trade accounts payable Consolidated The CompanyNote 2006 2005 2006 2005 (in million Baht)Trade accounts payable to related parties 5 819.31 521.12 - -Trade accounts payable to other parties1,456.36 1,170.02 - -Total2,275.67 1,691.14 _ _


17. Other current liabilitiesAdvanced payments from customers for purchase of goodsAccrued expenses Value added tax payableConstruction payableOutstanding cheque paid for excise taxDeposits and retention payableAccrued interest expenseAccrued promotion expenseWithholding tax payableOther payablesOthersTotal 18. Share capital AuthorisedAt 1 January Issue of new sharesAt 31 DecemberIssued and fully paidAt 1 JanuaryIssue of new sharesAt 31 DecemberPar value (in Baht)111111Consolidated The Company2006 2005 2006 2005 (in million Baht)1,004.74 1,879.05 - -883.34 727.00 90.47 53.92686.81 736.84 104.82 81.61344.32 596.98 4.72 11.78294.89 918.68 - -272.62 318.74 2.93 0.43163.23 15.13 156.56 14.13132.70 230.41 - -79.43 72.80 22.47 23.2060.93 43.17 11.77 1.31180.30 59.16 0.47 0.374,103.31 5,597.96 394.21 186.75Number2006 2005Baht Number (million share/million Baht)Baht29,000 29,000 22,000 22,000- - 7,000 7,00029,000 29,000 29,000 29,00022,000 22,000 22,000 22,0003,110 3,110 - -25,110 25,110 22,000 22,000153The Extraordinary Meeting of Shareholders of the Company No. 1/2005 held on 8 July 2005 unanimously approved to increasethe authorised share capital of the Company from Baht 22,000 million to Baht 29,000 million through the issue of 7,000million ordinary shares with a Baht 1 par value. Of this increase, an amount not exceeding 6,000 million shares will beallocated to the public and an amount not exceeding 1,000 million shares will be available as a “Greenshoe Option”. The Company registered the increase of its authorised share capital with the Ministry of Commerce on 11 July 2005.


154The Company listed on the SGX-ST on 29 May 2006 received net proceeds of Baht 16,191.60 million from the issue of2,444.45 million new ordinary shares, sold to the public through an Initial Public Offering (the “IPO”) at a price of SingaporeDollar 0.28 per share. Directly attributable expenses for the IPO amounting to Baht 676.49 million are accounted for as adeduction from the premium on share capital received from the IPO. The Company registered the change in paid-up capitalwith the Ministry of Commerce on 29 May 2006 from Baht 22,000 million to Baht 24,444.45 million.On 3 July 2006, an over allotment option was exercised related to its recent IPO, whereby the Company sold a further665.58 million new ordinary shares, raising Baht 4,390.54 million in proceeds. The Company registered the change inpaid-up capital with the Ministry of Commerce on 3 July 2006 from Baht 24,444.45 million to Baht 25,110.03 million.19. ReservesShare premiumSection 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received inexcess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available fordividend distribution.Currency translation changesCurrency translation changes consisted of foreign exchange differences arising from translation of the financial statementsof foreign operations to Thai Baht.Fair value changes and revaluation surplusesFair value changesFair value changes recognised in shareholders’ equity relate to cumulative net changes in the fair value of available-for-saleequity securities.Revaluation surplusesDuring 2003 and 2004, the Group revalued all land held. Revaluations of land are carried out by independent professionalvaluers on an open market basis. The revaluations were originally based on valuations reported by the independentprofessional valuers in 2003 and 2004. In September 2005, the valuers updated the valuations, which have beenrecognised as adjusting events occurring after the balance sheet date. As a result of the updated revaluations a surplus ofBaht 6,453.34 million was recognised as a revaluation surplus in 2003 as a component of shareholders’ equity, a surplusof Baht 246.38 million was recognized in 2004, and a surplus of Baht 134.83 million was reversed in 2005.In addition, in 2005, a subsidiary company obtained a revaluation of its land from independent professional valuers and a surplus of Baht 20.35 million was recognised in the 2005 financial statements.Subsequently, in 2006, a subsidiary company obtained a revaluation of its land from independent professional valuers andrecognised a revaluation surplus in the amount of Baht 3.16 million. The other subsidiary company sold its land which hasbeen revalued and recognised a revaluation surplus, and adjusted in a reduction in the revaluation surplus in the amount ofBaht 1.63 million.


Legal reserveSection 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5% of its annualnet profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reachesan amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.20. Segmental informationSegment information is presented in respect of both business and geographical segments. The primary format, businesssegments, is based on the Group’s management and internal reporting structure.Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocatedon a reasonable basis.In preparing segmental information, those liabilities and related interest expense that are not specifically attributable to aparticular segment are allocated on a percentage of net assets basis. Management believes this to be a fair indication ofthe actual use of the liabilities.Inter-segment transactions are eliminated on consolidation.Business segmentsThe Group comprises the following main business segments:Beer/water Production and sales of branded beer and water products (mostly outside the group);Spirits Production and sales of branded spirits products (mostly outside the group);Alcohol Production and sales of alcohol (mostly outside the group); andRelated Purchasing of packaging materials and sale of byproducts (mostly within the group).Geographical segmentsOperating units of the Group are mainly located in Thailand. Portions of product produced from these units are exporteddirectly or indirectly through foreign subsidiaries to external customers. Certain operating units of subsidiaries are located inforeign countries.In presenting information on the basis of geographical segments, segment revenue is based on the geographical location ofcustomers. Segment assets are based on the geographical location of the assets.155


Business segment resultsRevenueInterest incomeOther incomeTotal revenueCost of salesSelling and administrative expensesTotal expensesProfit before interest and income tax expensesInterest expenseIncome taxNet profit (loss)Business segment financial positionInventories, netProperty, plant and equipment, netOther assetsTotal AssetsTotal debtOther liabilitiesTotal liabilitiesCapital expenditure- Fixed assets- Intangible assetsDepreciationAmortisationBeer/water Spirits Alcohol Related EliminationTotal2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005(in million Baht)46,641.00 42,276.97 51,428.33 52,810.99 1,205.04 869.18 7,155.13 6,633.04 (8,631.58) (7,686.77) 97,797.92 94,903.4124.44 33.73 25.90 33.75 1.07 0.39 9.14 5.11 (4.10) (1.46) 56.45 71.5243.63 141.16 97.69 94.17 3.76 12.41 43.58 20.72 (87.03) (53.16) 101.63 215.3046,709.07 42,451.86 51,551.92 52,938.91 1,209.87 881.98 7,207.85 6,658.87 (8,722.71) (7,741.39) 97,956.00 95,190.2335,608.95 32,548.68 33,002.21 32,061.52 995.25 471.34 6,365.11 6,068.29 (6,646.40) (5,962.09) 69,325.12 65,187.746,932.13 6,983.69 7,169.68 7,343.53 177.31 165.74 454.34 461.61 (2,048.90) (1,774.32) 12,684.56 13,180.2542,541.08 39,532.37 40,171.89 39,405.05 1,172.56 637.08 6,819.45 6,529.90 (8,695.30) (7,736.41) 82,009.68 78,367.994,167.99 2,919.49 11,380.03 13,533.86 37.31 244.90 388.40 128.97 (27.41) (4.98) 15,946.32 16,822.24302.94 386.69 1,187.26 1,263.96 51.23 42.14 31.32 50.48 (4.10) (1.46) 1,568.65 1,741.811,896.70 1,330.16 2,276.93 3,281.67 7.78 51.71 141.48 79.64 - - 4,322.89 4,743.181,968.35 1,202.64 7,915.84 8,988.23 (21.70) 151.05 215.60 (1.15) (23.31) (3.52) 10,054.78 10,337.25Beer/water Spirits Alcohol RelatedTotal2006 2005 2006 2005 2006 2005 2006 2005 2006 2005(in million Baht)2,823.32 2,743.99 25,077.45 25,598.22 275.07 118.99 139.32 285.82 28,315.16 28,747.0219,940.44 20,716.07 25,673.45 25,241.98 1,681.17 1,736.57 2,237.08 2,333.22 49,532.14 50,027.841,680.17 2,571.89 5,298.09 5,079.23 562.75 144.80 191.20 566.25 7,732.21 8,362.1724,443.93 26,031.95 56,048.99 55,919.43 2,518.99 2,000.36 2,567.60 3,185.29 85,579.51 87,137.035,567.24 11,368.59 13,012.17 27,557.96 571.33 1,029.88 357.57 1,288.79 19,508.31 41,245.224,615.66 4,812.41 7,837.00 8,507.07 45.45 78.08 1,019.54 779.74 13,517.65 14,177.3010,182.90 16,181.00 20,849.17 36,065.03 616.78 1,107.96 1,377.11 2,068.53 33,025.96 55,422.521,350.45 6,395.43 2,606.06 481.49 67.83 254.25 14.20 170.84 4,038.54 7,302.014.98 4.80 7.65 5.26 0.24 0.23 0.19 63.27 13.06 73.562,025.26 1,902.56 2,238.02 2,228.60 126.29 120.54 91.21 85.47 4,480.78 4,337.172.20 16.42 44.83 59.87 0.09 0.03 124.21 18.65 171.33 94.97


Geographical segmentsThe segment financial information of the Group based on geographical segments for the year 2006 and 2005 was as follows:157ThailandOverseasTotalConsolidatedRevenueFixed assets2006 2005 2006 2005 (in million Baht)95,106.26 92,362.87 48,031.73 48,501.262,849.74 2,827.36 1,500.41 1,526.5897,956.00 95,190.23 49,532.14 50,027.8421. Other incomeRevenue from sales of scrapsGain on disposal of assetsGain on exchange rateReversal of accrued royalty expenseOthersTotalConsolidated The Company2006 2005 2006 2005 (in million Baht)31.79 20.19 - -1.69 11.98 - -- 43.78 - 0.01- 41.86 - -44.46 75.45 4.87 2.0277.94 193.26 4.87 2.0322. Selling and administrative expensesMarketing and advertising expensesPersonnel expensesVehicle and transportation expensesIdle capacity Depreciation and amortisationLoss on exchange rateOthersTotalConsolidated The Company2006 2005 2006 2005 (in million Baht)3,993.54 4,949.79 98.06 84.163,095.15 2,946.54 522.48 420.581,679.04 2,165.00 - -806.09 642.18 11.23 25.68515.68 541.19 24.08 7.84129.34 - 14.97 -2,465.72 1,935.55 272.50 184.3712,684.56 13,180.25 943.32 722.63


23. Personnel expenses158Salaries and wagesBonusContribution to defined contribution plansOthersTotalNumber of employees as at 31 DecemberConsolidated The Company2006 2005 2006 2005 (in million Baht)3,265.19 3,064.57 321.36 288.25637.22 564.84 154.13 116.759.37 6.05 5.35 0.05785.91 781.49 41.64 15.534,697.69 4,416.95 522.48 420.58(number of employees)22,412 20,134 335 281The defined contribution plans comprise provident funds established by the Group for its employees. Membership to thefunds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 2% to 3% of theirbasic salaries and by the Group at from 2% to 3% of the employees’ basic salaries. The provident funds are registeredwith the Ministry of Finance as juristic entities and are managed by a licensed Fund Manager.24. Earnings per shareThe calculation of basic earnings per share is based on the profit attributable to ordinary shareholders and the weightedaverage number of shares outstanding.Consolidated The Company2006 2005 2006 2005Profit attributable to ordinary shareholders (in million Baht)10,054.78 10,337.25 10,078.65 10,132.78Weighted average number of ordinary sharesIssued ordinary shares at 1 JanuaryEffect of shares issued on 29 May 2006Effect of shares issued on 3 July 2006Weighted average number of ordinary sharesfor the yearConsolidated The Company2006 2005 2006 2005 (in million share)22,000.00 22,000.00 22,000.00 22,000.001,453.27 - 1,453.27 -331.88 - 331.88 - 23,785.15 22,000.00 23,785.15 22,000.00


