Annual Report 2007 - Thai Beverage

Transcription

Contents
03
04
20
24
28
Investor
Information
Financial
Highlights
Message from
the Chairman
40
42
44
52
58
Shareholding
Structure
Report of the Board
of Directors
60
Board of
Directors
Executive
Committee
Profile of Directors
&Key Management
Organization
Structure
Product
Portfolio
Operating and
Financial Review
94
96
98
100
108
112
116
117
Our people
Our Success
Credit Rating
Announcement
Awards
Corporate Governance
Report
Corporate Social
Responsibility Report
PR
Talk
Audit Committee
Report
Audit Report of
Certified Public
Accountant
118
149
213
215
216
Financial
Statements
Interested Persons
Transactions Report
Accounting Manual Policy/
SAP System
Announcements to
SGX 2007
General Corporate
Information
Annual Report 2007
Thai Beverage Public Company Limited
03
Investor Information
President’s Talk
Thai Beverage is listed on the Singapore Exchange (SGX-ST) main board
STI ticker
Reuters
Bloomberg
Google Finance
30 May 2006
S$ 0.28
December 31
KPMG Phoomchai Audit Ltd.
Not less than 50% of net profit after
deducting all appropriated reserves
ThaiBev's stock performance
Vol.
(M shares)
Price
(S$)
Thaibev close
Share price*
Volume
0.3
1600
2007 High S$ 0.29
2007 Low S$ 0.24
*data from January 3 to December 31, 2007
Source: www.shareinvestor.com
1400
Investor Relations Contact
0.25
1200
Investor Relations Department
14 Vibhavadi Rangsit Road, Chomphon
Chatuchak, Bangkok 10900, THAILAND
1000
Mr. Richard W. Jones
800
0.2
600
Tel:
+662 127 5035
Fax:
+662 272 2280
E-mail: [email protected]
Ms. Namfon Aungsutornrungsi
400
0.15
Tel:
+662 127 5037
Ms. Ariya Silakorn
Tel:
+662 127 5036
December
November
October
September
August
July
June
May
0
April
President
March
200
February
They say time flies right by you when you're enjoying life.
How true that is! Still, the past year's nearly 9,000 hours
somehow didn't seem enough for the bustling energy with
which we filled every bottle of ThaiBev products. Simply put,
our steady growth truly stemmed from our 110% dedication.
For us at ThaiBev, the mere sight of sparkling bubbles and
a golden smile-shaped reflection no
doubt convey our brimming happiness
to customers worldwide. With such
rippling effects across the globe, this
happiness and your collective trust
in us concurrently foster our robust
business.By any standard, 2007
was a memorable year for all ...
so much so that I wish there were
Mr. Thapana Sirivadhanabhakdi
more than 24 hours in a day!
IPO date
IPO offer price
Fiscal year ends
External Auditor
Dividend Policy
January
8,760 HOURS OF
HAPPINESS
THBEV
tbev.si
thbev sp
SIN:Y92
0.1
2007
Corporate website: www.thaibev.com
IR website: www.thaibev.com/set/investor.html
Annual Report 2007
05
Financial Highlights
ANNUAL REPORT 2007
(Consolidated)
(Consolidated)
2007
2006
2005
2007
2006
2005
Million Baht
Million Baht
Million Baht
Million Baht
Million Baht
Million Baht
%
%
%
%
29.51
29.11
31.31
21.14
21.06
22.40
16.19
16.31
17.73
0.30
0.16
0.30
%
%
%
101.02
90.07
169.82
10.33
10.28
10.89
19.32
23.86
31.58
%
%
times
12.58
11.64
11.35
22.41
20.22
21.17
1.22
1.13
1.04
times
0.45
0.63
1.75
times
times
%
0.29
0.46
1.43
20.29
13.13
12.20
70.13
54.94
51.08
Income Statement ( Mil.Baht )
Profitability Ratio
Revenue from sales
Total revenues
Cost of sales
Gross profit
Operating profit
EBIT
Net profit
Depreciation and amortisation
EBITDA
100,541
97,798
94,903
100,839
97,956
95,190
70,873
69,325
65,188
29,668
28,473
29,715
15,979
15,789
16,534
16,277
15,946
16,822
10,383
10,055
10,337
4,974
4,652
4,432
21,251
20,598
21,254
Balance Sheet ( Mil.Baht )
Efficiency Ratio
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Total liabilities and shareholders’ equity
33,129
33,522
36,349
46,398
52,058
50,788
79,527
85,580
87,137
19,049
26,151
55,228
5,568
6,875
195
24,617
33,026
55,423
54,910
52,554
31,714
79,527
85,580
87,137
1.74
1.28
0.66
0.27
0.20
0.14
0.86
0.55
0.52
72.20
70.32
60.51
5.06
5.19
6.03
Liquidity Ratio
Current Ratio
Quick Ratio
Operating Cash Flows Ratio
Receivable Turnover
Average Collection Period
Inventory Turnover
Average Inventory Period
Payable Turnover
Average Payable Period
Cash Cycle
Gross Profit Margin
EBITDA Margin
EBIT Margin
Other Profit Margin
Operating Cash Flows to
Operating Profit Ratio
Net Profit Margin
Return on Equity
Return on Assets
Return on Fixed Assets
Fixed Assets Turnover
Leverage Ratio
times
times
times
times
days
times
days
times
days
days
2.51
2.43
2.09
145.16
150.22
174.37
31.32
34.95
35.20
11.65
10.44
10.37
138.57
144.97
170.03
Debt to Equity Ratio
Interest Bearing Debt to
Equity Ratio
Interest Coverage Ratio
Dividend Payout Ratio
Annual Report 2007
07
SHOW TIME
MY TIME
What's New
Full-bodied Beer a cut above the rest
Making its grand splash into the UK market with its premium look, Beer Chang is the talk of the
town these days. Would it surprise you then to see Elephants toasted in every pub there?
Archa Beer
Archa Beer Crowned and in the Game
Sooner than one can say Archa, this beer has chalked up 600% growth in revenue, sending our
competitors scurrying back to their marketing textbooks.
Old Liquor in New Bottles
Rebottled and rebranded, your perennial favorites have now transformed into heartbreakers.
1998
1983
1982
Gold Medal from International
Beer Awards Australia
Chang Beer
Spirit Awards in Madrid
SangSom Rum
Spirit Awards in Madrid
SangSom Rum
Annual Report 2007
09
Special Report
GUESS WHOSE
,
SMILE YOU LL
SEE WITH
RISING SALES ?
Beer: Volume
Total
2007 : 957
2006 : 923
million liters
Low Alcohol
Beer
Low Alcohol
Beer
313
102
Chang
Chang
644
821
2007
Total Sales
2006
million baht
100,541
110,000
97,798
Spirits: Volume
100,000
Total
90,000
2007 : 446
2006 : 476
million liters
368
80,000
70,000
Sales of THB 100.5 bn in 2007
329
60,000
50,000
1%
from industrial
alcohol and others
117
40,000
from beer
and water
47%
108
30,000
from spirits
20,000
52%
10,000
0
White
2007
2006
Brown
2007
White
Brown
2006
Annual Report 2007
Time Travels
ROCK
AROUND
THE CLOCK
Believe it or not ... in any given second, a ThaiBev
guy is whistling away, working in a distant corner
of the world.
As the lights go
out in our Bangkok
headquarters, they are
coming on in our New
York offices, and it is
only half way through
the day at our Airdrie
offices. Whatever the
time, somewhere in
the world ThaiBev
is getting down to
business.
Annual Report 2007
13
Hot Issue
Spirits
Beer
GLOBAL COOLING
So torrid is the alcohol beverage market these days, but not because
of global warming. ThaiBev has made waves in practically all
aspects of the business this past year, ranging from new looks for
its brands, Expansion into global markets, to the quenching of a
million thirsts.
Annual Report 2007
15
made in Thailand
around the world
Annual Report 2007
17
Sukhumvit 09.00 pm
Chiangmai 10.30 pm
Lifestyle
Kaosan Road 08.22 pm
Silom Soi 4 08.38 pm
Phuket 06.30 pm
Asoke 09.46 pm
HAPPY
HOURS
Lung Suan 11.00 pm
Bangkok 06.30 pm
Rachadapisek 07.13 pm
Ramintra 06.26 pm
Annual Report 2007
19
Society
GENTLE AS
RAIN DROPS
In that it is our duty to play an active role in national
development, to better our society, and to assist those in
need, Thai Beverage Public Company Limited (ThaiBev)
has a long history of contribution to projects and activities
to display our loyalty to the monarchy and improve society,
education, sports, public health, safety and dissemination
of a good reputation for Thailand. The following accounts
describe our major contributions in 2007.
Annual Report 2007
20
Message from
the Chairman
Dear Shareholders,
Since our listing on the Singapore Exchange in May
2006, the Company has begun to plan for changes that
will make it more professional and competitive inside
and outside of Thailand. It was the Board’s intention
when we were established as a public company, with
all that that entails regarding corporate governance and
greater professionalism. While these internal projects
have not warranted detailed reports previously, needless
to say, we believe that improvements to our human
resources structure and greater accountability at all
levels of management will assist us in implementing
the strategies we have made public since listing. On
that note, I would like to spend some time to review
these strategies as they will have a material impact on
our future.
We also intend to continue what we call a premiumisation
process by launching higher margin products to lift
our portfolio into the standard and premium ends
of both spirits and beer. This will enable us to gain
higher margins over time and prepare for consumer
aspirations as the economy improves in the long term.
To achieve this, we will continue to invest in our brands by
investing in integrated marketing communications and
premiumisation. Some passing examples would be the
introduction of gift boxes for some of our spirits products
like Sangsom and Mekhong. We also introduced some
new beers to the Thai market, Chang Light and Chang
Draught in bottles and these have done well, in fact,
surpassing some foreign competitors whose beers
were introduced to the Thai market several years prior
to the arrival of our brands.
Strategic Direction
The key strength of ThaiBev has always been its
phenomenal distribution network, which covers the
entire country. We will need to leverage this infrastructure
by taking on products from other companies, and we
need to develop it to be more modern and efficient.
To assist in this, the Company commenced the
construction of five major distribution centers in
different regions in August 2007. Together with greater
implementation of SAP enterprise resource planning
software throughout our group of companies, we
envisage being better able to forecast the inventory
needs of our dealers and to ensure that products are
pushed through the network in the most efficient manner.
A key strategy to date has been to develop the local
market and maintain market leadership by managing
the marketing mix and the pricing of individual brands.
To enable us to offer a spirits portfolio at every price
range, the Company has acquired two white spirits
brands, White Tiger and White Bear, which give us
the opportunity to offer economy spirits to compete
with local community spirits and homemade liquor.
The value of these acquisitions is in our ability to now
compete at every price level.
Annual Report 2007
22
23
Foreign Expansion Strategy
We have also begun to establish a platform for strategic
international expansion. We now export our products
to 80 countries globally. I am pleased to inform you that
our acquisition of Inver House in October 2006 is now
bearing the fruit of integration. Not only have we
been able to make Inver House’s Airdrie headquarters
the base for all operations in the UK, and thus save
on several costs, but our distribution of Chang beer
in Australia came about because of Inver House’s
contacts. In a later chapter, we will report in more
detail on our overseas strategies. However, suffice
to say that there are plans to increasingly export our
products as premium offerings and acquire businesses
that add more value. Our investments aim to have an
internal rate of return (IRR) in the suitable amount.
As a public company, we have not rushed into foreign
acquisitions over the past year. We are focusing on the
Asian region as there are many cultural and consumer
similarities among Asian countries that would make
the region more attractive for us at the beginning.
We are already making inroads into certain markets
such as Singapore and Malaysia for instance, but
our eye must be on markets such as China and India
as these are phenomenal regional growth markets.
In Europe, the USA and Australia, ThaiBev has
commenced selling Chang beer in its export version
as a premium beer, while Mekhong rum is being
positioned at the high end of the consumer market.
This is a signal of the confidence we have in the quality
of our products. We intend to enter continental
European markets as and when we can set up
distribution, which is a critical success factor. While
entry through Thai and Asian restaurants and outlets
is an appropriate first step, we will certainly be seeking
to penetrate the mainstream drinks markets over time.
we hope, have been ameliorated by the general election
of December 2007. Nevertheless, this uncertainty led
to an economic slowdown and this had some effect
on this company as it did on others in the industry.
GDP growth for 2008 is now forecasted as a moderate
4.5 - 5.5% by the Office of the National Economic
and Social Development Board, however, the
Consumer Confidence Index has risen to 119 at
the end of 2007 (source: Bureau of Trade and
Economic Indices, Ministry of Commerce), which
should be cause for optimism.
As the domestic market still counts for 96.4% of total
sales, I should like to bring to your attention sales
growth of 2.8% in 2007, compared with 2006, and
a commensurate increase of 3.3% in net profit
year-on-year. This increase reflects the strength of the
company under less-than-ideal economic conditions.
Massive flooding over much of the country from the
end of 2006 into the first half of 2007 meant that many
of our agents were unable to handle large orders
during our peak period. In spite of these difficulties,
we managed to grow our revenue.
Two tax rises were implemented in Thailand, one in
August 2007 and one in January 2008. The former
had been discussed for some time and the Company
was to some extent prepared for it. The second rise, of
one and a half percent, was to cover the establishment
of a public broadcasting system. Shareholders will
want to know if there is any way to forecast future
tax increases, however, this depends on government
policy and tax collection targets that may change from
time to time, making forecasting unfeasible.
Diversification into Non-alcoholic
Beverages
Domestic Factors
Most shareholders will be aware of the political events
in Thailand in our recent history that left the country in
a state of uncertainty for over a year. These problems,
One other strategy not listed above is the diversification
of the Company into non-alcoholic beverages. This is
a deliberate move to ensure that we explore other
products that fit in with our portfolio. Post year-end,
the acquisition of Wrangyer in January 2008 was our
entry into the energy drinks market. This diversification
will allow us to enter into a new market that is growing
3-4% a year and where our distribution network will
contribute considerably to further sales growth. The
construction of the five distribution centers mentioned
above will help us to manage the increase in the
portfolio too. The Company will be looking very closely
at fruit juices and other non-alcoholic beverages;
we will keep you informed about planned acquisitions
when they become material.
Corporate Development
As we enter into 2008, our vision of the evolution of the
Company is an important issue for shareholders. We
want to continue improvements to the management
structure and build a team that is able to react faster
to events and think further ahead. We will rely more
and more on professional management to drive our
growth. We will then also be better able to satisfy our
distributors by offering more professional services.
I have a vision of ThaiBev as a leading player in the
ASEAN region and want to assure shareholders not
only that our above-mentioned strategies are well
thought-out, but that we have the ability to implement
them successfully. The natural outcome will be higher
revenue growth and profitability.
As for our relationship with you, our shareholders and
other investors, we must now strive towards a goal
of becoming a role model of transparency and good
corporate governance so that you remain fully aware of
our plans and achievements moving forwards.
I believe ThaiBev will be an even better company five
years from now and I shall continue to work with
the Board of Directors to help guide the Company to
ensure that we not only achieve our goals but satisfy
all stakeholders in the process.
Charoen Sirivadhanabhakdi
Chairman of the Board
Annual Report 2007
24
25
Shareholding Structure
ANNUAL REPORT 2007
Authorized share capital of Baht 29,000,000,000 of which paid-up capital of Baht 25,110,025,000
consisting of 25,110,025,000 issued common shares, with the par value of Baht 1 each.
100%
Thai Alcohol
Public Company Limited
Distillery Group 1
Distillery Group 2
Distillery Group 3
Sangsom Co., Ltd.
Sura Bangyikhan Co., Ltd.
Red Bull Distillery (1988) Co., Ltd.*
Beer Chang Co., Ltd.
Banglen Agriculture Co., Ltd.
Fuengfuanant Co., Ltd.
Athimart Co., Ltd.
Simathurakij Co., Ltd.
Archa Beer Co., Ltd.
Sint Ek Panich Co., Ltd.
Mongkolsamai Co., Ltd.
S.S. Karnsura Co., Ltd.
Nateechai Co., Ltd.
Thanapakdi Co., Ltd.
Kankwan Co., Ltd.
Luckchai Liquor Trading Co., Ltd.
Kanchanasingkorn Co., Ltd.
Theparunothai Co., Ltd.
United Winery & Distillery Co., Ltd.
Brewery Group
Trademark Group
Beer Thip Brewery (1991) Co., Ltd.
T.C.C. Cosmo Corporation Limited
Cosmos Brewery (Thailand) Co., Ltd.
Beer Thai (1991) Public Company Limited
- Vidhayathan Co.,Ltd.
Sura Piset Thipharat Co., Ltd.
* Sura Piset Pattharalanna Co., Ltd.
80.82%
- United Products Co., Ltd.
83.20%
- S P M Foods and Beverage Co., Ltd.
58.55%
- Sura Piset Sahasan Co., Ltd.
100%
Beer Marketing Group
Liquor Marketing Group
Distribution Agent Group
Related Business Group
Logistics Group
Pomthip Co., Ltd.
Num Yuk Co., Ltd.
Thipchalothorn Co., Ltd.
Bionic Humus Co., Ltd.
Thai Beverage Logistics Co., Ltd.
Pomkit Co., Ltd.
Num Thurakij Co., Ltd.
Krittayabun Co., Ltd.
Additive Food Co., Ltd.
Pomchok Co., Ltd.
Num Muang Co., Ltd.
Surathip Co., Ltd.
Charun Business 52 Co., Ltd.
Porncharoen Co., Ltd.
Num Nakorn Co., Ltd.
Sunthornpirom Co., Ltd.
Dhanasindhi Co., Ltd.
Pomklung Co., Ltd.
Num Palang Co., Ltd.
Piromsurang Co., Ltd.
Dhospaak Co., Ltd.
Pomburapa Co., Ltd.
Num Kijjakarn Co., Ltd.
Maharas Agri Co., Ltd.**
Bang-na Logistics Co., Ltd.
Thai Molasses Co., Ltd.
Thai Cooperage Co., Ltd.
Pan International (Thailand) Co., Ltd.
Muangkij Co., Ltd.
100%
Marketing Group
Thai Beverage Marketing Co., Ltd.
Overseas Group
International Beverage Holdings Limited***
Red Bull Distillery (1988) Co., Ltd.*
Thai Cooperage Co.,Ltd.
93.50%
36.57%
33.83%
Thai Thum Distillery Co., Ltd.
Sura Piset Sahasan Co., Ltd.
58.63% - Sura Piset Samphan Co., Ltd.
7.54%
** The name has been changed to Wrangyer (2008) Beverage Co., Ltd.
as of February 19, 2008.
100%
Pan Alcohol Co., Ltd.
Annual Report 2007
26
27
Shareholding Structure
ANNUAL REPORT 2007
Thai Beverage Public Company Limited - 100%
Thai company listed in Singapore Exchange
International Beverage Holdings Limited ***
100%
International Beverage
100%
Best Spirits Company Limited
100%
InterBev (Singapore) Limited
100%
InterBev Malaysia Sdn. Bhd.
100%
InterBev (Cambodia) Co.,Ltd.
100%
International Beverage
Holdings (UK) Limited
Holdings Limited USA, Inc.
*** Name Changed from Pacific
Spirits (UK) Limited on Dec 2, 2007
** Name Changed from InterBev
USA Inc. on Jan 30, 2007
100%
Blairmhor Limited
100%
Blairmhor Distillers Limited
100%
Inver House Distillers Limited
49.49%
Liquorland Limited
100%
100%
100%
6 non-trading subsidiaries
44%
Inver House Polska Limited
100%
100%
Wee Beastie Limited
50.02%
100%
Inver House Distribution SA
Moffat & Towers Limited
100%
The Knockdhu Distillery
Speyburn-Glenlivet Distillery
The Pulteney Distillery
The Balblair Distillery
Company Limited
Company Limited
Company Limited
Company Limited
Note : Figures circa Dec 12, 2007
Annual Report 2007
28
29
Report of
the Board of
Directors
Breakdown in Shares and Types of Share
Company / Location
Type of
Business
Type of
Share
No. of
Shares Held
Shares Issued
% of
(Direct/Indirect) Shareholding
Paid-Up Capital
(Baht)
Remark
Company / Location
Type of
Business
Type of
Share
No. of
Shares Held
Paid-Up Capital
(Baht)
% of
Shares Issued
1. Beer Thai (1991) PLC.
15 Moo 14, Vibhavadi Rangsit Road,
Chomphon Sub-District,
Chatuchak District, Bangkok 10900
Beer, Drink &
Soda Production
Common
5,550,000,000.00
555,000,000
554,999,985
100.00%
11. Kankwan Co., Ltd.
14 Vibhavadi Rangsit Road,
Liquor Production
Common
800,000,000.00
80,000,000
79,999,994
100.00%
2. Beer Thip Brewery (1991) Co., Ltd.
Beer, Drink &
Soda Production
Common
6,600,000,000.00
660,000,000
659,999,940
100.00%
12. Theparunothai Co., Ltd.
99 Moo 4, Tambon Hat Kham
Amphoe Muang, Nong Khai 43000
Liquor Production
Common
700,000,000.00
70,000,000
69,999,994
100.00%
Common
5,000,000,000.00
500,000,000
499,999,940
100.00%
Liquor Production
Common
7,500,000,000.00
750,000,000
749,999,994
100.00%
13. Red Bull Distillery (1988) Co., Ltd.
Chomphon Sub-District, Chatuchak District,
Bangkok 10900
Liquor Production
3. Sangsom Co., Ltd.
1,800,000,000.00
180,000,000
179,999,994
100.00%
Liquor Production
Common
900,000,000.00
90,000,000
89,999,994
100.00%
14. United Winery & Distillery Co., Ltd.
liquor Production
14 Sangsom Building Soi Yasoob 1,
Vibhavadi Rangsit Road, Chompon Sub-District,
Common
4. Fuengfuanant Co., Ltd.
333 Moo 1, Tambon Tha Toom
Amphoe Si Maha Phot,
Prachin Buri 25140
Common
900,000,000.00
90,000,000
89,999,994
100.00%
Liquor Production
Common
700,000,000.00
70,000,000
69,999,994
100.00%
15. Simathurakij Co., Ltd.
1 Moo 6, Tambon Ban Daen
Amphoe Banphot Phisai, Nakon Sawan 60180
Liquor Production
5. Mongkolsamai Co., Ltd.
Liquor Production
Common
800,000,000.00
80,000,000
79,999,994
100.00%
6. Thanapakdi Co., Ltd.
315 Moo 4, Tambon Mae Faek,
Amphoe San Sai, Chiang Mai 50290
Liquor Production
Common
700,000,000.00
70,000,000
69,999,994
100.00%
16. Nateechai Co., Ltd.
Common
800,000,000.00
80,000,000
79,999,994
100.00%
Liquor Production
Common
700,000,000.00
70,000,000
69,999,994
100.00%
17. Luckchai Liquor Trading Co., Ltd.
46 Moo 1, Tambon Nong Klang Na
Amphoe Muang, Ratchaburi 70000
Liquor Production
7. Kanchanasingkorn Co., Ltd.
Common
500,000,000.00
5,000,000
4,999,994
100.00%
8. Sura Bangyikhan Co., Ltd.
82 Moo 3, Tambon Bang Khoo Wat
Amphoe Muang, Pathum Thani 12130
Liquor Production
Common
4,000,000,000.00
400,000,000
399,999,994
100.00%
18. Sura Piset Thipharat Co., Ltd.
Liquor Production
14 Sangsom Building, Soi Yasoob 1,
800,000,000.00
160,000,000
159,999,986
100.00%
Liquor Production
Common
900,000,000.00
90,000,000
89,999,994
100.00%
19. Thai Alcohol PLC.
31-35 Chalermkhet 1 Road,
Wat Thepsirin Sub-District,
Pomprab District, Bangkok 10100
Alcohol Production Common
9. Athimart Co., Ltd.
170 Moo 11, Tambon Nikhom,
Amphoe Satuek, Buri Ram 31150
10. S.S. Karnsura Co., Ltd.
101 Moo 8, Tambon Kaeng Dom
King Amphoe Sawang Wirawong
Ubon Ratchathani 34190
Liquor Production
Common
800,000,000.00
80,000,000
79,999,994
100.00%
20. Pomthip Co., Ltd.
2194 Charoen Krung Road,
Wat Phraya Krai Sub-District,
Bang Kho Laem District, Bangkok 10120
Beer Distribution
10,000,000.00
1,000,000
999,994
100.00%
Common
Remark
Annual Report 2007
30
Company / Location
Type of
Business
Type of
Share
No. of
Shares Held
Shares Issued
% of
Paid-Up Capital
(Baht)
31
Remark
Company / Location
Type of
Business
Type of
Share
No. of
Shares Held
Paid-Up Capital
(Baht)
% of
Shares Issued
21. Pomkit Co., Ltd.
48,50,52 Suranaree Road,
Tambon Nai Muang, Amphoe Muang,
Nakhon Ratchasima 30000
Beer Distribution
Common
10,000,000.00
1,000,000
999,994
100.00%
34. Surathip Co., Ltd.
Chompon Sub-District, Chatuchak District,
Bangkok 10900
Liquor Distribution Common
Agent
1,200,000.00
120,000
119,940
100.00%
22. Pomklung Co., Ltd.
80/13-14 Ekathosarot Road,
Phitsanulok 65000
Beer Distribution
Common
10,000,000.00
1,000,000
999,994
100.00%
35. Sunthornpirom Co., Ltd.
Bangkok 10900
Agent
5,000,000.00
500,000
499,994
100.00%
23. Pomchok Co., Ltd.
16/1 Moo 1,U Thong Road,
Tambon Tha Wasukri, Amphoe Muang,
Ayutthaya 13000
Beer Distribution
Common
10,000,000.00
1,000,000
999,994
100.00%
36. Piromsurang Co., Ltd.
Bangkok 10900
Agent
5,000,000.00
500,000
499,994
100.00%
24. Pomcharoen Co., Ltd.
135/3 Moo 4, Kanchanavithi Road,
Tambon Bang Kung, Amphoe Muang
Surat Thani 84000
Beer Distribution
Common
10,000,000.00
1,000,000
999,994
100.00%
37. Bionic Humus Co., Ltd.
Bangkok 10900
Fertilizer Sale
Common
860,000,000.00
8,600,000
8,599,994
100.00%
25. Pomburapa Co., Ltd.
51/42 Moo 3, Sukhumvit Road,
Tambon Ban Suan, Amphoe Muang,
Chon Buri 20000
Beer Distribution
Common
10,000,000.00
1,000,000
999,994
100.00%
38. Maharas Agri Co., Ltd.
Bangkok 10900
Japanese Rice
Planting
Common
2,000,000.00
200,000
199,940
100.00%
26. Num Yuk Co, Ltd.
95/390-391 Trok Nokkhet, Rama III Road,
Chong Nonsi Sub-District,
Yannawa District, Bangkok 10120
10,000,000.00
1,000,000
999,994
100.00%
39. Thai Molasses Co., Ltd.
Bangkok 10900
Molasses
Distribution
Common
40,000,000.00
40,000
39,885
99.72%
27. Num Kijjakarn Co., Ltd.
1,3,5 Trok Wat Muang, Suranaree Road,
Nakhon Ratchasima 30000
10,000,000.00
1,000,000
999,994
100.00%
40. Additive Food Co., Ltd.
Bangkok 10900
Animal Feed
Distribution
Common
1,000,000.00
10,000
9,994
100.00%
28. Num Palang Co., Ltd.
1/7-8 Phraya Surasi Road,
Phitsanulok 65000
10,000,000.00
1,000,000
999,994
100.00%
41. Pan International (Thailand) Co., Ltd.
Bangkok 10900
Trading of Supplies Common
and Procurement
1,000,000.00
10,000
9,994
100.00%
29. Num Muang Co., Ltd.
16/2 Moo 1, U Thong Road,
Tambon Tha Wasukri, Amphoe Muang,
Ayutthaya 13000
10,000,000.00
1,000,000
999,994
100.00%
42. Charun Business 52 Co., Ltd.
Bangkok 10900
Brick Production
Common
121,800,000.00
1,218,000
1,217,994
100.00%
30. Num Nakorn Co., Ltd.
149/3 Chulachomklao Road,
Tambon Tha Kham, Amphoe Phun Phin,
Surat Thani 84130
10,000,000.00
1,000,000
999,994
100.00%
43. Thai Cooperage Co., Ltd.
Bangkok 10900
Oakwood Barrel
Production
Common
300,000,000.00
30,000,000
29,999,940
100.00%
31. Num Thurakij Co., Ltd.
51/40-41 Moo 3, Sukhumvit Road,
Chon Buri 20000
10,000,000.00
1,000,000
999,994
100.00%
44. Bang-na Logistics Co., Ltd.
Bangkok 10900
Bottle Distribution
Common
123,000,000.00
1,230,000
1,229,994
100.00%
32. Thipchalothorn Co., Ltd.
Bangkok 10900
Beer and Liquor
Distribution Agent
Common
1,000,000.00
100,000
99,994
100.00%
45. Thai Beverage Logistics Co., Ltd.
14, Vibhavadi Rangsit Road,
Bangkok 10900
Logistics
Common
12,000,000.00
1,200,000
1,199,940
100.00%
33. Krittayabun Co., Ltd.
Chompon Sub-District,
Beer and Liquor
Distribution Agent
Common
5,000,000.00
500,000
499,994
100.00%
46. Thai Beverage Marketing Co., Ltd.
Bangkok 10900
Liquor Import &
Export / Overseas
Marketing
Common
300,000,000.00
30,000,000
29,999,940
100.00%
Remark
On January 25, 2008
Increase in shares capital to
20,000,000 shares @ 10 Baht,
totalling 200,000,000 Baht.
Name Changed to
“Wrangyer Beverage (2008)”
Co., Ltd. as of 19 Feb 2008
On February 28, 2008
Increase in shares capital
to 101,200,000 shares
@ 10 Baht, totalling
1,012,000,000 Baht.