25. Promotional privilegesPromotional privileges from the Board of InvestmentBy virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, a subsidiary has been granted privilegesby the Board of Investment relating to the production of alcohol and agricultural fuel. The privileges granted include: (a) exemption from payment of import duty on approved machinery. (b) exemption from payment of income tax for a period of eight years from the dates on which the income is first derivedfrom such operations. In the event the subsidiary incurs a loss during this eight year period, the subsidiary can carry theselosses forward to deduct against any future profits for a period of five years. (c) exemption from income tax on dividends derived from the promoted business of its subsidiary during this eight year period. As a promoted company, the subsidiary must comply with certain conditions and restrictions provided for in the promotional certificate.Privileges granted to business operator in Free ZoneAlso in 2004 another subsidiary was granted approval from the Customs Department to operate in a “Free Zone”, wherebythe subsidiary obtains privileges related to the payment of import and export taxes, valued added tax and excise tax.Various other privileges are also granted.26. DividendsAt the Annual General Meeting of the shareholders of the Company held on 27 March 2006, the shareholders approved theappropriation of dividends of Baht 0.24 per share, amounting to Baht 5,280 million, from the net profit of 2005. The dividend was paid to shareholders on 26 April 2006. At the Board of Directors Meeting of the Company held on 10 August 2006, the meeting approved the appropriation ofinterim dividends of Baht 0.11 per share, amounting to Baht 2,762.10 million, from the first half of 2006. The interimdividend was paid to shareholders on 8 September 2006.27. Financial instrumentsFinancial risk management and policiesThe Group is exposed to normal business risks from changes in market interest rates and currency exchange rates and fromnon-performance of contractual obligations by counterparties. The Group does not hold or issue derivative financialinstruments for speculative or trading purposes.Interest rate riskInterest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s operationsand its cash flows because loan interest rates are mainly fixed. The Group is primarily exposed to interest rate risk from itsborrowings (Note 15). The Group mitigates this risk by ensuring that the majority of its borrowings are at fixed interest rates. 159Foreign currency riskThe Group is exposed to foreign currency risk relating to purchases and sales which are denominated in foreign currencies.


160The Group primarily utilises forward exchange contracts with maturities of less than one year to hedge such financial assetsand liabilities denominated in foreign currencies. The forward exchange contracts entered into at the balance sheet datealso relate to anticipated purchases and sales, denominated in foreign currencies, for the subsequent period. The table below provides an indication of the Group’s foreign currency positions as at 31 December, relating to theGroup’s exposure and forward exchange contracts used to hedge against the exposure as a result of the Group’s policy.Financial assets denominated in foreign currencies:US Dollar (USD)Euro (EUR)Canadian Dollar (CAD)Singapore Dollar (SGD)OthersTotalFinancial liabilities denominated in foreign currencies:US Dollar (USD)Euro (EUR)Great Britain Pound (GBP)Australian Dollar (AUD)OthersTotalForward exchange contracts to buy foreigncurrencies (mark-to-market value):US Dollar (USD)Euro (EUR)Great Britain Pound (GBP)Australian Dollar (AUD)TotalForward exchange contracts to sell foreigncurrencies (mark-to-market value):US Dollar (USD)Singapore Dollar (SGD)TotalIn foreigncurrency 2006ConsolidatedIn Baht (million)In foreigncurrency 2005In Baht1.10 39.57 0.19 7.840.75 35.55 - 0.110.12 3.78 - -- 0.06 0.15 3.570.12 1.38 - - 80.34 11.529.98 362.17 7.28 299.022.27 108.22 0.79 38.621.26 89.42 0.54 38.120.22 6.47 0.24 7.420.92 4.81 0.05 0.39 571.09 383.5753.25 1,919.99 16.24 667.3916.18 771.15 20.17 991.867.62 539.64 5.41 384.810.87 24.88 3.97 119.55 3,255.66 2,163.61- - 1.20 49.1663.60 1,500.61 - - 1,500.61 49.16


Credit riskCredit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial andcontractual obligations to the Group as and when they fall due.Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluationsare performed on all customers requiring credit over a certain amount. At the balance sheet date there were no significantconcentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financialasset in the balance sheet. However, due to the large number of parties comprising the Group’s customer base, managementdoes not anticipate material losses from its debt collection.Liquidity riskThe Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management tofinance the Group’s operations and to mitigate the effects of fluctuations in cash flows.Fair valuesThe fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willingparties in an arm’s length transaction. In determining the fair value of its financial assets and liabilities, the Group takes intoaccount its current circumstances and the costs that would be incurred to exchange or settle the underlying financial instrument. 28. CommitmentsCapital commitments Contracted but not provided for BahtEuro (EUR)US Dollar (USD)Great Britain Pound (GBP)Singapore Dollar (SGD)Authorised but not contracted for BahtEuro (EUR)Non-cancellable operating lease commitmentsWithin one yearAfter one year but within five yearsAfter five yearsTotalConsolidated The Company2006 2005 2006 2005 (in million)620.82 1,330.20 11.00 132.698.59 7.44 - -0.06 - - -2.97 - - -0.11 - 0.11 -2,914.15 2,927.79 1,633.70 1,259.790.56 - - -Consolidated The Company2006 2005 2006 2005 (in million Baht)284.52 275.75 23.78 19.51284.46 214.12 37.77 31.1718.93 0.26 - -587.91 490.13 61.55 50.68161


162Further to the above, the Group has the following additional commitments as at 31 December 2006 are as follows:In Million In Million In Million In Million In MillionBaht US$ AUD Euro GBPRaw material purchasing agreements (Malt & Hop) - 44.12 - 9.39 6.24Molasses purchasing agreements 1,727.81 - - - -Computer system installation agreements 309.13 - - - -Advertising and sponsorship agreements 122.52 - - - -Consulting and supervising service agreement for beer production 31.68 - - - -Other service agreements 32.43 0.14 - - - Raw material sale agreements 6.66 - - - -(a) During 2004, the Company and four subsidiaries entered into production and blending control agreements with aspecialist for a period of 40 years from 1 August 2004 to 1 August 2044. Under the agreements, the Company and itssubsidiaries are obliged to pay monthly service fees of Baht 4.3 million which are to be annually increased by 5% for thefirst 20 years from August 1, 2004 to August 1, 2024. Afterwards, the Company has to pay monthly service fees of Baht250,000 until the expiration of the agreements. Service fee under the agreements totaled Baht 1,766.20 million. As at 31December 2006 the remaining commitments to be paid, relating to these agreements, amounted to Baht 1,636.72 million.Subsequently, on 30 December 2005, the Company and the four subsidiaries entered into an addendum to the originalagreements described above. The addendum became effective on 1 January 2006 whereby the Company paid Baht 375million and the four subsidiaries paid a total of Baht 1,625 million as consideration to the specialist in January 2006 toexclusively secure his services. Under the addendum, the Company and the four subsidiaries concerned are entitled toseek damages, not exceeding Baht 2,000 million, for any intentional breach that the specialist fails to remedy, includingnon-performance of his contractual duties. Therefore, the total service fees under the agreements both outstanding andalready paid by the Company and its subsidiaries amounted to Baht 3,766.20 million.(b) During 2005, a subsidiary renewed a sponsorship agreement with Everton Football Club, in the United Kingdom, for aperiod of three years as from 1 June 2005 to 31 May 2008 in order to promote the Group’s businesses globally. Underthe agreement, the subsidiary is obliged to pay a minimum amount of £0.50 million and a maximum amount of £2.9 millionper year, dependent on the performance of Everton football team in each year.29. Litigation Since 2002 up to 2006, a subsidiary’s property tax assessment totaled Baht 167.82 million, recognised as expenses ofBaht 16.50 million and other current assets of Baht 151.32 million. However, the subsidiary filed an application to theCentral Tax Court to withdraw the assessment of the property tax (amount recognised as other current assets). During2004 and 2006, the Central Tax Court ruled that the subsidiary should pay additional property taxes amounting to Baht18.10 million. These additional taxes have been paid by the subsidiary and recognised as an expense.


The subsidiary has appealed and the case is currently being considered by the Central Tax Court and the Supreme Court.The management of the subsidiary and their attorney believe that the likelihood of winning is high.30. Events after the balance sheet dateSignificant events after the balance sheet date were as follows:(a) The Executive Board of Directors’ Meeting No. 1/2007 held on 23 January 2007 unanimously approved the Companyto utilise the long-term loan facilities from a commercial bank in the amount of Baht 4,500 million in order to increase thecapital of International Beverage Holdings Limited in the amount of HK Dollar 980 million.(b) The Board of Directors’ Meeting No. 1/2007 held on 9 February 2007 unanimously approved to sell land and buildingof ThaiBev Tower Project to T.C.C. Hotel Collection Company Limited, a related party, in the amount of Baht 819 millionwith a gain on sale of Baht 131.86 million. (c) The Board of Directors’ Meeting No. 2/2007 held on 27 February 2007 unanimously agreed to propose a dividendpayment of Baht 0.22 per share, totalling Baht 5,524.20 million. The interim dividend was paid of Baht 0.11 per share,amounting to Baht 2,762.10 million. The remaining is a dividend payment of Baht 0.11 per share, amounting to Baht2,762.10 million(d) The Executive Board of Directors’ Meeting No. 4/2007 held on 27 February 2007 unanimously passed for thefollowing solutions :- Approval for Pacific Spirit (UK) Limited in principle of granting term loan facilities offered by Barclays Bank PLC. in the amount of GBP 24 million. - Approval for Inver House Distillers Limited in principle of granting credit facilities offered by Barclays Bank PLC. in the amount of GBP 16 million.- Approval in principle of capital increase of Red Bull Distillery (1988) Co., Ltd. from Baht 3,000 million to Baht 5,000 million by the issue of 200 million ordinary shares with a Baht 10 par value.31. Reclassification of accountsCertain accounts in the 2005 financial statements have been reclassified to conform with the presentation in 2006 thefinancial statements.32. New and revised accounting standards not yet adoptedOn 11 October 2006, the Federation of Accounting Profession (FAP) announced that the Thai Accounting Standard No.44 (TAS No.44) “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” is to be revised. FAP announcement No. 26/2006 requires a parent company which has investments in a subsidiary company, an entity163


164under joint control, or an associate company, which is not classified as a “held for sale” investment, to record suchinvestment in accordance with either the cost method or with the recognition and measurement basis for financialinstruments (when an announcement is made), instead of the equity method currently used. This revision to TAS No. 44 isapplicable to financial statements covering periods beginning on or after 1 January 2007, with early adoption encouraged.The Company will adopt the change in accounting treatment for its investments in subsidiaries and associates for itsseparate financial statements from equity method to cost method on 1 January 2007 onward.33. Significant differences between Thai GAAP and IFRS (unaudited/unreviewed)These consolidated financial statements have been prepared in accordance with generally accepted accounting principlesin Thailand (“Thai GAAP”), which differ in certain significant respects from International Financial Reporting Standards(“IFRS”). The following disclosure provides a summary of certain significant differences between Thai GAAP and IFRS, asapplicable to the consolidated financial statements of the Group, and a reconciliation of net profit and total shareholders’ equityfrom Thai GAAP to IFRS. Neither the narrative summary nor the reconciliation should be construed as being exhaustive orpresented fairly in all material respects and are provided for information purposes only. (a) Deferred taxThere is no Thai accounting standard currently effective in relation to accounting for income and deferred taxes. In 2007,Thai GAAP plans to adopt TAS No. 56 Accounting for Income tax, which is not materially different from InternationalAccounting Standard (“IAS”) No.12 Income Taxes, with early adoption allowed. Whilst not specifically addressed in ThaiGAAP, provisions for income taxes are typically based on corporate income taxes currently payable in the period under theRevenue Code of Thailand. The group has not opted for early adoption of TAS No. 56 and, as such, the Group does notrecognise deferred tax assets and liabilities.Under IFRS, provision is made for deferred tax using a balance sheet approach, with deferred tax calculated on temporarydifferences, being the differences between the tax and the book values of assets and liabilities. The deferred tax charge orcredit is the change in the period in deferred tax liabilities and assets. Deferred tax assets are recognised to the extent thatit is probable that future taxable profits will be available against which the temporary differences can be fully utilised.(b) Employee benefitsThere is currently no Thai accounting standard in relation to accounting for employee benefits, including termination,retirement and post-retirement benefits. The Group’s primary obligations in respect of employee benefits are contributionson behalf of employees to provident funds and the payment of statutory severance benefits on retirement and terminatingemployment involuntarily. Severance termination and retirement benefits vary according to various factors, including theemployee’s service life and salary. Whilst not specifically addressed in Thai GAAP, contributions are charged as an expense asincurred. Under IFRS, employee benefits are accounted for in accordance with IAS No. 19 Employee Benefits. Accordingly,termination benefits are recognised as a liability and an expense when, and only when, the enterprise is demonstrablycommitted to either terminate the employment of an employee or group of employees before the normal retirement date or


provide termination benefits as a result of an offer made in order to encourage voluntary redundancy. Retirement benefits are recognised as a liability, being the net total of the present value of the obligation at the balancesheet date less the fair value of any plan assets and recognised as an expense the net total of current service costs,interest costs, past service costs and any actuarial gains and losses.(c) Financial instrumentsThai GAAP has certain disclosure requirements for financial instruments, but only limited guidance on the recognition andmeasurement of financial instruments. The Group has decided not to recognise derivative financial instruments on thebalance sheet. However, foreign currency assets and liabilities hedged by these contracts are translated into Thai Baht atexchange rates prevailing on the balance sheet date.Under IFRS, derivative financial instruments are recognised on the balance sheet as either an asset or a liability initially atcost, which is the fair value of consideration given (in the case of an asset) or received (in the case of a liability). Transactioncosts are included in the initial measurement. Subsequent to initial recognition, derivative financial instruments are stated at fair value. Movements in fair values are recognised in the consolidated statement of income.(d) Investment in propertyIn accordance with Thai GAAP, owned land held to earn rentals is classified as part of property, plant and equipment. This land is carried at a revalued amount less any subsequent accumulated impairment losses. Movements on therevaluation surplus are reflected in equity.Under IFRS, owned property held to earn rentals is classified as part of investment property. This is covered by IAS No. 40Investment Property. IAS No. 40 allows enterprises to choose either a fair value model or a cost model to measureinvestment property.In accordance with the fair value model, an enterprise should measure all of its investment property at its fair value. A gainor loss arising from a change in the fair value of investment property should be included in net profit or loss for the period in which it arises.In accordance with the cost model, land and buildings held as investment property should be measured at cost less anyaccumulated impairment losses.For the purposes of disclosure under IFRS, the Group has adopted the cost model for investment property consisting ofboth land and buildings. For Thai GAAP, the land has been revalued while the buildings have not.(e) Business combination (Goodwill)Thai GAAP requires goodwill acquired in business combination to be systematically amortised over its estimated useful life,although its useful life should not exceed 20 years from initial recognition.165


166Thai Beverage Public Company Limited and its SubsidiariesNotes to The Financial Statements.For the years ended 31 December 2006 and 2005Under IFRS, acquired goodwill is measured after initial recognition at cost less any accumulated impairment losses.Therefore, goodwill is not amortised and must be tested for impairment annually, or more frequently if events or changes incircumstances indicate that it might be impaired.As reported in these consolidated financial statements under Thai GAAPAdd (less) : Thai GAAP/IFRS differences(net of tax effect)(a) Deferred tax(b) Employee benefits(c) Financial instruments(d) Business combination (Goodwill)Under IFRSConsolidated net profit 2006 2005(in million Baht) 10,054.78 10,337.25 16.12 128.58 (61.65) (54.95) (44.69) 13.98 18.74 34.73 9,983.30 10,459.59 As reported in these consolidated financial statements under Thai GAAPAdd (less) : Thai GAAP/IFRS differences(net of tax effect)(a) Deferred tax(b) Employee benefits(c) Financial instruments(d) Investment in property(e) Business combination (Goodwill)Under IFRSConsolidated total shareholders’ equity 2006 2005(in million Baht) 52,553.55 31,714.50 (1,428.73) (1,444.90) (520.73) (459.09) (70.54) (25.85) (50.86) (50.86) 73.29 54.55 50,555.98 29,788.35


Interested Persons Transactions ReportAnnual Report 2006 - Thai Beverage Public Company Limited167Transactions in statements of incomeY-T-DJan. - Dec. 06Description Reference Expenses RevenuesRevenue from sales and service income Attachment 1 - 178,462,319.37Interest income Attachment 2 - 22,383.56Other income Attachment 3 - 18,302,408.95Cost of sales Attachment 4 4,977,498,478.12 -Interest expense Attachment 5 109,000,366.16 -Other expenses Attachment 6 274,214,504.09 -Total 5,360,713,348.37 196,787,111.88Net - expense 5,163,926,236.49As at 31 Dec. 06Transactions in balance sheets Assets LiabilitiesAccounts receivable Attachment 7 21,080,549.67 -Accounts payable Attachment 8 - 819,305,613.29Amount due from and advances Attachment 9 64,334,647.95 -Amount due to and advances Attachment 10 - 4,837,787,398.32Purchase of assets Attachment 11 3,762,175.70 -Total 89,177,373.32 5,657,093,011.61Net - liabilities 5,567,915,638.29


168Revenue from sales and service incomeAttachment 1Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountLSPV Co., Ltd. Purchasing service 163.90Bang-Na Glass Co., Ltd. Purchasing service, sales of glass 1,113,052.25Pisetkij Co., Ltd. Sales of glass remnants 28,603,942.90PS Recycle Co., Ltd. Sales of scrap, hire of work 106,485,976.91The Chonburi Sugar Corp. Ltd. Purchasing service, hire of work 3,639,073.98The Mae Wang Sugar Industry Co., Ltd. Purchasing service 270,630.64The Suphanburi Sugar Industry Co., Ltd. Purchasing service 366,567.52Dhipaya Sugar (1999) Co., Ltd. Purchasing service 8,195.52South East Capital Co., Ltd. Sales of water, rental and service 2,455,215.78The Thai Glass Industries PCL Hire of work 92,651.77T.C.C. Technology Co., Ltd. Purchasing service, sales of water 191,730.76Thai Beverage Can Co., Ltd. Hire of work 16,861.91Thai Charoen Insurance PCL Sales of drinking water 23,048.88Plastic Agachon Co., Ltd. Purchasing service 2,155.00Golden Wealth Co., Ltd. Sales of goods 10,692.00T.C.C. Commercial Property ManagementCo., Ltd. Sales of drinking water 545,504.09T.C.C. Capital Co., Ltd. Sales of water 89,671.92Siam Realty Co., Ltd. Sales of water 24,195.72Southeast Assurance (2000) Co., Ltd. Advertising service, sales of drinking water 4,316,209.73Southeast Life Assurance Co., Ltd. Advertising service 569,130.89Plaza Athenee Hotel (Thailand) Co., Ltd. Sales of goods 1,251,691.46Queen’s Park Hotel Co., Ltd. Sales of goods 123,766.76Uttaradit Sugar Industry Co., Ltd. Sales of goods 392,577.29T.C.C. Holding Co., Ltd. Sales of drinking water 60,314.04Chroenwannakij Co.,Ltd. Construction service 23,210.00T.C.C. AGRO Co., Ltd. Advertising service 48,406.32


169Revenue from sales and service incomeAttachment 1Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountTara Hotel Co., Ltd. Sales of goods 257,167.84Regent Gold Property Fund Sales of drinking water 7,883.84BJC Engineering Co., Ltd. Construction service 1,117,114.90Oishi Trading Co., Ltd. Sales of goods 10,730,337.14Lake View Land Co., Ltd. Sales of goods 671,787.00North Park Golf And Sport Club Co., Ltd. Sales of drinking water 177,684.55T.C.C. Land Co., Ltd. Sales of goods 76,782.78TCCCL Sena Co., Ltd. Sales of goods, advertising service 1,778,224.53TCCCL Narathiwad Co., Ltd. Sales of goods, advertising service 1,936,009.72TCCCL Sukhumvit 24 Co., Ltd. Advertising service 2,219,626.17TCC Hotel Collection Co.,Ltd. Sales of goods 1,569,014.29Madrigal Trading Limited Sales of goods 7,196,048.67Total 178,462,319.37Interest incomeAttachment 2Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountPlastic Agachon Co., Ltd. Interest income 22,383.56Total 22,383.56


170Other incomeAttachment 3Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountWattanapat Trading Co., Ltd. Rental and service 76,000.00Pisetkij Co., Ltd. Sales of scrap 12,935,820.55PS Recycle Co., Ltd. Sales of scrap 206,125.13Poon Peum Karnsura Co., Ltd. Telephone bill 995.00Dhipaya Sugar (1999) Co., Ltd. Rental and service 102,504.32South East Capital Co., Ltd. Claim of document lost 4,000.00The Thai Glass Industries PCL Sales of scrap, claim of damaged bottles 2,557,155.84Thai Beverage Can Ltd. Compensation for beer 36,283.50Berli Jucker PCL. Support for ThaiBev’s event 186,915.89Thai Charoen Insurance PCL Claim of document lost 896,628.69Plastic Agachon Co., Ltd. Transportation (employee) 3,500.00Southeast Assurance (2000) Co., Ltd. Support for ThaiBev’s event 269,041.89T.C.C. AGRO Co., Ltd. Gain on sales of asset 5,616.88Best Spirits (China) Company Limited Reimbursement of telephone 3,479.20BJC Engineering Co., Ltd. Rental 96,000.00Oishi Trading Co., Ltd. Rental of booth, miscellaneous sales 715,800.00Mae Ping Hotel (1988) Co., Ltd. Reimbursement of utilities 6,542.06Mong Reththy Investment CambodiaOil Palm Co., Ltd. Sales of boiler 200,000.00Total 18,302,408.95