Annual Report 2007
32
Company / Location
Type of
Business
Type of
Share
No. of
Shares Held
Paid-Up Capital
(Baht)
Shares Issued
(Direct/Indirect)
% of
Shareholding
47. Dhanasindhi Co., Ltd.
949/6-8 Nakhon Chaisi Road,
Dusit District, Bangkok 10300
Construction
Common
20,000,000.00
20,000
19,994
100.00%
48. Dhospaak Co., Ltd.
195 Empire Tower, 25th Floor,
Sathon Tai Road, Yannawa
Sub-District, Sathon District, Bangkok 10120
Advertising
Common
25,000,000.00
2,500,000
2,499,994
100.00%
49. International Beverage Holdings Limited
Room 901-2, Silvercord, Tower 1,
30 Canton Road, Tsim Sha Tsui,
Kowloon, Hong Kong
Holding Company
50. Cosmos Brewery (Thailand) Co., Ltd.
Bangkok 10900
Beer, Drink &
Soda Production
51. T.C.C. Cosmo Corporation Ltd.
Bangkok 10900
Trademark
Proprietor
52. Beer Chang Co., Ltd.
Bangkok 10900
Trademark
Proprietor & Beer
Concentrate
Production
Common
53. Archa Beer Co., Ltd.
14, Vibhavadi Rangsit Road,
Bangkok 10900
Trademark
Proprietor & Beer
Concentrate
Production
Common
54. Sura Piset Pattharalanna Co., Ltd.
Holding Company
Common
55. Thai Thum Distillery Co., Ltd. #
Bangkok 10900
Common
Common
Common
56. Sura Piset Sahasan Co., Ltd. #
Liquor Production
& Distribution
Common
57. Sura Piset Samphan Co., Ltd. #
Liquor Production
& Distribution
Common
58. Muangkij Co., Ltd. #
9 Dao Khanong-Chom Thong Road,
Bang Kho Sub-District,
Chom Thong District, Bangkok 10150
Oakwood Supply
Common
59. Sint Ek Panich Co., Ltd. #
Pomprab Satru-pai,Bangkok 10100
Mining
Common
HK$
1,470,000,000.00
1,666,666,500.00
5,000,000.00
1,000,000.00
1,000,000.00
600,000,000.00
17,500,000.00
100,000,000.00
100,000,000.00
3,810,000.00
9,000,000.00
Remark
33
Company / Location
Type of
Business
Type of
Share
No. of
Shares Held
Paid-Up Capital
(Baht)
% of
Shares Issued
Remark
60. Pan Alcohol Co., Ltd. #
Bangkok 10900
Vinegar Production Common
& Distribution
2,000,000.00
20,000
20,000
100.00%
Agricultural
Planting
Common
20,000,000.00
20,000
20,000
100.00%
1,470,000,000 1,470,000,000 100.00%
61. Banglen Agriculture Co., Ltd. #
Pomprab Satru-pai District,
Bangkok 10100
Conservation
Public Relations
Common
5,000,000
500,000
500,000
100.00%
166,666,650
100.00%
62. Vidhayathan Co., Ltd.
Bangkok 10900
Liquor Production
& Distribution
Common
350,000,000.00
3,500,000
2,828,850
80.82%
100.00%
63. United Products Co.,Ltd.
56 Sukhapibal Road, Tambon Nokornchaisri,
Amphoe Nokornchaisri,
Nakornpathom 73120
Seasoning Sauce,
Fruit Juice,
Energy Drink,
Liquor Agent
Common
100,000,000.00
1,000,000
832,000
83.20%
100.00%
64. S P M Foods and Beverages Co.,Ltd.
79 Pholdumri Road, Tambon Lamlukbua,
Amphoe Dontoom,
Nakornpathom 73150
65. InterBev (Singapore) Limited
3 Philip Street # 13-04 Commerce Point,
Singapore
Trading of alcoholic Common
beverages
SGD 3,000,000.00 3,000,000
3,000,000
100.00%
66. InterBev (Cambodia) Co.,Ltd.
140 Nehru (Street # 215) Sankat Vealvong,
Khan 7 Makara, Phnom Penh
Kingdom of Combodia
beverages
USD 200,000.00
1,000
1,000
100.00% The “shares
issued” & “no.
of shares held
are amended
from “NA”
“to” 1,000”.
67. InterBev Malaysia Sdn. Bhd.
Suite 6.01, 6th Floor, Plaza See Hoy Chan,
Jalan Raja Chulan, 50200 Kuala Lumpur,
Malaysia
beverages
MYR 100,000.00
100,000
100,000
100.00%
68. International Beverage Holdings
Limited USA, Inc.
405 Lexington Avenue, 25th Floor,
Suite 2532, New York, USA
beverages
USD 2,600,000.00 2,600,000
2,600,000
100.00% Name Changed
from “InterBev
USA Inc.”
as of 7 Feb 2007
69. Best Spirits Company Limited
Room 901-2, Silvercord Tower 1,
Kowloon, Hong Kong
beverages
HKD 15,300,000.00 15,300,000
15,300,000
100.00%
Holding Company
Common
£68,500,000.00
68,500,000
68,500,000
100.00%
70. International Beverage Holding (UK) Limited
Moffat Distillery, Airdrie, ML6 8PL,
Scotland
100.00% Name Changed
from “Pacific Spirits
(UK) Limited” on
2 Dec 2007
Holding Company
Common
£9,009,406.7
900,940,670
900,940,670
100.00%
100.00%
71. Blairmhor Limited
Moffat Distillery, Airdrie ML6 8PL,
Scotland
72. Inver House Distillers Limited
Scotland
Production and
distribution of
spirits
Common
£10,000,000
10,000,000
10,000,000
100.00%
50,000
10,000
100,000
6,000,000
17,500
1,000,000
1,000,000
38,100
90,000
166,666,590
49,940
9,940
99,940
5,999,994
17,483
1,000,000
1,000,000
38,100
90,000
100.00%
100.00%
100.00%
100.00%
100.00%
Annual Report 2007
34
Company / Location
Type of
Business
Type of
Share
73. Blairmhor Distillers Limited #
Scotland
Dormant
Common
74. Wee Beastie Limited
Scotland
beverages
No. of
Shares Held
Shares Issued
(Direct/Indirect)
% of
Shareholding
2,000
2,000
100.00%
Paid-Up Capital
(Baht)
£200.00
List of Direct and Deemed Interests of Each Director
As at January 21, 2008
Remark
£100.00
100
100
100.00%
Common
£100.00
100
100
100.00%
76. The Knockdhu Distillery Company Limited #
Scotland
Dormant
Common
£100.00
100
100
100.00%
77. The Pulteney Distillery Company Limited #
Scotland
Dormant
Common
£2.00
2
2
100.00%
78. The Balblair Distillery Company Limited #
Scotland
Dormant
79. R. Carmichael & Sons Limited #
Scotland
Dormant
80. J MacArthur Junior & Company Limited #
Scotland
Dormant
81. Mason & Summers Limited #
10 Foster Lane, London, EC2V 6HH,
England
Dormant
82. Hankey Bannister & Company Limited #
Scotland
Dormant
83. James Catto & Company Limited #
Scotland
Dormant
84. Glen Calder Blenders Limited #
Scotland
Dormant
85. Moffat & Towers Limited #
Scotland
Dormant
86. Liquorland Limited
8 Westbank Road, Belfast, BT3 9JL
Northern Ireland
Off licences
87. Inver House Polska Limited
ul. Obodrzyców 34 A/1, 81-812 Sopot,
Poland
beverages
88. Inver House Distribution SA #
Avenue des Tilleuls, 62140 Marconne
France
Dormant
Common
Common
Common
Common
Common
Common
Common
Common
Common
2.00
£30,000.00
£100.00
£10,030.00
£100.00
£50,000.00
£100.00
£1.00
£495,000
700,000.00 zl
2
30,000
100
10,030
100
50,000
100
100
495,000.00
700,000
2
30,000
100
10,030
100
50,000
100
100
245,000.00
308,000
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
49.49%
44.00%
1. Mr. Charoen Sirivadhanabhakdi
Good Show Holdings Limited (2)
Risen Mark Enterprise Ltd. (3)
Siriwana Co., Ltd. (4)
Golden Capital (Singapore) Limited (5)
MM Group Limited
3,156,500,000
199,999,997
25,000
12.57
50.00
50.00
MM Group Limited
MM Group Limited
MM Group Limited
-
5,000
50,000
10,000,000
-
100
100
100
-
2. Khunying Wanna Sirivadhanabhakdi
Good Show Holdings Limited (2)
Risen Mark Enterprise Ltd. (3)
Siriwana Co., Ltd. (4)
Golden Capital (Singapore) Limited (5)
MM Group Limited
3,156,500,000
199,999,997
25,000
12.57
50.00
50.00
MM Group Limited
MM Group Limited
MM Group Limited
-
5,000
50,000
10,000,000
-
100
100
100
-
3. Mr. Narong Srisa-an
1
0.00
-
-
-
4. Mr. Komen Tantiwiwatthanaphan
34,068,668
0.14
-
-
-
5. Mr. Puchchong Chandhanakij
1
0.00
-
-
-
6. Mr. Staporn Kavitanon
-
-
-
-
-
-
7. Prof. Kanung Luchai
-
-
-
-
-
-
8. Mr. Manu Leopairote
-
-
-
-
-
-
9. Mr. Ng Tat Pun
-
-
-
-
-
-
10. Mr. Michael Lau Hwai Keong
-
-
-
-
-
-
11. Prof. Pornchai Matangkasombut
-
-
-
-
-
-
12. Gen. Dr. Choo-Chat Kambhu Na Ayudhya -
-
-
-
-
-
13. Mr. Sakthip Krairiksh
-
-
-
-
-
-
14. Mr. Vivat Tejapaibul
291,541,500
1.16
-
-
-
15. Mr. Panote Sirivadhanabhakdi (1)
107,000,000
0.43
-
-
-
16. Mr. Thapana Sirivadhanabhakdi
107,000,000
0.43
-
-
-
17. Mr. Samut Hatthasing
1
0.00
-
-
-
18. Ms. Kanoknart Rangsithienchai
1
0.00
-
-
-
19. Mr. Sithichai Chaikriangkrai
1
0.00
-
-
-
20. Mr. Ueychai Tantha-Obhas
-
-
-
-
-
-
21. Dr. Pisanu Vichiensanth
-
-
-
-
-
-
22. Mr. Chukiet Tangpongprush
1
0.00
-
-
-
£24,450.00
2,493.00
1,247.00
50.02%
(1)
(2)
(3)
(4)
(5)
Number of
Shares
Mr. Panote Sirivadhanabhakdi was appointed as the member of the Board of Directors on February 27, 2007.
Good Show Holdings Limited holds 3,492,720,000 shares in Thai Beverage Public Company Limited.
Risen Mark Enterprise Ltd. holds 3,193,150,000 shares in Thai Beverage Public Company Limited.
Siriwana Co., Ltd. holds 2,197,200,000 shares in Thai Beverage Public Company Limited.
Golden Capital (Singapore) Limited holds 608,638,000 shares in Thai Beverage Public Company Limited.
Deemed
Interests
Percentage
of
Shareholding
Number of
Shares
Remark:
Common
Percentage
of
Shareholding
Direct Interests
Name of shareholders
75. Speyburn-Glenlivet Distillery Company Limited # Dormant
Scotland
Remark: # These are currently non - trading
35
Annual Report 2007
36
37
Top Twenty Shareholders
Statistics Of Shareholders
As at March 12, 2008
No.
INFORMATION ON SHARE CAPITAL
Authorised share capital
Issued and fully paid-up capital
Class of shares
Number of shares issued
Voting rights
Number of Shareholders
%
Number of Shares
Number of Shares
%
1.
The Central Depository (PTE) Limited
6,325,659,920
25.19
2.
Good Show Holdings Limited
3,492,720,000
13.91
3.
Mr. Charoen Sirivadhanabhakdi
3,156,500,000
12.57
4.
Khunying Wanna Sirivadhanabhakdi
3,156,500,000
12.57
5.
Risen Mark Enterprise Ltd.
2,359,815,000
9.40
6.
Siriwana Co., Ltd.
2,197,200,000
8.75
7.
Mr. Suchin Worawongwasu
900,000,000
3.58
%
8.
Mrs. Siriluck Maithai
338,519,080
1.35
Mr. Vivat Tejapaibul
291,541,500
1.16
Baht 29,000,000,000
Baht 25,110,025,000
Common shares with a par value of Baht 1
25,110,025,000 shares
One vote per one share
Analysis of Shareholders by Size of Shareholdings
Size of Shareholdings
8
6.84
8
0.00
9.
N/A
N/A
N/A
N/A
10.
Miss Somrhudee Siriaongprasert
213,188,000
0.85
10,001 – 1,000,000
23
19.66
6,491,469
0.03
11.
Mr. Paisal Chevasiri
150,000,000
0.60
1,000,001 and above
86
73.50
25,103,533,523
99.97
12.
Golden Capital (Singapore) Limited
116,480,000
0.46
117
100
25,110,025,000
100
13.
Mrs. Wantanee Chevasiri
110,236,750
0.44
14.
Mrs. Wongchanok Chevasiri
110,236,750
0.44
15.
107,000,000
0.43
16.
Mr. Panote Sirivadhanabhakdi
107,000,000
0.43
17.
Mrs. Atinant Sirivadhanabhakdi
107,000,000
0.43
18.
Mrs. Thapanee Techajareonvikul
107,000,000
0.43
19.
Mrs. Wallapa Trisorat
107,000,000
0.43
20.
Mr. Suthep Opaspanich
80,000,000
0.32
23,533,597,000
93.72
1 – 999
1,000 – 10,000
Total
The 19.69 % the Company’s shares are held in the hands of public. Accordingly, the Company has complied
with Rule 723 of the Listing Manual of the SGX-ST.
Total
Annual Report 2007
38
Statistics of Shareholders under the Central Depository (PTE) Limited
Size of Shareholdings
Number of Shareholders
1 – 999
%
Number of Shares
%
9
0.08
1,802
0.00
1,000 – 10,000
8,224
69.85
36,420,764
0.58
10,001 – 1,000,000
3,550
29.81
213,724,054
3.38
31
0.26
6,075,513,300
96.04
11,774
100.00
6,325,659,920
100.00
1,000,001 and above
Total
39
Particular of material contracts with related parties
for the year 2007 consist of:
Sell and Purchase Bottle Agreement between Berli Jucker Public Company Limited (a related company) who is
seller and Bang-na Logistic Co., Ltd. (a wholly owned subsidiary of Thai Beverage Public Company Limited) who
is purchaser for a period of two years and eight months effective date from May 1, 2007 to December 31, 2009.
The sell and purchase amounts of bottle for the year 2007 was Baht 2,247.08 million.
Net book value of the company freehold land and building as at December 31, 2007 are as follows:
Twenty Largest Shareholders under the Central Depository (PTE) Limited
No.
(million Baht)
Number of Shares
%
2,479,016,824
39.19
1.
DBS Nominees Pte Ltd
2.
Risen Mark Enterprise Limited
833,335,000
13.17
3.
Citibank Nominees Singapore Pte Ltd
761,301,938
12.04
4.
UOB Kay Hian Pte Ltd
565,234,500
8.94
5.
DBSN Services Pte Ltd
496,837,414
7.85
6.
HSBC (Singapore) Nominees Pte Ltd
438,217,570
6.93
7.
United Overseas Bank Nominees Pte Ltd
270,171,461
4.27
8.
Golden Capital (Singapore) Limited
75,000,000
1.19
9.
Raffles Nominees Pte Ltd
51,261,451
0.81
10.
DB Nominees (S) Pte Ltd
36,396,000
0.58
11.
Merrill Lynch (Singapore) Pte Ltd
21,702,000
0.34
12.
Morgan Stanley Asia (S’pore) Securities Pte Ltd
6,542,000
0.10
13.
OCBC Securities Private Ltd
6,520,000
0.10
14.
ING Nominees (S’pore) Pte Ltd
5,148,000
0.08
15.
DBS Vickers Securities (S) Pte Ltd
3,336,500
0.05
16.
CLSA Singapore Pte Ltd
3,130,000
0.05
17.
Chang Kuei Chue
2,110,000
0.03
18.
Freddie Tan Poh Chye
2,000,000
0.03
19.
Yala Pte Ltd
1,954,642
0.03
20.
Liauw Lee Lee @ Kartini Djantin @ Iskandar Lilianti
1,900,000
0.03
6,061,115,300
95.81
Total
Land
8,145
Surplus on land revaluation
4,389
Land improvement
741
Building and improvements
10,693
Total
23,968
Current land revaluations were conducted in the year 2007 by independent professional valuers.
The company leases various premises, primarily for the branch offices and warehouses. All of these leases
are operating leases and not financial leases.
As at December 31, 2007, the amount of freehold land held for planned future business operations amounted to
Baht 1,721 million which is 11.3% of profit before income tax.
Annual Report 2007
40
41
Board
of Directors
Chairman
1
2
3
4
Vice Chairman
7. Prof. Kanung Luchai
Independent Director and
Audit Committee Member
7
8
9
10
10. Mr. Michael Lau Hwai Keong
Independent Director
13. Gen. Dr. Choo-Chat Kambhu Na Ayudhya
Director
11
12
13
14
Vice Chairman
Vice Chairman
5
6
6. Mr. Staporn Kavitanon
Director
Audit Committee Chairman
8. Mr. Manu Leopairote
9. Mr. Ng Tat Pun
11. Prof. Pornchai Matangkasombut
12. Mr. Sakthip Krairiksh
14. Mr. Vivat Tejapaibul
15. Mr. Panote Sirivadhanabhakdi
Director
Director
President
Director and Executive Vice President
15
Director and Senior Vice President
16
17
18
19
20
Mr. Thapana Sirivadhanabhakdi was appointed President by the Board of Directors on January 18, 2008.
21
22
Mrs. Vaewmanee Soponpinij
Mr. Thidi Suwanarat
Company Secretary / Secretary to the Board
Assistant Secretary
Senior Vice President
Annual Report 2007
42
43
Executive
Committee
Executive
Committee
Executive Chairman
3 rd Executive Vice Chairman
President
1
2
3
4
1st Executive Vice Chairman
2 nd Executive Vice Chairman
4 th Executive Vice Chairman
5 th Executive Vice Chairman
Executive Vice President
5
13. Mr. Sawat Sopa
14. Mr. Saikeaw Vongpisethkul
15. Mr. Jean Lebreton
* Mr. Sawat Sopa, Mr. Saikeaw Vongpisethkul, and Mr. Jean Lebreton were appointed on February 27, 2008.
6
7
8
9
10
Management
Committee
11
12
13
14
15
President
Business Development
Finance
General Affairs
10. Mr. Jean Lebreton
Strategy
* Set up January 2008
President
Sales Planning and Support
Marketing
8. Mr. Sawat Sopa
Spirit Production
Corporate Services
Beer Production
9. Mr. Saikeaw Vongpisethkul
Non-Alcohol Production
Annual Report 2007
44
Director Profile
45
Mr. Narong Srisa-an
Chairman / Executive Chairman
Vice Chairman / 2nd Executive Vice Chairman
Mr. Charoen Sirivadhanabhakdi was appointed
Chairman of the Board of Directors of ThaiBev in
2003. He has been the Chairman of Beer Thai (1991)
Public Company Limited and the Red Bull Distillery
Group of Companies since 2004; the Chairman of
T.C.C. Land Co., Ltd. since 2002; the Chairman of
T.C.C Capital Land Limited since 2003; the Chairman
of Berli Jucker Public Company Limited since 2001
and the Chairman of T.C.C Capital Co., Ltd. since
1997. In addition, he has been the Chairman of the
Executive Board of T.C.C. Holding Co., Ltd. since
1987. Mr. Charoen holds an Honorary Doctoral Degree
in Agricultural Business Administration from Maejo
Institute of Agricultural Technology and an Honorary
Doctoral Degree in Industrial Technology from
Chandrakasem Rajabhat University. Mr. Charoen has
received many honors and Royal decorations, including
the Knight Grand Cordon (Special Class) of the Most
Exalted Order of the White Elephant, Knight Grand Cordon
(Special Class) of the Most Noble Order of the Crown
of Thailand, the Knight Grand Cross (First Class) of the
Most Admirable Order of the Direkgunabhorn and the
Grand Companion (Third Class, Higher Grade) of the
Most Illustrious Order of Chula Chom Klao.
Vice Chairman / 1st Executive Vice Chairman
Khunying Wanna Sirivadhanabhakdi was appointed
Vice Chairperson of the Board of Directors in 2003.
She has been the Chairperson of Beer Thip Brewery
(1991) Company Limited and the Sangsom Group of
Companies since 2004. She has also been the Vice
Chairperson of T.C.C. Capital Land Company Limited
since 2003, a Vice Chairperson of Berli Jucker Public
Company Limited since 2001 and the Vice Chairperson
of the Executive Board of T.C.C. Company Limited
since 1972. Khunying Wanna holds an Honorary
Doctoral Degree in Bio-technology from Ramkhamhaeng
University, an Honorary Doctoral Degree in Agricultural
Business Administration from Maejo University and an
Honorary Degree in Business Administration from
Chiang Mai University. She is also the Vice Chairperson
of the Sirivadhanabhakdi Foundation, a Director of the
Siriraj Foundation and a Director of Ramathibodi
Foundation. Khunying Wanna has received numerous
honors and royal Thai decorations, such as the Knight
Grand Cordon (Special Class) of the Most Exalted Order
of the White Elephant (Ladies), the Knight Grand Cordon
(First Class) of the Most Noble Order of the Crown of
Thailand (Ladies), the Knight Commander (Second
Class, Lower Grade) of the Most Illustrious Order of
Chula Chom Klao and the Knight Grand Cross (First
Class) of the Most Admirable Order of the Direkgunabhorn.
Mr. Narong Srisa-an was appointed Vice Chairman
of the Board of Directors in 2003. He has 44 years’
experience in the banking industry, having served
in Kasikorn Bank Plc. from 1954 to 1998 as its
Executive Vice Chairman. He also holds directorships
in several public companies in Thailand, including
Vice-Chairman of Berli Jucker Plc., Chairman of
Advance Agro Plc., and Independent Director of True
Corporation Plc. He holds an Honorary Master of
Economics from Thammasat University.
Mr. Komen Tantiwiwatthanaphan
Vice Chairman / 3rd Executive Vice Chairman
Mr. Komen Tantiwiwatthanaphan was appointed Vice
Chairman of the Board of Directors and Vice President
in 2003. He has had over 40 years’ experience in
managing companies in the distilling industry. He has
served as President of Sahasan (2529) Co., Ltd., since
1986, and as Director and Senior Vice President of
Suramaharas Plc. from 1986 to 1999. He holds a High
School Certificate.
Mr. Puchchong Chandhanakij
Director / 5th Executive Vice Chairman
Mr. Puchchong Chandhanakij was appointed a Director
and Executive Vice Chairman in 2003. Before joining
ThaiBev, he was Managing Director of LSPV Co., Ltd.,
from 1988 to 2003; he was Executive Director
(Finance) of the T.C.C. group of companies from
1983 to 1988; the Director of Administration of Robina
Credit Ltd. from 1980 to 1982; and Vice President
of Asia Credit Ltd., from 1975 to 1979. He holds a
Bachelor of Business Administration and a Master of
Science in Accounting from California State University,
Long Beach.
Annual Report 2007
46
47
Mr. Michael Lau Hwai Keong
Mr. Manu Leopairote
Independent Director and Audit Committee Member
Mr. Staporn Kavitanon
Independent Director and Audit Committee Chairman
Mr. Staporn Kavitanon was appointed a Director in
2004. He has extensive experience in the management
of companies with directorship and membership of
Committee at various companies, such as Bangkok
Bank Berhad, Kanyong Electric Plc. and Berli Jucker
Plc. From 1994 to 1999, he was the Vice Chairman
of Bangkok Bank Plc. He holds a Bachelor of Arts in
Economics from Thammasat University and a Master
of Arts in Economics from Vanderbilt University.
Prof. Kanung Luchai
Prof. Kanung Luchai was appointed an Independent
Director in 2005. He has wide-ranging experience in
the public sector and legal business, having worked as
Junior and Senior Public Prosecutor in the Department
of Public Prosecution from 1946 to 1971; DirectorGeneral of the Policy and Planning Department of the
Ministry of Interior from 1971 to 1973. He served as the
Deputy Under-Secretary of State for the Ministry of
Interior from 1973 to 1974 and as the Deputy Minister
of Interior from 1974 to 1975. He practised law at
Bangkok International Law Offices Co., Ltd. from 1976
to 1985, and at Kanung-Prok Law Office Co., Ltd. from
1986 to 1992. He is currently a Director of Kanung &
Partners Law Offices Company Limited and a Director
of Kanung & Partners International Consultancy
Company Limited. He is also a Director of Thailand
Iron Works Plc. and Bangkok Bank Plc. In 2001, he
received the Prof. Sanya Thammasak Award for being
an Outstanding Lawyer from the Private Sector.
He holds a Bachelor of Law from Thammasat
University, and a Bachelor of Arts and Bachelor of Law
from the University of Cambridge. He is also a member
of the Thai Bar Association.
Mr. Manu Leopairote was appointed an Independent
Director in 2004. He has extensive experience in the
public sector, having served as a Director, Secretary
General, Inspector and Director General from 1968 to
1999, and as the Permanent Secretary at the Ministry of
Industry from 1999 to 2004. He was also the Chairman
of the Petroleum Authority of Thailand from 1999 to
2004. From 1994 to present, he is the Chairman of
Technonet Asia, and from 1995 to 1996, the Chairman
of the International Sugar Organization Council of
England. He was also part-time lecturer at the Faculty
of Economics, Thammasat University, Assumption
University, and Bangkok University. He was the
President of the Thammasat University Association
from 2002 to 2004 and was the President of the
Thammasat University Economics Association from
2000 to 2006. He holds a Bachelor of Economics
(Honors) from Thammasat University and a Master of
Science in Economics from the University of Kentucky.
He won the Asian Productivity Organization Award
in 2005
Mr. Michael Lau Hwai Keong was appointed as an
Independent Director in 2006. He is a Managing
Director, Advisory Services of Octagon Advisors Pte.
Ltd., a business and risk management consultancy
company. From June 2000 to September 2004, he
served as the Executive Vice President of United
Overseas Bank Ltd., where he was responsible for
the administration and governance of the bank’s
international operations. He was an Advisor to Asia
Pulp and Paper Ltd. from February 1999 to May
2000. He has held various positions at the Monetary
Authority of Singapore (MAS) from February 1985 to
July 1989, and from April 1991 to August 1997. His
last position at the MAS was Senior Deputy Director
(Development and Domestic Institutions). From August
1989 to March 1991, he was a Senior Manager
(Institutional Sales) at J M Sassoon & Company, a stock
broking company. He was also the Executive Vice
President of the Central Depository (Pte.) Limited
(CDP) from November 1997 to February 1999. He
holds a Bachelor of Business Administration (First Class
Honors) from the National University of Singapore and
the Chartered Financial Analyst (CFA) charter.
Mr. Ng Tat Pun
Prof. Pornchai Matangkasombut
Mr. Ng Tat Pun was appointed as an Independent
banking and finance industry. He started his banking
career with Citibank in 1971 and was a Vice President
when he left in 1982. Since then, he has served in
various senior positions with local and foreign financial
institutions. From 1988 to 1997, he was the Executive
Vice President of OCBC Bank, Singapore, in charge of
its International Banking and Financial Institutions
business. In 1998, he was appointed the Executive Director
and Chief Executive Officer of OCBC Bank Malaysia.
He was a Managing Director at JP Morgan Chase
from 1999 to 2002 and a Managing Director and
subsequently, a Senior Advisor at UBS, AG from 2003
to 2008. He is also an Independent Director of Engro
Corporation Limited, Singapore and SP Chemicals Limited,
Singapore. Mr. Ng holds a Bachelor of Arts degree
(Economics and History) from the University of Singapore.
.
Prof. Pornchai Matangkasombut was appointed as an
Independent Director in 2006. He is the President of
the Mahidol University and, before his appointment in
1999, was a professor at the University. He has been
a member of the International Union of Immunological
Societies since 1971 and a Member of the Executive
Board of the International Union of Microbiological
Societies from 1986 to 1990. He has won the highest
level of Royal Decorations (Knight Grand Cordon of
White Elephant, Special Class and Knight Grand Cordon
of the Crown of Thailand, Special Class) and the Royal
Thai Award of Chula Chom Klao Order (Special Third
Class) and the Palmes Academiques (Commandeur)
from the Government of France, the Borden Research
Award in Medicine. He was also an Honorary Research
Associate at Harvard University and a Visiting Professor
at Osaka University and the University of Saigon.
He holds a Bachelor of Arts degree and M.D. and Ph.D.
from the University of Wisconsin.
Mr. Sakthip Krairiksh
Mr. Sakthip Krairiksh was appointed an Independent
public sector, having worked in Thai ministries. He
began his career as a civil servant in 1971 at the
Ministry of Interior. From 1979 to 2004, he served as
a Diplomat in the Ministry of Foreign Affairs, where
he held various positions, including Secretary to
the Minister; Deputy Chief of Mission of the Embassy
in Washington, USA; Director-General, Protocol Department;
Director General, Information Department; Spokesman
of the Foreign Ministry; and Ambassador to the Kingdom
of Cambodia, Japan and the United States. He was an
Advisor to the Prime Minister in 2004 and from 2004
to September 2007 the Permanent Secretary, Ministry
of Tourism and Sports.
He holds a Bachelor of Political Science from Boston
University and has attended the National Defense
College. He has received various royal Thai and foreign
decorations, such as the Knight Grand Cordon (Special
Class) of the Most Noble Order of the Crown of Thailand,
the Knight Grand Cordon (Special Class) of the Most
Exalted Order of the White Elephant, the Grand Companion
(Second Class, Lower Grade) of the Most Illustrious
Order of Chula Chom Klao, the Order of the Sacred
Treasure, Gold and Silver Star and the Grand Cordon
of the Order of the Rising Sun.
He is currently a Chairman of the Board of the Tourism
Authority of Thailand and Chairman of the University
Council at the Rajamangala University of Technology
Krungthep.
Annual Report 2007
48
49
Mr. Sithichai Chaikriangkrai
Gen. Dr. Choo-Chat Kambhu Na Ayudhya
Gen. Dr. Choo-Chat Kambhu Na Ayudhya was
appointed Independent Director in 2006. He served
the Royal Thai Army from 1973 to 1987 as General
Surgeon of the Medical Department. From 1987 to
1991, he was Chairman of the Department of Anatomy
of the Phra Mongkut College of Medicine. From 1994
to 2004, he held various positions in the Royal Thai
Army, including the Director-General of the Armed
Forces Research Institute of Medical Service; an
Assistant Surgeon-General; Deputy Surgeon-General;
Surgeon-General; and General Special Army Expert
and Consultant. He is a senior surgeon and physician
at the Medical Bureau to the Royal Court of Thailand.
He received his Diploma in Medicine from Westf.
Wilhelms Universitat zu Munster, and Doctorate
in Medicine from the Georg-August Universitat zu
Goettingen. He also has a Diploma from the National
Defense College of Thailand and a Certificate of
Proficiency in General Surgery from the Royal College
of Surgeons of Thailand. He is a permanent member
of the Royal College of Surgeons of Thailand and
the Medical Association of Thailand. As for royal
decorations, he has won the Knight Grand Commander
(Special Class, Higher Grade) of the Most Illustrious Order
of Chula Chom Klao and Knight Grand Cordon (Special
Class) of the Most Exalted Order of the White Elephant.
Director
Mr. Vivat Tejapaibul was appointed a Director in 2003.
He has over 18 years’ experience in the banking
industry, having served in Bangkok Metropolitan Bank
Plc. in various positions from 1979 to 1998, including
Secretary to the Managing Director, Deputy Director of
the Trading Department, Director of Branch Administrative
and Vice President. He holds a Bachelor of Law from
Thammasat University and a Master’s degree from
Fairleigh Dickinson University, USA.
President
Mr. Panote Sirivadhanabhakdi
Director
Mr. Panote Sirivadhanabhakdi was appointed Director
in February 2007. He has been Director of Beer Thai
(1991) Plc. from 2000 to 2004 and Director of Beer
Thip Brewery (1991) Co., Ltd. since 2004 and Director
of Sura Bangyikhan Group of Companies since 2002.
He holds a Bachelor of Science in Manufacturing
Engineering from Boston University and a Master of
Science in Analysis, Design and Management of
Information System from the London School of
Economics and Political Science.
Mr. Samut Hatthasing
Director / 4th Executive Vice Chairman
Mr. Samut Hatthasing has been the Fourth Executive
Vice Chairman since January 2008 and was the President
of ThaiBev from February 2004 to December 2007.
He joined the Group in 1986 and has held various
marketing positions. He was also a Trading Manager of
Sura Maharas Plc from 1986 to 1999. He was a Director
and Executive Vice President of the Sura Bangyikhan
Group of Companies from 2000 to 2003. In 1980, he
was a Provincial Manager of the Surathip Group of
Companies and later Marketing Manager of Surathip
Co., Ltd. from 1981 to 1985. He was a Senior Manager
of PTI Co., Ltd. in 1979 and a Supervisor in the
Agricultural Credit Division of Thai Military Bank
from 1977 to 1978. From 1967 to 1976, he served
as an Assistant Branch Manager of the Bank of
Agriculture and Agricultural Cooperatives. He holds a
Bachelor of Economics from Thammasat University and
has completed the Director Accreditation Program with
the Thai Institute of Directors.