171Cost of salesAttachment 4Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountPraserdsuk Karnsura Co., Ltd. Purchase bottles 12,780.67Surapiset Rungroj Co., Ltd. Utilities 858,955.00Bang-Na Glass Co., Ltd. Purchase of used bottles 43,721,931.02Pisetkij Co., Ltd. Purchase packing material 819.00PS Recycle Co., Ltd. Purchase of used bottles 917,990,521.65The Chonburi Sugar Corp. Ltd. Purchase of molasses 39,835,349.91The Mae Wang Sugar Industry Co., Ltd. Purchase of molasses 23,952,535.10The Suphanburi Sugar Industry Co., Ltd. Purchase of molasses 52,539,291.90Dhipaya Sugar (1999) Co., Ltd. Purchase of molasses 7,652,426.80South East Capital Co., Ltd. Car rental 3,886,305.15The Thai Glass Industries PCL Purchase pallet, supplies 1,636,312.50T.C.C. Technology Co., Ltd. Consultancy and system development 31,120,606.41Thai Beverage Can Co., Ltd. Purchase packaging material 1,070,207,042.28Berli Jucker PCL. Purchase of new bottles 1,971,160,065.11Thai Charoen Insurance PCL Insurance service 35,542,637.78Plastic Agachon Co., Ltd. Purchase of material 2,381,280.00Golden Wealth Co., Ltd. Service charge 18,705.00Southeast Assurance (2000) Co., Ltd. Insurance service 29,111,175.21Southeast Life Assurance Co., Ltd. Insurance service 792,388.60N.C.C. Management and Development Co., Ltd. Food and beverage 93,457.94Plaza Athenee Hotel (Thailand) Co., Ltd. Food and beverage 293,996.88Queen’s Park Hotel Co., Ltd. Food and beverage 319,508.38Uttaradit Sugar Industry Co., Ltd. Purchase of molasses 32,078,860.08T.C.C. AGRO Co., Ltd. Purchase of herb 3,305,220.00Tara Hotel Co., Ltd. Food and beverage 18,859.81Regent Gold Property Fund Office rental 1,003,120.75New Noble Property And Loan Fund Land rental 14,239,860.00


172Cost of salesAttachment 4Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountMr. Pisanu Vichiensanth Hire of work 1,986,825.00BJC Engineering Co., Ltd. Service charge 159,478.00Indara Insurance Public Co., Ltd. Insurance service 5,280,409.59Mae Ping Hotel (1988) Co., Ltd. Food and beverage 1,162,263.42North Park Golf And Sport Club Co., Ltd. Food and beverage 534,200.63Dynamic Assets Property and Loan Fund Land rental 50,808,000.00Pan-Paper (1992) Co.,Ltd. Purchase paper 93,055.00T.C.C. Ningbo Best Spirits Co., Ltd. Purchase liquor 8,342,644.66Madrigal Trading Limited Purchase liquor 625,357,588.89Total 4,977,498,478.12Interest expenseAttachment 5Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountSouth East Capital Co., Ltd. Int Expense 291,126.04Great Oriole Limited Int Expense 108,709,240.12Total 109,000,366.16


173Other expensesAttachment 6Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountSurapiset Rungroj Co., Ltd. Utilities 17,137.79Wattanapat Trading Co., Ltd. Reimbursement of utilities (984.00)Pisetkij Co., Ltd. Purchase supplies 301,628.70PS Recycle Co., Ltd. Reimbursement of packaging material (225,133.65)Dhipaya Sugar (1999) Co., Ltd. Purchase sugar 81,448.01South East Capital Co., Ltd. Car rental 81,984,478.98The Thai Glass Industries PCL Damaged pallet 3,149,575.00T.C.C. Technology Co., Ltd. Consultancy and system development 19,545,295.94Berli Jucker PCL. Service charge 600.00Thai Charoen Insurance PCL Insurance service 24,315,684.61Sura Sumpun Co., Ltd. Rental, repair 3,426,876.00Phatralanna Co., Ltd. Rental, service 240,000.00Plastic Agachon Co., Ltd. Rental, service 892,493.97Golden Wealth Co., Ltd. Service charge 68,330.00T.C.C. Capital Co., Ltd. Service charge 558,879.31Siam Realty Co., Ltd. Rental, service 503,600.00Southeast Assurance (2000) Co., Ltd. Insurance service 8,741,278.62Southeast Life Insurance Co., Ltd. Insurance service 5,719,080.80Plaza Athenee Hotel (Thailand) Co., Ltd. Entertainment 52,170,775.41Queen’s Park Hotel Co., Ltd. Entertainment 17,699,710.04T.C.C. Holding Co., Ltd. Training 157,901.84T.C.C. AGRO Co., Ltd. Travelling 747.66Tara Hotel Co., Ltd. Entertainment 6,122,575.17Regent Gold Property Fund Office rental, utilities, car parking 5,273,646.72Chalitlarp Co., Ltd. Rental, service 180,000.00Silvercord Capital Co., Ltd. Office shared cost 206,166.97New Noble Property And Loan Fund Rental, service 918,395.00


174Other expensesAttachment 6Jan. - Dec. 2006(Unit : Baht)Company Type of transaction AmountBJC Marketing Co., Ltd. Entertainment 312,453.99BJC Engineering Co., Ltd. Service charge 90,000.00Indara Insurance Public Co., Ltd. Insurance service 1,029,669.32Mae Ping Hotel (1988) Co., Ltd. Entertainment 5,434,790.80Lake View Golf And Yacht Club Co., Ltd. Entertainment 1,594,882.05Lake View Land Co., Ltd. Entertainment 550,487.04The Imperial Lake View Hotel Co., Ltd. Entertainment 732,632.87North Park Golf And Sport Club Co., Ltd. Entertainment 8,923,505.55The Imperial Angkor Palace Hotel Co., Ltd. Entertainment, transportation 433,760.37Kampuchea Liquor Trading Co., Ltd. Office shared cost 474,804.58T.C.C. Land Leisure Co., Ltd. Entertainment 2,477,115.34TCC Hotel Collection Co., Ltd. Entertainment, training 11,615,573.06Dynamic Assets Property and Loan Fund Insurance service 2,177,323.39Best Wishes Co., Ltd. Office shared cost 6,220,116.84Pan-Paper (1992) Co., Ltd. Purchase A4 paper 97,200.00Total 274,214,504.09


175Accountds receivableCompanyAttachment 7As at 31 December 2006(Unit : Baht)AmountLSPV Co., Ltd. 60.13Pisetkij Co., Ltd. 3,848,926.32PS Recycle Co., Ltd. 6,674,072.21The Chonburi Sugar Corp. Ltd. 48,672.06The Mae Wang Sugar Industry Co., Ltd. 22,347.74The Suphanburi Sugar Industry Co., Ltd. 43,347.12Dhipaya Sugar (1999) Co., Ltd. 69.55South East Capital Co., Ltd. 27,399.54The Thai Glass Industries PCL 18,080.64T.C.C. Technology Co., Ltd. 26,119.93Golden Wealth Co., Ltd. 11,440.44T.C.C. Commercial Property Management Co., Ltd. 49,723.24T.C.C. Capital Co., Ltd. 7,425.70Siam Realty Co., Ltd. 16,948.80Southeast Assurance (2000) Co., Ltd. 850,264.44Southeast Life Assurance Co., Ltd. 231,413.49Plaza Athenee Hotel (Thailand) Co., Ltd. 129,715.32Queen’s Park Hotel Co., Ltd. 2,400.05Uttaradit Sugar Industry Co., Ltd. 35,087.53T.C.C. Holding Co., Ltd. 13,816.29T.C.C. AGRO Co., Ltd. 37,670.76Tara Hotel Co., Ltd. 30,414.98Berli Jucker Foods Co., Ltd. 48,000.00BJC Engineering Co., Ltd. 73,402.00Oishi Trading Co., Ltd. 2,567,851.20Mae Ping Hotel (1988) Co., Ltd. 1,680.00Lake View Land Co., Ltd. 166,443.81


176Accountds receivableCompanyAttachment 7As at 31 December 2006(Unit : Baht)AmountNorth Park Golf And Sport Club Co., Ltd. 69,798.24T.C.C. Land Co., Ltd. 62,535.74TCCCL Narathiwad Co.,Ltd. 225.02TCC Hotel Collection Co.,Ltd. 228,295.43Madrigal Trading Limited 5,736,901.95Total 21,080,549.67Accountds payableCompanyAttachment 8As at 31 December 2006(Unit : Baht)AmountBang-Na Glass Co., Ltd. 205,102.04Pisetkij Co., Ltd. 59,583,997.27PS Recycle Co., Ltd. 74,111,881.56The Suphanburi Sugar Industry Co., Ltd. 3,348,578.33Dhipaya Sugar (1999) Co., Ltd. 39,375.00South East Capital Co., Ltd. 51,681.00T.C.C. Technology Co., Ltd. 23,326.00Thai Beverage Can Co., Ltd. 126,042,054.16Berli Jucker PCL. 553,917,295.81Southeast Assurance (2000) Co., Ltd. 538.21T.C.C. AGRO Co., Ltd. 134,100.00Mae Ping Hotel (1988) Co., Ltd. 250,306.36Pan-Paper (1992) Co.,Ltd. 77,371.70TCC Ningbo Best Spirits Co Ltd 1,520,005.85Total 819,305,613.29


177Amount due from and advancesCompanyAttachment 9As at 31 December 2006(Unit : Baht)AmountPisetkij Co., Ltd. 6,868,887.49PS Recycle Co., Ltd. 36,872.27The Chonburi Sugar Corp. Ltd. 7,974,045.99The Mae Wang Sugar Industry Co., Ltd. 6,518,750.00The Suphanburi Sugar Industry Co., Ltd. 12,031,250.00South East Capital Co., Ltd. 200,801.22The Thai Glass Industries PCL 1,462,886.88Thai Beverage Can Co., Ltd. 38,823.35Berli Jucker PCL. 7,155.00Thai Charoen Insurance PCL 1,808,502.29Padermchai Co., Ltd. 9,000.00Southeast Assurance (2000) Co., Ltd. 1,752,939.53Uttaradit Sugar Industry Co., Ltd. 6,671,875.00T.C.C. AGRO Co., Ltd. 1,961,583.00Chalitlarp Co., Ltd. 45,000.00New Noble Property And Loan Fund 3,552,900.00Best Spirits (China) Company Limited 3,722.74BJC Engineering Co., Ltd. 16,000.00Indara Insurance Public Co., Ltd. 1,150.40T.C.C. Land Co., Ltd. 100,000.00Dynamic Assets Property and Loan Fund 13,038,000.00Mong Reththy Investment Cambodia Oil Palm Co.,Ltd. 234,502.79Total 64,334,647.95


178Amount due to and advancesCompanyAttachment 10As at 31 December 2006(Unit : Baht)AmountSurapiset Rungroj Co., Ltd. 172,821.90Pisetkij Co., Ltd. 29,269.74The Suphanburi Sugar Industry Co., Ltd. 67.41Dhipaya Sugar (1999) Co., Ltd. 2,587.48South East Capital Co., Ltd. 16,608,045.94T.C.C. Technology Co., Ltd. 9,899,315.15Thai Charoen Insurance PCL 1,214.45Suratip Vieng Ping Co., Ltd. 65,400.00Suratip Sawan Vichitr Co., Ltd. 65,100.00T.C.C. Capital Co., Ltd. 51,049.70Southeast Assurance (2000) Co., Ltd. 41,322,276.32Plaza Athenee Hotel (Thailand) Co., Ltd. 10,883,063.89T.C.C. Holding Co., Ltd. 106,450.00Tara Hotel Co., Ltd. 923,941.06Regent Gold Property Fund 59,528.00Silvercord Capital Co., Ltd. 231,213.34BJC Marketing Co., Ltd. 69,336.00BJC Engineering Co., Ltd. 13,910.00Indara Insurance Public Co., Ltd. 3,533,743.69Mae Ping Hotel (1988) Co., Ltd. 1,491,366.15Lake View Golf And Yacht Club Co., Ltd. 151,490.00Lake View Land Co., Ltd. 234,738.75North Park Golf And Sport Club Co., Ltd. 400,753.38T.C.C. Land Co., Ltd. 400,000.00Kampuchea Liquor Trading Co., Ltd. 413,021.13TCC Hotel Collection Co.,Ltd. 6,666,224.54


179Amount due to and advancesCompanyAttachment 10As at 31 December 2006(Unit : Baht)AmountDynamic Assets Property and Loan Fund 1,605.59Great Oriole Limited 4,743,851,305.06Pan-Paper (1992) Co.,Ltd. 138,559.65Total 4,837,787,398.32Purchase of assetsCompanyAttachment 11As at 31 December 2006(Unit : Baht)AmountLSPV (2001) Co., Ltd. 616,000.00Parksiri Co., Ltd. 638,505.00Peampolkanka Co., Ltd. 788,508.78Wattanapat Trading Co., Ltd. 25,000.00South East Capital Co., Ltd. 301,476.92Sukhothai Marketing Co., Ltd. 4,500.00T.C.C. Technology Co., Ltd. 176,175.00BJC Engineering Co., Ltd. 1,211,700.00T.C.C. Capital Co., Ltd. 310.00Total 3,762,175.70


180AppexdixRenewal of Shareholders’ Mandate for Interested Person Transactions1. BackgroundThe Board of Directors of Thai Beverage Public Company Limited (the “Company”) refer to (a) the Notice of AnnualGeneral Meeting of the Company dated April 2, 2007 (the “Notice”), accompanying the Annual Report 2006, conveningthe Annual General Meeting (“AGM”) of the Company to be held on April 20, 2007, and (b) Resolution No. 9 under theheading “Special Business” set out in the Notice.2. Shareholders’ MandatePursuant to the Company’s Prospectus dated 19 May 2006 (the “Prospectus”), approval of the Shareholders was deemedobtained for a shareholders’ mandate (the “Shareholders’ Mandate”) to enable the Company and its subsidiaries whichare considered to be “entities at risk” within the meaning of Rule 904(2) of the listing manual (the “Listing Manual”) of theSingapore Exchange Securities Trading Limited (“SGX-ST”), in their ordinary course of businesses, to enter into categoriesof transactions with specified classes of the Company’s interested persons, provided that such transactions are enteredinto on an arm’s length basis and on normal commercial terms. The details of the interested person transactions andshareholders’ mandate were disclosed in pages 124 to 148 of the said Company’s Prospectus.3. Proposed Renewal of the Shareholders’ MandateThe Shareholders’ Mandate was expressed to take effect until the conclusion of the next AGM. Accordingly, the Directorspropose that the Shareholders’ Mandate be renewed at the forthcoming AGM on April 20, 2007, to take effect until thenext AGM of the Company.4. Details of the Shareholders’ Mandate and Extension of Shareholders’ Mandate to include the provisions ofmanufacturing services to and by Interested PersonsDetails of the Shareholders’ Mandate, including the rationale for, and the benefits to, the Company, the review proceduresfor determining transaction prices with interested persons and other general information relating to Chapter 9 of the ListingManual, are set out in the Annexure to this Appendix.The Company is also proposing to extend the Shareholders’ Mandate as set out in the Company’s Prospectus to includethe obtaining of manufacturing and distributorship services from the specified classes of interested persons and theprovision of manufacturing services to the specified classes of interested persons. The rationale for this extension of theShareholders’ Mandate to allow for the provision of manufacturing and distributorship services from the specified classesof interested persons is to provide the Company, in times of growth and expansion, with the flexibility and quicker accessto manufacturing capacity and a distributorship network should these interested persons be able to render these serviceson terms that are acceptable to the Company in accordance with the Shareholders’ Mandate. Similarly, where theCompany has excess manufacturing capacity, the extension of the Shareholders’ Mandate to allow the Company toprovide manufacturing services to the specified classes of interested persons, will facilitate the Company’s better use of itsmanufacturing capability, provided such services are rendered on terms that are acceptable to the Company in accordancewith the Shareholders’ Mandate.5. Audit Committee StatementThe Audit Committee has reviewed the terms of the Shareholders’ Mandate and confirms that:-(a) the review procedures for determining the transaction prices under the Shareholders’ Mandate have not changed since19 May 2006, date of the Company’s prospectus; and


181(b) the review procedures referred to in the Annexure are sufficient to ensure that the transactions will be carried out onnormal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders.If, during the periodic reviews by the Audit Committee, it is of the view that the established review procedures are nolonger appropriate or adequate to ensure that the Interested Person Transactions will be transacted on normal commercialterms and will not be prejudicial to the interests of the Company and minority Shareholders, the Company will seek a freshmandate from Shareholders based on new review procedures.6. Directors’ and Substantial Shareholders’ InterestsThe interests of the directors and substantial shareholders of the Company in the issued shares in the capital of theCompany as at 21 January 2007 and 6 March 2007 respectively can be found in the Annual Report in respect of thefinancial year ended 31 December 2006 to be, or which has been, distributed to shareholders.7. Abstention from VotingMr. Charoen Sirivadhanabhakdi, Khunying Wanna Sirivadhanabhakdi, Mr. Thapana Sirivadhanabhakdi andMr. Panote Sirivadhanabhakdi, who are Directors of the Company, have interests in the shares of the InterestedPersons (as described in the Annexure to this Appendix), and also hold directorships and/or executive positions in them.They and their respective associates will abstain from voting on Resolution No. 9 being the Ordinary Resolution relating tothe proposed renewal of the Shareholders’ Mandate in respect of their shareholdings in the Company, if any, at theforthcoming AGM.8. Directors RecommendationThe Directors who are considered independent for the purposes of the proposed renewal of the Shareholders’ Mandate areMr. Komen Tantiwiwatthanaphan, Mr. Narong Srisa-an, Mr. Samut Hatthasing, Ms. Kanoknart Rangsithienchai, Mr. ChukietTangpongprush, Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, Dr. Pisanu Vichiensanth, Mr. Vivat Tejapaibul,Mr. Puchchong Chandhanankij, Gen. Dr. Choo-Chat Khumbhu Na Ayudhya, Prof. Pornchai Matangkasombut, Mr. MichaelLau Hwai Keong, Mr. Sakthip Krairiksh, Mr. Staporn Kavitanon, Prof. Kanung Luchai, Mr. Manu Leopairote andMr. Ng Tat Pun (the “Independent Directors”). The Independent Directors are of the opinion that the entry into of theMandated Transactions described in the Annexure to this Appendix and those Interested Persons (as described in theAnnexure to this Appendix is in the ordinary course of its business will be entered into to enhance the efficiency of theGroup and are in the best interests of the Company.For the reasons set out in the Annexure to this Appendix, the Independent Directors recommend that Shareholders to votein favour of Resolution No. 9, being the Ordinary Resolution relating to the proposed renewal of the Shareholders’ Mandateat the Second AGM.9. Directors’ Responsibility StatementThe Directors collectively and individually accept responsibility for the accuracy of the information given herein and confirm,having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the opinionsexpressed herein are fair and accurate and that there are no material facts the omission of which would make anystatement herein misleading.10. Action To Be Taken By ShareholdersAny Shareholder who is not able to attend the AGM in person should please duly complete a proxy form and submit to theChairman of the Meeting prior to his proxy attending the Meeting.


18211. SGX-STThe SGX-ST takes no responsibility for the accuracy of any statements or opinions made in this Appendix.ANNEXUREGeneral Mandate for Interested Persons TransactionsWe anticipate that we would, in the ordinary course of business, continue to enter into certain transactions with ourinterested persons, including but not limited to those categories of transactions described below. In view of the timesensitivenature of commercial transactions, it would be advantageous for us to obtain a shareholders’ mandate to enterinto certain interested persons transactions in our ordinary course of business, provided that all such transactions arecarried out on normal commercial terms and are not prejudicial to the interests of our Company and our minority Shareholders.Chapter 9 of the Listing Manual allows a listed company to obtain a mandate from its shareholders for recurrent interestedpersons transactions which are of a revenue or trading nature or for those necessary for its day-to-day operations. Thesetransactions may not include the purchase or sale of assets, undertakings or businesses which are not part of our day-todayoperations.Pursuant to Rule 920(2) of the Listing Manual, our Company may treat a general mandate as having been obtained fromour Shareholders (“Shareholders’ Mandate”) for us to enter into interested persons transactions with our interestedpersons, if the information required under Rule 920(1)(b) of the Listing Manual is included in this document. In relation tous, the information required by Rule 920(1)(b) is as follows:(a) the class of interested persons with which the Entity At Risk (as defined below) will be transacting;(b) the nature of the transactions contemplated under the mandate;(c) the rationale and benefit to the Entity At Risk;(d) the methods or procedures for determining transaction prices;(e) the independent financial advisor’s opinion on whether the methods or procedures in (d) above are sufficient to ensurethat the transactions will be carried out on normal commercial terms and will not be prejudicial to the interests of ourCompany and our minority Shareholders;(f) an opinion from our Audit Committee if it takes a different view to the independent financial advisor; and(g) a statement from us that we will obtain a new mandate from our Shareholders if the methods or procedures in (d)above become inappropriate.The Shareholders’ Mandate will be effective until the earlier of the following: (i) our first annual general meeting followingthe Listing Date of our Company on the Main Board of the SGX-ST; or (ii) the first anniversary of the Listing Date.Thereafter, we will seek the approval of our Shareholders for renewal of the Shareholders’ Mandate at each subsequentannual general meeting.Entities At RiskFor the purposes of the Shareholders’ Mandate, an “Entity At Risk” means:• our Company;• a subsidiary of our Company that is not listed on the SGX-ST or an approved exchange; or• an associated company of our Company that is not listed on the SGX-ST or an approved exchange, provided that theGroup or the Group and interested persons has control over the associated company.