Mr. Thapana Sirivadhanabhakdi was appointed the
President of the Company in January 2008. Prior to this
appointment, he was the director and Executive Vice
President of the Company from 2003 to January 2008. In
addition, he has also held several executive positions in
many leading companies such as Vice Chairman of Red
Bull Distillery (1998) Co., Ltd. since 2004, and Executive
Director of Berli Jucker Public Company Limited since
2001. In 2004, he was appointed Vice Chairman of Thai
Alcohol Public Company Limited, Executive Director of
Beer Thai (1991) Public Company Limited, and Vice
Chairman of Dhospaak Co., Ltd. Since 2006, he has
been Vice Chairman of Oishi Group Public Company
Limited. Furthermore, since 2007, he has held other
important positions, such as Director and Chairman of the
Executive Committee of Univentures Public Company
Limited, and Vice Chairman of Siam Food Products
Public Company Limited. He has also acted as a Director
of several ThaiBev subsidiary companies.
He holds a Bachelor of Business Administration in
Finance and a Master of Science Administration in
Finance Economics from Boston University, USA.
Ms. Kanoknart Rangsithienchai
Ms. Kanoknart Rangsithienchai was appointed as a
Director and Executive Vice President in 2003. She has
extensive experience in finance and accounting.
Before joining the Company, she had been the
Executive Vice President of the Sangsom Group of
Companies from 2000 to 2003, and the Vice President
of the Office of Controller, Surathip Group of Companies
from 1983 to 1999. From 1975 to 1982, she served
as the Accounting Manager of the T.C.C. Group of
Companies and as an accountant at J&JHO Co., Ltd.,
from 1970 to 1975. She holds a Bachelor of Accounting
from Thammasat University and has completed the
Director Accreditation Program with the Thai Institute
of Directors.
Mr. Sithichai Chaikriangkrai was appointed a Director
and Senior Vice President in 2004. He joined the
T.C.C. Group in year 1990 and has also been the
Chairman of Group Financial Center since 2003. He
has over 23 years’ experience in financial positions,
including the Finance and Accounting Manager of
Asia Voyages & Pansea Hotel Co., Ltd., from 1983
to 1990; as a Financial Analyst of Goodyear (Thailand)
Co., Ltd., from 1980 to 1983; and as an External
Auditor in Coopers & Lybrand from 1977 to 1980. He
holds a Bachelor of Accountancy (First Class Honors)
from Thammasat University, and has a Diploma in
Computer Management from Chulalongkorn University
and completed the Director Certification Program with
the Thai Institute of Directors. He also has a mini M.B.A.
in Leadership Management from Kasetsart University.
Mr. Ueychai Tantha-Obhas
Mr. Ueychai Tantha-Obhas has been a Director since
September 2005. Before joining ThaiBev, he was the
Chief Executive Officer, from July 1995 to December
2002, and Managing Director of Riche Monde
(Bangkok) Ltd., from January 1988 to February 1994;
the Managing Director of Sarin Property Co., Ltd., from
March 1994 to June 1995; and the Group Product
Manager of Colgate Palmolive Co., Ltd., from September
1979 to June 1983. From May 1973 to August 1979,
he held various sales and marketing positions in
Karnasuta General Assembly Co., Ltd. He holds a
Bachelor of Science in Accounting from St. Louis
University, a Master of Business Administration from
Thammasat University and is certified to have
completed the Advanced Management Program from
INSEAD, France.
Annual Report 2007
50
51
Dr. Pisanu Vichiensanth
Dr. Pisanu Vichiensanth has been a Director and
Senior Vice President since February 2004. He has
held several positions in ThaiBev, including Executive
Vice President from 2000 to 2003 and Senior Vice
Executive President from 2003 to 2004, at subsidiary
Beer Thai (1991) Plc. He is currently the President
of Beer Thai (1991) Plc. Before joining ThaiBev,
he had been the Vice President of Engineering and
Development (1997-2000) and Assistant Plant
Executive (1994-1996) of Carlsberg Brewery
(Thailand) Co., Ltd.
He was a consultant at Pan Engineering Consultant
Co., Ltd., from 1992 to 1994. From 1977 to 1993,
he held several teaching positions, including Head of
Food Science and Technology at Thammasat University
and Head of Food Technology at Khon Kaen University
from 1992 to 1993, and from 1989 to 1992, respectively.
He lectured in food technology at Khon Kaen University
from 1977 to 1990. He holds a Ph.D. in Engineering
from Technical University, Berlin; a Master of
Technology (Second Class Honors) in Biotechnology
from Massey University; and a Bachelor of Science
(Food Science) from Kasetsart University.
Mr. Chukiet Tangpongprush
Mr. Chukiet Tangpongprush was appointed as a
Director and Senior Vice President of ThaiBev in 2003.
Before joining, he was a lawyer from 1963 to 1983.
From 1983 to 1986, he served first as Manager of
law firm and later as Executive Director of Surathip
Sansukko Co., Ltd. From 1987 to 1999, he served
first as Executive Director and later as the head of
the General Affairs Department of Suramaharas Plc.
He joined Surabangyikhan Co., Ltd., in 2000 as
the head of the Human Administration and General
Affairs. He holds a Bachelor of Law from Thammasat
University and the Thai Barrister at Law from the
Institute of Legal Education Barrister at Law, and has
completed the Director Accreditation Program with
the Thai Institute of Directors. He is also a member of
the Thai Bar and of the Lawyers Council of Thailand.
Top Executive Profile
Mr. Sawat Sopa
Mr. Saikeaw Vongpisethkul
Mr. Sawat Sopa was appointed Executive Vice President
in 2004, responsible for liquor production and
technique. He was the Managing Director of Beer Thai
(1991) Co., Ltd., and Executive Vice Chairman of Red
Bull Distillery (1988) Co., Ltd., from 1992 to 1995,
and from 1995 to Present, respectively. From 1980
to 1992, he served as an Executive Director of the 43
Group of companies and Assistant Chief Executive
Director, responsible for liquor and alcohol production.
From 1964 to 1975, he served first as an engineer and
later as the Chief Engineer of Siam Chem Co., Ltd. From
1963 to 1964, he served as an engineer in Bangchak
Oil Refinery. Mr. Sawat sits on the boards of directors
of various organizations including the Thab Neelaniti
Foundation, Chulalongkorn University Association, The
Petroleum & Petrochemical College, Chulalongkorn
University and President of Gymnastics Association
of Thailand. He has also been appointed as Special
Commissioner of the Secretariat of the House of
Representatives to consider draft bills on workmen’s
protection, the securities and stock market and excise
tax; a specialist to the Committee of the House Standing
Committee on Natural Resources and Environment;
and a member of the Financial Committee and
Subcommittee of the Ethanol Investment Project under
the Royal Ethanol Project Bureau, Ministry of Science,
Technology and Environment. He holds a Bachelor
degree of Science in Chemical Engineering and has
completed the Director Accreditation Program with
the Thai Institute of Directors. He is a Member (Fifth
Class) of the Most Exalted Order of the White Elephant
and a Companion (Fourth Class) of the Most Noble
Order of the Crown of Thailand.
Mr. Saikeaw Vongpisethkul was appointed Senior Vice
President in 2006. He has over 39 years’ experience
in management as Vice President of Thai Pure Drink
Co., Ltd. from 1967 to 2006. He was also an Advisor of
the Association for Overseas Technical Scholarships
from 1991 to 1993. He has served the Federation
of Thai Industries as Logistics Committee Member
and Environmental Committee Member since 1981. He
holds a Bachelor of Engineering (Honors) from
Chulalongkorn University.
Mr. Jean Lebreton
Head of Strategy and Business Development
Mr. Lebreton worked for the Boston Consulting Group
(BCG) from 1989 to 2005. He became a partner in the
company in 1995. After working for BCG in France
for five years, he moved to Thailand in 1994 to open
the Bangkok office of BCG. After leaving BCG in 2005,
Mr. Lebreton worked independently for several years
before joining ThaiBev in January 2008.
Mr. Lebreton has extensive experience in Asia, including
several years in Shanghai, China. He has worked in
many industry sectors as a consultant, including
consumer goods, banking, and energy, covering topics
such as market development, consumer research,
re-engineering, and value management.
At ThaiBev, Mr. Lebreton will work with other senior
executives to develop and implement strategy and
facilitate the integration of future acquisitions.
Mr. Lebreton has an MBA from Wharton School of
the University of Pennsylvania.
Annual Report 2007
52
53
Organization Structure
ANNUAL REPORT 2007
Audit Committee
Board of Directors
Risk Management Committee
Office of Internal Audit
Executive Committee
Nomination Committee
Remuneration Committee
Office of Chairman
of Executive Committee
General Affairs
President and CEO
International Businesses
Office of the CEO
Office of Corporate Communications
Office of Corporate Secretariat
Office of External Affairs
Office of Legal Affairs
Corporate
Services
- Office of Human
Resources
- Office of
Information
Technology
Strategy
Finance
Sales
Marketing
- Office of Strategic
Planning
- Office of Controller
- Office of Sales
Planning and
Support
- Office of Marketing
- Office of Treasury
- Centre of
Excellence
Business
Development
Non-Alcohol
Production
Beer
Production
Spirit
Production
- Office of Business
Development
- Office of Non-Alcohol
Production
- Office of Beer
Production
- Office of Liquor
Production
- Office of Technical
Service and Environment
- Office of Engineer
- Office of
Corporate Planning &
General Services
- Office of Natural
Essences Production
*Effective from January 18, 2008
Annual Report 2007
54
Responsibilities
and authorization
of each Office
Office of Chairman of the
Executive Board
Manages and screens items to be
proposed to the Chairman of the
Executive Board and manages
general tasks for the Chairman
of the Executive Board.
Office of President
Manage secretarial tasks for the
President. Provide essential back-up
in both administrative and strategic
tasks. Coordinate with all internal
units as well as external organizations
both domestically and internationally.
Arrange meetings of each ad hoc
committee as assigned.
Office of Internal Audit
Assists the Board in promoting
good corporate governance; reports
to the Audit Committee significant
issues of risk management, internal
controls and governance; provides
advisory services and the resolution
of issues concerning internal
controls; and promotes risk
management to all units’ operations.
55
Office of Liquor Production
Manages and oversees operations
of the three liquor groups in
compliance with the goals and
policies of Thai Beverage Public
Company Limited, including the
promotion of the development of
production and personnel skills
for the sustainable benefit of the
Company.
Office of Technical
Service & Environment
Formulates liquor production
processes and controls liquor
production at 17 distilleries to meet
the requirements of each type as
well as the standards of the Thai
Industrial Standards Institute.
This includes the formulation of
environmental management systems
and controlling water treatment
systems.
Office of Non-Alcohol
Production
Office of Sales Planning
and Support
Manages and oversees operations
of the non-alcoholic beverages
in compliance with the goals and
promotion of the development of
production and personnel skills
Company.
Supervises and oversees support
on the sale activities by coordinating
with Office of Marketing in order to
ensure that the sale activities are
performed according to the strategic
plan.
Office of Business
Development
Supervises and oversees all related
businesses in order to ensure the
compliance to the Company
business policy including giving
advice and strategic planning to
develop each business unit to
gain a maximize value added to
the Company.
Office of Marketing
Office of Engineer
Oversees the engineering section
to support the distilleries and the
Company’s affiliates to align with
goals for the utmost benefit to the
Group.
Office of Natural
Essences Production
Oversees the process of natural
essences production to meet the
quality set forth by the Company.
Office of Beer Production
Manages and oversees the production
of the three beer companies in
compliance with the goals and
promotion of the development
of production and personnel skills
Group.
Creates marketing, sales, advertising,
public relations, product development
and merchandise distribution plans
in support of Group activities.
Manages budgets, arranges and
controls the total product distribution
in compliance with goals. Analyzes
and formulates marketing strategies
in line with market competition.
Office of Controller
Supervises and oversees the
corporate functions of accounting
and budgeting to ensure the
compliance with generally accepted
accounting principles in Thailand to
present the complete, accurate and
timely financial informations as well
as compliance with the procedures
set forth by the Board of Directors.
Office of Treasury
Supervises and oversees support for
treasury affairs to ensure technical
and legal compliance of operations,
as well as compliance with the
procedures set forth by the Board of
Directors.
Office of Strategic Planning
To oversee and coordinate
Thai Beverage Public Company
Limited transformation program
through the Project Management
Office (PMO), centralize all M&A
activities in close coordination with
the finance Office, with a focus
on strategic evaluation and Post
Merger Integration, and leads key
projects as required to define and
implement the group’s strategy.
Annual Report 2007
56
Centre of Excellence
To manage the budgeting and
reporting processes, oversee the
investor relation department, and
identify and disseminate best
practices.
Office of Human Resources
Institutes international-standard
human resources procedures that
are capable of coordinating between
the headquarters and regional
offices - taking into account the
value of human resources, commitment
to ethics, and compliance with laws.
Office of Information
Technology
Responsible for information
technology (IT) services, including
development of advanced IT
systems so that business units
can access information and tools
to enhance the Company’s
competitiveness.
Office of General Services
Oversees administrative works for
both the Company and its affiliates,
such as cleaning services and
maintenance of office buildings,
supply of office equipment and
stationery, security systems and
insurance for the assets. Ensures
that the work complies with
Company policies and regulations
to efficiently support the major
business and activities of the
Group.
Office of Corporate
Communications
Supervises and is responsible for all
aspects of corporate communications
functions, namely public relations,
internal and external communications,
electronic communications as well as
investor relations, to garner the utmost
benefits for the Company, particularly
in regards to corporate image and
the fostering of relationship to
efficiently support the Company’s
businesses and activities.
Office of Corporate
Secretariat
Arranges all Board and shareholders
meetings of the Company and its
group companies and oversees in
compliance with Securities Laws
and the Listing Manual of the
Singapore Exchange as well as
controls disclosure of material
information to ensure compliance
with laws, regulations and the Lising
Manual, as well as Company policy.
Provides suitable advice to all
directors and key executives.
Administers corporate information
and analyzes Securities Laws relating
to Company business. Oversees the
share registration of the Company
and its group companies and
coordinates with related parties
to the share registrar work and
organizes the preparation of the
annual report.
57
Office of External Affairs
Oversees external affairs. Directly
and indirectly creates positive
relationships with business
partners, leading to commercial
oppotunities and supporting
negotiations and business
connections over the short
and long terms. In addition, build
relations with government and
social aspects organizations as
well as planning and running
corporate community programmes.
Office of Legal Affairs
Analyzes and advises all units of the
Company on legal issues to ensure
full compliance with the law and for
the best interests of the Company
as well as being responsible for
litigation matters, juristic acts/
contracts matters, registration
matters relating to partnerships/
companies, and intellectual
property.
Others
Chinese Herb Spirits
White Spirits
Brown Spirits
59
58
Niyomthai 40 Degrees
White Tiger 40 Degrees
Paitong 35 Degrees
Paitong 30 Degrees
Ruang Khao 40 Degrees
Ble nd 285
Blue
Crown 99
Hong Thong
Mungkorn Thong
Mekhong Superior
Mekhong
SangSom Similan
SangSom Premium
SangSom Superior
SangSom
Beer
Annual Report 2007
Product
Portfolio
Chang Soda Water
Chang Drinking Water
Shinobu
Choo 10 New
Choo 3 New
Sua Dum
Chiang-Chun
Archa
Chang Light
Chang Draught
Chang
Archa
Chang Light
Chang Draught
Chang
Annual Report 2007
60
61
Operating and
Financial Review
Contents
Corporate Vision
1. Overview
“We will strive to become a leading global
beverage company with focus on commercial
excellence, continued premiumisation of our
products, and professionalism.”
2. Corporate Vision
3. Business in Thailand
4. Overseas Business
5. Management Discussion and Analysis
6. Shareholder Returns
7. Risk Factors
Overview
Mission
Thai Beverage Public Company Limited (“ThaiBev”) was incorporated in Thailand in October 2003 in order to
consolidate Thailand’s leading beer and spirits businesses owned by the principal shareholders and their business
associates under a single holding company. ThaiBev was subsequently listed on the Singapore Exchange (“SGX”)
on May 30, 2006. The listing was the largest in Singapore in ten years, raising US$1.574 billion (or Baht
38.08 billion) and received great interest.
We will seek “partnerships” among our key stakeholders through six guiding values
The major substantial shareholder in ThaiBev is Mr. Charoen Sirivadhanabhakdi, family and associates, who
own approximately 64.94% of the company’s paid-up share capital (as of December 31 2007), the rest being held
by private groups, investment institutions and retail investors.
Not only is ThaiBev Thailand’s largest alcohol beverages producer, it is also one of Southeast Asia’s largest, though
today 96.4% of its revenues are generated in Thailand.
Since listing, ThaiBev has implemented a strategy to allow it to expand overseas. To this end, its wholly-owned
subsidiary, International Beverage Holdings Limited (“IBHL”) is charged with this task. To date, IBHL has set up
sales offices in 6 countries and commenced active promotion of sales to countries like the USA, UK, Australia,
and others of two of ThaiBev’s products, Chang Beer and Mekhong rum. Expansion will also include whiskies
made in Scotland by IBHL’s subsidiary Inver House.
Corporate Vision
“We will strive to become a leading global beverage company with focus on commercial excellence, continued
premiumisation of our products, and professionalism.”
•
•
•
•
•
•
Offer quality products for every customer segment
Satisfy distributors’ needs by offering professional services
Provide first quartile returns to our shareholders with consistent high revenue growth and profitability
Become a role model in terms of professionalism, transparency, and good corporate governance
Trust, empower, and reward our staff to make them accountable
Contribute to public and local communities
Corporate Development Strategy
Our corporate development strategy will emphasize premiumisation, internationalization and professionalisation.
We will discuss premiumisation and internationalization in following sections, but the professional development
of our management and other human resources will play an increasing role in the success of the Company over
time. Part of the impetus has been the conversion of the Company from private to public, and there are ongoing
measures to allow management to embrace accountability and create an organization that is more efficient and
focused on operational excellence. Professionalism is linked to good corporate governance, which will ensure the
Company is well-run on behalf of shareholders. Investors should note that we have commenced the introduction
of international-standard metrics that will assist management monitor their performance and thus help to improve
it over time.
Annual Report 2007
62
63
Business in Thailand
While 2007 has seen a continuation of the vigorous competition seen in 2006, the alcohol beverage industry has
continued to grow. ThaiBev has continued to see a rise in demand for low alcohol beers and brown spirits. White
spirits sales were affected by economic difficulties, but remain the key underpinning of ThaiBev’s profitability for
the present.
Domestic Business Strategy
ThaiBev’s strategy for the domestic market focuses on the protection of the core businesses of beer and spirits. We
intend to continue growing the portfolio and become a leader in all alcoholic segments. We strongly believe that
the Thai market has room to grow further as there is still a lack of choice regarding the number of brands available
and the narrow segmentation of brands. Thai people aspire to move to higher-end drinks, whether alcoholic or
non-alcoholic and as the economy improves, as it must do over time, ThaiBev will have products ready to meet
consumer demand.
Today, the Company dominates the economy segment of its businesses. In future, we will introduce standard and
premium products that will extend the portfolio upwards. This will provide us with higher margins and greater
profitability over time. We have noted that the spirits market will move toward brown spirits over the long term and
a more balanced portfolio will allow us to diversify the inherent risk of relying on one type of product or another
over time.
We also intend to continue to premiumize our current portfolio. For instance, we have already introduced gift boxes
for several spirits products such as Sangsom rum in 2007. We re-launched Hong Thong in 2006 with new packaging
that led to a good response from consumers. These steps will raise the market perception of our products and
lead to more sustained growth in the future.
Investment in machinery picked up as seen in rising capital goods’ imports in the latter half of the year. However,
construction continued to contract. Private consumption rose 1.3% year-on-year but this was lower than expected.
Business sentiment has been reasonably stable, with the Business Sentiment Index (BSI) now standing at 44.5
in December 2007. However, the outlook is positive due to public satisfaction with the election result. Domestic
demand in 2007 has improved gradually. Export growth slowed but the trade surplus remained high due to lower
imports. The Thai economy in 2007 grew by 4.5% with domestic demand contributing to overall growth. Negative
factors that may slow down the pick-up in future domestic demand are higher oil prices and consumer goods
driven by higher transportation costs.
Core Inflation
0.8-1.3% (2007)
GDP Growth
4.3-4.8% (2007)
Exchange Rates
34.5367 Baht/US$ (2007 avg.)
Population
65.6 Million (2005)
Alcohol Consumption
Beer
31.3 (liters per capita, 2006)
Spirits
10.4 (liters per capita, 2006)
Source: Bank of Thailand, Canadean, The Beer Service Annual Report - 2007 Cycle
In order to diversify the portfolio further, the Company will expand further into the non-alcoholic drinks market to
offer a complete range of beverages. The Company has already acquired all the energy drinks and ready-to-drink
(RTD) coffee assets of Wrangyer Beverage Company Limited, in January 2008 and we have informed the market
that we are negotiating for another acquisition in the energy drinks business. The energy drinks market is growing
by approximately 3% per annum and the net profit margins are around 10%, making it an attractive entry point
into non-alcoholic beverages for us.
ThaiBev has one of the largest distribution networks in Thailand and it will have to make more strategic use of this
network over time by offering it to outside organizations. First the Company needs to make it more efficient in, and
more capable of, handling a wider range of products. To achieve this, the Company introduced a logistics project
in August 2007. One of the objectives of which is to introduce five huge distribution centers around Thailand that
would be able to store more products and distribute them to surrounding regions more efficiently.
Legislation
The Alcohol Control Act was passed by parliament in December 2007. A National Committee for Alcoholic Beverage
Policy was set up to provide the framework of how the Act is to be implemented. The final draft of the Act was
approved by parliament on February 13, 2008, and promulgated in the Royal Gazette on February 14, 2008.
Many of the regulations mentioned here were expected by the Company for some time and we are already prepared
to comply with the law.
The Thai Economy
Sites where alcohol may be sold and consumed are now regulated. Alcohol may not be sold or consumed in
temples and other religious places, health-related sites, hospitals and pharmacies. Neither may alcohol be sold at
government sites, hostels and educational institutions. However, shops, private rest areas and clubs situated on
government sites are exempt. Sites that have traditionally been used for eating and drinking are also exempt.
The Thai economy has declined slowly over the course of 2007, but with some positive sentiment towards the
1
end of the year as the election on December 23 approached. Private investment fell 0.8% year-on-year in 2007.
Alcohol may not be sold in petrol or fuel service stations or shops in their vicinity, nor is alcohol allowed in public
parks run by the state.
1
Source: Bank of Thailand estimate
We should note that petrol stations in Thailand have not been selling alcohol in the shops on their premises for
some time due to an earlier Ministerial Regulation.
Annual Report 2007
64
Although the Minister of Health may on occasion proclaim days and times when alcohol may not be sold, this
would be in addition to existing restrictions on times when alcohol may not be sold. Normally alcohol is not
sold the evening before an election, for instance.
It is now forbidden to sell alcoholic drinks to anyone under 20 years old.
It is also forbidden to sell alcohol using automatic vending machines, by hawking or to offer discounts to promote
sales. No gifts, rewards or prizes may be provided to those purchasing alcoholic drinks or by using the redemption
of things like bottle tops, for example. Companies may not offer alcoholic drinks for people to try or to impose
any conditions that oblige the purchase of alcohol.
Regarding advertising, it is now forbidden to advertise alcoholic beverages directly or show the drinking of alcohol.
The industry cannot show the name or brand of alcoholic drinks to accentuate the merits of alcoholic drinks or
entice people to drink. This has been a regulation for some time and the Company already complies with it.
Advertising and public relations of alcoholic beverages are allowed per se but there are exemptions relating to
advertising subject to Ministerial Regulations (that have not yet been issued). These would be limited to information
and news about social contributions without the appearance of any product photos or the packaging of alcoholic
drinks, except for the symbol or logo of the drink or company only. In principle, this implies that advertising may
now be allowed, but the focus must be on meritorious activities, such as how ThaiBev provides support to society.
Examples here would be our continued support for arts and crafts, health, sports, religious activities, youth projects
and other support for the poor and underprivileged that ThaiBev has pursued over the years. Therefore, as long as
the advert does not show bottles or drinking scenes, it should be allowed. We note this will enable ThaiBev to
continue to build its corporate image in Thailand.
65
The Cabinet approved raising the excise tax ceiling from an ad valorem rate of 60% and a specific rate of Baht 400 per
liter of pure alcohol, to an ad valorem rate of 99% and a specific rate of Baht 1,000 per liter of pure alcohol as proposed
by the Minister of Finance. The objective of this ceiling rate increase is to provide flexibility to the Excise Department
in managing future excise tax rates. The matter must be passed by Act of Parliament. Due to the change of government
following the election on December 23, 2007, the Act must be re-submitted to the new parliament for its approval.
On August 28, 2007, the government approved and announced new excise tax increases. The increases were on
white and compound spirits and brandy. The tax increases affected ThaiBev’s white spirits and its three compound
spirit brands; Mungkorn Thong, Hong Thong, Blend 285 and Chinese herbal spirits. The white spirits specific rate
increased from Baht 70 per liter of 100 per cent alcohol to Baht 110 per liter of 100 per cent alcohol, while the
ad valorem rate changed from 25% to 50%. The specific rate for compound and Chinese spirits increased from
Baht 240 per liter of 100 per cent alcohol to Baht 280 per liter while the ad valorem rate remains 50 per cent of the
ex-factory price. For brandy, the ad valorem rate increased from 40 per cent to 45 per cent of the ex-factory price,
while the specific rate remained unchanged at Baht 400 per liter of 100 per cent alcohol. On 14 January 2008,
the Government applied an additional amount of 1.5% onto the excise tax of all alcoholic beverages in order to pay
for the new public broadcasting system.
Table of Excise Taxes levied on the Company’s products showing the rise in August 2007 on certain
products and the addition of 1.5% across the board in January 2008
Product
Ad Valorem Rate
(Ex-factory)
The law does not cover advertisements that originate outside Thailand. Investors should note that ThaiBev is a shirt sponsor
of Everton Football Club in the UK and that this sponsorship will not be affected by these new regulations in Thailand.
After consideration of these regulations under the Alcohol Control Act, ThaiBev believes that while there will be
some effect on promotional activities, the Company’s extensive distribution network mitigates the loss of some
other marketing tools. Moreover, while the restrictions on public places where alcohol may be sold and consumed
are reasonable, we should note that the vast majority of ThaiBev’s products today are drunk in the home.
In sum, the Alcohol Control Act is a restriction on the ability of companies to promote and position their products
in the minds of consumers, but is not in itself an obstruction to sales. Nothing in the Act forbids consumers from
purchasing and drinking alcohol. Certainly, there is a risk to new entrants that they may not be able to establish
themselves with consumers who will be unaware of their presence if they can only advertise logos and social
contributions as they will not have the distribution network in place to offer a pervasive brand presence. ThaiBev has an
extensive distribution network in Thailand for alcoholic beverages which is advantageous to the sales of new products.
Taxation
Besides corporate income tax, which is set at a rate of 30% in Thailand, the Company pays excise tax on its alcoholic
beverages. This is imposed before our products leave the factory and explains why the Company has a relatively high
use of short term cash. There are two methods that can be used by the Government to levy the tax; either according to the
amount of alcohol per liter, called a specific rate, or based on a determined ex-factory price, called the ad valorem rate.
The Excise Department may use either the specific or ad valorem rates depending on which one is the higher.
Fermented Liquor
Beer
Wine & Sparkling wine from grapes
Local Fermented Liquor
Other
Distilled Liquor
White spirits*
Compounded spirits (Hong Thong, Mungkorn Thong, Chinese Herb)*
Blended spirits (Mekhong)
Special spirits
Brandy*
Whisky
Other (Sangsom, Crown99, Blue)
Absolute Alcohol
used in industry
used in medicine, pharmaceuticals, science
other
Specific Rate
Unit
55%
60%
25%
25%
Liter of pure alcohol
100
100
70
70
25% - > 50%
50%
50%
70 - > 110
240 - > 280
400
40% - > 45%
50%
50%
400
400
400
2%
0.10%
10%
Liter
Liter
1
0.05
6
+ Municipal Taxes: 10% of Excise
+ Health Promotion Fund Contribution: 2% of Excise
+ Thai Public Broadcasting Service Fund Contribution: 1.5% of Excise**
* New Tax Rate Applied from 28 Aug 2007, ** TPBS Funds Applied From 14 Jan 2008
Bt/Unit
Annual Report 2007
66
Beer Business
Archa Beer was the only
Thai beer to have received
a Gold Medal. Back in 1998,
Chang was the first Thai beer
to win this award, making
Thai Beverage Public
Company Limited the only
Thai brewer to have won
AIBA Gold Medals.
67
Since the introduction of Chang
Beer to the masses in 1995, people
in rural areas had limited choice
and there was a potential to provide
more products to them. In 2006 it
became clear that an alternative
would either have to be introduced
by ThaiBev or a competitor.
The re-launch of Archa Beer into
the northeast and other rural areas
proved the case that there is a
section of society that wants
a lighter alternative to Chang Beer.
Along with Chang Light and Chang
Draught, lighter beers are finding
favor in both rural and urban
areas, with the total sales volume
at the end of 2007 Climbing to
956.8 million liters. Total sales of
Archa Beer alone accounts for
31% of ThaiBev’s beer portfolio.
Archa Beer won over more than
20 judges to claim the coveted
Gold Medal in European Lager
Division at the 2007 Australian
International Beer Awards (AIBA).
Archa Beer was cited for being
“an outstanding beer that displays
the correct balance of taste, aroma
and appearance appropriate for
the style and excellent technical
merit”.
Archa Beer was the only Thai beer
to have received a Gold Medal.
Back in 1998, Chang Beer was
the first Thai beer to win this award,
making ThaiBev the only Thai
brewer to have won AIBA Gold
Medals.
There has been phenomenal
growth among the lighter beers in
the portfolio on the back of a rising
trend globally. ThaiBev intends to
continue this success by introducing
new beers at the right time at high
market positions and higher margins
as part of its premiumisation policy.
In 2004, the Company decided to
expand the capacity of its northern
brewery at Kamphaengphet
province. This was done as the beer
market had risen to the extent that
the former total capacity of the
Company’s three breweries was
already running at full capacity.
With plans to expand production
to include exports, the expansion
was timed well to meet the current
upsurge in demand for beer.
The Baht 7.2 billion project was
completed in 2007, bringing the
capacity of Kamphaengphet
province up to 900 million liters.
Together with the two other
breweries at Wang Noi and Bang
Ban in Ayutthaya province, the
Company now has a total production
capacity of 1,550 million liters per
annum, making us one of the
largest brewers in Southeast Asia.
Utilization normally runs at
approximately 68% of total
capacity per annum. However,
this sometimes increases to
almost 95% utilization prior to
and during peak periods as our
brewing team has a policy of
providing only fresh beer to
consumers and therefore does
not normally brew well in advance
of a peak period and store the
beer. At this level of utilization,
and the growth of the beer industry
in 2007 of 6%, ThaiBev expects
full utilization in approximately
six years.
Annual Report 2007
68
Spirits Business
While approximately 52% of
ThaiBev’s sales come from spirits,
this product accounts for about
85% of net profit. ThaiBev’s spirits
portfolio is split into two types,
brown and white spirits. All the
Company’s white spirits are made
from molasses (a product of sugar
cane) as are the majority of its
brown spirits made in Thailand.
Only Crown 99 and Blue are whiskies.
Whereas white spirits are an economy
drink, commonly consumed in rural
areas and among the segment of
society that performs physical labor,
brown spirits are what most
consumers aspire to drink.
69
The past year has seen the Thai
economy slow measurably, with the
effect being felt mostly in rural areas
and among laborers. As consumer
confidence has declined, the Company
has seen a noticeable effect on its
white spirits’ sales, which acts as
a barometer of the rural economy.
Sales volume of white spirits began
to decline as consumers switched to
half bottles or single shots. In some
cases the community spirits sector
in Thailand was the beneficiary.
However, we know that white spirits
are consumed mostly by the older
generation and we do not expect
the younger generation to continue
this tradition forever. By nature,
younger people prefer to consume
brown spirits and beer, and this is
the area that the Company will be
concentrating more on in the future.
In October 2006, we launched
Blend 285 and positioned it to
provide the consumer with a superior
quality product at an affordable
price. The product features premium
clues such as an individual gift
box, non-refillable cap (“NRF”), and
westernized packaging design.