183Classes of Mandated Interested PersonsThe Shareholders’ Mandate will apply to our Group’s transactions with the list of interested persons as set out in theSchedule – List of Our Interested Persons and Mandated Interested Persons” (the “Mandated Interested Persons” andeach a “Mandated Interested Person”).Transactions with Mandated Interested Persons which do not fall within the ambit of the Shareholders’ Mandate shall besubject to the relevant provisions of Chapter 9 of the Listing Manual.Mandated TransactionsThe transactions with interested persons which will be covered by the Shareholders’ Mandate (“Mandated Transactions”)relating to the provision to, or obtaining from, interested persons of products and services in the ordinary course ofbusiness of our Group or which are necessary for the day-to-day operations of our Group (but not in respect of thepurchase or sale of assets, undertakings or businesses which are not part of our day-to-day operations) are as follows:(a) purchases from interested persons of raw materials and packaging materials including new and used glass bottles,aluminium cans, molasses, herbs for the production of beer concentrate, cartons and caps;(b) obtaining from interested persons of insurance and insurance-related services;(c) purchases from interested persons of all kinds of consumer products, office and storage supplies including tissuepaper and sugar for office use, scrap steel, malt bags and wooden pallets;(d) obtaining from interested persons of services, including services relating to provision of accommodation, vehicles andfacilities for the directors of the Company and/or subsidiaries, staff training, telecommunications and software licensing,marketing and advertising and management services and services for the manufacturing and distributorship of products;(e) obtaining from interested persons of leases or subleases of office space, warehouses, passenger cars and land;(f) provision to interested persons of services including procurement services, property improvement services, advertisingand sales services and manufacturing services;(g) lease or sub-lease to interested persons of office space, warehouses, passenger cars and land;(h) sale to interested persons of by-products including fertilizer, used bottles, and factory remnants such as aluminiumand glass remnants and scrap paper;(i) sale to interested persons of our beer, spirits and water, and soda and other products; and(j) provision or the obtaining of such other products and/or services which are incidental to or in connection with theprovision or obtaining of products and/or services in sub-paragraphs (a) to (i) above.Review Procedures for Interested Persons TransactionsOur Audit Committee has oversight of all interested persons transactions undertaken by our Group including, the reviewand where required, approval of such transactions. For this purpose, our Board of Directors has appointed Mr. Ng Tat Pun,an independent non-executive Director and member of the Audit Committee, to lead the Audit Committee in its role inrespect of interested persons transactions undertaken by our Group (the “Lead Independent Director for IPTs”). We havealso established the following procedures to ensure that the interested persons transactions are undertaken on an arm’slength basis and on normal commercial terms.


184Review Procedures and Threshold LimitsIn general, there are procedures established by our Group to ensure that interested persons transactions, including theMandated Transactions with the Mandated Interested Persons, are undertaken on an arm’s length basis and on normalcommercial terms consistent with our Group’s usual business practices and policies, and on terms which are generally nomore favorable to the interested persons than those extended to or obtained from unrelated third parties.In particular, the following review procedures have been implemented:(1) Procurement and purchase of goods and obtaining services(a) All procurement and purchases made by our Group of a recurring nature which are in the ordinary course of businessof our Group or which are necessary for the day-to-day operations of our Group, including procurement and purchaseswhich are Mandated Transactions with Mandated Interested Persons (such as the transactions referred to in paragraphs(a), (b), (c), (d) and (j) above under “General Mandate for Interested Person Transactions - Mandated Transactions”) willbe governed by internal control procedures, which detail matters such as the constitution of internal approving authorities,their approval limits, the number of vendors (minimum of two) who provide us quotes, and the review procedures. Theguiding principle is to objectively obtain the best goods and/or services on the best terms through competitive quotations,if appropriate. In determining whether the price and terms offered by interested persons are fair and reasonable, factorssuch as, but not limited to, delivery schedules, specification compliance, track record, experience and expertise,preferential rates, discounts or rebates offered for bulk purchases, will be taken into consideration. In addition, eachinterested person transaction entered into by our Group will be monitored as an individual transaction and based on thevalue of the transaction, will require the prior approval of the corresponding approving authority who is a Director ormanagement employee of the Group (not being an interested person or his associate) and who does not have anyinterests, whether direct or indirect, in relation to the transaction (the “Relevant Approving Authority”) as follows:Approval LimitsInterested person transaction not exceedingBaht 500,000 in valueInterested person transaction above Baht 500,000but not exceeding Baht 5 million in valueInterested person transaction above Baht 5 millionbut not exceeding Baht 10 million in valueInterested person transaction above Baht 10 millionbut not exceeding Baht 20 million in valueInterested person transaction above Baht 20 millionbut not exceeding 3% of the latest audited net tangibleassets of the Group in valueInterested person transaction above 3% of the latestaudited net tangible assets of the Group in valueRelevant Approving AuthorityA deputy managing director or officer of equivalent rankA managing director or officer of equivalent rankA vice-chairman or officer of equivalent rankA chairman or officer of equivalent rankAny two vice-chairmen and/or chairmen or officersof equivalent rankAny two Audit Committee members, one of whommust be the Lead Independent Director for IPTs


185In relation to paragraph (j) above under “General Mandate for Interested Persons Transactions-Mandated Transactions,”the Relevant Approving Authority (as determined by the value of the transaction) will also assess and approve that theproposed transaction is one which is incidental to or in connection with the provision or obtaining of products and/orservices in sub-paragraphs (a), (b), (c) and (d) above under “General Mandate for Interested Persons Transactions-Mandated Transactions.”(b) In the event that we cannot obtain competitive quotations (for instance, if there are no unrelated third party vendors ofsimilar products and services (taking into account quantum, specifications and delivery schedules among others), or if theproduct is proprietary in nature), based on the value of the proposed interested persons transaction, the correspondingRelevant Approving Authority as set out above (not being an interested person or his associate) and who does not haveany interests, direct or indirect, in relation to the transaction, will determine whether the price and terms offered by theinterested person are fair and reasonable.(c) Purchases under the prevailing terms of the Glass Bottle Purchase Agreement dated 4 August 2004 entered intobetween Bang-Na Logistic Co., Ltd. and Berli Jucker Public Company Limited (the “Glass Bottle Purchase Agreement”)will be covered under the Shareholders’ Mandate, provided that any amendment to the material provisions of the GlassBottle Purchase Agreement, including any adjustment authorized by the agreement to the purchase price for glass bottlespursuant to and any renewal or extension of tenure of the Glass Bottle Purchase Agreement, requires the approval of ourBoard of Directors and the Audit Committee.(2) Other interested persons transactions of a recurring nature(a) We intend to conduct other interested persons transactions not covered by paragraph (1) above which are of arecurring nature and that occur in the ordinary course of business of our Group. These transactions are necessary for theday-to-day operations of our Group and include the sale of products and provisions of services to interested persons andlease or sub-lease of property to or from interested persons and the Mandated Transactions with Mandated InterestedPersons referred to in paragraphs (e), (f), (g), (h), (i) and (j) under “General Mandate for Interested PersonsTransactions-Mandated Transactions” above. We intend to conduct these transactions at the prevailing market rates orprices of the product or service to be provided, and at prevailing market rentals for leases and sub-leases of property, onterms no more favorable to the interested person than the usual commercial terms extended to or, where applicable, byunrelated third parties (including, where applicable, preferential rates, discounts to favored customers or for bulkpurchases) or otherwise in accordance with applicable industry norms, provided that:(i) in relation to the sale of products and provision of services which are not contemporaneously in time as the proposedinterested person transaction being sold or provided to an unrelated third party, quotes from at least two other supplierswho are unrelated third parties not being the relevant interested person or his associates of similar products or serviceswill be obtained; and(ii) in relation to the lease or sub-lease of property, we are required to obtain enquiries with at least two landlords and/ortenants who are unrelated third parties not being the relevant interested person or his associates of similarly sized andlocated properties put to similar use.In addition, each interested person transaction entered into by our Group will be monitored as an individual transaction andbased on the value of the transaction, will require the prior approval of the corresponding Relevant Approving Authority whois a Director or management employee of the Group (not being an interested person or his associate) and who does nothave any interests, whether direct or indirect, in relation to the transaction as follows:


186Approval LimitsInterested person transaction not exceedingBaht 200,000 in valueInterested person transaction above Baht 200,000but not exceeding Baht 500,000 in valueInterested person transaction above Baht 500,000but not exceeding Baht 5 million in valueInterested person transaction above Baht 5 millionbut not exceeding 3% of the latest audited net tangibleassets of the Group in valueInterested person transaction above 3% of the latestaudited net tangible assets of the Group in valueRelevant Approving AuthorityA deputy managing director or officer of equivalent rankA managing director or officer of equivalent rankA vice chairman or officer of equivalent rankA chairman or officer of equivalent rankAny two Audit Committee members, one of whommust be the Lead Independent Director for IPTsIn relation to paragraph (j) above under “General Mandate for Interested Persons Transactions - Mandated Transactions,”the Relevant Approving Authority (as determined by the value of the transaction) will also assess and approve that theproposed transaction is one which is incidental to or in connection with the provision or obtaining of products and/orservices in sub-paragraphs (e), (f), (g), (h) and (i) above under “General Mandate for Interested Persons Transactions-Mandated Transactions.”(b) Where the prevailing market rates or prices are not available, whether due to the nature of products to be sold orservices to be provided, the unavailability or impracticality of obtaining quotes from third party sources or otherwise, ourGroup’s pricing for these products and services will be determined in accordance with the Group’s usual businesspractices and pricing policies, consistent with the usual margin our Group will obtain for the same or substantially similartype of transaction with unrelated third parties. In determining the transaction price payable by Mandated InterestedPersons for these products or services, factors such as, but not limited to, quantity, volume, consumption, customerrequirements, specifications, duration of contract and strategic purposes of the transaction will be taken into account. Inrelation to leases and sub-leases of property, where prevailing market rentals are not available, whether due to theunavailability or impracticality of obtaining rental comparisons or otherwise, rental will be determined according to theGroup’s usual business practices and policies. In addition, based on the value of the proposed interested persontransaction, the corresponding Relevant Approving Authority as set out in paragraph (a) above (not being an interestedperson or his associate) and who does not have any interests, direct or indirect, in relation to the transaction, willdetermine whether the price and terms offered by the interested person are fair and reasonable.(3) Non-recurring interested persons transactionsWe may from time to time also conduct interested persons transactions not covered by paragraphs (1) and (2) above andwhich do not form part of the Shareholders’ Mandate. These transactions are not of a recurring nature or occur outside theordinary course of business of our Group or which may not be necessary for the day-to-day operations of our Group andinclude the purchase or sale of assets, undertakings or businesses which are not part of our day-to-day operations.We intend to conduct such transactions in accordance with the SGX-ST Listing Manual, including the threshold, approval


187and other requirements under paragraphs 905 and 906 of the SGX-ST Listing Manual. In addition, we will monitor eachtransaction on an individual basis, and each transaction will require the prior approval of the corresponding RelevantApproving Authority below who is a Director or management employee of the Group (not being an interested person or hisassociate) and who does not have any interests, whether direct or indirect, in relation to the transaction. The RelevantApproving Authority will also review the transaction to ensure that they are carried out on normal commercial terms and notprejudicial to the interests of our Company and minority Shareholders:Approval LimitsInterested person transaction not exceedingBaht 200,000 in valueInterested person transaction above Baht 200,000but not exceeding Baht 500,000 in valueInterested person transaction above Baht 500,000but not exceeding Baht 5 million in valueInterested person transaction above Baht 5 millionbut not exceeding 3% of the latest audited net tangibleassets of the Group in valueInterested person transaction above 3% of the latestaudited net tangible assets of the Group in valueRelevant Approving AuthorityA deputy managing director or officer of equivalent rankA managing director or officer of equivalent rankA vice chairman or officer of equivalent rankA chairman or officer of equivalent rankAny two Audit Committee members, one of whommust be the Lead Independent Director for IPTsIn the event that these interested persons transactions require the approval of our Shareholders, additional information maybe required to be presented to Shareholders and an independent financial adviser may be appointed for an opinion.Other Review ProceduresOur Audit Committee led by the Lead Independent Director for IPTs will also review all interested persons transactionsincluding, Mandated Transactions to ensure that the prevailing rules and regulations of the SGX-ST (in particular, Chapter9 of the Listing Manual) are complied with.Our Group has also implemented the following procedures for the identification of interested persons transactions(including Mandated Transactions) and interested persons (including Mandated Interested Persons) and the recordingof all our interested person transactions:(a) our Group Chief Financial Officer will maintain a register of all transactions carried out with interested persons,including the Mandated Interested Persons (and the basis, including the quotations obtained to support such basis,on which these transactions are entered into), whether mandated or non-mandated; and(b) on a quarterly basis, our Group Chief Financial Officer will submit a report to our Audit Committee of all recordedinterested persons transactions, and the basis of all recorded interested persons transactions, entered into by our Group.Our Company’s annual internal audit plan will incorporate a review of all interested persons transactions, including theestablished review procedures for the monitoring of the interested persons transactions including Mandated Transactions,entered into or existing interested persons transactions that are renewed or revised during the current financial year,pursuant to the Shareholders’ Mandate.


188In addition, our Audit Committee led by the Lead Independent Director for IPTs will review, on a quarterly basis, internalcontrols and review procedures for interested persons transactions to determine if they are adequate and/or commerciallypracticable in ensuring that the transactions between our Group and interested persons are conducted on normalcommercial terms and are not prejudicial to the interests of our Company and our minority Shareholders. In conjunctionwith this review, our Audit Committee will also ascertain whether we have complied with the established review procedures.Further, if during these periodic reviews by our Audit Committee, our Audit Committee is of the view that the internalcontrols and review procedures for interested persons transactions are inappropriate or not sufficient to ensure that theinterested persons transactions will be on normal commercial terms and not prejudicial to the interests of our Company andour minority Shareholders, our Audit Committee will (pursuant to Rule 920(1)(b)(iv) and (vii) of the Listing Manual) revertto our Shareholders for a new Shareholders’ Mandate based on new internal controls and review procedures fortransactions with the Mandated Interested Persons. During the period prior to obtaining a new mandate from Shareholders,all transactions with interested persons will be subject to prior review and approval by the Audit Committee.For the purposes of the above review of the internal controls and review procedures, any member of our Audit Committeewho is not considered independent will abstain from participating in the Audit Committee’s review of the internal controlsand review procedures.Our Audit Committee will have overall responsibility for determining the review procedures with the authority to delegate toindividuals or committees within our Group as they deem appropriate.SCHEDULEList of our Mandated Interested PersonsMandated Interested Persons1. TCC Holding Co., Ltd.2. Bang-Na Glass Co., Ltd.3. Berli Jucker Cellox Co., Ltd.4. BJC Engineering Co., Ltd.5. Berli Jucker Foods Co., Ltd.6. Berli Jucker Logistics Co., Ltd.7. Berli Jucker Public Company Limited8. Berli Jucker Special Co., Ltd.9. BJC Marketing Co., Ltd. ,10. BJC Trading Co., Ltd.11. Chalitlarp Co., Ltd.12. Dhipaya Sugar (1999) Co., Ltd.13. Golden Wealth Co., Ltd.14. Indara Insurance Public Company Limited15. Lake View Golf and Yacht Club Co., Ltd.16. Lake View Land Co., Ltd.17. Mae Ping Hotel (1988) Co., Ltd.18. N.C.C. Management and Development Co., Ltd.19. New Noble Property and Loan Fund20. Nongkhai Country Golf Club Co., Ltd.21. North Park Golf and Sports Club Co., Ltd.22. P.S. Recycle Co., Ltd.23. Pisetkij Co., Ltd.24. Plastic Agachon Co., Ltd.25. Plaza Athenee Hotel (Thailand) Co., Ltd.26. Queen’s Park Hotel Co., Ltd.27. Regent Gold Property Fund28. Siam Realty Co., Ltd.29. Southeast Capital Co., Ltd.30. The Southeast Insurance (2000) Co., Ltd.31. The Southeast Life Insurance Co., Ltd.32. The Suphanburi Sugar Industry Co., Ltd.33. Tara Hotel Co., Ltd.34. T.C.C. Agro Co., Ltd.35. T.C.C. Capital Co., Ltd.36. T.C.C. Commercial Property Management Co., Ltd.37. T.C.C. Technology Co., Ltd.38. Thai Beverage Can Co., Ltd.39. Thai Charoen Insurance Public Company Limited40. The Chonburi Sugar Corporation Limited41. Thai Glass Industries Public Company Limited42. The Maewang Sugar Industry Co., Ltd.43. The New Imperial Hotel Public Company Limited44. The Utaradit Sugar Industry Co., Ltd.


Accounting Manual Policy / SAP SystemAnnual Report 2006 - Thai Beverage Public Company Limited189Status of the Completion and Implementation of the Group’s Accounting PoliciesThaiBev developed an accounting manual in 2006, inviting Deloitte Touche Tohmatsu Jaiyos Advisory (Deloitte), part ofone of the world’s top four auditing firms, to assist. An accounting manual will be used eventually to aid in the uniformunderstanding and utilization of the accounting system throughout companies in ThaiBev group. It formally comprisesour accounting policy, chart of accounts, organization chart, accounting process flow, samples of documents andreports received and generated in the accounting process and etc. Deloitte delivered the accounting manual to ThaiBevon December 22, 2006.The initial four companies in the group to make use of this accounting manual are Thai Beverage PLC., the parentcompany, Beer Thai (1991) PLC., a brewery, Sangsom Co., Ltd., a distiller, and Pomthip Co., Ltd., a marketing anddistribution company. All companies in ThaiBev group are expected to commence implementing the use of theaccounting manual within 2007.Implementation and Status of ThaiBev’s SAPInformation technology systems are important to our ability to manage business. Even though the current accountingclosing activities can be supported by the existing system (principally the AS/400), we wish to gain the benefit ofEnterprise Resource Planning (ERP). In 2001, we began implementation of an ERP system called SAP for two breweriesand realized that there was a benefit in consistency and cooperation among business units; group harmonizing andimproved business processes; and centralized financial analysis presenting a credible and transparent accountingof the costs and the business value realized. In 2006, our management therefore approved a budget to extend SAPimplementation to 34 subsidiaries around Thailand. The working committee issued bid invitations to various SAPimplementation vendors in Thailand and selected SAP Thailand as implementation vendor with the following milestones.January 2007June 2007July 2007September 2007January 2008SAP System goes live for four companies in the distillery group and Thai Alcohol PLC.SAP System goes live for ten companies in distillery groupSAP System goes live for three companies in related business groupSAP System goes live for four companies in related business group and five spirits and beer agencycompaniesSAP System goes live for four companies in related business group, one brewery company andThai Beverage PLC.


190Currently, the project is according to the schedule, as we have already gone live at five companies in the distillery groupand at Thai Alcohol PLC. We expect the 28 remaining companies to migrate to the SAP system under the project plan.In addition, we plan to extend the implementation scope of the current project as follows:• Extend SAP implementation to cover distillation operation at Sura Piset Thipharat Co., Ltd.• Extend SAP implementation to cover production planning and plant maintenance at Cosmos Brewery (Thailand) Co., Ltd.It is expected that the cost of the additional scope can be covered by the implementation budget approved bymanagement, but operation costs may slightly increase due to the increase in user licenses required.In addition to the above SAP implementation project plan, we plan to interface BC-Accounting system of 12 companiesin the marketing business group to the SAP system by September 2008, and to extend SAP implementation to ouroverseas businesses by the end of 2010.


Announcements to SGX 2006Annual Report 2006 - Thai Beverage Public Company Limited191Compliance with Singapore Exchange Regulations and Best PracticesFrom May to December 2006, the Company posted 96 announcements via SGX-Net categorized as follows:1. Four announcements of quarterly financial statements and dividend declaration.2. Fifty-seven notices of major (substantial) shareholders and directors’ interest and changes in interest. Each timethe Company Secretary was informed of the changes in interest of any director(s), the Company Secretary alsoreported such information to other directors.3. Four appointment announcements, consisting of a Senior Vice President, Company Secretary, Vice President - Officeof Controller, and Vice President - Office of Corporate Planning & Business Development.4. Two announcements of acquisitions and realizations of assets of other companies resulting from acquisitions byCompany’s subsidiaries.5. Twenty-nine miscellaneous announcements to conform to the regulations of the SGX, involving details of capitalincreases of the Company’s subsidiaries, a summary of business performance results for each quarter for investors,a clarification of news about the Company, and disclosure of connected transactions among interested persons.


192General Corporate InformationAnnual Report 2006 - Thai Beverage Public Company LimitedCompany NameAddressPostCode Telephone Fax RemarkThai Beverage Public Company Limited14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2328Alcohol Group1 Thai Alcohol Public Company Limited 31-35 Chalermkhet 1 Road, Khwaeng Wat Thepsirin,Khet Pomprab, Bangkok 10100 (02) 223 3116 (02) 225 42052 Moo 5, Tambon Bang Sai Pa, Amphoe Banglen,Nakhon Pathom 73130 (034) 391 021-4 (034) 234 909 FactoryBrewery Group1 Beer Thai (1991) Public Company Limited 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272-2441349 Moo 2 Tambon Mae Lad Amphoe Klong KlungKampaengphet 62120 (055) 728 400-15 (055) 728 371 Factory2 Beer Thip Brewery (1991) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500 (02) 617 954668 Moo 2, Tambon Namtoa, Amphoe Bangban,Ayutthaya 13250 (035) 259 333-47 (035) 289 371 Factory3 Cosmos Brewery (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 9549Distillery Group1 Sangsom Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 278 4321 (02) 278 343649 Moo 4, Tambon Hormkret, Amphoe Sampran,Nakhon Pathom 73111 (034) 321 777-9 (034) 321 777 Factory 137/3 Moo 7, Tambon Wangkhanai,Amphoe Thamuang, Kanchanaburi 71110 (034) 611 053 (034) 611 778 Factory 22 Fuengfuanant Co., Ltd. 333 Moo 1, Tambon Tha Toom,Amphoe Si Maha Phot, Prachin Buri 25140 (037) 285 016-20 (037) 285 2373 Mongkolsamai Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321149 Moo 5, Wangseesoob Ngew-Ngam Road,Tambon Phajud, Amphoe Muang, Uttaradit 53000 (055) 449 126-30 (055) 449 131 Factory4 Thanapakdi Co., Ltd. 315 Moo 4, Tambon Mae Faek, Amphoe San Sai,Chiangmai 50290 (053) 849 550-3 (053) 849 5555 Kanchanasingkorn Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 229550 Moo 7, Tambon Wangkhanai, Amphoe Thamuang,Kanchanaburi 71110 (034) 611 783-5 (034) 611 786 Factory