The product has proven popular
throughout 2007 and sold 14.8
million liters, a success that
clearly demonstrates the strength
of our distribution platform which
enables new products to gain
deep market penetration over
a short period of time.
ThaiBev has approximately 74%
of the spirits market. In May 2007,
the prices of some brown spirits
were raised.
The selling price in Baht for one
case (i.e. a dozen bottles) increased
as illustrated here:
Increase per case (Baht)
Bottle
Half bottle
Hong Thong
110 (+7.1%)
118 (+15.3%)
Sangsom
120 (+5.5%)
60 (+5.6%)
Mekhong
110 (+7.7%)
55 (+7.7%)
Blend 285
150 (+8.5%)
N/A
Mungkorn Thong
None
118 (+16.6%)
In September 2007, we acquired
United Products Company Limited
(“UPC”) and SPM Foods and
Beverages Company Limited (“SPM”).
Annual Report 2007
70
71
Industrial Alcohol Business
UPC is primarily engaged in the manufacturing
and distribution of spirits, including contract
distilling. UPC has various brands in its portfolio,
for example “White Bear” white sprits, “Mungkorn
Taejean” white sprits, “Noble Lords” whisky,
“Tumbler” whisky, etc. Its distillery is located in
Nakhon Pathom province, not far from Bangkok.
The total design capacity of UPC’s distillery
at 50 degree alcohol content is approximately
30,000 liters per day. In 2007, UPC has been
operating its distillery at approximately 35%
utilization of its design capacity. This utilization
comprises 90.18% white spirits and 9.82 special
spirits, known as Bacardi Breezer, under the
Bacardi brand. We have agreed to renew
Bacardi’s current contract for another year and
are now working on a longer-term contract.
SPM is a company primarily engaged in the
manufacture and distribution of mineral drinks,
sports drinks, fruit juices and seasoning sauce.
It produces OEM products under contract, for
example “Gatorade” sports drink, “Fruitnette Jelly
Drink,” “SPM” juice, “Furen” seasoning sauce, etc.
The Company is considering the extension of the
Gatorade contract to the middle of 2008. SPM’s
factory is located at Nakhon Pathom province.
The rationale for these acquisitions was to enable
ThaiBev to obtain new customers and new brands
of liquor products, in particular white liquor; to
diversify our current alcohol beverage business,
and to enter into new non-alcohol beverage
businesses.
ThaiBev is interested to become a comprehensive
producer of drinks, both alcoholic and non-alcoholic
as part of its strategy to diversify its portfolio and
seek higher returns.
We acquired our industrial alcohol plant in 2002 to create further integration in our alcohol business. We are now
increasing our exports of industrial alcohol products to key markets such as Japan and India. Since September
2004, we have produced ethanol to make gasohol fuel as a substitute for 95 octane gasoline. We have increased
our capacity of ethanol production to meet the expected demand for gasohol and capitalize on the Government’s
policy on clean energy.
In 2007, our sales volume of ethanol was 42.6 million liters compared to 46.6 million liters in 2006. However, our
overall sales volume of industrial alcohol in 2007 is slightly more than that of 2006 due to a temporary production
halt as a result of unfavorable product margins in the first quarter of 2006.
The industrial alcohol business throughout 2007 was still under pressure. The postponement of an import ban
on 95 octane gasoline by the transitional government directly affected demand in the industrial alcohol business
in Thailand. Most of the domestic industrial alcohol producers were stuck with high inventories forcing them to
lower their prices to deplete stocks. Oil companies are enjoying good profit from gasohol due to low alcohol prices
but this was not enough to motivate them to promote gasohol. Exporting industrial alcohol is the only available
source of business open to ThaiBev. However, global industrial alcohol prices have been very competitive due
to abundant supplies from Brazil. Despite all the difficulties, ThaiBev managed to sell a total of 59.5 million liters of
alcohol,which was 23 percent higher than total sales of the same period last year. ThaiBev will continue to focus on
the exporting business for the remainder of this year.
Domestic sales in 2007 were 36.7 million liters, which was 9.4% lower than the sales in 2006. The average price
per liter of Baht 24.97 in 2006 decreased to Baht 16.14 per liter in 2007. Thai Alcohol Public Company Limited
exported 22.8 million liters in 2007, mainly to Japan. There were no export sales in 2006. The Company showed
a gross loss of Baht 6 million compared to a gross profit of Baht 211 million last year.
Related Businesses
The Glass Bottle Purchase Agreement between Bangna Logistics Co., Ltd. (a wholly-owned subsidiary of ThaiBev)
and Berli Jucker Public Company Limited. expired on April 30, 2007 and the parties entered into a new Glass Bottle
Purchase Agreement dated May 24, 2007 for a period of two years and eight months (effective from May 1, 2007
to December 31, 2009).
Annual Report 2007
72
73
Overseas
Business
International Beverage Holdings Limited (“IBHL” see: www.
interbevgroup.com) has been established to be the international
arm of Thai Beverage Public Company Limited (ThaiBev).
These global operations are managed out of our four regional
headquarters located in Hong Kong, Singapore, North America
and the United Kingdom together with our major Scotch whisky
operations in five distilleries in Scotland.
IBHL is responsible for ThaiBev’s international business and is engaged in activities such
as the production, marketing and distribution of our portfolio of alcoholic beverages including
ThaiBev’s domestically-produced products and Scotch whisky.
We currently export our brands to over 80 countries outside
Thailand managing this directly with our in-house sales and
marketing teams as well as through suitable local distributors where
necessary.
International Strategy
The changing face of the world’s drinks industry will create
opportunities for the development of our company in the years
ahead. Consumers are demonstrating an increasing desire to trade
up to more premium products as well as to experiment with new
and interesting brands and these are just two of the trends that
we believe will help IBHL achieve its strong brand growth targets.
IBHL is incorporated in Hong Kong and currently has subsidiaries in
six countries, as follows:
• InterBev (Singapore) Limited
• InterBev Malaysia Sdn. Bhd.
• InterBev (Cambodia) Co., Ltd.
• International Beverage Holdings Limited USA, Inc.
• International Beverage Holdings (UK) Ltd. and subsidiaries
including Inver House Distillers Limited
• Best Spirits Company Limited
Business Strategy
The Company’s strategy with regard to international expansion remains consistent. The
Company strongly believes that it must adopt an appropriate route to market, wholly
owned or third party depending on our ambitions in that market and market circumstances.
We actively seek out distribution partners. Should our beverages begin to gain traction in
a country, we would then consider, at least in the case of beer, either contract brewing or
purchasing a brewery locally. Where we want to strengthen our presence, we are actively
considering investing in existing businesses or start-up companies. Due to the need to
identify projects that offer good value, any
investment made would have to offer an
internal rate of return in the suitable
amount. In any investment, IBHL will
consider value and potential synergy over
price.
Initially, IBHL is focusing on flagship
brands – Chang beer, Mekhong rum
(branded overseas with the legend: “the
Spirit of Thailand”), its single malt whiskies, Balblair, Old Pulteney, Speyburn and
AnCnoc and blended scotch whiskies such
as Hankey Bannister. IBHL has identified
key focus markets for each brand and is
directing its efforts and resources at these
‘brand market units’. IBHL intends to be
a global player with a comprehensive portfolio
of products.
Annual Report 2007
74
We also believe that local partners and management
are ways of moving into new markets without a steep
learning curve. Key international executives are
internationally sourced, and chosen for their long
experience in the business. We are also assembling a
strong talent pool in the areas of Sales and Marketing
from candidates with wide-ranging experience across
both beer and spirits. We are doing this by recruitment
and through the integration of the Inver House
commercial team. We are at the same time building
a strong platform of marketing expertise.
By employing high-quality, experienced management,
IBHL intends to expand faster than it would otherwise
be able to do. In some markets, strong local partners
will be sought to assist us to work with local
distribution networks and overcome indigent cultural and
business practice hurdles.
We aim to build a strong and unique brand presence
in all our core target markets throughout the world
and 2007 has already seen the repackaging and
successful launch of the iconic Chang Beer and
Mekhong brands on the international stage.
Chang Beer has been repackaged and recently
launched in the major Western markets including USA,
UK, Europe and Australia with a focus on the
premium imported beer market.
Mekhong has also been revamped to appeal to the
more discerning spirits drinkers. It will be sold through
high-end restaurants and cocktail bars in Europe and
North America with the help of its Thai-inspired
collection of cocktail recipes.
75
Inver House
Recognized Quality
Inver House Distillers Limited (www.inverhouse.com)
is a leading firm of Scotch whisky distillers, headquartered
in Central Scotland, exporting to over 80 countries
worldwide. It is held by IBHL through a holding
company called International Beverage Holdings (UK)
Limited. The company’s principal business is the
distillation and sale of Scotch whisky.
Inver House Distillers recently received (28 th February
2008) the prestigious ‘International Distiller of the
Year’ award at a glittering ceremony held in London.
The Airdrie based company beat off impressive
competition from exceptional companies throughout
the world including Japan, Ireland, Canada, India,
Sweden and the USA.
Inver House Distillers Limited owns five malt distilleries
and markets a number of multi-award winning Single
malt Scotch Whiskies: Old Pulteney, Balblair, anCnoc
(pronounced ‘a-nock’) and Speyburn. It also distills,
blends and bottles a number of Blended Scotch Whisky
brands including: Hankey Bannister, Catto’s and
McArthur’s, which are marketed and sold in over 78
countries.
Inver House, who in the last year has globally
re-launched their Balblair Single Malt as a superpremium ‘vintage’ offering, reached the final of the
‘Icons of Whisky’ event by first beating off competition
in Scotland from Glenmorangie, Bowmore and William
Grant & Sons, before claiming whisky’s highest accolade
over seven other global finalists. The industry-voted
award is designed to highlight the company who has
‘shown the most commitment to the development of
whisky at all levels’ and is highly sought after.
A successful redesign of core Thai Product for key
export markets.
Announced on the eve of Whisky Live London, the
Icons of Whisky dinner was created to celebrate the
people and places behind the greatest whiskies and
whisky companies in the world. The event’s international
judging panel recognized Inver House Distillers for
bringing ‘dynamic, inspirational and dedicated passion’
to the world of whisky.
Milestones
2003
2004
2006
2007
October
June
May
October
September
Thai Beverage was established
as a holding company for the alcohol
beverage business
Expansion of Kamphaengphet
brewery commenced
Thai Beverage successfully
listed in the Singapore Exchange
main board
Acquisition of distillery assets from
Sin Surang Karn Sura Co., Ltd.,
manufacturer of White Tiger
Acquisition of United Products Co., Ltd.
and SPM Foods and Beverages Co., Ltd.
manufacturer of White Bear spirits and
other products
Acquisition of Pacific Spirits UK (PSUK),
owner of Inver House Distillers in Scotland and
acquisition of Best Spirits Company Limited
Remark: In January 2008: Acquisition of energy drink and ready-to-drink coffee assets from Wrangyer Beverage Company Limited
Annual Report 2007
76
Major re-launch of flagship malt whisky brand
Balblair (www.balblair.com), was successfully repackaged
and relaunched during 2007 in our biggest-ever launch
program to date for an Inver House single malt whisky.
The striking new identity inspired by a 4,000 year old
Pictish standing stone overlooking the distillery, has
been carefully crafted and will mean the vintages offer
a superior choice for informed whisky drinkers across
Europe, North America and the fast growing Asian
region. The company’s strategy is to position Balblair as
a super-premium single malt scotch whisky. Balblair
was successfully launched in UK, France, Mexico,
Holland, Greece and Japan among other countries.
As part of this process, the company developed a new
direct marketing program to associate the brand with
other luxury goods through a partnership marketing
program. Current partners include Mackintosh
(www.mackintoshrainwear.com), the original manufacturer
of rainwear, who have repositioned themselves in the
luxury arena and are one of the “hot brands” in Japan
at present. Another partner is John Lowrie Morrison
(www.jolomo.com). He is one of the UK’s most
prestigious artists and he has exhibited widely in the
UK as well as Hong Kong and the USA.
The company’s premium single malt whiskies are
Old Pulteney (www.oldpulteney.com) and anCnoc
(www.ancnoc.com) and its entry-level single malt is
Speyburn (www.speyburn.com).
Inver House is now poised to enter markets with a
clear positioning for all its key brands. Blended scotch
whiskies will aid the company in establishing its
reputation in global markets. A new blended Scotch
whisky is expected to be introduced into Thailand in 2008.
Inver House Distillers Limited, which was purchased by
IBHL in October 2006, has benefited from a buoyant
Scotch market as well as a strategic shift towards
focusing more on core malt brands. As a result, pre tax
profit have risen to £4.0 million, up 121% for the same
period in 2006.
77
Annual Report 2007
78
79
USA Launch
IBHL USA now operational
International Beverage Holdings Ltd. USA, Inc. (IBHL USA) was established as the regional headquarters
for launching the business in North America. The office, based in New York City, is charged with developing
the company’s diverse international portfolio of branded Asian spirits and beer throughout North America.
IBHL USA is a wholly owned-subsidiary of IBHL, which is 100% owned by ThaiBev.
Strategy
The introduction to Americans commenced on July 4, 2007, with initial focus on the 5,000 Thai, Vietnamese,
Cambodian and Asian-Fusion restaurants in the USA. Unlike in Thailand, Chang is being presented as a
super-premium beer in the US market. By offering choice to consumers we believe the category will expand, as
demonstrated by Mexican, Japanese and Italian beers. The strategy is to build a platform for growth in East and
West Coast markets and to expand further into the interior once these core coastal markets have reached critical
mass. While the company is focusing on Thai and other Asian restaurants as its entry point into this market, the
following phases include a presence in off-premise trade and, when Chang becomes more established, entry into
the mass consumer on-premise market. As part of IBHL’s global strategy, the US market will not be limited to
Chang beer alone. Inver House, for instance, counts the USA as a major market for single malt whiskies already.
In early 2008, ThaiBev is planning to launch Mekhong rum into the US as part of its strategy of approaching overseas markets as a complete beer and spirits producer. Mekhong will be positioned as a unique Thai spirit using
the series of cocktails that have been created to drive interest in this product.
Chang is available in six-packs of 330 ml (11.2 oz.) and 640 ml (22 oz.). To the end of 2007, approximately
240,000 liters of beer have been shipped to the USA during the initial six month launch period. Over 30,000 cases
have been sold.
Key successes in 2007
IBHL’s key successes in 2007 include the successful
integration of Inver House and the improvement of
its business performance. IBHL was able to integrate
Hong Kong-based Best Spirits Company Limited and
improve its business performance. The company’s
brand marketing and presentation of key brands has
developed considerably and revenue is growing faster
than volume due to premiumisation and better
management. Finally, we have commenced operating
in the USA, UK and Australia, not just an achievement
in itself but a sign that the company has the potential
to enter any market it finds attractive.
Initially, the company is targeting the key states of California, Washington, Oregon, Arizona, Nevada, Texas, Georgia,
the D.C. area, Pennsylvania, New York, New Jersey, Connecticut, Massachusetts and Illinois. In the early stages,
the key markets are New York City metropolitan area and California. These two major markets are expected
to account for almost 30% of total Chang imports. In fact, 66% of Asian Americans live in the states of New York,
California, Hawaii, Texas and Illinois; over half of Asian Americans live in Los Angeles, New York City,
San Francisco, Honolulu, the District of Columbia and Baltimore, and Chicago. The United States’ highest
consumption of alcoholic beverages occurs in New York, Pennsylvania, Florida, Illinois, Texas and California.
To date, the company has established Chang in 16 states and 26 metropolitan areas, mainly focused on the
East and West coasts.
Consumers in the USA have been moving towards super premium imported and craft beers (unique beers made by
local small or micro breweries) for several years. The drivers have been the improved economic environment,
consumers seeking new, different flavors and a narrowing of the price gap between imported and craft beers, which
have held the line on pricing, and major domestic beers. A 330ml bottle of Chang currently sells for around US$4-5
in on premise outlets, while the price is around US$ 7.99 per six-pack of 330ml bottles for off premise outlets.
In May 2007, the Company increased the total paid-in capital of IBHL USA, from US$1,000 to US$2.6 million.
The capital increase was surplus cash injected by International Beverage Holdings Limited from its working
capital. The proceeds provided working capital to support the operations of IBHL USA for 2007.
Annual Report 2007
80
81
UK Launch
Australia
In May 2007, International Beverage Holdings (UK)
Limited (IBHL UK), launched Chang beer into the UK
after testing of the products in the market proved
favorable. At present, a 330ml bottle sells in a restaurant
for an average of £3.00, and is clearly positioned as a
premium imported beer. In Everton FC’s stadium a 330ml
can sells for £1.90 (only sold where draught is not a
vailable) and a pint (568ml) of Chang draught sells for
£3.00. This in the only UK venue where Chang is
available on draught.
ThaiBev added Australia to its network of product sales
in 2007. The Company has established a relationship
with Woolworths, Australia’s largest retailer, to distribute
and sell Chang Beer.
This deal provides a major launch platform that will mean
Chang Beer will be available nationally for Australians
to enjoy. Woolworths has almost 3,000 stores nationwide
and over 175,000 employees.
Europe
When Chang Draught was introduced at Everton FC’s
Goodison Park stadium at the end of 2006, it broke the
record for the most pints sold at Goodison in the first
game. It was sold and has quickly established itself
as a firm fans’ favorite. Sales volume at the stadium
has risen from 33,185 liters at the end of 2006 to
50,400 liters in 2007, showing a growth rate of 52%.
Chang sales in Europe, especially in the Netherlands,
have seen steady growth since 2006 and after a very
strong year in 2007, will see further expansion as new
initiatives are implemented and joined with Mekhong rum
launch activity.
Throughout the UK, Chang beer has seen some
remarkable growth, with sales for the country rising 138%
from the previous year.
New Markets
Strategy
IBHL has launched Chang through Thai restaurants in
the UK, but will then extend over time into mainstream
outlets such as pubs and bars. In the case of the UK,
the company has the advantage of distribution contacts
through the Inver House subsidiary and is expanding
throughout the country. Mekhong, The Spirit of Thailand,
was launched in January 2008 and is being introduced to high-end cocktail bars and is being positioned
as a premium product. The Inver House’s whiskies are
receiving consistent and innovative marketing initiatives
to establish them as key brands in the UK. The same
strategy will be employed in other appropriate markets.
ThaiBev will continue to concentrate on its domestic market, but is now seeking opportunities abroad.
While there have been entries into 19 markets to date,
the Company feels that Asia in general and ASEAN in
particular are interesting potential markets. One of the
advantages of exports within the ASEAN Free Trade Area
(AFTA) is the low duties imposed on trade within the
region today. The other is the similarity of business
cultures. Local spirits made from molasses or sugar cane
are evident within the region as is the rising trend for beer.
Vietnam and the Philippines are potential markets that
need to be explored. Further afield, China and India are
now fast-awakening economic giants that the Company
cannot ignore. Investments overseas will be thoroughly
scrutinized to ensure they are good value for money.
Annual Report 2007
82
83
Management Discussion and Analysis
The Company has completed the acquisition of a distillery named United Products Company Limited (UPC)
and a non-alcohol beverage manufacturer named SPM Foods and Beverages Company Limited (SPM) by
purchasing about 81% and 83% of the shares in the companies respectively. The operations of UPC and SPM
have been included in the Company’s financial statements since November 2007 onwards.
The Thai Excise Tax Department, Ministry of Finance, declared an increase of the excise tax rate with immediate
effect on white spirits, compounded spirits and brandy (which falls under the “special spirits” tax classification)
on August 28, 2007. The new excise tax as related to the Company’s products increased about 16.7% for
compounded spirits and about 57.1% to 70.8% for white spirits compared with the previous excise tax. However,
the Company had a substantial volume of spirits finished goods on which excise tax had already been paid at
the previous rate. The Company has already increased the selling price of spirits to cover the excise tax rise.
The Company is planning to improve the efficiency of its distribution network and establish more effective cost
control by implementing a Logistics Project. This consists of the establishment of five Regional Distribution
Centers, the charter of a new side-loading fleet and the implementation of a Supply Chain Management System.
Total cost of the Logistics Project will be approximately Baht 2,541 million from the fourth quarter of 2007 to 2009.
Earnings before interest, tax, depreciation and amortization (EBITDA) was Baht 21,251 million, an increase of
Baht 652 million, or 3.2%, mainly due to the increase in gross profit from the spirits business.
Net profit was Baht 10,383 million, an increase of Baht 328 million, or 3.3%, mainly from the spirits business.
Unit :Million Baht
YTD_2007
Beer
/Water
% to
Sales
Spirits
% to
Sales
Sales
47,557
Cost of sales
37,040
100.0
52,940
100.0
966
100.0
77.9
33,924
64.1
972
100.6
Gross profit
10,517
22.1
19,016
35.9
(6)
(0.6)
141
expenses
6,456
13.6
7,055
13.3
140
14.5
Operating profit
4,061
8.5
11,961
22.6
(146)
(15.1)
111
0.2
237
0.4
19
2.0
4,172
8.8
12,198
23.0
(127)
The Company adopted current accounting policy which require an appraisal to be conducted by independent
professional valuer every three to five years to determine fair value of land owned by the Company and its
subsidiaries and recorded the impacts in the period ended December 31, 2007 whereas the previous
appraisals were conducted in 2003. The appraisals resulted net decrease of Baht 2,121.6 million which
were recorded to equity Baht 2,062.7 million and to statements of income Baht 58.9 million.
From the third quarter of 2007 onwards, the reporting of business segments has been rearranged to present
transactions with external customers more meaningfully. Related business segments that normally conduct
most of their business within the group will no longer be presented separately as in previous periods but
will be allocated to the Company core business segments which consist of Beer/Water, Spirits and Industrial
Alcohol. The segmental information for the same period of 2006 has been restated for comparison with 2007.
Group
Other income / Interest income
Interest expenses
Gross profit was Baht 29,668 million, an increase of Baht 1,195 million, or 4.2%, mainly due to higher margin
from the spirits business.
% to
Sales
Total
% to
Sales
(922)
100.0
100,541
100.0
(1,063)
115.3
70,873
70.5
(15.3)
29,668
29.5
38
(4.1)
13,689
13.6
103
(11.2)
15,979
15.9
(69)
7.5
298
0.3
(13.1)
34
(3.7)
16,277
16.2
1.0
278
0.6
731
1.4
38
3.9
-
-
1,047
Income tax
2,192
4.6
2,652
5.0
3
0.3
-
-
4,847
4.8
Net Profit
1,702
3.6
8,815
16.7
(168)
(17.4)
34
(3.7)
“ 10,383
10.3
Depreciation & Amortization
2,364
5.0
2,418
4.6
192
19.9
-
-
4,974
4.9
EBITDA
6,536
13.7
14,616
27.6
65
6.7
34
(3.7)
21,251
21.1
Unit :Million Baht
YTD_2006
Beer
/Water
% to
Sales
Spirits
% to
Sales
Alcohol
Sales
46,103
Cost of sales
35,944
100.0
51,576
100.0
1,205
100.0
(1,086)
78.0
33,470
64.9
994
82.5
(1,083)
Gross profit
10,159
22.0
18,106
35.1
211
17.5
(3)
% to
Sales Eliminate
% to
Sales
Total
% to
Sales
100.0
97,798
100.0
99.7
69,325
70.9
0.3
28,473
29.1
expenses
5,768
12.5
6,740
13.1
178
14.8
(2)
0.2
12,684
13.0
Operating profit
4,391
9.5
11,366
22.0
33
2.7
(1)
0.1
15,789
16.1
70
0.2
106
0.2
6
0.5
(24)
2.2
158
0.2
4,461
9.7
11,472
22.2
39
3.2
(25)
2.3
15,947
16.3
309
0.7
1,202
2.3
62
5.1
(4)
0.4
1,569
1.6
Income tax
1,989
4.3
2,325
4.5
9
0.7
-
-
4,323
4.4
Net Profit
2,163
4.7
7,945
15.4
(32)
(2.7)
(21)
1.9
10,055
10.3
2,226
4.8
2,300
4.5
126
10.5
-
-
4,652
4.8
EBITDA
6,687
14.5
13,772
26.7
165
13.7
(25)
2.3
20,599
21.1
Selling and administrative
EBIT
In 2007, total sales revenue of the Company was Baht 100,541 million, an increase of 2.8%, or Baht 2,743 million,
from Baht 97,798 million in the previous year, mainly due to the increase of sales revenue from the spirits business
of about 2.6% and the beer/water business of about 3.2%
% to
Sales Eliminate
EBIT
The Company has also planned to increase PET (Polyethylene Terephthalate) drinking water bottle production
capacity from the current approximately 7 million litres per year to about 70 million litres per year. Total cost of
the project will be approximately Baht 194 million from the fourth quarter of 2007 to the third quarter of 2008.
Alcohol
Interest expenses
Annual Report 2007
84
Increase (Decrease)
Sales
Cost of sales
Gross profit
expenses
Operating profit
EBIT
Interest expenses
Income tax
Net Profit
EBITDA
85
Beer
/Water
%
Spirits
%
Alcohol
1,454
1,096
358
3.2
3.0
3.5
1,364
454
910
2.6
1.4
5.0
(239)
(22)
(217)
688
(330)
41
(289)
(31)
203
(461)
138
(151)
11.9
(7.5)
58.6
(6.5)
(10.0)
10.2
(21.3)
6.2
(2.3)
315
595
131
726
(471)
327
870
118
844
4.7
5.2
123.6
6.3
(39.2)
14.1
11.0
5.1
6.1
(38)
(179)
13
(166)
(24)
(6)
(136)
66
(100)
% Eliminate
%
Total
%
(19.8)
(2.2)
(102.8)
164
15.1
20
1.8
144 4,800.0
2,743
1,548
1,195
2.8
2.2
4.2
(21.3)
(542.4)
216.7
(425.6)
(38.7)
(66.7)
(425.0)
52.4
(60.6)
40 2,000.0
104 10,400.0
(45) (187.5)
59
236.0
4
100.0
55
261.9
59
236.0
1,005
7.9
190
1.2
140 88.6
330
2.1
(522) (33.3)
524
12.1
328
3.3
322
6.9
652
3.2
The Beer, Soda & Drinking Water Business
Sales revenue of this segment was Baht 47,557 million in 2007, rising by Baht 1,454 million, or 3.2%, mainly due
to an increase in beer sales volume. Total sales volume of beer was 956.8 million litres, an increase of 3.7%
over the year 2006. Low alcohol beer sales volume was 312.6 million litres, an increase over the year 2006
of 210.7 million litres or 206.9%. The sales volume of soda was 10.6 million litres, a decline of 15.6%,
and the sales volume of drinking water was 43.8 million litres, an increase of 2.9%.
Gross profit of Baht 10,517 million reflected an increase of Baht 358 million, or 3.5%, over the year 2006, mainly
due to the increase of the beer sales volume.
Gross profit of Baht 19,016 million reflected an increase of Baht 910 million, or 5%, mainly due to higher margins
from new sales price increases and lower raw material cost of molasses.
EBITDA of Baht 14,616 million increased by Baht 844 million, or 6.1%, mainly due to the above-mentioned higher
gross profit, which helped cover higher employee expenses and the increase in marketing expenses from free goods
used for sales promotion. Free spirits volume used for sales promotion as a percentage of sales volume increased
from 1.3% on average over the year 2006, to 1.7% in 2007.
Net profit of Baht 8,815 million increased by Baht 870 million, or 11%, mainly due to higher EBITDA and lower
interest expense, which covered higher depreciation cost.
Industrial Alcohol Business Segment
In 2007, sales of Baht 966 million reflected a decrease of Baht 239 million, or 19.8%, over the previous year mainly
due to the decrease in the selling price resulting from oversupply in the Thai market. The sales volume of ethanol
was 42.6 million litre, a decrease of 8.5% over 2006, and the average selling price decreased from Baht
24.94 per litre in 2006 to Baht 16.63 per litre in 2007. Alcohol 95 sales volume was 16.8 million litres, which mostly
came from exports, an increase of 1,032.7%, while the average sales price decreased from Baht 24.60 per litre
in 2006 to Baht 14.81 per litre in 2007.
The gross loss of Baht 6 million in 2007 showed a decrease of Baht 217 million, or 102.8% over gross profit
of Baht 211 million in 2006, mainly due to lower sales volume of ethanol and a lower margin caused by
oversupply in the domestic market although lower raw material cost of molasses.
EBITDA of Baht 65 million decreased by Baht 100 million, or 60.6%, from the previous year, mainly due to the
above-mentioned gross loss; however, other income increased.
EBITDA of Baht 6,536 million decreased by Baht 151 million, or 2.3%, over the previous year mainly due to higher
employee expenses, marketing expenses and transportation costs that offset the higher gross profit. Free beer
volume for sales promotion as a percentage of total sales volume was 8.2% by average over the year 2007,
close to the 8.1% achieved in 2006.
The net loss was Baht 168 million, an increase of Baht 136 million or 425% over 2006, mainly due to the decrease
in sales margin and higher depreciation but lower interest expense.
Net Profit of Baht 1,702 million decreased by Baht 461 million or 21.3% mainly due to lower EBITDA and higher
depreciation associated with the commencement of depreciation on the capital expenditure of the Kamphaengphet
brewery expansion project but lower interest expense.
Financial Position
Assets
The Spirits Business
Sales in the year 2007 amounted to Baht 52,940 million, higher than in 2006 by Baht 1,364 million, or 2.6%,
mainly due to the increase of brown spirits’ sales volume and the increase in the sales price in May and August. The
total sales volume of spirits was 446.3 million litres, a decrease of 6.2%. This is attributed to the white spirits’ sales
volume declining by 10.3% to 329.4 million litres, though brown spirits sales increased by 8.1% to 116.9 million litres.
Total assets as at end of December 2007 was Baht 79,527 million, a decrease of Baht 6,053 million, or 7.1%, compared
with the end of 2006. Current assets decreased by Baht 393 million, mainly due to the decrease in inventory of
finished goods. Non-current assets decreased by Baht 5,659 million, mainly due to the sale of land and a building
known as the ThaiBev Tower Project, plus the impact of land revaluation, and depreciation of property, plant and
equipment.
Annual Report 2007
86
Liabilities
87
Financial Ratios
Total liabilities as at end of December 2007 was Baht 24,617 million down by Baht 8,409 million, or 25.5%,
compared with the end of 2006. This was mainly due to the re-payment of loans and bonds.
The maturity of loans and bonds are as follows.
Unit: Million Baht
Dec.31, 07
Dec.31, 06
Current Ratio (times)
1.74
1.28
Total Debt to Equity Ratio (times)
0.45
0.63
Net asset value per share (Baht)
2.19
2.21
Within December 2008
10,753
Within December 2009
5,025
Within January 2010
375
Accounts Receivable Turnover (days)
Total
16,153
Inventory Turnover (days)
Shareholders’ Equity
Jan.- Dec 07
Jan.- Dec 06
5
5
15
12
4
4
79
75
Beer/water Business
Finished Goods
Total shareholders’ equity as at end of December 2007 was Baht 54,910 million, an increase of Baht 2,356 million,
or 4.5% compared with the end of 2006. This was mainly due to the increase of retained earnings although the
decrease of land revaluation surplus of Baht 2,062.7 million.
Raw Materials
Spirits Business
Liquidity
Finished Goods (Excl. Legacy Stocks)
Raw Materials
Cash and cash equivalents as at December 31, 2007 was Baht 2,189 million. The net increase from the beginning
of the period was Baht 269 million. Details of activities are as follows.
12
8
Shareholder Returns
Unit: Million Baht
Net cash provided by operating activities
16,444
Net cash used in investing activities
(715)
Net cash used in financing activities
(15,271)
Adjustment from financial statement translation
(189)
Net increase in cash and cash equivalents in period
269
Cash and cash equivalents at beginning of period
1,920
Cash and cash equivalents at end of period
2,189
Net cash provided by operating activities of Baht 16,444 million. This was mainly derived from net income of Baht
10,383 million and adjusted with non-cash items, such as depreciation and amortization, of Baht 4,975 million.
Net cash used in investing activities of Baht 715 million was mainly due to the investment activities in property, plant
and equipment, which exceeded the proceeds from sales of land and building, called the Thai Bev Tower project.
Net cash used in financing activities of Baht 15,271 million was mainly due to the dividend paid of Baht 5,775
million and the repayments of bonds and loans
Dividends
The current policy of the Board of Directors is to recommend to our shareholders a dividend of not less than 50%
of net profits after deduction of all specified reserve, subject to investment plans and as the Board of Directors
deems appropriate. For the financial year ended December 31, 2007, the Board of Directors has recommended
total dividend of Baht 7,281.91 million.
2007
2006
2005
Dividend for the year (Million Baht)
Number of shares issued (Million Shares)
Interim dividend per share (Baht)
Final dividend per share (Baht)
Total dividend per share (Baht)
7,281.91
25,110
0.12
0.17
0.29
5,524.21
25,110
0.11
0.11
0.22
5,280.00
22,000
0.24
0.24
Pay Out Ratio (%)
Return on Equity
70.13%
54.94%
51.08%
Return on Average Equity (%)
19.3%
23.9%
31.6%
Earning Per Share
Earning per Weighted Average Ordinary Shares (Baht)
Weighted Average number of ordinary shares for
0.41
25,110
0.42
23,785
0.47
22,000
the year (million shares)
Annual Report 2007
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89
Risk Factors
Operation Risks
Strategic Risks
Raw-material or container material price hikes or shortages could raise production costs,
potentially hurting the company’s business
If the company cannot expand its business to markets for beer and
spirits of higher prices, or cannot expand to international markets, the
company’s growth may be affected
A major strategy is brand base expansion through the launch of new brands of
higher prices, which will lead to greater sales revenue. It is believed that beer
and spirits of higher prices in the domestic market have considerable potential
for expansion, and that consumers have altered their behavior of consuming
economy beer and spirits to those of higher prices. That said, business expansion
into such markets is very challenging for the company because of intense
competition, thereby calling for massive investments associated with marketing,
brand promotion, distribution development, and product sale, and the company
is relatively new to marketing of products under this group. However, without
development, promotion, and sale of higher-priced products under new brands, the
company may lose opportunities for growth, particularly if the demand for premium
beer rises at the expense of economy products. Equally important, this may harm
the company’s financial status, performance, and business opportunities.
As a rule, raw materials and container materials critical to production and distribution are sold by third-party
distributors, making it questionable whether such distributors can deliver them as required. In other words, the
company’s operation could be affected by shortages or price hikes of such materials, namely molasses, malt, hops,
water, glass bottles, labels, caps, and other packaging products. In addition, some raw materials and container
materials are sold in currencies other than the Baht, therefore making their prices susceptible to changes in
foreign-exchange rates, currency controls, government controls, world-market demand-supply changes, and
climate. The higher the prices of these materials, the higher the production costs. Unless such cost rises are
passed on to consumers, the company’s margins will shrink. And if delivery of these materials cannot be sustained,
their prices are bound to sharply rise or affect production processes. All these could raise production costs,
which may harm the company’s financial status, performance, and business opportunities.
To mitigate such risks, the company has purchased critical raw materials and container materials in advance.
As regards foreign-exchange risks, the company is going to use suitable financial tools together with the policy prohibiting
a speculation on the foreign exchange.
Taking due care of crucial senior executives and succession plan
Completed in 2007, expansion at the Kamphaengphet brewery has raised the
company’s total capacity to 1,550 million liters per year. One possible strategy is to
export the additional volume of beer to countries like Cambodia, Laos, and
neighboring countries. However, with relatively little experience in selling consistently
high volumes of beer in foreign countries, the company is unsure if it can raise
its beer sales overseas.
Besides, the company cannot guarantee sale of the above - mentioned additional
volume of beer, which accompanies greater fixed costs. Still, the sales prices of
such beer may not yield commercially acceptable profits - or yield potential losses.
If so, the company may need to cut production, which will lower its capacity
utilization of the brewery in question as well as its profit margin. In short, being
unable to sell the above-mentioned additional volume of beer may harm the
company’s financial status, performance, and business opportunities.
To mitigate such risks, the company has set up an international sales team under
the International Beverage Holdings Limited to take charge of international business
expansion. In addition, to raise sales efficiency, domestic sales personnel have
received training on ways to sell higher-priced products.
The company’s business today is executed by a group of senior executives and management team members with
extensive experiences in its beverage subsidiaries, the loss of whom without equally competent successors could
hurt the company’s business.
For continued growth and success, the company needs to retain qualified and experienced personnel in
management, sale, marketing, and production, and to train personnel to efficiently carry out production and
product distribution. If the company cannot attract, retain, or motivate the above-mentioned personnel, or cannot
find a suitable replacement for them, it is bound to lose customers and revenue. Still, should it successfully attract
and retain such personnel, brain-drains are a distinct possibility, causing the company to pay these personnel
elevated compensation to keep them, which may in turn harm the company’s financial status, performance,
and business opportunities.
The Office of Human Resources has initiated projects to continuously and sustainably raise the efficiency and
effectiveness of recruitment, development, and retention of personnel critical to the company’s business.
Annual Report 2007
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91
Financial and Investment Risks
It requires massive investment to conduct and expand the business, which is fraught with
risks and uncertainties
The company’s business is highly capital-intensive, calling for continuous investment in research and development of innovative products, new plant construction, as well as the maintenance and development of existing
plants. In addition, the company needs to constantly monitor beverage market development, both domestic and
regional (Southeast Asia).
While past investments relied on loan sources, recapitalization, and internal cash flows, future business capital or
fund used for improving breweries and distilleries is likely to come from additional loans and internal cash flows.
Should such loan sources, however, be unavailable under desirable commercial conditions, the company may
need to call for recapitalization, which will dilute shareholding. If the company cannot find a proper loan source,
this may harm the company’s financial status, performance, and business opportunities.
This business falls under several regulations, making it susceptible
to changes in such regulations - including higher costs and business
limitations
In the beverage business, compliance is essential to the production, packaging, quality
maintenance, labeling, and domestic distribution, apart from compliance with the
regulations of importing countries. Production and distribution are subjected to several
laws and regulations concerning the environment and workplace conditions issued by the
Ministry of Public Health, Ministry of Commerce, and Ministry of Finance. Non-compliance
or violation of these laws and regulations, now or in the future, could result in excessive
expenses and harm the company’s financial status, performance, and business opportunities.
To mitigate such risks, the finance group is required to participate in every investment planning, so that it may use
pertinent information for its future financial structure preparation.
The company must also comply with regulations concerning beer and spirits
advertisement, which is subject to more rigorous enforcement in the future, thereby
diminishing the current and future marketing capability of such products, which may
harm the company’s financial status, performance, and business opportunities.
Compliance Risks
The government’s regulations concerning the time and location of alcoholic beverage
sale, or other future limitations concerning retail sales, could hurt sales, which may harm
the company’s financial status, performance, and business opportunities.
Tax hikes or changes in tax computation methods may affect the demand for the company’s products
The alcoholic beverage business calls for not only collection of excise and interior taxes, but contribution to the
national fund for health promotion as well. Therefore, any tax hike or change in tax computation methods could
cause the company to raise product prices at the expense of consumption and sales revenue. Apart from this,
the company could end up wholly or partially bearing additional tax burdens. All these may harm the company’s
financial status, performance, and business opportunities.
Business expansion to products of higher prices and the international market plays an instrumental role in mitigating
such tax implications for the company and its financial standing.
The Risk Management Committee has assigned relevant offices to constantly monitor
and report on new laws and regulations so that business and production departments
may efficiently develop marketing strategies and modify production processes
to mitigate the impacts.
Compliance and exemption from compliance with environmental laws
and regulations could hurt the company’s financial status, performance,
and business opportunities
Operation under this business comes under laws concerning the environment,
health, and safety, as well as those concerning air emissions, effluent discharges into
water bodies, and related matters. Violations are regarded as both civil and criminal
offenses, potentially resulting in the revocation of licenses and factory closure.
Even if the company is not the culprit, expenses are bound to be incurred
for fact-finding examination and elimination of contaminants.
Expenses are naturally incurred for compliance with the laws concerning the
environment, health, and safety, and other regulations alike. If new laws become
more rigorous or drastically modified, if it can be proved that the company’s
past operation emitted contaminants without the company’s knowledge, or if new
regulations are issued concerning the cleaning of contaminants, more expenses
than previously projected are a possibility, which may harm the company’s financial
status, performance, and business opportunities.
Annual Report 2007
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93
IBHL Highlights
International Beverage Holdings Limited
International Beverage Holdings Limited (InterBev) has been established to be the international arm of Asia’s
leading drinks business, the Thai Beverage Public Company Limited (ThaiBev) with an outstanding portfolio of
beverage alcohol brands across spirits, wine and beer categories.
These global operations are managed out of our 4 regional headquarters located in Hong Kong, Singapore,
North America, and the United Kingdom together with our major scotch operation of 5 distilleries in Scotland.
We currently export our brands to over 80 countries outside Thailand, managing this directly with our in-house
sales and marketing teams as well as through suitable local distributors where relevant.
The changing face of the world’s drinks industry will create opportunities for the development of our company in
the years ahead. Consumers are demonstrating an increasing desire to trade up to more premium products as
well as to experiment with new and interesting brands and these are just two of the trends that we believe will help
InterBev achieve its strong brand growth targets.
A successful redesign of core Thai products for key export markets
The Risk Management Committee has assigned relevant offices to constantly monitor and report on new laws and
regulations so that production departments can prepare to modify production processes and successfully comply
with laws and regulations while mitigating potential impacts.
Enactment of a 1999 Thai law against trade monopoly could affect the company’s financial status,
performance, and business opportunities
The Trade Competition Act of 1999 prohibits practices against free trade while empowering the Trade Competition Commission to issue injunctions to dominant operators and unfair operators to refrain from, suspend, or alter
their market shares. Unfair practices include price fixing and making unfair conditions. Since the company is
Thailand’s largest brewer and distiller, with several products occupying leading market shares, it is subject to
complaints from rivals and other parties of unlawful practices. Therefore, the act and accompanying regulations
could harm the company’s financial status, performance, and business opportunities.
The Risk Management Committee has assigned the Office of Legal Affairs to investigate and closely monitor such
law and regulations, and educate other units to prevent wrongdoings.
Thai Beverage Public Company Limited has established a systematic risk management process, with at least
quarterly meetings of the Risk Management Committee designed to review risk levels, issue measures, and approve
contingency outlays for risk management. The objective is to ensure that these risks are accounted for by company
personnel and work plans prudently executed, so that if undesirable events occurred, the damage could be alleviated.
We aim to build a strong and unique brand presence in all our core target markets throughout the world and 2007
has already seen the repackaging and successful launch of the iconic Chang Beer and Mekhong brands on the
international stage
• Chang Beer, Thailand’s number one beer brand, has been repackaged and recently launched in
the major Western markets including the USA, UK, Europe and Australia with a focus on the premium
imported beer market.
• Mekhong has also been revamped to appeal to the more discerning spirits drinkers. It will be sold
through high-end restaurants and cocktail bars in Europe, and North America with the help of its
Thai-inspired collection of cocktail recipes.
Major relaunch of flagship malt whisky brand
Balblair, one of our high-end malt brands, was also successfully repackaged and relaunched during 2007 in our
biggest-ever launch programme to date for a single malt whisky.
The striking new identity has been carefully crafted and will mean the vintages offer a superior choice for informed
whisky drinkers across Europe, North America and the fast growing Asian region.
Inver House Distillers, which was purchased by InterBev during 2007, has benefited from a buoyant Scotch market
as well as a strategic shift towards focusing more on core malt brands. As a result, pre tax profits have risen
significantly from the same period in 2006.
Annual Report 2007
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95
Our People
Our Success
We believe that our people are the most crucial engine
that drives our sustainable growth and future success
and that human capital is one of the critical pillars of
our growth strategy. We aim to develop happy, highlycommitted, and performance-driven teams instilled
with social responsibility spirit. By our definition, a high
performer highly contributes to the success to the
organization and the well-being of society.
Our people will grow together with our business in
competency development and career opportunities. We
have launched the Human Capital Transformation Program
to align our human capital management and development
with our business strategy and long-term direction.
The initiatives of this program will enhance the strategic
alignment of all human capital elements within the
employee lifecycle: workforce planning, career deployment
and management, performance management, reward
management, learning and development, retention
management, and workplace management.
appropriate career and development opportunities.
We also develop a career and development plan for
each workforce group which properly aligns with
business needs and growth.
Career Opportunities
The opportunities for our people are expanding with
our business. With our business expansion, our people
are also provided with greater career opportunities,
not only within our current businesses, but in the
businesses of non-alcoholic beverages as well as
non-beverages across the ThaiBev Group. We are
committed to providing borderless opportunities to our
people. We initiate the “employee exchange program”
with our strategic partners, where our people can obtain
experience and knowledge from working with different
organizations and different people. These are not only
career opportunities, but also learning opportunities
which have proven powerful to our people and our business.
Employee Segmentation
Performance Management
We care for different needs among our different
workforces. We arrange our employees into groups
which represent the nature and characteristics of job
and required competencies. It enables us to develop
human resource management mechanisms to match
the different needs of each workforce while providing
We have recently adopted the key performance
indicator (KPI) system as the key mechanism of our
performance management where the expected
corporate performance was cascaded down to the
operating level. The system has enhanced the strategic
alignment of people performance with corporate
performance as well as a performance-oriented culture.
The process involved senior management and middle
management in managing and driving the expected
performance of the organization, the departments, and
the individuals. A performance monitoring system is
also applied to the implementation of key strategic
initiatives, which strengthens disciplined execution.
Learning and Development
We believe in providing our people with learning and
development opportunities. Along with our growth
strategy, our human resource development plan has
been defined to reflect the required strategy for critical
capabilities. Learning and development is through
knowledge sharing on–the-job training and regular
training session, local and international. We prepare the
next generation of leaders by providing our middle
management with opportunities to explore new
management techniques and practical experiences in
our mini-MBA program. The program was organized and
designed in conjunction with Chulalongkorn University,
Thailand’s top university. We successfully develop
highly-qualified brew masters as well as engineers and
spirit production’s technical team by providing our
people with both in-house and overseas training. Our
people learn from our “continuous improvement program” which allows them to initiate new ideas for
efficiency improvement. All implemented ideas were
collected and maintained in databases to share and
allow others to learn from them. Knowledge can be
passed on throughout the organization which is the
beginning of– a learning organization.
TEAM SPIRIT: THE POWER OF ONE
At ThaiBev, we believe in working as a team. We recognize
the power of unity and the power of our people when they
share and collaborate. The organizational structure,
work processes, and work assignments encourage
teamwork across the organization. In short, our meaning
of teamwork is equal to cross-functional teams. Our
learning and development approach also emphasizes
on how to develop the spirit of teamwork and how to
form teams that work. One of the performance factors
that we use to evaluate our people is the ability to
work as a team and collaborate with others inside and
outside their work units. We aim to continually cultivate
team spirit as our core value. The power of one will be
realized when our people work as an effective team and
we will do our best to make it happen.
A high-performance organization is made up of
high-performing people. At ThaiBev, it is our commitment
to develop happy and highly-competent people who
can fulfill their career aspirations and grow their
potential domestically and internationally.
Annual Report 2007
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97
Credit Rating
Announcement
ON FEBRUARY 18, 2008, THE ANNUAL
REVIEW ANNOUNCEMENT, TRIS
RATING CO., LTD. (“TRIS”) AFFIRMED
THE RATING OF THAI BEVERAGE
PLC. (“THAIBEV”) AND THE RATING
OF THAIBEV’S SENIOR GUARANTEED
DEBENTURES OUTSTANDING BAHT
3,000 MILLION AT “AA-” WITH A
“STABLE” OUTLOOK.
To gain an international credit rating in order to establish Company’s overseas credit
flexibility in the financial markets, the Company engaged Standard and Poors (“S&P”)
and Moody’s Investors Service Pty Limited (“Moody’s”), both well-recognized globally
in their field. On January 15, 2007, S&P assigned the ThaiBev rating at “BBB” rating
with a “Stable” outlook, and Moody’s rated the ThaiBev rating at “Baa2” with a “Stable”
outlook.
Note: The Thailand Country Rating from TRIS is “AAA”, “BBB+” from S&P and “Baa1” by Moody’s. The rating,
if assigned, will be subjected to revision or withdrawal by each of the Rating Companies, TRIS, S&P or Moody’s
when there has been material change to the rating and/or annual review and/or review on opinion of each of the
Rating Companies.
Annual Report 2007
98
99
Awards
Onward to the Number One spot with Thai
Beverage Public Company Limited
the pride of Thai businesses.
Thai Beverage Public Company Limited (“ThaiBev”)
listed on the Singapore Exchange (SGX) with the intention
of becoming a good example of a public company with
good corporate governance. We stated at that time
that we would try not simply to follow the rules and
regulations of the market with regard to disclosure and
transparency, but would strive to exceed them. Our
success can only be measured by the stakeholders
who experience our services firsthand. We were proud
to receive some recognition within a very short time
after listing in Singapore when it was announced we
had been awarded The Securities Investor Association
of Singapore’s (SIAS) 2006 Merit Award for transparency
among newly-listed companies (New Issue) on the
Singapore Exchange. This was given to ThaiBev to declare
that it was among the most transparent new listings
in Singapore as the company has hosted activities
to disseminate information to investors and media
continuously, as well as for transparently running its
business.
Thai Beverage PLC. wins the
“2006 Merit Award for Transparency among
newly-listed Companies (New Issue)
on the Singapore Exchange”
Contrary to popular belief, the eligibility for the “Best
Investor Relations in the Singapore Market”award is not
restricted to companies listed on the SGX, but rather
all Southeast Asian companies that had some form of
investor relations activities in Singapore in that year.
There were no runners-up in 2007.
Acclaim for “Capital Markets Deal of
the Year 2006”
Whisky Magazine for “Icons of Whisky
Distiller of the Year 2008”
IR Magazine accolades for “Best Investor Relations”
Shortly after, the Company was named Best Investor
Relations in the 2006 Singapore Market By a Thai
Company by IR Magazine. This UK journal relating to
investors relations is published worldwide. To illiustrate
further that the Company had not relaxed its efforts
to maintain steady communications with investors,
ThaiBev was awarded Best Investor Relations in the
Singapore Market By a Thai Company in 2007 also.
The judging panel cited as its reason for bestowing
the Best Investor Relations award on ThaiBev as:
“Thai Beverage Public Company Limited has a very
good person doing its investor relations, especially in
terms of explaining the business, providing disclosures
and being knowledgeable about the company.”
As the Company’s listing in Singapore was one of the largest
in terms of market cap, it was perhaps unsurprising
that the listing was recognized and nominated for the IFR
Asia Awards 2006. In February, 2007, IFR Asia Magazine
named ThaiBev as winner of the Thailand Capital Market
Deal of the year-Singapore IPO 2006, based on the firm’s
initial public offering in Singapore of S$ 1.37 billion.
Most recently, ThaiBev also garnered a silver medal for
best annual report by a newly listed company by the
Singapore Corporate Awards. The Awards are organised
by the Business Times in collaboration with UBS and
supported by the SGX. The Award “seeks to encourage
excellent financial reporting presentation and a wider
scope of disclosures beyond the minimum regulatory
requirements... to create awareness of the role of
both mandatory accounting standards and voluntary
practices issued and recommended by the Council
on Corporate Disclosure and Governance and The
Institute of Certified Public Accountants of Singapore
and to increase awareness through the encouragement
of social responsibility reporting that business enterprises
and organisations are responsible to the community
both as employers and corporate citizens.”
Besides corporate governance, ThaiBev has received
international recognition for the quality of the drinks it
produces. It was a matter of great pride that the Company
was awarded a gold medal at the Australian International
Beer Awards (AIBA) 2007 for its Archa Beer. The beer
won over the judges to claim the coveted Gold Medal in
the European Lager Division. The Company holds the
distinction of being the first Thai company to win a gold
medal at AIBA, which is a globally recognized beer
competition, in 1998 with Chang beer.
Inver House Distillers was named ‘International Distiller
of the Year’ in February 2008. The company beat off
competition from exceptional companies throughout
the world, including Japan, Ireland, Canada, India and
Sweden and the USA.
Inver House, who in the last year has globally re-launched
their Balblair Single Malt as a super-premium ‘vintage’,
reached the final of the ‘Icons of Whisky’ event by first
beating competition in Scotland from Glenmorangie,
Bowmore and William Grant & Sons, before claiming
whisky’s highest accolade over seven other global
finalists. The industry-voted award is designed to
highlight the company who has ‘shown the most
commitment to the development of whisky at all
levels’ and is highly sought after.
The event’s international judging panel recognised
Inver House for bringing ‘dynamic, inspirational and
dedicated passion’ to the world of whisky. Said one of
the judges, “Inver House pioneer a creative approach
to whisky and we believe that their team brings genuine
passion and fresh thinking to all they do. They’ve made
a very bold statement in recent times and every person
on our panel strongly backed their win.”
Annual Report 2007
1 00
101
Corporate
Governance
Report
The Board met 10 times in 2007, and the following table shows directors’ attendances up to December 31, 2007:
May 30, 2006 is the day that we will never forget. It
was the day that our symbol “THBEV” started ticking
on the main board of Singapore Exchange. THBEV
conducts our business activities with a view to bring
value of added to our shares and ensure benefit to our
stakeholders. As time goes by, our commitment to good
corporate governance remains unchanged. The adherence
to the principles and guidelines of the Singapore Code
of Corporate Governance 2005 stay with us.
In 2007, we were proud to receive Best Investor
Relations in the Singapore Market by a Thai Company
in 2007 award.
The Board’s Conduct of Affairs
Principle 1
Our Board of Directors oversees the Company’s business
and affairs with shareholder approval in accordance with
applicable laws. The Board must exercise good business
judgment and act in good faith for the best interests
of the Company.
Name
Position
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
Chairman
Vice Chairman
Vice Chairman
Vice Chairman
Director
Director
Independent Director and Audit Committee Chairman
Director
Director
Director
President
Director
Director
Director
Director
Director
Mr. Narong Srisa-an
Mr. Paisal Chevasiri (1)
Prof. Kanung Luchai
Mr. Manu Leopairote
Mr. Ng Tat Pun
Gen. Choo-Chat Kambhu Na Ayudhya
Mr. Panote Sirivadhanabhakdi (2)
Mr. Thapana Sirivadhanabhakdi (3)
Number of Attendances / Total of Meetings
Remark (1) Mr. Paisal Chevasiri resigned from the member of the Board of Directors effective on February 26, 2007.
(2) Mr. Panote Sirivadhanabhakdi was appointed the member of the Board of Directors on February 27, 2007.
(3) Mr. Thapana Sirivadhanabhakdi was appointed the President by the Board of Directors on January 18, 2008.
9/10
9/10
9/10
10/10
1/10
10/10
7/10
10/10
9/10
6/10
9/10
8/10
7/10
9/10
4/10
6/10
8/10
9/10
10/10
10/10
8/10
9/10
10/10
Annual Report 2007
1 02
Matters Requiring Board Approval
Our Board recognizes their duties to Company’s
shareholders. They oversee and responsible for the
administration of the Company’s affairs and thus
ensure that the Company complies with the law, its
Articles of Associations and objectives. In addition to
its general oversight of management in compliance
with shareholders’ resolutions in good faith, our
Board ensures that the Company and its subsidiary
companies comply with the Listing Manual of the
Singapore Exchange.
some of them are also top executive officers of the
Company. To enhance Company business operation,
the Board granted them the authority to perform their
duties. To help the Board run the Company properly,
it established four committees: the Audit Committee
(AC), Risk Management Committee (RMC), Nomination
Committee (NC) and Remuneration Committee (RC).
The Board is required by the law to meet not less than
four times a year, during 2007 the Board met more
than requirement in order to consider special issues.
In brief, the Board monitors major plans and activities,
and oversees control of subsidiary companies.
The Board also appoints executive members to hold
directorships in subsidiaries, both domestic and
overseas, to monitor the Company’s interests.
Training
All directors have passed the Director Accreditation
Program (DAP) of the Thai Institute of Directors.
Some also accredited the Director Certification
Program (DCP) of the same institution. We also encourage
and support directors to understand Singapore Law
and the Listing Manual applicable to our Company
through in-house training and information updating.
• prepare and propose business plans, targets,
operational plans, business strategies and annual
budgets for the Board of Directors;
All directors receive a clear explanation of their roles
and responsibilities at the time of their proposed
appointment to the Board.
Board Composition and Guidance
Principle 2
Board of Directors
Our Board consists of 22 directors, including eight
independent directors, or more than one-third. Each
director either has long-term experience in business
or attained honorary positions.
Executive Committee
The Board appointed an Executive Committee
(previously called “Executive Board of Directors”), which
consists of 12 members from the Board members;
Normally the Executive Committee meets once a month
to oversee business operations, or more than once to
consider and approve any important or urgent matter.
The Executive Committee’s responsibilities are to:
• determine business plans, budgets and management
authorizations for approval;
• monitor the operations of the Group, that they are in
line with business plans, targets, operational plans,
business strategies, budgets and management
authorizations approved by our Board to facilitate
corporate efficiency and appropriate to business
conditions;
• propose investments, borrowing or lending,
including acting as a guarantor if that is in line
with the normal business of the Group;
103
• approve the appointment of the Company’s representatives to the Board and/or subsidiaries’ subcommittees to
ensure compliance with the Company’s business policies, goals, plans, strategies, budget and other management
powers approved by the Board, to improve efficiency and facilitate the business;
• supervise and approve operational issues; at times appointing or authorizing persons to engage specified
activities on behalf of the Executive Committee, or appoint subcommittees with particular knowledge and
expertise to manage and screen work before discussion by the Executive Committee, provided the
Executive Committee is entitled to repeal or modify the scope of such authorization; and
• perform any other activity delegated by the Board.
No one, including the Executive Committee, is authorized to approve any transaction in which the board or the
individual has or may have a conflict of interest, or where the transactions require the approval of the Board and/or
of a Shareholders’ meeting.
During 2007, the Executive Committee met 18 times and the following table shows Executive Committee’ s
attendances up to December 31, 2007:
Name
Position
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Executive Chairman
1st Executive Vice Chairman
2nd Executive Vice Chairman
3rd Executive Vice Chairman
4th Executive Vice Chairman
5th Executive Vice Chairman
President
Mr. Narong Srisa-an
Mr. Samut Hatthasing (1)
Mr. Thapana Sirivadhanabhakdi (2)
Number of Attendances / Total of Meetings
13/18
10/18
15/18
17/18
16/18
17/18
11/18
18/18
18/18
13/18
16/18
17/18
Remark (1) Mr. Samut Hatthasing resigned from President effective on January 1, 2008. He was appointed the 4th Executive Vice Chairman
by the Executive Committee on December 25, 2007.
(2) Mr. Thapana Sirivadhanabhakdi was previously Executive Vice President and appointed President and CEO by the Board of
• approve payments as determined by our Board;
Directors on January 18, 2008.
(3) On February 27, 2008 the Board of Directors appointed three additional Executive Committee members, who are Mr. Sawat Sopa,
• determine the organization and management
structure of the Group for the Board;
• supervise and approve all employment and salary
matters relating to the Company (other than
matters which are within the purview of the RC);
Mr. Saikeaw Vongpisethkul and Mr. Jean Lebreton.
On January 18, 2008 the Board approved the change of the composition of the Executive Committee. The Executive
Committee will be elected from directors and/or other persons as the Chairman of the Executive Committee
deemed appropriate and propose the nominee(s) to the Board of Directors to approve the appointment.
Annual Report 2007
1 04
Audit Committee
The Audit Committee members are Mr. Staporn Kavitanon,
Prof. Kanung Luchai, Mr. Manu Leopairote, and Mr. Ng Tat
Pun. The Chairman of the Audit Committee is Mr. Staporn
Kavitanon.
The AC meets at least each quarter. Please refer to Audit
Committee Report.
Risk Management Committee
The Risk Management Committee members are the
directors, Mr. Narong Srisa-an, Mr. Samut Hatthasing,
M s. Ka n o k n a r t Rangs it hienchai, Mr. Thap an a
Sirivadhanabhakdi, Mr. Chukiet Tangpongprush,
Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai,
Dr. Pisanu Vichiensanth, Mr. Puchchong Chandhanakij,
and the employees, Mr. Chalerm Pornrutchakit, Mr.
Pichit Burapavong, Mr. Mahin Kraivixien, and Mr. Thidi
Suwanarat who is the secretary to the Committee. The
Chairman of the Risk Management Committee is
Mr. Narong Srisa-an.
Among others responsibilities, the Risk Management
Committee ensured the analysis of both internal and
external risks, determined the acceptable level of risks
with timely review the criteria of risk management.
Nomination Committee
The Nomination Committee members are Mr. Staporn
Kavitanon, Mr. Manu Leopairote, and Khunying Wanna
Sirivadhanabhakdi. The Chairman of the Nomination
Committee is Mr. Staporn Kavitanon.
Remuneration Committee
The Remuneration Committee members are Mr. Staporn
Kavitanon, Mr. Manu Leopairote, and Prof. Kanung Luchai.
The Chairman of the Remuneration Committee is
Mr. Staporn Kavitanon.
relations among the Board,Executive Committee and
management.The Chairman approves the agenda for
Board and Executive Committee meetings and exercise
control over quality, quantity and timeless of the flow of
information between management and the Board. In
addition, an independent director who is a Singaporean
was appointed to act as the lead independent director
for Interested Persons Transactions undertake by our
Group.
Our Chairman and Chief Executive Officer is the
same person. Our Chairman encourages constructive
Board Performance
Principle 5
Our Board members include self-assessment in their
performances, and take the result of business operations
into their consideration. The Board expressed opinions
and asked questions in the meeting to exercise their
duty of care.
If a member of the RC has an interest in a matter
deliberated by the Committee, he will abstain from
participating in the review and approval process for
that matter.
Level and Mix of Remuneration
On January 18, 2008, Mr. Thapana Sirivadhanabhakdi
was appointed President and Chief Executive Officer to
oversee the business operation in accordance with
the new business plan of the Company.
Board Membership
Principle 4
In order to assure a transparent process for the
appointment of new directors to the Board, we
established the Nomination Committee (NC) to review and
assess candidates for directorships (including executive
directorships) before making recommendations to our
Board. The NC also reviews the retirement and re-election
of directors at each annual general meeting under our
Articles of Associations and makes recommendations
to the Board.
The NC consists of three directors with a majority of
independent directors, including the Chairman. It
adopted a charter and proposed it to the Board for
approval.
The Company also established a Remuneration Committee
(RC) that makes recommendations to the Board, for it
to endorse remuneration policies and guidelines, and
to set the remuneration for Directors, Executive Directors,
President, Executive Vice Presidents and Senior Vice
Presidents.
Chairman and Chief Executive Officer
Principle 3
105
In performing their roles, our NC and RC adhere to the
law and the Listing Manual applicable to our Company.
Access to Information
Principle 6
We are committed to providing our Board members
with adequate, complete, continuous and timely
information before Board meetings. The Board
members have separate and independent access to
the Company Secretary. The Company Secretary, in
consultation and cooperation with the Office of Legal
Affairs, is responsible for advising the Board, through
the Chairman, on all governance matters. In this respect,
we set up a Compliance Unit, having a Compliance
Manager responsible with the unit under supervision of
the Company Secretary. This is to ensure compliance
with legal and regulatory requirements. The Board
approves the appointment and the removal of the
Company Secretary. This year the Company Secretary
attended all Board meetings and Executive Committee
meetings.
Procedure for Developing
Remuneration Policies
Principle 7
The Remuneration Committee reviews matters
concerning the remuneration of Board members,
Presidents, Executive Vice Presidents and Senior
Vice Presidents in consultation with the Chairman of
the Board.
Principle 8
The components of remuneration are structured to
reward both executive and non-executive directors
based on corporate and individual performance,
including our two top executives. The level of
remuneration reflects their experience and dedication.