193Company NameAddressPostCode Telephone Fax Remark6 Sura Piset Thipharat Co., Ltd. 14 Soi Yasoob 1, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 22957 Sura Bangyikhan Co., Ltd. 515-323-5 Moo 2, Tambon Prachathipat,Amphoe Thanya Buri, Pathum Thani 12130 (02) 589 2911-2 (02) 958 438082 Moo 3, Tambon Bang Khoo Wat, Amphoe Muang,Pathum Thani 12000 (02) 598 2850-9 (02) 598 2858 Factory8 Athimart Co., Ltd. 170 Moo 11, Tambon Nikhom, Amphoe Satuek,Buri Ram 31150 (044) 627 200-3 (044) 627 202(044) 681 011-29 S.S. Karnsura Co., Ltd. 101 Moo 8, Tambon Kaeng Dom,King Amphoe Sawang Wirawong, Ubon Ratchathani 34190 (045) 202 210-1 (045) 202 212(045) 442 006-810 Kankwan Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 2295309 Moo 6, Nampong-Kranuan Road,Tambon Nampong, Amphoe Nampong, Khon Kaen 40310 (043) 441 013-5 (043) 441 017 Factory11 Theparunothai Co., Ltd. 99 Moo 4, Tambon Hat Kham, Amphoe Muang,Nong Khai 43000 (042) 462 657 (042) 420 211(042) 420 20812 Red Bull Distillery (1988) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95308 Moo 5, Setthakit 1 Road, Tambon Nadee,Amphoe Muang, Samut Sakhon 74000 (034) 830 216-6 (034) 831 000 Factory13 United Winery & Distillery Co., Ltd. 14 Soi Yasoob 1, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 229554 Moo 2, Sukhaphiban Road, Tambon Nakhonchaisri,Amphoe Nakhonchaisri, Nakhon Pathom 73120 (034) 331 954 (034) 331 955 Factory(034) 227 754-714 Simathurakij Co., Ltd. 1 Moo 6, Tambon Ban Daen, Amphoe Banphot Phisai,Nakhon Sawan 60180 (056) 279 088-9 (056) 279 09115 Nateechai Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 22951 Moo 2, Highway No. 41 Road,Tambon Thakong Pang, Amphoe Punpin, Surat Thani 84130 (077) 357 170-3 (077) 357 174 Factory16 Luckchai Liquor Trading Co., Ltd. 46 Moo 1, Tambon Nong Klang Na, Amphoe Muang,Ratchaburi 70000 (032) 321 791-2 (032) 321 793(032) 313 611-2


194Company NameAddressPostCode Telephone Fax RemarkBeer Marketing Group1 Pomthip Co., Ltd. 2194 Charoen Krung Road, Khwaeng Wat Phraya Krai,Khet Bang Kho Laem, Bangkok 10120 (02) 291 9711 (02) 289 47512 Pomkit Co., Ltd. 48, 50, 52 Suranaree Road, Tambon Nai Muang,Amphoe Muang, Nakhon Ratchasima 30000 (044) 242 496 (044) 241 7143 Pomchok Co., Ltd. Daw.16/1 U Thong Road, Tambon Tha Wasukri,Amphoe Phra Nakhon Si Ayutthaya, Ayutthaya 13000 (035) 241 678 (035) 241 0324 Pomcharoen Co., Ltd. 135/3 Moo 4, Kanchanavithi Road,Tambon Bang Kung, Amphoe Muang, Surat Thani 84000 (077) 224 774 (077) 224 7755 Pomklung Co., Ltd. 80/13-14 Ekathosarot Road, Tambon Nai Muang,Amphoe Muang, Phitsanulok 65000 (055) 219 110 (055) 219 0246 Pomburapa Co., Ltd. 51/42 Moo 3, Sukhumvit Road, Tambon Ban Suan,Amphoe Muang, Chon Buri 20000 (038) 287 268 (038) 272 525Liquor Marketing Group1 Num Yuk Co., Ltd. 95/390-391 Trok Nokkhet, Rama III Road,Khwaeng Chong Nonsi, Khet Yannawa, Bangkok 10120 (02) 291 9711-5 (02) 289 47512 Num Thurakij Co., Ltd. 51/40-41 Moo 3, Sukhumvit Road,Tambon Ban Suan, Amphoe Muang, Chon Buri 20000 (038) 287 268-9 (038) 272 5253 Num Muang Co., Ltd. Daw.16/2 Moo 1, U Thong Road, Tambon Tha Wasukri,Amphoe Phra Nakhon Si Ayutthaya, Ayutthaya 13000 (035) 242 691 (035) 242 6914 Num Nakorn Co., Ltd. 149/3 Chulachomklao Road, Tambon Tha Kham,Amphoe Phun Phin, Surat Thani 84130 (077) 224 771-4 (077) 224 7755 Num Palang Co., Ltd. 1/7-8 Phraya Surasi Road, Tambon Nai Muang,Amphoe Muang, Phitsanulok 65000 (055) 241 132 (055) 219 0246 Num Kijjakarn Co., Ltd. 1, 3, 5 Trok Wat Muang, Suranaree Road,Tambon Nai Muang, Amphoe Muang, NakhonRatchasima 30000 (044) 242 496 (044) 241 747Distribution Agent Group1 Thipchalothorn Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95302 Krittayabun Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 22953 Surathip Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 2295


195Company NameAddressPostCode Telephone Fax Remark4 Sunthornpirom Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 22955 Piromsurang Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 2295Import - Export & Logistics Group1 Thai Beverage Marketing Co., Ltd. 40/53 Vibhavadi Rangsit Road,Khwaeng Talat Bangkhen, Khet Laksi, Bangkok 10210 (02) 973 4100-5 (02) 973 4109(02) 521 8040-12 Sahatipkarnkonsong Co., Ltd.* 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2316* The name has been changed to“Thai Beverage Logistics Co., Ltd.” as of 30 Jan. 07Related Business Group1 Dhospaak Co., Ltd. 195 Empire Tower, 25th Floor, Sathon Tai Road,Khwaeng Yannawa, Khet Sathon, Bangkok 10120 (02) 670 2525 (02) 670 25352 Pan International (Thailand) Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95303 Bionic Humas Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95304 Maharas Agri Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 23165 Thai Molasses Co., Ltd. 14 Vibhavadi Rangsit Road, Khwaeng Chomphol,Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 23166 Additive Food Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95307 Charun Business 52 Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95308 Thai Cooperage Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95309 Dhanasindhi Co., Ltd. 949/6-8 Nakhon Chaisi Road,Khwaeng Thanon Nakhon Chaisi, Khet Dusit, Bangkok 10300 (02) 241 0127 (02) 243 1607(02) 241 085810 Bang-na Logistics Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 9530


196Company NameAddressPostCode Telephone Fax RemarkOverseas Group1 International Beverage Holdings Limited Room 901-2, Silvercord Tower 1, 30 Canton Road,Tsim Sha Tsui, Kowloon, Hong Kong (852) 2375 6648 (852) 2375 6188Moffat Distillery, Airdrie, Lanarkshire, ML6 8PL,Scotland 44 (0) 1236 769377 44 (0) 1236 7790012 InterBev (Singapore) Limited 3 Philip Street # 13-04 Commerce Point,Singapore 048693 (65) 6435 21613 InterBev (Cambodia) Co., Ltd. 140 Nehru (Street # 215) Sankat Vealvong,Khan 7 Makara, Phnom Penh, Kingdom of Cambodia4 InterBev Malaysia Sdn. Bhd. Suite 6.01, 6th Floor, Plaza See Hoy Chan,Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia 47500 (603) 5631-1486 (603) 5635-85955 International Beverage Holdings Limited 405 Lexington Avenue, 25th Floor, Suite 2532,USA, Inc. New York, USA 10174 (212) 907 6446-7 (1)(917) 368 80052711 Centerville Road, Suite 400, Wilmington,New Castle, State of Delaware, USA 198086 Best Spirits Company Limited Room 901-2, Silvercord Tower 1, 30 Canton Road,Tsim Sha Tsui, Kowloon, Hong Kong (852) 2375 6648 (852) 2375 61887 Pacific Spirits (UK) Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 1236 769377 44 1236 7713728 Blairmhor Limited Moffat Distillery, Airdrie ML6 8PL, Scotland 44 1236 7693779 Blairmhor Distillers Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 1236 769377 44 1236 769781 Dormant10 Inver House Distillers Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 1236 769377 44 1236 76978111 Liquorland Limited 8 Westbank Road, Belfast, BT3 9JL, Northern Ireland Dormant12 Inver House Polska Limited ul. Obodrzyc?w 34 A/1, 81-812 Sopot, Poland Dormant13 Wee Beastie Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 76937714 Inver House Distribution SA Avenue des Tilleuls, 62140 Marconne, France Dormant15 Moffat & Towers Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant16 The Knockdhu Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant17 Speyburn-Glenlivet Distillery Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 DormantCompany Limited18 The Pulteney Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant19 The Balblair Distillery Company Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant20 Glen Calder Blenders Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant21 Hankey Bannister & Company Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant22 R. Carmichael & Sons Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant23 J MacArthur Junior & Company Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant24 Mason & Summers Limited 10 Foster Lane, London, EC2V 6HH, England 44 (0) 1236 769377 Dormant25 James Catto & Company Limited Moffat Distillery, Airdrie, ML6 8PL, Scotland 44 (0) 1236 769377 Dormant


Company NameAddressPostCode Telephone Fax RemarkOthers1 Vidhayathan Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95302 Muangkij Co., Ltd. 9 Dao Khanong-Chom Thong Road,Khwaeng Bang Kho, Khet Chom Thong, Bangkok 19500 (02) 272 2051 (02) 272 25843 T.C.C. Cosmo Corporation Limited 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95304 Pan Alcohol Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2330 Dormant5 Banglen Agriculture Co., Ltd. 31-35 Chalermkhet 1 Road, Khwaeng Wat Thepsirin,Khet Pomprab, Bangkok 10100 (02) 223 3125 (02) 225 4205 Dormant6 Archa Beer Co., Ltd. 4236/56 Trok Nokkhet, Rama III Road,Khwaeng Bang Khlo, Khet Bang Kho Laem, Bangkok 10120 (02) 617 9500-29 (02) 617 95307 Beer Chang Co., Ltd. 15 Moo 14, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 617 9500-29 (02) 617 95308 Sint Ek Panich Co., Ltd. 31-35 Chalermkhet 1 Road, Khwaeng Wat Thepsirin,Khet Pomprab, Bangkok 10100 (02) 223 3125 (02) 225 4205 Dormant9 Sura Piset Sahasan Co., Ltd. 14 Soi Yasoob 1, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 2295 Dormant10 Sura Piset Samphan Co., Ltd. 14 Soi Yasoob 1, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321(02) 272 2295 Dormant11 Sura Piset Pattharalanna Co., Ltd. 14 Soi Yasoob 1, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2584# 1722 Dormant12 Thai Thum Distillery Co., Ltd. 14 Soi Yasoob 1, Vibhavadi Rangsit Road,Khwaeng Chomphol, Khet Chatuchak, Bangkok 10900 (02) 272 2051-5 (02) 272 2321,# 1731 (02) 272 2295 DormantCompany Legal AdvisorWhite & Case (Thailand) Limited, 22nd floor, Mercury Tower, 540 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330Company Compliance AdvisorVenture Law LLC, 50 Raffles Place #31-01, Singapore Land Tower, Singapore 048623Cerfified Public AccountantMr. Nirand Lilamethwat (CPA No.2316) or Mr. Supot Singhasaneh (CPA No.2826) or Ms. Nittaya Chetchotiros (CPA No.4439) of KPMG Phoomchai Audit Ltd.has been appointed as Company Auditor on March 27, 2006.

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