The remuneration bands rank from A to C as follows.
Remuneration Bands:
“A” refers to remuneration below the equivalent
of S$250,000
“B” refers to remuneration between the equivalent
of S$250,000 and S$499,999
“C” refers to remuneration between the equivalent
of S$500,000 and above.
The Company entered into a long-term employment
agreement with Dr. Pisanu Vichiensanth, who is our
director, the Managing Director of Beer Thai (1991)
Public Company Limited and a Senior Master Brewer.
Annual Report 2007
1 06
107
Disclosure of Remuneration
Audit Committee
Principle 9
Principle 11
As at December 31, 2007, directors and two top executives received the remuneration under the following bands:
The Board appointed an Audit Committee, which
consists of four independent directors: three Thais
and one Singaporean. Their responsibilities are clearly
set forth in the Audit Committee Charter, for instance,
assessing the adequacy and effectiveness of the
internal controls, preparing the process of financial
statements and information disclosures and reviewing
the compliance with applicable laws, regulations and
rules of the Stock Exchange of Thailand and the Singapore
Exchange. This includes internal investigations and
consideration of Interested Persons Transactions to
prevent an occurrence of conflict of interests.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
Mr. Narong Srisa-an
Mr. Paisal Chevasiri (1)
Prof. Kanung Luchai
Mr. Manu Leopairote
Mr. Ng Tat Pun
Gen. Choo-Chat Kambhu Na Ayudhya
Mr. Panote Sirivadhanabhakdi (2)
Top Executives
1. Mr. Sawat Sopa
2. Mr. Saikeaw Vongpisethkul*
Remuneration Band
C
B
C
B
A
B
A
A
A
A
A
A
A
A
A
A
C
C
C
C
C
C
B
(Remark: 1 S$ = Baht 24)
Name of Directors
B
A
Remark (1) Mr. Paisal Chevasiri resigned from the member of the Board of Directors effective on February 26, 2007.
(2) Mr. Panote Sirivadhanabhakdi was appointed the member of the Board of Directors on February 27,
Internal Controls
Principle 12
Our Board values a sound management internal control
system. To safeguard shareholders’ investments and
the Company’s assets, it appointed an Executive
Committee, each member of which oversees different
departments and business units to ensure the adequacy
of financial, operational and compliance controls,
including risk management policies.
In support of this, the Board also assigned the Office
of the Corporate Secretariat to oversee compliance
with the law and regulations concerning public
companies and the issuer of securities.
Based on the information provided to it, the AC believes
that the system of internal controls and risk management
is adequate.
2007 in replace of Mr. Paisal Chevasiri.
Internal Audit
Accountability
Principle 13
Principle 10
The Board is responsible for providing a balanced and understandable assessment of the Company’s performance,
and for providing shareholders with quarterly and annual financial reports. The financial statements for the first
three quarters are released to shareholders within 45 days of the end of each quarter. The annual result is released
within 60 days of the end of each financial year. In addition, our top management also participated in quarter
results briefing and telephone conference from time to time. This is to ensure the timely update to our investors.
The Company established the Office of Internal
Audit to assist the Board through Audit Committee
(AC) in promoting sound risk management and good
corporate governance by assessing the adequacy and
effectiveness of the internal controls for key businesses
and operations in areas described in the audit plan.
In this respect, the AC appointed the head of the Office
of Internal Audit the secretary to the AC. Annual audit
schedules ensure that the performance of internal
audit is accurate.
Communication with Shareholders
Principle 14
Not only we make various announcements via
SGX-NET to communicate with our shareholders, Mr.
Richard W. Jones, head of Investor Relations Unit
works closely with our top management to ensure
timely disclosure. The unit arranges quarterly briefings
following the disclosure of interim and full year results,
so that investors may query management about
financial, marketing or strategic issues. Between
reporting periods, the unit regularly meets with
investors to communicate the policies and strategies
of the Company so that investors have a good
understanding of them. Investor Relations provides
timely detailed information via the corporate website.
The unit also reports to management about investors’
comments and concerns. Contact information for the
Investor Relations Unit appears in this annual report
or on the investor relations section of the corporate
website http://www.thaibev.com/set/investor.html.
Annual Report 2007
1 08
109
Corporate
Social
Responsibility
Report
Thais Are Ready to
Give Each Other…
Thai Bev for Thai Society
Since the establishment in 2003 of Thai Beverage Public Company Limited, a conglomerate of affiliated
companies, our core commitment has been to map out the policy and implement projects that benefit
the Thai society, Thai people, and Thai spirit. This is because ThaiBev is convinced that ‘Thais never
abandon other Thais’. Thais are ready to help each other, as reflected in ThaiBev’s social activities.
These activities can be categorized into four aspects: education, sports, healthcare, and arts & culture.
All through the years, ThaiBev has always been at the forefront in the private sector in its contribution
to society. Our Corporate Social Responsibility (CSR) projects will be further strengthened as
everyone at ThaiBev, from senior executives down to the junior staff, recognizes the importance
of participating in public service activities. The importance of the support for the society has
been impressed upon all ThaiBev staffs, and is now being disseminated throughout the country.
In 2007, ThaiBev implemented several projects under our commitment to “Give back to the Thai
Society”. These projects included “ThaiBev Unites to Fight the Cold”, “Drive Safely with ThaiBev”,
as well as other projects to help flood victims. The ‘ThaiBev Unites to Fight the Cold’ project has
been carried out for eight consecutive years. This year we donated 200,000 blankets to villagers
in 15 northern and northeastern provinces. The ‘Drive Safely with ThaiBev’ project, a joint project
with the Royal Thai Police for the second year in a row, urged motorists to minimize road accidents
and drive properly. As part of the project, safety helmets were given away to motorcyclists
while copies of “Drive Safely with ThaiBev” manual were distributed to motorists in general.
Activities related to education included a joint program
with other members of the Thai private sector to set
up a fund for Thai students and educators who wish
to pursue higher studies at Johns Hopkins University’s Paul H. Nitze School of Advanced International
Studies (SAIS), as well as activities to promote Thai
and US relations. In addition, ThaiBev sponsored the
construction of a school building for Wat Hom Kred
School, Sam Phran District, Nakhon Pathom Province.
Other projects and activities included support to
educational funds, school lunches for needy students,
provision for educational equipment and sports
equipment.
On arts & culture, one of ThaiBev’s major projects was the renovation of mural
paintings in the Buddha Saiyas Vihara, or the chapel of the Reclining Buddha, at
Wat Phra Chetuphon Wimonmangkhlaram Rajwaramahawihan. The 150-year-old-plus
paintings here were a prototype of the Rattanakosin Period art. The restoration took
10 years to complete and was ready for public viewing in 2007. The mural paintings,
particularly the ones higher up near the ceiling thus difficult to view, were
photographed and put on exhibit. Incidentally, these photographs appeared in
the 2008 ThaiBev calendar.
The healthcare aspects included the donation of modern medical equipment for
the Chalerm Phra Kiat Sixth-cycle Birthday Anniversary of His Majesty the King
Building, Phra Mongkutklao Hospital, valued at 3,000,000 baht. In addition, the
much appreciated “Chang Clinic” in Kamphaengphet Province has continued to
provide the people in the surrounding community with diagnosis and treatment
by experienced specialists from hospitals in Bangkok and Kamphaengphet who
volunteer their time at the clinic. Other healthcare activities included donation
of ambulances to hospitals, donation of equipment to the mobile prostheses
units of the Maha Vajiralongkorn Foundation and many other activities.
The sports aspects included our active support to football, volleyball, tennis, snooker,
and many other sports of interest to the Thai people, with expectations of improving
the health of Thai youths, sporting skills and future victories in the international arena.
ThaiBev also launched the “ThaiBev… Thai Talent” project in support of talented
and gifted young Thais in various fields. These fields include music, sports,
arts & cultural, and educational. Assorted forms of support are provided, such as
scholarships, travel expenses to participate in tournaments or events in Thailand
and abroad, as well as allowances.
ThaiBev embarked on
the 8th “ThaiBev Unites to
Fight the Cold” project in
which 200,000 blankets
worth 30 million baht
were donated to villagers
in 15 northern and
northeastern provinces.
Annual Report 2007
1 10
Khunying Wanna Sirivadhanabhakdi,
Vice Chairman of ThaiBev, dedicated
the ‘SangSom’ school building to
Wat Hom Kred School in Sam Phran
District of Nakhon Pathom Province.
Khunying Wanna (left) is shown
presenting a token photo of the building
to Khunying Kasama Varavarn,
Secretary-General of the Basic
Education Commission.
Mr. Polapatr Suvarnazorn (right, center), ThaiBev
Vice President for External Affairs, presented a
donation to cover the travel expenses of the Sax
Chamber Orchestra, which was on its way to give
concert performances in Germany and Switzerland.
This troupe consisted of talented youths under the
“ThaiBev… Thai Talent” project. Accepting the donation
was Associate Professor Dr. Sukree Charoensook
(left, center), director of the College of Musical Arts,
Mahidol University.
111
One of the “Drive Safely with ThaiBev” projects was
to provide 10,000 safety helmets to motorcyclists in
Bangkok and the provinces. ThaiBev helmets were of
high safety standards as certified by the Thai
Industrial Standard Institute. Picture shows the happy
atmosphere at the ceremony attended by hundreds of
motorcyclists.
ThaiBev donated 3-million-baht
worth of medical equipment to
the Chalerm Phra Kiat Sixth-cycle
Birthday Anniversary of His Majesty
the King Building, Phra Mongkutklao
Hospital. Accepting the donation from
(right) was former prime minister
General Surayud Chulanont
(4th from left).
The renovation of mural
paintings at Buddha Saiyas
Vihara, Wat Phra Chetuphon
Wimonmangkhlaram
Rajwaramahawihan (Wat Pho)
which began in 2000 was
finally completed in 2007.
Attending the press
conference at the completion
of the renovation and the
opening of the photo exhibition
was ThaiBev President,
(left), the abbot of Wat Phra
Chetuphon (center) and
well known photographer,
Mr. Nitikorn Kraivixian (right).
ThaiBev presented 2 million baht cash
to the national soccer team as a way
to provide moral support. ThaiBev President,
Mr. Thapana Sirivadhanabhakdi (center,
in yellow shirt), said the Thai national team
deserved the award for its gutsy performance
and determination.
ThaiBev organized a joint program with Thai private sector
called The PremTinsulanonda Fellowship Program, established to
provide a fund to Thai students and educators who wished to
pursue their studies at Johns Hopkins University’s Paul H.Nitze
School of Advanced International Studies (SAIS), as well as related
activities to promote Thai and US relations.
Annual Report 2007
1 12
113
PR Talk
The year 2007 was extremely auspicious, as Thai people from all walks of life celebrated
the 80th Birthday Anniversary of His Majesty the King who has devotedly himself to the
development of the country and his subjects.
ThaiBev was a proud part of this grand celebration in expressing its gratitude to His Majesty
the King by participating in the “Ruam Jai Phak Rak Nai Luang” activities – one of which was
the setting up of the “Thais Love the King Exhibition House” as a means to communicate
to the viewers the bond between a king and his people as well as the sacrifice His Majesty
made to better the livelihood of the Thai people in every corner of the country.
In addition, ThaiBev in cooperation with the Photography Association of Thailand under
His Majesty’s Royal Patronage organized the ‘Photos of the Land’, a photographic contest
with four royal trophies, to celebrate the auspicious occasion of His Majesty the King’s 80th
Birthday Anniversary. This was the first time for a photography competition to feature
four Royal trophies in the same event, namely His Majesty the King’s trophy to be awarded
under the theme “Thai People Love the King”; Her Majesty the Queen’s trophy under the
theme “United in Harmony”; His Royal Highness Crown Prince Maha Vajiralongkorn’s
trophy under the theme “Love the Forest, Conserving the Water”; and Her Royal Highness
Princess Maha Chakri Sirindhorn’s trophy under the theme “Agriculture the Thai Way”.
Dr. Sumet Tantivejkul, Secretary-General of the Chaipattana Foundation, chaired the judging
panel. Moreover, an exhibition of His Majesty the King’s photographic worked were put on
display to the general public at Lifestyle Hall, 2nd floor, Siam Paragon shopping mall, from
December 4 to 12, 2007.
Last year, Thailand hosted the 24th University Summer Games – Universiade. ThaiBev, as the
major sponsor, in cooperation with the Thai Sports Association under the Royal Patronage,
constructed a “Thai Sports Village” to promote the uniqueness of Thai traditional sports for
the appreciation of sports people and visitors from all over the world. It displayed all aspects of
the Thai way of life from the perspective of sports as well as the history and uniqueness of Thai
sports. The Thai Sports Village housed an exhibition of Thai sports history, the demonstration of
traditional Thai sports such as loop takraw, kite flying, sword-fighting, boxing, chess, draughts,
traditional massage, and classical dances. It also included
special demonstrations of kite-making, sword-fighting,
and boxing lessons.
In addition, ThaiBev solely, or in partnership with
the public sector, the private sector and the mass
media, implemented various public service activities.
A significant example was its campaign to alleviate
global warming – a critical issue for international
organizations and nations worldwide, including Thailand.
ThaiBev recognizes the importance and urgency of
this issue and has drawn up policies for the corporation
and affiliated companies. These include the cooperation
with various organizations to implement measures
against global warming. ThaiBev has also invited the
media and investors to visit its plants to observe our
modern production processes reflecting responsibility
for society and the environment, efficient use of energy,
as well as the application of alternative energy derived
from the waste treatment systems. This is our corporate
pride in being a responsible member of the society.
‘Ruam Jai Phak Rak Nai Luang’ activities:
the “Thais Love the King Exhibition House”
– a means to communicate to the visitors
Annual Report 2007
1 14
115
The Photography Association of Thailand,
in cooperation with ThaiBev, organizes
the first ‘Photos of the Land’ competition
featuring four Royal trophies, to celebrate
the auspicious occasion of His Majesty
the King’s 80th Birthday Anniversary.
Dr. Sumet Tantivejkul (2nd from left),
Secretary-General of Chaipattana Foundation,
chaired the judging panel. Also present at
the press conference was ThaiBev President,
Mr. Thapana Sirivadhanabhakdi (Center).
ThaiBev supported the “Cosmopolitan and GM Single
Party 2007” event under the theme “100 Couples Unite to Fight
Global Warming”. This activity promoted global warming
awareness in 200 youths who would become representatives
in promoting the anti-global warming campaign.
Members of the media visited
Beer Thai (1991) Public Co., Ltd.,
Kamphaengphet Province,
to observe the brewing processes
of Chang Beer and Archa Beer,
on the occasion of Archa Beer
winning a gold medal award at
the Australian International
BeeAwards (AIBA) 2007.
ThaiBev, a major sponsor of the 24th
University Games – Universiade, in
cooperation with the Thai Sports Association
under the Royal Patronage, constructed a ‘
Thai Sports Village’, inaugurated on
August 16 to welcome athletes from
all over the world. The exhibition displayed
all aspects of the Thai way of living from sports
perspectives, as well as demonstration and
lessons on Thai sports. A certificate was granted
to each participant. Presiding at the opening
ceremony of the “Village” was ThaiBev President,
Mr. Thapana Sirivadhabhakdi (3rd from left).
Thai and foreign investors familiarized
themselves with the production processes
of Chang Beer and Archa Beer at
Beer Thai (1991) Public Company Limited
Khamphaeng Phet Province.
Annual Report 2007
116
Audit Committee Report
Annual Report 2007 Thai Beverage Public Company Limited
The Audit Committee is comprised of four directors named below.
1.
2.
3.
4.
Mr.
Mr.
Mr.
Mr.
Staporn Kavitanon
Kanung Luchai
Manu Leopairote
Ng Tat Pun
Chairman of the Audit Committee
Member of the Audit Committee
Each member of the Audit Committee is an independent director who meets the independence, experience and
other qualifications requirements of the Stock Exchange of Thailand and the Securities and Exchange Commission.
The Audit Committee has reviewed and discussed the Company’s audited financial statements with Management
and KPMG Phoomchai Audit Limited, its external auditor for 2007, to express the Audit Committee’s opinion of the
conformity to the Company’s audited financial statements with generally accepted accounting principles. It also
reviewed and expressed its opinion on the audit plan, and considered results of the audit from the Company’s internal
audit division to ensure that the internal control system is adequate and appropriate.
The Audit Committee has recommended that the Board propose for consideration and approval the continued
nomination of KPMG Phoomchai Audit Limited as the Company’s external auditor for 2008 and its remuneration to the
Annual General Meeting of Shareholders.
Based on the above-mentioned reviews and discussions, the Audit Committee views that the Company has an adequate
internal control and its financial statement is fairly presented in accordance with the generally accepted accounting
principles.
Staporn Kavitanon
Chairman of the Audit Committee
Date: February 26, 2008
117
Audit report of Certified Public Accountant
To the shareholders of Thai Beverage Public Company Limited
I have audited the accompanying consolidated and separate balance sheets as at 31 December 2007 and 2006, and the
related statements of income, changes in shareholders’ equity and cash flows for the years then ended of Thai Beverage
Public Company Limited and its subsidiaries, and of Thai Beverage Public Company Limited, respectively. The Company’s
management is responsible for the correctness and completeness of information presented in these financial statements.
My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material
respects, the financial positions as at 31 December 2007 and 2006 and the results of operations and cash flows for the
years then ended of Thai Beverage Public Company Limited and its subsidiaries, and of Thai Beverage Public Company
Limited, respectively, in accordance with generally accepted accounting principles.
As described in note 29 to the financial statements, the Company’s financial statements for the year ended 31 December
2006 have been restated for the effects of the change in accounting policy for investments in subsidiaries and associates
from the equity method of accounting to the cost method, and are now termed ‘separate’ financial statements.
Disclosure of significant differences between generally accepted accounting principles in Thailand and International
Financial Reporting Standards is not a required part of the basic financial statements under generally accepted accounting
principles in Thailand, but it is presented in Note 36 to the notes to financial statements for information purposes only.
I have not audited or reviewed such information and therefore do not express any audit opinion or review report thereon.
(Nirand Lilamethwat)
Certified Public Accountant
Registration No. 2316
KPMG Phoomchai Audit Ltd.
Bangkok
27 February 2008
Annual Report 2007
118
119
Thai Beverage Public Company Limited and its Subsidiaries
Balance Sheets
As at 31 December 2007 and 2006
Note
Consolidated
Separate
Consolidated
Separate
financial statements
2007
2006
2007
Assets
Note
2006
(Restated)
2007
(Restated)
Current liabilities
Cash and cash equivalents
6
2,188,991,774
1,919,576,970
9,168,240
15,622,582
Current investments
7
7,685,085
4,358,600
-
-
5, 8
1,467,001,317
1,317,930,493
-
-
Short-term loans to and amounts
Inventories
Other current assets
5
4,371,057
50,951,648
3,916,012,461
11,035,118,471
9
28,056,925,651
28,315,158,270
-
-
10
1,403,965,020
1,914,238,542
8,481,487
16,988,878
33,128,939,904
33,522,214,523
3,933,662,188
11,067,729,931
Total current assets
Bank overdrafts and short-term
loans from financial institutions
15
5,998,233,815
6,753,305,295
4,797,684,522
3,029,559,266
Trade accounts payable
16
2,249,329,022
2,275,670,644
-
-
Short-term guaranteed bonds
15
-
2,200,000,000
-
2,200,000,000
15
3,000,000,000
2,300,000,000
3,000,000,000
2,300,000,000
15
1,755,000,000
1,500,000,000
1,755,000,000
1,500,000,000
5, 15
69,141,215
4,837,042,378
2,115,288,548
13,084,828,757
2,773,848,081
2,180,870,323
146,248,940
47,791,738
3,203,278,986
4,103,314,358
161,542,579
394,209,562
19,048,831,119
26,150,202,998
11,975,764,589
22,556,389,323
Current portion of long-term
guaranteed bonds
Current portion of long-term loans
Short-term loans from and amounts
due to related parties
Non-current assets
Investments in subsidiaries and associates
Income tax payable
11
124,518,368
135,490,042
71,470,329,894
63,594,730,188
Other current liabilities
7
3,633,579
3,753,619
-
-
Total current liabilities
due from related parties
5
1,172,250
13,563,000
9,411,471,969
5,500,898,900
Property, plant and equipment
12
43,216,507,663
49,428,039,362
71,600,623
845,926,385
Intangible assets
13
978,770,498
354,876,536
16,165,989
12,353,346
Other non-current assets
14
2,073,413,637
2,121,574,962
351,336,250
357,128,650
46,398,015,995
52,057,297,521
81,320,904,725
70,311,037,469
Other long-term investments
2006
(in Baht)
Current assets
due from related parties
2007
Liabilities and shareholders’ equity
(in Baht)
Trade accounts receivable
2006
17
Long-term loans to and amounts
Total non-current assets
Total assets
79,526,955,899
The accompanying notes are an integral part of these financial statements.
85,579,512,044
85,254,566,913
81,378,767,400
Non-current liabilities
Long-term guaranteed bonds
15
-
3,000,000,000
-
3,000,000,000
Long-term loans from financial institutions
15
5,400,000,000
3,755,000,000
5,400,000,000
3,755,000,000
5, 15
-
-
6,540,500,000
4,372,200,000
Other non-current liabilities
168,184,325
120,753,208
117,900
-
Total non-current liabilities
5,568,184,325
6,875,753,208
11,940,617,900
11,127,200,000
24,617,015,444
33,025,956,206
23,916,382,489
33,683,589,323
Long-term loans from related parties
Total liabilities
Annual Report 2007
120
121
Balance Sheets
Statements of Income
As at 31 December 2007 and 2006
For the years ended 31 December 2007 and 2006
Note
Consolidated
Separate
Consolidated
Separate
2007
2006
2007
Liabilities and shareholders’ equity
Note
2006
2007
2007
(Restated)
2006
(Restated)
(in Baht)
(in Baht)
Shareholders’ equity
Share capital
2006
Revenues
5
Revenue from sales
18
100,540,895,079
97,797,921,895
-
-
40,834,243
56,452,361
775,352,387
858,621,337
Authorised share capital
29,000,000,000
29,000,000,000
29,000,000,000
29,000,000,000
Interest income
Issued and paid-up share capital
25,110,025,000
25,110,025,000
25,110,025,000
25,110,025,000
Management fees
-
-
2,577,305,358
3,432,470,973
Dividends
-
-
18,985,153,408
8,055,408,868
228,524,668
77,938,829
89,527,428
4,873,832
28,641,891
23,684,083
-
100,838,895,881
97,955,997,168
22,427,338,581
12,351,375,010
70,872,565,833
69,325,121,958
-
-
13,689,414,856
12,684,556,582
1,154,217,891
943,322,290
84,561,980,689
82,009,678,540
1,154,217,891
943,322,290
16,276,915,192
15,946,318,628
21,273,120,690
11,408,052,720
Difference arising from common
control transactions
Reserves
(17,141,406,365)
(17,141,406,365)
-
-
17,215,736,603
Currency translation changes
21
Share of profits from investments
19
Share premium
Other income
(208,076,374)
17,215,736,603
(19,508,334)
17,215,736,603
17,215,736,603
-
-
-
134,521,429
accounted for using the equity method
Total revenues
-
Fair value changes and
revaluation surpluses
4,388,935,374
6,586,263,579
Retained earnings
Appropriated - legal reserve
Unappropriated
Total shareholders’ equity
Expenses
5
Cost of sales
19
2,900,000,000
1,700,000,000
2,900,000,000
1,700,000,000
Selling and administrative expenses
22,644,726,217
19,102,445,355
16,112,422,821
3,534,895,045
Total expenses
54,909,940,455
52,553,555,838
61,338,184,424
47,695,178,077
22
Profit before interest and
Total liabilities and shareholders’ equity
79,526,955,899
85,579,512,044
85,254,566,913
81,378,767,400
income tax expenses
Interest expense
24
1,047,277,561
1,568,651,172
1,577,560,366
2,253,267,473
Income tax expense
25
4,846,572,448
4,322,890,312
277,248,227
149,318,355
10,383,065,183
10,054,777,144
19,418,312,097
9,005,466,892
0.41
0.42
0.77
0.38
Net profit
Basic earnings per share
26
from common
paid-up
-
Dividends
for the common control transactions
-
Legal reserve
Dividends
(17,141,406,365)
-
-
-
-
-
-
-
-
Dividends
25,110,025,000
-
Legal reserve
Balance at 31 December 2007
-
-
-
-
-
-
-
Net profit
Total recognised income and expense
-
17,141,406,365
-
28
25,110,025,000
(17,141,406,365)
-
-
-
Net surplus on property revaluation
Change in shareholders’ equity for 2007
Restated balance
29
25,110,025,000
Balance at 1 January 2007
Change in accounting policy
25,110,025,000
3,110,025,000
18
28
Dividends
Issue of ordinary shares
-
-
-
-
15,979,264,833
(15,979,264,833)
Legal reserve
22,000,000,000
-
22,000,000,000
share capital control transactions
from common
paid-up
-
29
Note
Difference arising
Issued and
Net profit
Changes in shareholders’ equity for 2006
Restated balance
Changes in accounting policy
Statements of Changes in Shareholders’ Equity
25,110,025,000
-
-
Net profit
-
-
-
28
(17,141,406,365)
3,110,025,000
25,110,025,000
27,039,805
(1,505,240,976)
-
-
(32,415,518)
(23,871,663)
(8,543,855)
(8,543,855)
-
(15,630,789,676)
-
Net expense recognised directly in shareholder’s equity
of foreign operations
Translation loss relating to financial statements
Issue of ordinary shares
business restructuring
Increase in share capital in subsidiaries before
18
-
Legal reserve
-
-
Consideration paid to shareholders of subsidiaries
-
Net profit
-
-
22,000,000,000
share capital control transactions
-
28
Note
Difference arising
Issued and
Net expense recognised directly in shareholder’s equity
of foreign operations
Translation loss relating to financial statements
Statements of Changes in Shareholders’ Equity
17,215,736,603
-
-
-
-
-
17,215,736,603
-
17,215,736,603
17,215,736,603
17,215,736,603
-
-
-
-
-
-
-
-
-
-
-
-
19,508,334
(19,508,334)
-
-
-
-
-
-
5,341,471
-
-
2,900,000,000
-
1,200,000,000
-
-
1,700,000,000
-
1,700,000,000
1,700,000,000
-
-
590,000,000
-
1,110,000,000
-
1,110,000,000
to legal reserve
Appropriated
-
-
22,644,726,217
(5,775,305,750)
(1,200,000,000)
10,517,586,612
10,383,065,183
134,521,429
-
134,521,429
19,102,445,355
-
-
-
(8,042,102,750)
(590,000,000)
10,078,648,807
10,078,648,807
-
-
-
17,655,899,298
Unappropriated
16,112,422,821
(5,775,305,750)
(1,200,000,000)
19,552,833,526
19,418,312,097
134,521,429
3,534,895,045
(15,567,550,310)
19,102,445,355
3,534,895,045
-
(8,042,102,750)
(590,000,000)
9,005,466,892
3,161,530,903
(14,494,368,395)
17,655,899,298
Unappropriated
Retained earnings
2,900,000,000
-
1,200,000,000
-
-
-
-
-
1,700,000,000
-
-
-
-
590,000,000
-
-
-
-
-
1,110,000,000
(134,521,429)
(134,521,429)
134,521,429
(6,451,742,150)
6,586,263,579
134,521,429
-
-
-
-
134,521,429
(6,450,214,015)
6,584,735,444
surpluses
and revaluation
Fair value changes
(in Baht)
(5,341,471)
changes
premium
Currency
Reserves
translation
-
4,388,935,374
-
-
(2,197,328,205)
-
(2,197,328,205)
-
(2,197,328,205)
6,586,263,579
-
-
-
-
-
1,528,135
-
1,528,135
-
1,528,135
Appropriated
Retained earnings
to legal reserve
Separate financial statements (Restated)
(208,076,374)
-
-
(188,568,040)
-
(188,568,040)
(188,568,040)
-
(19,508,334)
-
-
-
-
-
(14,166,863)
-
(14,166,863)
(14,166,863)
-
Share
17,215,736,603
-
-
-
-
-
-
-
17,215,736,603
17,215,736,603
-
-
-
-
-
-
-
-
-
6,584,735,444
surpluses
and revaluation
Fair value changes
(in Baht)
(5,341,471)
changes
-
translation
Share
premium
Currency
Reserves
Consolidated financial statements
61,338,184,424
(5,775,305,750)
-
19,418,312,097
19,418,312,097
-
47,695,178,077
(4,858,377,761)
52,553,555,838
47,695,178,077
20,325,761,603
(8,042,102,750)
-
9,005,466,892
26,406,052,332
(4,959,976,106)
31,366,028,438
equity
Total shareholders’
54,909,940,455
(5,775,305,750)
-
8,131,690,367
10,383,065,183
(2,251,374,816)
(188,568,040)
(2,062,806,776)
52,553,555,838
20,325,761,603
27,039,805
(1,505,240,976)
(8,042,102,750)
-
10,033,594,561
10,054,777,144
(21,182,583)
(22,710,718)
1,528,135
31,714,503,595
equity
Total shareholders’
Annual Report 2007
124
125
Statements of Cash Flows
Note
Consolidated
Separate
Consolidated
Separate
2007
2006
2007
Note
2006
2007
2006
2007
(Restated)
(Restated)
(in Baht)
(in Baht)
Changes in operating assets and liabilities
Cash flows from operating activities
Net profit
10,383,065,183
10,054,777,144
19,418,312,097
9,005,466,892
Interest income
Interest expense
Unrealised loss on exchange rate
4,974,695,900
(40,834,243)
4,651,978,462
(56,452,361)
28,966,567
24,071,862
(775,352,387)
(858,621,337)
1,047,277,561
1,568,651,172
1,577,560,366
2,253,267,473
5,841,586
11,720,775
1,164,320
16,321,434
Allowance for obsolete inventories
Allowance for impairment loss on property
-
57,800,991
35,968,778
1,293,629,337
Inventories
240,314,893
76,897,733
-
543,222,112
657,219,479
8,507,390
(52,736,803)
583,226,076
-
-
(152,525,782)
45,335,778
16,230,422
5,885,734
(139,223,931)
78,444,379
Amounts due to related parties
Other non-current liabilities
(1,220,696,777)
4,841,922
(2,775,617)
117,900
-
(2,000,000,000)
-
50,000,000
9,375,000
9,375,000
145,536,197
354,960,794
-
-
Advance payments to a specialist
58,768,300
-
-
-
Income taxes paid
(4,253,594,691)
(4,671,000,532)
Net cash provided by operating activities
16,443,526,789
14,362,352,061
(70,105,694)
3,190,891
(63,880,601)
50,309
-
Gain on sale of investment
-
708,828
(6,044)
Dividends
-
-
(18,985,153,408)
(8,055,408,868)
Share of profits from investments
accounted for using the equity method
Income tax expense
(1,444,554,668)
50,000,000
(Gain) loss on sale and disposal of property,
plant and equipment and intangible assets
143,293,100
Amortisation of advance payments to
a specialist
(95,274,423)
Amounts due from related parties
Adjustments for
2006
(28,641,891)
(23,684,083)
-
-
4,846,572,448
4,322,890,312
277,248,227
149,318,355
21,372,175,347
20,938,741,934
1,488,234,137
2,543,841,120
(178,791,025)
2,488,704,230
(354,909,409)
(7,432,139)
(375,000,000)
(198,576,232)
1,692,253,453
Annual Report 2007
126
127
Statements of Cash Flows
Note
Consolidated
Separate
Consolidated
Separate
2007
2006
2007
Note
2006
2007
2006
2007
(Restated)
(Restated)
(in Baht)
(in Baht)
Cash flows from investing activities
Interest received
Cash flows from financing activities
40,930,836
58,093,432
780,791,231
847,583,522
-
16,975,616
20,290,212,836
8,055,408,868
5,640,990
-
-
-
40,850,000
1,908,300,440
39,613,566
-
Dividends received
Current investments
(3,326,485)
Loans to related parties
(9,180,660,910)
(1,144,799,640)
(509,999,340)
Consideration paid to shareholders of subsidiaries
for the common control transactions
-
(1,505,240,976)
-
-
Increase in share capital in subsidiaries
Purchase of property, plant and equipment
(1,420,545,600)
(1,708,451,681)
(2,086,173,156)
Dividends paid
(5,775,305,750)
(8,042,102,750)
(5,775,305,750)
(8,042,102,750)
(1,140,914,252)
(33,405,319,840)
1,768,125,256
(33,570,440,734)
Bank overdrafts and short-term loans
from financial institutions
Proceeds from short-term guaranteed bonds
-
Repayment of short-term guaranteed bonds
(2,200,000,000)
Loans from related parties
(4,615,231,380)
27,039,805
-
-
Repayment of long-term guaranteed bonds
120,039
26
7,820
-
Proceeds from issuance of share capital
(1,454,554,671)
(4,231,904,150)
933,321,336
51,883,323
Purchase of intangible assets
(26,925,503)
(12,511,963)
Decrease in intangible assets
11,202,717
(1,211,354)
37,899
(24,843,220)
(9,205,674)
819,205,608
(8,595,148)
(3,582,600)
(129,607,370)
58,906
(6,666,764)
(4,716,900)
Net cash outflow on acquisition of
(2,300,000,000)
(253,908,978)
-
-
-
financial institutions
(5,573,979,218)
14,596,473,603
7,107,261,282
financial institutions
Net cash used in financing activities
629,727,420
5,300,000,000
-
4,700,000,000
(2,200,000,000)
(2,500,000,000)
(8,776,000,000)
1,815,500,000
(2,300,000,000)
5,300,000,000
-
-
20,325,761,603
-
20,325,761,603
5,400,000,000
26,600,000,000
5,400,000,000
26,600,000,000
(3,500,000,000)
(22,431,600,000)
(3,500,000,000)
(21,345,000,000)
(15,270,805,448)
(10,244,079,167)
(17,091,632,175)
(8,802,455,037)
(188,568,040)
(22,710,718)
-
-
Net increase (decrease) in cash and
269,414,804
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(2,500,000,000)
-
Repayment of long-term loans from
cash equivalents
(714,738,497)
4,700,000,000
Proceeds from long-term loans from
Net cash provided by (used in)
investing activities
(1,139,354,066)
-
Decrease in property, plant and equipment
indirect subsidiaries
Interest paid
Proceeds from long-term guaranteed bonds
before business restructuring
Sale of long-term investments
2006
6
(1,478,417,042)
(6,454,342)
(2,940,302)
1,919,576,970
3,397,994,012
15,622,582
18,562,884
2,188,991,774
1,919,576,970
9,168,240
15,622,582
Annual Report 2007
128
129
Notes to the Financial Statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the directors on 27 February 2008.
Note
Contents
Note
Contents
1. General information
Thai Beverage Public Company Limited, the “Company”, is incorporated and registered as a public company in Thailand
1
General information
19
Reserves
2
Basis of preparation of the financial statements
20
Segment information
3
Significant accounting policies
21
Other income
4
Business restructuring
22
Selling and administrative expenses
5
Related party transactions and balances
23
Personnel expenses
6
24
Interest expense
The principal businesses of the Company and its subsidiaries are the production, distribution and marketing of alcoholic
7
Other investments
25
Income tax expense
and non-alcoholic beverages, industrial alcohol and other by-products. Details of the Company’s subsidiaries as at
8
26
Earnings per share
31 December 2007 and 2006 were as follows:
9
Inventories
27
Promotional privileges
10
28
Dividends
11
29
Changes in accounting policy
12
30
Financial instruments
13
Intangible assets
31
Commitments with non-related parties
14
32
Litigation
15
Interest-bearing liabilities
33
Events after the balance sheet date
16
34
Thai Accounting Standards (TAS) not yet adopted
17
35
Reclassification of accounts
18
Share capital
36
Significant differences between Thai GAAP and IFRS
on 29 October 2003. The registered office of the Company is at 14 Vibhavadi Rangsit Road, Chomphon, Chatuchak,
Bangkok.
The Company was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) in May 2006.
Ownership
Country of
Name of the entity
Type of business
incorporation
1. Beer Thai (1991) PCL.
Beer brewery
interest (%)
2007
2006
Thailand
100.00
100.00
Beer brewery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
14. United Winery and Distillery Co., Ltd.
Spirits distillery
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
100.00
Direct subsidiaries
Annual Report 2007
130
131
Ownership
Country of
Name of the entity
Type of business
incorporation
Spirits distillery
Ownership
interest (%)
Country of
Type of business
incorporation
49. International Beverage Holdings Ltd.
Holding company
100.00
100.00
100.00
Thailand
100.00
100.00
Beer distributor
Thailand
100.00
100.00
production of concentrate
Beer distributor
Thailand
100.00
100.00
materials
22. Pomkung Co., Ltd.
Beer distributor
Thailand
100.00
100.00
Beer distributor
Thailand
100.00
100.00
production of concentrate
Beer distributor
Thailand
100.00
100.00
Beer distributor
Thailand
100.00
100.00
26. Num Yuk Co., Ltd.
Spirits distributor
Thailand
100.00
100.00
Spirits distributor
Thailand
100.00
100.00
Spirits distributor
Thailand
100.00
100.00
Spirits distributor
Thailand
100.00
100.00
Spirits distributor
Thailand
100.00
100.00
Spirits distributor
Thailand
100.00
100.00
Beer and sprits agency
Thailand
100.00
100.00
Beer and sprits agency
Thailand
100.00
100.00
2007
2006
Thailand
100.00
100.00
Spirits distillery
Thailand
100.00
18. Sura Piset Thipparat Co., Ltd.
Spirits distillery
Thailand
19. Thai Alcohol PCL.
Alcohol distillery
Name of the entity
2007
2006
Hong Kong
100.00
100.00
Beer brewery
Thailand
100.00
100.00
Trademark holding
Thailand
100.00
100.00
Trademark holding and
Thailand
100.00
100.00
materials
Thailand
100.00
100.00
Holding company
Thailand
100.00
100.00
55. Thai Thum Distillery Co., Ltd. #
Trading of spirits
Thailand
99.90
99.90
56. Sura Piset Sahasan Co., Ltd. #
Production and distribution
Thailand
100.00
100.00
of spirits
Thailand
100.00
100.00
58. Muangkij Co., Ltd. #
Import of oak woods
Thailand
100.00
100.00
59. Sint Ek Panich Co., Ltd. #
Mining
Thailand
100.00
100.00
60. Pan Alcohol Co., Ltd. #
of vinegar
Thailand
100.00
100.00
61. Banglen Agriculture Co., Ltd. #
Agriculture
Thailand
100.00
100.00
62. Vitayathan Co., Ltd.
Environmental public relations
Thailand
100.00
100.00
Trading of alcoholic beverages
Singapore
100.00
100.00
64. InterBev (Cambodia) Co., Ltd.
Cambodia
100.00
100.00
Malaysia
100.00
100.00
54. Sura Piset Phatra Lanna Co., Ltd. ##
Trademark holding and
Indirect subsidiaries
of spirits
57. Sura Piset Sampan Co., Ltd. #
Spirits agency
Thailand
100.00
100.00
35. Sunthronpirom Co., Ltd.
Spirits agency
Thailand
100.00
100.00
Spirits agency
Thailand
100.00
100.00
Trading of fertilizer
Thailand
100.00
100.00
Japanese rice farming
Thailand
100.00
100.00
Trading of molasses
Thailand
99.72
99.72
Trading of feeds
Thailand
100.00
100.00
Trading of supplies and
procurement
Thailand
100.00
100.00
Brick producer
Thailand
100.00
100.00
Oak barrel producer
Thailand
100.00
100.00
44. Bang-Na Logistic Co., Ltd.
Trading of bottles
Thailand
100.00
100.00
Transportation
Thailand
100.00
100.00
trading/ international marketing Thailand
100.00
100.00
Construction
Thailand
100.00
100.00
of water and energy drinks
Advertising agency
Thailand
100.00
100.00
and spirits agency
(Formerly: Sahatipkarnkonsong Co., Ltd.)
interest (%)
USA, Inc. (Formerly: InterBev USA Inc.)
United States
of America
100.00
100.00
Hong Kong
100.00
100.00
Holding company
United Kingdom
100.00
100.00
Thailand
80.82
-
Thailand
83.20
-
68. International Beverage Holdings
(UK) Limited (Formerly: Pacific Spirits
(UK) Limited)
69. United Products Co., Ltd.
Import and export spirits for
of spirits
70. S P M Foods and Beverages Co., Ltd.
Annual Report 2007
132
Ownership
Country of
Name of the entity
Type of business
incorporation
133
2. Basis of preparation of the financial statements
interest (%)
2007
2006
The financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation
of the financial statements has been prepared for the convenience of readers not conversant with the Thai language.
Subsidiaries of indirect subsidiaries*
71. Blairmhor Limited #
Holding Company
United Kingdom
100.00
100.00
of spirits
United Kingdom
100.00
100.00
73. Blairmhor Distillers Limited #
Dormant
United Kingdom
100.00
100.00
of alcoholic beverages
United Kingdom
100.00
100.00
Dormant
United Kingdom
100.00
100.00
Dormant
United Kingdom
100.00
100.00
77. The Pulteney Distillery Company Limited #
Dormant
United Kingdom
100.00
100.00
78. The Balblair Distillery Company Limited #
Dormant
United Kingdom
100.00
100.00
79. R. Carmichael & Sons Limited #
Dormant
United Kingdom
100.00
100.00
80. J MacArthur Junior & Company Limited #
Dormant
United Kingdom
100.00
100.00
81. Mason & Summers Limited #
Dormant
United Kingdom
100.00
100.00
82. Hankey Bannister Limited #
Dormant
United Kingdom
100.00
100.00
83. James Catto & Company Limited #
Dormant
United Kingdom
100.00
100.00
84. Glen Calder Blenders Limited #
Dormant
United Kingdom
100.00
100.00
85. Moffat & Towers Limited #
Dormant
United Kingdom
100.00
100.00
The financial statements are prepared in accordance with Thai Accounting Standards (“TAS”) including related
interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) and with generally
accepted accounting principles in Thailand.
During 2007, the FAP issued the following revised TAS relevant to the Group’s operations and effective for accounting
periods beginning on or after 1 January 2007:
75. Speyburn-Glenlivet Distillery
Company Limited #
76. The Knockdhu Distillery
Company Limited #
TAS 44 (revised 2007) Consolidated and Separate Financial Statements
TAS 45 (revised 2007) Investments in Associates
The adoption of these revised TAS has resulted in a change in the Company’s accounting policy for interests in
subsidiaries and associates in the separate financial statements of the Company. The effects of this change are
disclosed in note 29.
In addition to the above revised TAS, the FAP has issued during 2007 a number of other new and revised TAS which
are only effective for financial statements beginning on or after 1 January 2008 and have not been adopted in the
preparation of these financial statements. These new and revised TAS are disclosed in note 34.
The financial statements are presented in Thai Baht, rounded in the notes to the financial statements to the nearest
million, unless otherwise stated. They are prepared on the historical cost basis except as stated in the accounting
Associates of indirect subsidiaries**
Off licences
United Kingdom
49.49
49.49
Poland
44.00
44.00
88. Inver House Distribution SA #
Dormant
France
50.02
50.02
policies.
The preparation of financial statements in conformity with TAS requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses.
*
Subsidiaries of International Beverage Holdings (UK) Limited
The estimates and associated assumptions are based on historical experience and various other factors that are
**
Associates of International Beverage Holdings (UK) Limited
believed to be reasonable under the circumstances, the results of which form the basis of making the judgements
#
These are currently non-trading.
about carrying amounts of assets and liabilities that are not readily apparent from other sources. Accordingly, actual
##
A subsidiary was changed from indirect subsidiary to direct subsidiary in October 2007 and is currently non-trading.
results may differ from these estimates.
In 2007, Sura Piset Phatra Lanna Co., Ltd., a subsidiary, acquired 2.8 million ordinary shares of United Product Co., Ltd.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
which represents 80.82% in share capital of such company for a total value of Baht 285.54 million, and 0.8 million
recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the
ordinary shares of SPM Foods and Beverages Co., Ltd. which represents 83.20% in share capital of such company for a
revision and future periods, if the revision affects both current and future periods.
total value of Baht 0.08 million from the former shareholders of both companies.
Annual Report 2007
134
3. Significant accounting policies
135
Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign
exchange rates ruling at the dates of the transactions.
(a) Basis of consolidation
The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”)
Foreign entities
and the Group’s interest in associates.
The assets and liabilities of foreign entities are translated to Thai Baht at the average foreign exchange rates ruling at
the balance sheet date.
Significant intra-group transactions between the Company and its subsidiaries are eliminated on consolidation.
The revenues and expenses of foreign entities are translated to Thai Baht at rates approximating the average foreign
Subsidiaries
exchange rates ruling at the dates of the transactions.
Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly
or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities.
Foreign exchange differences arising on translation are recognised in a separate component of equity until disposal of
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
the investments.
commences until the date that control ceases.
(c) Derivative financial instruments
Associates
Forward exchange contracts are treated as off-balance sheet items.
Associates are those companies in which the Group has significant influence, but not control, over the financial and
operating policies. The consolidated financial statements include the Group’s share of the total recognised gains and
(d) Cash and cash equivalents
losses of associates on an equity accounted basis, from the date that significant influence commences until the date
Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid
that significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s
carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group
short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the
purpose of the statement of cash flows.
has incurred legal or constructive obligations or made payments on behalf of the associate.
(e) Trade and other accounts receivable
Business combinations
Business combinations involving businesses under common control have been accounted for in a manner similar to a
Trade and other accounts receivables (including balances with related parties) are stated at their invoice value less
allowance for doubtful accounts.
pooling of interests, whereby the assets, liabilities and contingent liabilities transferred have been accounted for at book
values.
Business combinations are accounted for using the purchase method. The cost of an acquisition is measured at the
The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of
customer payments. Bad debts are written off when incurred.
fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange,
plus costs directly attributable to the acquisition.
(f) Inventories
Inventories are stated at the lower of cost and net realisable value.
(b) Foreign currencies
Foreign currency transactions
Cost of raw material, packaging materials, work in progress and finished goods is calculated using the weighted
average cost principle, and comprises all costs of purchase, costs of conversion and other costs incurred in bringing
Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the
transactions.
the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress,
cost includes an appropriate share of overheads based on normal operating capacity.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Thai Baht
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to
at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in
complete and to make the sale.
the statement of income.
Annual Report 2007
136
137
(g) Investments
an appraisal to be conducted every three to five years or when there are factors that might materially impact the value
of the land, to ensure that the carrying amount of these assets does not differ materially from that which would be
determined using fair values at the balance sheet date.
Investments in subsidiaries and associates in the separate financial statements of the Company are accounted for using
the cost method. This is a change of accounting policy, the effects of which are disclosed in note 29. Investments in
Any increase in value, on revaluation, is credited to equity under the heading “revaluation surplus” unless it offsets a
associates in the consolidated financial statements are accounted for using the equity method.
previous decrease in value recognised in the statement of income in respect of the same asset. A decrease in value is
recognised in the statement of income to the extent it exceeds an increase previously recognised in equity in respect of
Investments in other equity securities
the same asset. Upon disposal of a revalued asset, any related revaluation surplus is transferred from equity to retained
Marketable equity securities are classified as being available-for-sale and are stated at fair value, with any resultant
earnings and is not taken into account in calculating the gain or loss on disposal.
gain or loss being recognised directly in equity. The exceptions are impairment losses, which are recognised in the
statement of income.
Subsequent expenditure
Subsequent expenditure relating to an item of property, plant and equipment is added to the carrying amount of the
Equity securities which are not marketable are stated at cost less impairment losses.
asset when it is probable that the future economic benefits in excess of the originally assessed standard of performance
of the existing asset will flow to the Group. All other subsequent expenditure is recognised as an expense in the period
The fair value of financial instruments classified as available-for-sale is determined as the quoted bid price at the
in which it is incurred.
balance sheet date.
Depreciation
Disposal of investments
Depreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part
On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the
of an item of property, plant and equipment. The estimated useful lives are as follows:
associated cumulative gain or loss that was reported in equity is recognised in the statement of income.
Land improvement
5-20
years
(h) Property, plant and equipment
Building and structures
10-40
years
Owned assets
Building improvements
5-20
years
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for land,
Machinery and equipment
4-40
years
which is stated at its revalued amount. The revalued amount is the fair value.
Oak barrels
10-20
years
Furniture, fixtures and office equipment
3-10
years
Vehicles
3-10
years
Property that is being constructed or developed for future use is classified as property, plant and equipment and stated
at cost until construction or development is complete.
No depreciation is provided on freehold land and assets under construction.
Leased assets
Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as finance
(i) Intangible assets
leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and
Goodwill
the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and
Goodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s
impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so
share of the identifiable net assets acquired.
as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly
to the statement of income.
Goodwill is stated at cost less accumulated amortisation and impairment losses.
Revalued assets
Other intangible assets
Revaluations are performed by independent professional valuers with sufficient regularity. The Group’s policy requires
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment
losses.
Annual Report 2007
138
139
Amortisation
recognises the difference arising from common control transactions under shareholders’ equity until disposal of the
Amortisation is charged to the statement of income on a straight-line and unit of production basis over the estimated
investment.
useful lives of the assets. Intangible assets are amortised from the date that they are available for use. The estimated
(o) Revenue
useful lives are as follows:
Revenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts.
Goodwill
Computer software
Trademark
Broadcasting rights
Leasehold
20 years
(straight-line method)
3-10 years
Sale of goods and services rendered
10 years
Revenue is recognised in the statement of income when the significant risks and rewards of ownership have been
(unit of production method)
transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or
there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return
4 years
Lease term
of goods. Service income is recognised as services are provided.
(j) Impairment
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any
When the outcome of a contract for the rendering of services can be estimated reliably, contract revenue is recognised
indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.
in the statement of income by reference to the stage of completion of the contract activity at the balance sheet date.
When the outcome of the contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds
recognised that are recoverable.
its recoverable amount. The impairment loss is recognised in the statement of income unless it reverses a previous
revaluation credited to equity, in which case it is charged to equity.
Construction contracts
When the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised
(k) Interest-bearing liabilities
in the statement of income by reference to the stage of completion of the contract activity at the balance sheet date.
Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial
The stage of completion is assessed the percentage of completion method, which is measured by the project engineer.
recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised
value being recognised in the statement of income over the period of the borrowings on an effective interest basis.
immediately as an expense in the statement of income.
(l) Trade and other accounts payable
Interest and dividend income
Trade and other accounts payable (including balances with related parties) are stated at cost.
Interest income is recognised in the statement of income as it accrues. Dividend income is recognised in the statement
of income on the date the Group’s right to receive payments is established which in the case of marketable securities
(m) Provisions
is usually the ex-dividend date.
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result
of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a
(p) Expenses
reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by
Operating leases
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value
Payments made under operating leases are recognised in the statement of income on a straight line basis over the term
of money and, where appropriate, the risks specific to the liability.
of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease
payments made. Contingent rentals are charged to the statement of income in the accounting period in which they are
(n) Difference arising from common control transactions
incurred.
Difference arising from common control transactions relates to the restructuring of businesses under the common
control of the ultimate majority shareholder of the Company and arises from the difference between the cost of the
Finance costs
combination and the carrying amounts of net identifiable assets at the date of combination (except for businesses
Interest expenses and similar costs are charged to the statement of income in the period in which they are incurred,
acquired that are not under common control, net identifiable assets are measured at the fair value). The Company
except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production
Annual Report 2007
140
of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest
141
5. Related party transactions and balances
component of finance lease payments is recognised in the statement of income using the effective interest rate
method.
Related parties include subsidiary companies and those parties linked to the Group and the Company as shareholders
or by common shareholders or directors. Transactions with related parties are conducted at prices based on market
Research and development
prices or, where no market price exists, at contractually agreed prices.
Research and development costs, including costs of developing new beverage products and package design is
expensed in the period in which it is incurred.
The followings are relationships with related parties that are being controlled by the Company or have transactions with
the Group.
Other income and expenses are recognised on an accrual basis.
Country of
(q) Income tax
Name of the entity
incorporation
Nature of relationships
Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted at the balance sheet date and applicable to the reporting period, and any
1. Beer Thai (1991) PCL.
Thailand
Direct subsidiary, 100% shareholding
adjustment to tax payable in respect of previous years.
Thailand
Thailand
4. Business restructuring
Thailand
The Company was formed in 2003 to combine the separate beverages businesses of the ultimate controlling shareholder
Thailand
group, the Siriwadhanabhakdi family, which were held as part of the operations of 89 separate companies, into a single
Thailand
group of companies. Of these, 65 businesses were transferred between 2003 and 2004, four businesses were transferred
Thailand
during 2005 and 20 businesses were transferred during 2006. Prior to the restructuring these business were under the
Thailand
common control of the ultimate controlling shareholder of the Company.
Thailand
Thailand
As the same ultimate controlling shareholder controlled the businesses and operations transferred to the Company
Thailand
both before and after the recent restructuring, the consolidated financial statements have been prepared on the
Thailand
basis of a business combination involving entities and businesses under common control. Accordingly, the transfer of
Thailand
businesses and operations has been accounted for in a manner similar to a pooling of interests and the assets, liabilities
Thailand
and contingent liabilities transferred have been accounted for at book values.
Thailand
Thailand
The difference between the cost of the combination and the carrying amounts of net identifiable assets at the date of
Thailand
combination (except for businesses acquired that were not under common control, whereby net identifiable assets
18. Sura Piset Thipparat Co., Ltd.
Thailand
were measured at their fair value) was recorded as “Difference arising from common control transactions”, which is
19. Thai Alcohol PCL.
Thailand
shown as a reduction in shareholders’ equity.
Thailand
Thailand
In preparing the consolidated financial statements, those assets, liabilities, revenues and expenses that are clearly
22. Pomkung Co., Ltd.
Thailand
applicable to the businesses and operations transferred are included in the consolidated financial statements and
Thailand
are stated at their carrying values, after adjusting for intercompany transactions and transactions with the ultimate
Thailand
controlling shareholder. Expenses for which the specific identification method was not practical have been allocated
Thailand
on a percentage of sales basis. Management believes that this is a reasonable basis of estimating what the expenses
Thailand
would have been on a standalone basis.
Thailand
Annual Report 2007
142
143
Country of
Name of the entity
Country of
incorporation
Thailand
Thailand
Name of the entity
incorporation
Cambodia
Indirect subsidiary, 100% shareholding
Malaysia
Thailand
United States
Thailand
USA, Inc. (Formerly: InterBev USA Inc.)
Thailand
Thailand
68. International Beverage Holdings (UK) Limited
Thailand
35. Sunthronpirom Co., Ltd.
Thailand
Thailand
of America
Hong Kong
United Kingdom
Thailand
Indirect subsidiary, 80.82% shareholding
70. S P M Foods and Beverages Co., Ltd.
Thailand
Thailand
United Kingdom
Subsidiary of indirect subsidiary,
Thailand
Thailand
Direct subsidiary, 99.72% shareholding
Thailand
Thailand
Thailand
Thailand
44. Bang-Na Logistic Co., Ltd.
Thailand
Thailand
Thailand
Thailand
Thailand
49. International Beverage Holdings Ltd.
Hong Kong
Thailand
Thailand
Thailand
Thailand
54. Sura Piset Phatra Lanna Co., Ltd.
Thailand
55. Thai Thum Distillery Co., Ltd.
Thailand
56. Sura Piset Sahasan Co., Ltd.
Thailand
57. Sura Piset Sampan Co., Ltd.
Thailand
58. Muangkij Co., Ltd.
Thailand
59. Sint Ek Panich Co., Ltd.
Thailand
60. Pan Alcohol Co., Ltd.
Thailand
61. Banglen Agriculture Co., Ltd.
Thailand
62. Vitayathan Co., Ltd.
Thailand
Singapore
(Formerly: Pacific Spirits (UK) Limited)
100% shareholding
United Kingdom
100% shareholding
73. Blairmhor Distillers Limited
United Kingdom
100% shareholding
United Kingdom
100% shareholding
75. Speyburn-Glenlivet Distillery Company Limited
United Kingdom
100% shareholding
76. The Knockdhu Distillery Company Limited
United Kingdom
100% shareholding
77. The Pulteney Distillery Company Limited
United Kingdom
100% shareholding
78. The Balblair Distillery Company Limited
United Kingdom
100% shareholding
79. R. Carmichael & Sons Limited
United Kingdom
100% shareholding
80. J MacArthur Junior & Company Limited
United Kingdom
100% shareholding
81. Mason & Summers Limited
United Kingdom
100% shareholding
82. Hankey Bannister Limited
United Kingdom
100% shareholding
83. James Catto & Company Limited
United Kingdom
100% shareholding
84. Glen Calder Blenders Limited
United Kingdom
100% shareholding
Annual Report 2007
144
145
Country of
Name of the entity
85. Moffat & Towers Limited
Country of
incorporation
United Kingdom
Name of the entity
102. T.C.C. Technology Co., Ltd.
incorporation
Thailand
Directors and controlling shareholders hold
substantial shares indirectly
100% shareholding
United Kingdom
Associates of indirect subsidiary,
103. T.C.C. Capital Land Limited
Thailand
49.90% shareholding
Poland
104. Great Oriole Limited
40.00% shareholding
88. Inver House Distribution SA
France
105. Madrigal Trading Limited
50.00% shareholding
89. Pisetkij Co., Ltd.
Thailand
Thailand
Thailand
93. New Noble Property and Loan Fund
Thailand
Thailand
Have common controlling shareholders
British Virgin
Directors and shareholders are the directors
Islands
of subsidiary
106. Thai Glass Industries PCL.
Thailand
107. Bang-Na Glass Co., Ltd.
Thailand
108. Plaza Athenee Hotel (Thailand) Co., Ltd.
Thailand
are the directors and hold substantial shares
indirectly
Directors and controlling shareholders
investment fund
Thailand
109. TCC Hotel Collection Co., Ltd.
Thailand
are the principal unit holder of this real estate
94. The Maewang Sugar Industry Co., Ltd.
Directors and controlling shareholders are
relatives of controlling person
92. The Southeast Insurance (2000) Co., Ltd.
Islands
91. PS Recycle Co., Ltd.
British Virgin
90. Oishi Trading Co., Ltd.
110. Siam Realty Co., Ltd.
Thailand
95. The Chonburi Sugar Corp. Ltd.
Thailand
96. The Utaradit Sugar Industry Co., Ltd.
Thailand
Transactions
Pricing policies
Sale of finished goods
Agreed prices which approximate market prices
Rendering of services
Contractual prices
are the principal unit holder of this real estate
Purchase of raw materials
Agreed prices which approximate market prices
investment fund
Receiving of services
Contractual prices
Purchase and sale of property, plant and equipment
Contractual prices
Purchase and sale of investments
Contractual prices
Interest income and expense
Rate as mutually agreed by shareholders with reference
97. The Suphanburi Sugar Industry Co., Ltd.
98. Dynamic Assets Property and Loan Fund
99. Berli Jucker PCL.
100. Thai Beverage Can Co., Ltd.
Thailand
Thailand
Thailand
Thailand
50% shares
101. South East Capital Co., Ltd.
Thailand
The pricing policies for particular types of transactions are explained further below:
interest rates quoted by domestic commercial banks
Annual Report 2007
146
Significant transactions for the years ended 31 December 2007 and 2006 with related parties were summarised
147
Balances as at 31 December 2007 and 2006 with related parties were as follows:
as follows:
Consolidated
Separate
2007
2006
2007
Trade accounts receivable from related parties
2006
(in million Baht)
Subsidiaries
Consolidated
Separate
2007
2006
2007
2006
Management fees
-
-
2,577
3,432
Dividends
-
-
18,985
8,055
Purchases of investments
-
-
9,180
510
Oishi Trading Co., Ltd.
4
2
-
-
Interest income
-
-
773
844
Pisetkij Co., Ltd.
3
4
-
-
Interest expense
-
-
732
885
PS Recycle Co., Ltd.
3
7
-
-
Other income
-
-
9
5
Others
4
8
-
-
Other expenses
-
-
67
28
14
21
-
-
144
146
-
-
14
33
-
-
4,826
4,800
-
-
Overhead costs
225
177
-
-
Sales of property, plant and equipment
819
1
819
-
32
4
-
-
Other income
104
18
64
-
Other expenses
296
274
73
37
29
24
-
-
-
1,505
-
-
66
109
-
-
264
265
262
255
Other related parties
Revenue from sales
Service income
Purchases of raw materials and packaging
Purchases of property, plant and equipment
Share of profits from investments accounted
for using the equity method
Consideration paid for
common control transactions
Interest expense
Directors’ remuneration
(in million Baht)
Other related companies
Total
-
Sura Piset Thipparat Co., Ltd.
Thai Alcohol PCL.
Pomthip Co., Ltd.
Pomkit Co., Ltd.
Pomkung Co., Ltd.
Pomchok Co., Ltd.
Pomcharoen Co., Ltd.
Pomburapa Co., Ltd.
Num Yuk Co., Ltd.
-
Maharas Agri Co., Ltd.
-
T.C.C. Cosmo Corp., Ltd.
Sura Piset Phatra Lanna Co., Ltd.
Total subsidiaries
-
The Utaradit Sugar Industry Co., Ltd.
The Suphanburi Sugar Industry Co., Ltd.
Others
Total related companies
Total
-
The Chonburi Sugar Corp. Ltd.
-
New Noble Property And Loan Fund
The Maewang Sugar Industry Co., Ltd.
-
Pisetkij Co., Ltd.
Related companies
-
International Beverage Holdings Ltd.
(Formerly: Sahatipkarnkonsong Co., Ltd.
-
-
Piromsurang Co., Ltd
-
Sunthronpirom Co., Ltd.
-
-
-
-
-
Surathip Co., Ltd.
-
Num Muang Co., Ltd.
-
loans to
Subsidiaries (continued)
amounts due from related parties
Short-term
-
Short-term loans to and
-
-
Kankwan Co., Ltd.
-
Nateechai Co., Ltd.
-
Athimart Co., Ltd.
-
-
-
-
-
United Winery and Distillery Co., Ltd.
-
-
-
-
-
Sangsom Co., Ltd.
Red Bull Distillery (1988) Co., Ltd.
-
-
loans to
Short-term
Beer Thai (1991) PCL.
Subsidiaries
Short-term loans to and
2007
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
loans to
Short-term
4
4
2
-
-
-
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
4
4
2
-
-
-
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
51
51
-
8
-
12
7
8
6
3
7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
Amounts
2006
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
loans to
Short-term
2006
Amounts
Amounts
2007
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
Amounts
loans to
51
51
8
12
7
8
6
3
7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2007
3,548
-
-
-
-
-
368
-
-
-
-
-
-
-
-
-
368
2
-
1
-
-
-
1
3
17
42
38
7
5
9
8
due from
Amounts
2007
21
12
7
5
9
7
16
9
7
3
7
3
5
1
9
3
4
3
3
8
3
1
1
2
6
26
54
due from
Amounts
-
3,548
-
3
12
67
-
-
-
-
-
-
120
-
-
-
-
loans to
Short-term
-
85
-
-
-
-
-
-
124
-
431
219
519
-
-
-
-
-
-
-
182
-
-
-
-
-
1,786
(in million Baht)
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(in million Baht)
Total
Short-term
-
-
-
-
-
-
-
-
244
760
197
477
70
-
2,477
-
314
-
-
1,494
348
-
-
-
-
-
1,539
loans to
3,916
-
-
-
-
-
-
-
-
3,916
2
3
13
67
-
-
1
3
17
42
158
7
5
9
8
Total
9,367
-
-
-
-
-
-
-
-
9,367
-
-
1,276
50
13
23
-
-
-
-
85
-
-
-
-
loans to
Short-term
Separate financial statements
21
97
7
5
9
7
16
9
131
3
438
222
524
1
9
3
4
3
3
8
185
1
1
2
6
26
1,840
Total
Short-term
2006
1,668
-
-
-
-
-
-
-
-
1,668
-
-
8
-
-
-
14
61
72
190
203
30
25
47
39
due from
Amounts
2006
89
67
35
21
48
40
107
37
14
2
11
12
9
7
32
10
14
12
13
45
6
4
3
12
47
146
136
due from
Amounts
11,035
-
-
-
-
-
-
-
-
11,035
-
-
1,284
50
13
23
14
61
72
190
288
30
25
47
39
Total
89
67
35
21
48
40
107
37
258
762
208
489
79
7
2,509
10
328
12
13
1,539
354
4
3
12
47
146
1,675
Total
Total
Dynamic Assets Property and Loan Fund
Related companies
Total subsidiaries
Num Yuk Co., Ltd.
Thai Alcohol PCL.
Nateechai Co., Ltd.
Kankwan Co., Ltd.
Subsidiaries
Long-term loans to and
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
loans to
Long-term
2007
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
Amounts
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
loans to
Long-term
2006
14
14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
Amounts
14
14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,411
-
9,411
340
196
155
1,145
600
859
61
96
565
106
785
286
7
4,210
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
due from
loans to
(in million Baht)
Total
2007
Amounts
Long-term
9,411
-
9,411
340
196
155
1,145
600
859
61
96
565
106
785
286
7
4,210
Total
5,501
-
5,501
-
208
-
436
-
963
217
600
485
16
425
64
-
2,087
loans to
Long-term
2006
-
-
-
-
5,501
-
-
5,501
-
208
-
-
963
-
-
217
-
436
600
-
485
-
16
-
425
-
64
2,087
-
-
Total
due from
Amounts
151
Summary of loans to related parties
Consolidated
Separate
2007
2007
2006
2006
Total short-term loans to related parties
At 1 January
9,367
8,430
Increase
1,070
3,396
Decrease
(6,889)
(2,459)
At 31 December
3,548
9,367
At 1 January
41
-
Decrease
(41)
-
At 31 December
-
At 1 January
41
9,367
8,430
Increase
1,070
3,396
Decrease
(6,889)
(2,459)
At 31 December
3,548
9,367
(41)
-
2007
2006
(in million Baht)
Short-term loans
3,548
9,367
Long-term loans
9,411
5,501
Total loans to related parties
12,959
14,868
Movements during the years ended 31 December 2007 and 2006 of loans to related parties were as follows:
Consolidated
Separate
2007
2006
(in million Baht)
Short-term loans
Subsidiaries
-
Surathip Co., Ltd.
-
-
-
819
Num Muang Co., Ltd.
680
-
-
-
-
5
14
-
Others
Num Yuk Co., Ltd.
-
-
-
Pomburapa Co., Ltd.
60
-
10
Pisetkij Co., Ltd.
-
-
-
-
Pomchok Co., Ltd.
74
Pomkung Co., Ltd.
46
-
PS Recycle Co., Ltd.
Pomkit Co., Ltd.
-
-
-
Pomthip Co., Ltd.
126
-
139
Thai Beverage Can Ltd.
-
-
-
-
554
471
-
Berli Jucker PCL.
Athimart Co., Ltd.
Other related companies
-
(in million Baht)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2006
2007
-
-
Separate
-
Consolidated
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
64
81
10
189
65
100
-
-
406
-
-
-
25
29
80
39
193
-
50
45
-
-
-
-
129
(in million Baht)
loans from
Short-term
5,501
-
9,411
-
-
-
(773)
-
At 31 December
(776)
-
-
-
-
-
Decrease
Sangsom Co., Ltd.
964
-
4,686
-
-
-
-
-
Increase
-
5,310
5,501
Subsidiaries
Trade accounts payable - related parties
Total
-
due to
-
Amounts
At 1 January
loans from
Subsidiaries
Short-term
1
1
5
9
-
-
-
-
2
-
1
1
2
2
4
2
2
1
-
-
-
-
-
-
12
due to
Amounts
Long-term loans
Total
65
82
15
198
65
100
-
-
408
-
1
1
27
31
84
41
195
1
50
45
-
-
-
-
141
Total
674
1,012
594
474
175
126
170
95
1,249
120
333
123
323
311
1,395
305
50
286
396
193
130
92
200
1,052
964
loans from
Short-term
4
6
3
3
1
-
1
-
5
-
2
1
2
1
7
2
2
1
2
1
-
-
1
5
18
due to
Amounts
2006
678
1,018
597
477
176
126
171
95
1,254
120
335
124
325
312
1,402
307
52
287
398
194
130
92
201
1,057
982
Total
152
due to
(in million Baht)
Amounts
2006
loans from
2006
2007
Short-term
2007
2006
amounts due to related parties
2007
Short-term loans from and
2007
2006
Separate
2007
Total
Consolidated
Annual Report 2007
Total
Total related companies
Others
Great Oriole Limited
Plaza Athenee Hotel (Thailand) Co., Ltd.
(Formerly: Queen’s Park Hotel Group Co., Ltd.
TCC Hotel Collection Co., Ltd.
T.C.C. Technology Co., Ltd.
South East Capital Co., Ltd.
The Southeast Insurance (2000) Co., Ltd.
Related companies
Total subsidiaries
Dhospaak Co., Ltd.
Bang-Na Logistic Co., Ltd.
Subsidiaries (continued)
amounts due to related parties
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
loans from
Short-term
2007
69
69
5
-
10
10
11
14
19
-
-
-
-
-
-
-
-
-
-
-
-
-
due to
Amounts
69
69
5
-
10
10
11
14
19
-
-
-
-
-
-
-
-
-
-
-
4,615
4,615
-
4,615
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
loans from
Total
Short-term
2006
222
222
7
129
11
7
10
17
41
-
-
-
-
-
-
-
-
-
-
-
-
-
due to
Amounts
loans from
4,837
4,837
7
4,744
11
7
10
17
41
-
-
-
-
-
-
-
-
-
-
-
-
-
2,040
-
-
-
-
-
-
-
-
2,040
35
-
177
-
-
150
30
-
-
-
22
121
(in million Baht)
Total
Short-term
2007
75
10
-
-
-
1
7
2
-
65
-
1
3
1
14
1
-
-
-
-
-
-
due to
Amounts
2,115
10
-
-
-
1
7
2
-
2,105
35
1
180
1
14
151
30
-
-
-
22
121
Total
12,984
-
-
-
-
-
-
-
-
12,984
20
100
1,690
-
30
-
-
161
55
25
61
-
loans from
Short-term
2006
101
7
-
-
-
-
5
2
13,085
7
-
-
-
-
5
2
-
-
20
-
13,078
101
1
94
1,701
-
43
11
-
13
-
-
-
162
55
25
1
-
-
61
-
-
Total
due to
Amounts
155
The currency denomination of short-term loans from and amounts due to related parties as at 31 December was
as follows:
currencies of foreign subsidiaries
United States Dollars (USD)
Total
Consolidated
Separate
2007
69
2007
2006
(in million Baht)
Thai Baht (THB) and other functional
4,621
2006
2007
2006
2,115
13,085
216
-
69
4,837
2,115
13,085
Consolidated
Separate
2007
2006
(in million Baht)
Subsidiaries
2,910
2,525
90
-
104
-
133
-
210
344
Pomthip Co., Ltd.
329
140
Pomkit Co., Ltd.
682
208
Pomkung Co., Ltd.
309
-
Pomchok Co., Ltd.
426
250
115
-
Pomburapa Co., Ltd.
284
163
101
-
178
189
78
99
22
10
-
71
15
10
-
50
-
Dhospaak Co., Ltd.
10
10
320
407
107
-
13
-
Total
6,540
4,372
Annual Report 2007
156
157
Summary of loans from related parties
Consolidated
Separate
2007
2006
2007
Consolidated
Separate
2007
2006
2007
2006
(in million Baht)
2006
Long-term loans
(in million Baht)
Short-term loans
-
4,615
2,040
12,984
Subsidiaries
Long-term loans
-
-
6,540
4,372
At 1 January
-
-
4,372
2,733
Total loans from related parties
-
4,615
8,580
17,356
Increase
-
-
2,443
1,704
Decrease
-
-
At 31 December
-
-
Movements during the years ended 31 December 2007 and 2006 of loans from related parties were as follows:
(275)
6,540
(65)
4,372
Significant agreements with related parties
Loans from related parties
Consolidated
Separate
2007
2006
2007
Supporting service agreement
2006
The Company entered into the supporting service agreement with subsidiaries for the supporting service such as
human resource, administration, accounting, finance, public relations, public co-ordination, technology, law, secretary
(in million Baht)
and share register and internal audit for the period of one year from 1 January 2004 to 31 December 2004. Unless there
Short-term loans
are notifications to terminate the agreement within 30 days before the expiry date, this agreement continues to be in
Subsidiaries
effect for the successive one year term. The subsidiaries are committed to pay a service fee at the rate of 0.5% of their
At 1 January
-
-
12,984
12,808
Increase
-
-
459
3,638
Decrease
-
-
(11,403)
(3,462)
At 31 December
-
-
2,040
12,984
principal revenue.
Up to date, supporting service fee rate was adjusted to 1% of the principal revenue. Service fee rate was adjusted for
development of new goods, experiment and quality test, analysis, research and marketing survey for new products and
procurement of information.
At 1 January
Increase
Decrease
At 31 December
4,615
4,015
-
-
-
630
-
-
(30)
-
-
party, for the providing ongoing support and maintenance of the systems and infrastructure and is committed to pay
-
-
system, hardware and software rental fee and service fee on monthly basis throughout the contract period for
(4,615)
-
4,615
Application service provisioning agreement
The Company entered into the application service provisioning agreement with T.C.C. Technology Co., Ltd., a related
five years.
Total short-term loans from related parties
At 1 January
Increase
Decrease
At 31 December
4,615
4,015
12,984
12,808
-
630
459
3,638
The Group entered into the procurement agreement with Pan International (Thailand) Company Limited, the Company’s
(11,403)
(3,462)
subsidiary, for necessary purchase and procurement services to the Group. The Group is committed to pay procurement
2,040
12,984
fee at 1% of the value of goods and services purchased under such agreement.
(4,615)
-
(30)
4,615
Procurement agreement
Annual Report 2007
158
Molasses purchase agreement
159
The currency denomination of cash and cash equivalents as at 31 December was as follows:
Thai Molasses Co., Ltd., the Company’s subsidiary, entered into the molasses purchase agreement with various related
companies in order to sell to other subsidiary companies within the Group. The term and condition as specified in the
Consolidated
Separate
agreements is that the sellers would sales molasses to the buyers in specified quantity, price, quality, delivery and
2007
received, payments, responsibility, weight, sample analysis on molasses, and quality control, etc. These were mutually
2006
2007
2006
(in million Baht)
agreed by the parties.
Glass bottle purchase and sale agreement
Bang-Na Logistic Co., Ltd., the Company’s subsidiary, entered into the glass bottle purchase and sale agreement with
Berli Jucker Public Company Limited, a related party, to purchase various types of new glass bottles in order to sell to
other subsidiaries within the Group for a period of two years and eight months, effective date from 1 May 2007 to 31
December 2009 under the price and condition stated in the contract.
Euro (EUR)
Total
2,015
1,899
9
16
174
15
-
-
-
6
-
-
2,189
1,920
9
16
7. Other investments
License agreement
- Three subsidiaries entered into license agreements with Beer Chang Co., Ltd. and Archa Beer Co., Ltd., related
companies, in order to receive the rights and obligations in drinking water, soda water, beer, draft beer and lager beer
Consolidated
Separate
2007
under the trade names of “CHANG” and “ARCHA”. Subsidiaries are committed to pay fee at a rate of 2% based on
net sale at price distributing at the factory (excluding VAT) after deducting the excise tax and health promotion fund.
2006
2007
2006
(in million Baht)
Current investments
Short-term deposits at financial institutions
8
4
-
-
8
8
-
-
(4)
(4)
-
-
4
4
-
-
12
8
-
-
- Sura Bangyikhan Co., Ltd., the Company’s subsidiary, entered into license agreements with 12 subsidiaries to
provide the rights to use trademark for white liquor and Chiang - Chun blended liquor as stipulated in the agreement.
Other long-term investments
The trademark fee the rate ranging from Baht 0.50 - 1.50 per bottle based on contents of each type of bottles.
Other non-marketable equity securities
Less allowance for decline in value of investments
Net
6. Cash and cash equivalents
Total
Consolidated
Separate
2007
2006
8. Trade accounts receivable
2007
2006
(in million Baht)
33
33
-
-
Cash at banks - current accounts
1,203
1,186
1
1
Cash at banks - savings accounts
786
412
8
15
Highly liquid short-term investments
167
289
-
-
2,189
1,920
9
16
Cash on hand
Total
Note
Consolidated
Separate
2007
2006
2007
2006
(in million Baht)
Related parties
Other parties
Less allowance for doubtful accounts
Total
Bad and doubtful debts expenses for the year
5
14
21
-
-
1,608
1,321
-
-
1,622
1,342
-
-
-
-
(155)
(24)
1,467
1,318
-
-
20
35
-
-
Annual Report 2007
160
161
9. Inventories
Aging analyses for trade accounts receivable were as follows:
Consolidated
Separate
2007
2006
2007
2006
Consolidated
Separate
2007
(in million Baht)
18
-
-
4
3
-
-
14
21
-
-
Other parties
Within credit terms
979
940
14,659
-
-
Work in progress
3,769
3,423
-
-
Raw materials
1,938
1,390
-
-
593
582
-
-
8,310
8,161
-
-
Spare parts
455
489
-
-
-
-
Others
290
251
-
-
28,842
28,955
-
-
-
-
-
-
Packaging materials
Maturing spirits
Overdue:
Less than 3 months
2006
13,487
Finished goods
10
Overdue:
Less than 3 months
2007
(in million Baht)
Related parties
Within credit terms
2006
Less allowance for obsolete inventories
(785)
(640)
353
340
-
-
3-6 months
64
17
-
-
6-12 months
72
19
-
-
140
5
-
-
The cost of inventories which is recognized as an expense and included in ‘cost of sale of goods’ for 2007 amounted
1,608
1,321
-
-
to Baht 69,685 million (2006: Baht 67,560 million).
-
-
Over 12 months
(155)
(24)
Net
1,453
1,297
-
-
Total
1,467
1,318
-
-
Net
28,057
10. Other current assets
The normal credit term granted by the Group ranges from 7 days to 180 days.
Consolidated
Separate
2007
The currency denomination of trade accounts receivable as at 31 December was as follows:
Separate
2006
2007
2006
(in million Baht)
1,259
-
-
90
24
-
-
Australian Dollar (AUD)
1
-
-
-
Euro (EUR)
-
30
-
-
Others
-
5
-
-
1,467
1,318
-
-
Total
2007
2006
Prepaid excise tax
583
688
-
-
Refundable VAT
207
381
3
9
Prepaid property tax
154
152
-
-
Refundable excise tax
135
102
-
-
Prepaid expenses
103
56
4
1
92
374
-
-
148
179
1
7
1,422
1,932
8
17
-
-
8
17
Deposits
1,376
2006
(in million Baht)
Consolidated
2007
28,315
Others
Net
(18)
1,404
(18)
1,914
Total
At 1 January
Share of profits of investments - equity method
Acquisitions
Disposals
Recovery of investments
Translation differences on consolidation
At 31 December
Consolidated
Separate
2007
2007
(33)
124
2006
2006
135
129
63,595
63,085
29
24
-
9,180
510
-
(18)
2007
2006
(in million Baht)
1,403
1,913
8
17
1
1
-
1,404
1,914
8
17
11. Investments in subsidiaries and associates
Consolidated
Separate
2007
2006
(in million Baht)
-
(7)
-
135
71,470
63,595
(1,305)
-
44.00
50.02
Inver House Polska Limited
Inver House Distribution SA
79
2
8
69
2006
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Sangsom Co., Ltd.
Athimart Co., Ltd.
2007
(%)
100.00
100.00
2007
56
1
4
51
124
-
-
124
(in million Baht)
2006
800
900
4,000
700
700
700
900
7,500
6,600
5,550
2007
800
900
4,000
700
700
700
900
7,500
6,600
5,550
2006
Paid-up capital
2006
800
900
4,000
700
700
700
900
7,500
12,500
12,500
800
900
4,000
700
700
700
900
7,500
12,500
12,500
(in million Baht)
2007
Cost method
135
-
-
135
2006
Equity method
23
1
4
18
2007
Cost method
17
398
273
628
85
57
-
307
750
2,277
2,259
2007
-
-
17
2006
129
109
60
32
25
25
104
840
1,089
821
2006
Dividend income
-
-
-
-
2007
Dividend income
162
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
2006
Ownership interest
79
2
8
69
100.00
50.02
44.00
49.49
2007
Direct subsidiaries
Total
49.49
Liquorland Limited
Held by subsidiaries of indirect subsidiaries
Associates
(%)
2006
Paid-up capital
The currency denomination of other current assets as at 31 December was as follows:
2007
Ownership interest
Investments in subsidiaries and associates as at 31 December 2007 and 2006, and dividend income from those investments for the years then ended were as follows:
Annual Report 2007
163
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Nateechai Co., Ltd.
Thai Alcohol PCL.
Pomthip Co., Ltd.
Pomkit Co., Ltd.
Pomkung Co., Ltd.
Pomchok Co., Ltd.
Pomburapa Co., Ltd.
Num Yuk Co., Ltd.
Num Muang Co., Ltd.
Surathip Co., Ltd.
100.00
100.00
99.72
100.00
100.00
100.00
100.00
100.00
Maharas Agri Co., Ltd.
Bang-Na Logistic Co., Ltd.
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Dhanasindhi Co., Ltd.
Dhospaak Co., Ltd.
T.C.C. Cosmo Corp., Ltd.
Archa beer Co., Ltd.
Total
100.00
(Formerly: Sahatipkarnkonsong Co., Ltd.)
100.00
100.00
100.00
2007
Direct subsidiaries (continued)
100.00
(%)
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
2006
(%)
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.72
100.00
100.00
100.00
100.00
2006
Ownership interest
100.00
Kankwan Co., Ltd.
Direct subsidiaries (continued)
2007
Ownership interest
1
5
1
10
10
10
10
10
10
10
10
10
10
10
10
800
500
800
800
900
1,800
3,000
700
800
2006
50,917
600
1
1
5
1,667
6,760
25
20
300
12
123
300
122
1
1
40
2
350
5
5
2007
41,752
-
1
1
5
1,667
535
25
20
300
12
123
300
122
1
1
40
2
10
5
5
2006
Paid-up capital
2006
7
27
3
10
10
10
10
10
10
10
10
10
10
10
10
1,374
510
766
800
889
1,800
5,000
700
800
2006
71,470
615
130
4,301
39
4,212
6,760
61
24
300
12
134
296
84
34
32
35
2
354
24
25
63,595
-
130
4,301
39
5,150
535
61
24
300
12
134
300
84
54
38
35
2
14
24
25
(in million Baht)
2007
Cost method
7
27
3
10
10
10
10
10
10
10
10
10
10
10
10
1,666
510
800
800
900
1,800
3,000
700
800
(in million Baht)
2007
Cost method
1
5
1
10
10
10
10
10
10
10
10
10
10
10
10
800
500
800
800
900
1,800
5,000
700
800
2007
Paid-up capital
413
234
233
196
119
267
170
604
247
93
18,985
-
72
277
5
672
-
20
27
100
118
75
28
-
60
42
165
-
-
711
1,075
2007
-
155
74
116
100
120
-
24
38
23
67
-
95
122
2006
8,055
-
1
96
-
257
-
-
8
7
23
30
8
-
19
12
63
-
-
350
437
2006
Dividend income
649
359
573
413
238
528
387
1,424
858
382
26
534
275
570
292
66
-
35
157
138
70
-
190
340
2007
Dividend income
Annual Report 2007
164
165
-
Disposals
-
Transfers
Disposals
-
Transfers
Disposals
-
on consolidation
At 31 December 2007
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
revaluation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
558
-
-
-
81
477
-
(1)
224
53
201
-
-
-
-
6,425
26,440
(28)
(63)
(8)
(19)
(16)
3,666
22,881
-
(48)
86
3,171
19,672
5.97
9
5.82
121
(in million Baht)
equipment
6
792
5,654
(2)
(4)
(261)
733
5,188
5.97
4
5.82
33
improvement improvements
1,501
(8)
-
-
134
1,375
-
-
-
134
1,241
-
-
-
-
Oak barrels
432
-
(8)
11
83
346
-
(9)
(34)
76
313
-
-
-
-
equipment
and office
fixtures
and
Machinery
and
659
-
(9)
12
-
-
-
60
596
Building
Total
2,788
(17)
(5)
-
-
-
-
26
2,784
-
(11)
(35)
-
80
562
equipment
land
Land
43,569
(46)
(85)
2,191
-
-
-
199
41,310
-
-
-
-
31
2,753
17,118
(62)
(12)
719
-
-
-
85
16,388
-
(92)
5,439
-
1,073
34,890
Oak barrels
surplus on
1,299
(1)
-
145
-
-
-
1
1,154
(4)
(7)
796
-
201
15,402
(in million Baht)
equipment
Furniture
12,534
(1)
(545)
(2)
(59)
(2,794)
731
357
14,847
-
(2)
434
-
2
720
Land
4,389
-
(135)
-
-
(2,794)
731
-
6,587
-
(1)
(1)
-
-
3
424
14,421
-
3
-
6,585
revaluation
and office
fixtures
and
and
land
Land
Furniture
Machinery
Building
Land
surplus on
2,515
-
(21)
(1)
167
2,370
-
(22)
(15)
314
2,093
-
-
-
-
Vehicles
2,695
-
(26)
(1)
-
-
-
23
2,699
-
(25)
(21)
-
29
2,716
Vehicles
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
in progress
Construction
425
-
(210)
(3,064)
-
-
-
946
2,753
-
(1)
(6,613)
-
2,199
7,168
in progress
Construction
37,871
(55)
(100)
-
4,923
33,103
(2)
(84)
-
4,481
28,708
5.97
13
5.82
154
Total
81,087
(127)
(892)
-
(59)
(2,794)
731
1,697
82,531
(4)
(139)
-
3
4,039
78,632
Total
166
Translation differences
-
Depreciation charge for the year
1 January 2007
At 31 December 2006 and
on consolidation
-
-
-
-
-
-
Cost
8,145
At 1 January 2006
Accumulated depreciation
during 2007 (% per annum)
Rate of interest capitalised
during 2007 (note 24)
Finance costs capitalised
during 2006 (% per annum)
Rate of interest capitalised
during 2006 (note 24)
At 31 December 2007
on consolidation
(1)
(410)
Disposals
(2)
Transfers
(59)
-
Reversal of revaluation
Loss on revaluation
-
357
8,260
Surplus on revaluation
Additions
1 January 2007
on consolidation
-
-
Transfers
-
424
7,836
Surplus on revaluation
Additions
At 1 January 2006
Cost/revaluation
Cost
12. Property, plant and equipment
Annual Report 2007
167
8,145
-
8,145
8,260
-
8,260
land
4,389
-
4,389
6,587
-
6,587
revaluation
12,534
-
12,534
14,847
-
14,847
Total
and
741
-
741
677
-
677
10,693
-
10,693
10,734
-
10,734
Land
Building
17,129
-
17,129
18,429
-
18,429
(in million Baht)
equipment
and
Machinery
1,287
-
1,287
1,409
-
1,409
Oak barrels
227
-
227
250
-
250
equipment
and office
fixtures
Furniture
180
9
171
329
11
318
Vehicles
Total
49,417
11
49,428
43,207
9
43,216
in progress
2,753
2,753
425
425
Construction
The carrying amount of idle land which is held for planned future business operations as at 31 December 2007 amounted to Baht 1,721 million (2006: Baht 1,516 million).
31 December 2007 amounted to Baht 31,238 million (2006: Baht 34,530 million).
The net book value of property, plant and equipment of certain subsidiary companies used as security under the Negative Pledge agreement as disclosed in Note 15 as at
The gross carrying amount of fully depreciated plant and equipment that was still in use as at 31 December 2007 amounted to Baht 4,264 million (2006: Baht 3,026 million).
Total at 31 December 2007
Assets under finance leases
Owned assets
Total at 31 December 2006
Assets under finance leases
Owned assets
Net book value
Cost
Land
surplus on
Annual Report 2007
168
169
Separated financial statements
Cost
At 1 January 2006
1 January 2007
Additions
Disposals
411
134
545
68
24
121
758
Additions
27
100
127
Disposals
(11)
(11)
411
134
545
95
24
210
874
5
1
6
(1)
At 31 December 2007
1 January 2007
(411)
surplus on
Land
Furniture,
fixtures
land
and office
revaluation
Total
(134)
2007
equipment
(545)
Vehicles
Construction
in progress
Total
(in million Baht)
Cost/revaluation
2006
(210)
(756)
Accumulated depreciation
Net book value
100
23
1
124
At 1 January 2006
5
2
7
17
4
21
22
6
28
19
5
24
At 31 December 2007
41
11
52
At 31 December 2006
411
134
545
73
18
210
846
At 31 December 2007
59
12
1
72
Depreciation of plant and equipment for the years ended 31 December was as follows:
Consolidated
Separate
2007
2006
(in million Baht)
Included in cost of production
3,086
2,880
-
Included in selling and administrative expenses
1,837
1,601
24
21
Total
4,923
4,481
24
21
Annual Report 2007
170
171
13. Intangible assets
Separate
Computer software
Computer
Goodwill
software
(in million Baht)
Broadcasting
Trademark
rights
Leasehold
Total
(in million Baht)
Cost
At 1 January 2006
Additions
426
16
307
162
1
912
-
9
3
-
1
13
426
25
310
162
2
925
Additions
659
10
17
-
-
686
Decrease
-
-
-
-
(162)
(162)
on consolidation
At 31 December 2007
(19)
1,066
-
-
-
-
35
327
-
2
(19)
1,430
Accumulated amortisation
At 1 January 2006
Amortisation charge for the year
At 1 January 2006
9
Additions
7
At 31 December 2006 and 1 January 2007
16
Additions
9
At 31 December 2007
1 January 2007
Cost
25
Accumulated amortisation
At 1 January 2006
1
3
At 31 December 2006 and 1 January 2007
4
5
At 31 December 2007
9
Net book value
175
2
183
38
1
399
18
4
25
124
-
171
193
6
208
162
1
570
18
6
27
-
-
51
-
-
-
-
(162)
(8)
-
-
-
-
(8)
12
235
-
1
At 31 December 2006
12
At 31 December 2007
16
1 January 2007
Decrease
(162)
14. Other non-current assets
on consolidation
At 31 December 2007
203
Note
Consolidated
Separate
2007
451
2007
2006
(in million Baht)
Advance payments to a specialist
Net book value
2006
Idle land
31
1,829
1,879
343
352
106
106
-
-
At 31 December 2006
233
19
102
-
1
355
Stainless steel plates
67
71
-
-
At 31 December 2007
863
23
92
-
1
979
Deposits
65
58
8
5
Others
20
13
-
-
2,087
2,127
351
357
-
-
351
357
Less allowance for impairment of assets
Net
(14)
2,073
(5)
2,122
Annual Report 2007
172
15. Interest-bearing liabilities
173
The periods to maturity of interest-bearing liabilities as at 31 December were as follows:
Note
Consolidated
Separate
2007
2006
2007
2006
Consolidated
Separate
2007
(in million Baht)
2006
2007
2006
(in million Baht)
Current
Within one year
Bank overdrafts
Secured
899
1,516
-
-
Unsecured
101
367
-
30
4,998
4,870
4,798
3,000
5,998
6,753
4,798
3,030
Short-term loans from financial institutions
After one year but within five years
Total
10,753
17,368
11,593
22,014
5,400
6,755
11,940
11,127
16,153
24,123
23,533
33,141
As at 31 December 2007 the Group had unutilized credit facilities totalling Baht 24,724 million (2006: Baht 17,790 million).
Unsecured
Bank overdraft and short-term
loans from financial institutions
The principal features of the borrowings were as follows:
(a) Bank overdrafts are repayable on demand as at 31 December 2007, the Group has a total overdraft facilities
Guaranteed / Negative pledge
-
2,200
-
2,200
amounting to Baht 3,714 million (2006: Baht 3,705 million) which is partially guaranteed by five subsidiaries.
(b) Short-term loans from financial institutions as at 31 December 2007, the Group has short-term loan facilities from
guaranteed bonds
several financial institutions totalling Baht 25,010 million (2006: Baht 20,820 million) with money market rate quoted by
3,000
2,300
3,000
2,300
bank. The Group utilized those facilities in term of promissory notes issued by the Group to several domestic financial
institutions totalling Baht 3,000 million (2006: Baht 4,870 million).
Current portion of long-term loans
1,755
1,500
1,755
1,500
In September 2007, the Company issued and offered short-term bill of exchange amounting to Baht 5,000 million to two
Short-term loans from related parties
financial institutions, the said bills represents short-term bill of exchange offered to and exchanged among institutional
5
Unsecured
-
4,615
2,040
12,984
investors and/or substantial high net worth investors as prescribed in accordance with Notifications of the Securities
10,753
17,368
11,593
22,014
and Exchange Commission. As at 31 December 2007, the outstanding balance of bill of exchange was amounting to
Non-current
Baht 2,000 million.
-
3,000
-
3,000
(c) Guaranteed bonds as at 31 December 2007 and 2006 were guaranteed bonds with a full co-guarantee by four
subsidiaries and negative pledge undertaken by the Company whereby 17 subsidiaries agree not to sell, transfer,
Long-term loans from financial institutions
mortgage, pledge, encumber or grant any preferential right in relation to their land, buildings, plants and machinery.
Unsecured
-
3,755
-
3,755
5,400
-
5,400
-
The Company is required to maintain a consolidated debt (interest-bearing debt) to equity (excluding unrealised foreign
exchange gain or loss) ratio of not more than 2.5 to 1 based on the annual consolidated financial statements prepared
Unsecured
Total
in accordance with generally accepted accounting standards in Thailand.
5
-
-
6,540
4,372
5,400
6,755
11,940
11,127
16,153
24,123
23,533
33,141
Annual Report 2007
174
175
16. Trade accounts payable
The bonds have the following payment terms:
Maturity
Consolidated
Separate
Amount
Fixed interest rate
(in million Baht)
(% per annum)
First tranche
2,500
4.95
22 August 2006
Second tranche
2,200
5.40
22 February 2007
680
Third tranche
2,300
5.55
22 August 2007
Other parties
1,569
Fourth tranche
3,000
5.75
22 February 2008
Total
2,249
2,276
Note
The principal is to be redeemed at maturity. Interest is payable semi-annually commencing on 22 August 2006.
2007
2007
2006
819
-
-
1,457
-
-
-
-
(in million Baht)
Related parties
5
The currency denomination of trade accounts payable as at 31 December was as follows:
(d) Long-term loan and its current portion as at 31 December 2006 were loan agreements with eight financial institutions
to obtain long-term borrowings totalling Baht 26,600 million. Of this, the principal of Baht 23,600 million has a grace
Consolidated
Separate
2007
period of 2 years and is to be repaid in 36 monthly installments, Baht 654.22 million each for the first 35 installments and
Baht 702.20 million for the last installment, from 28 April 2008 to 31 March 2011 with interest at the fixed rates of 5.75%
2006
2006
2007
2006
(in million Baht)
Thai Baht (THB) and other functional currencies
and 6% per annum for the first and the second years, respectively, and MLR-1.5% to MLR-1.75% per annum from the
of foreign subsidiaries
third year onwards, payable monthly, commencing in March 2006. The remaining principal of Baht 3,000 million is to be
2,039
1,984
-
-
94
104
-
-
repaid in eight quarterly installments, Baht 375 million each, from 28 June 2006 to 28 March 2008 with a fixed interest
Euro (EUR)
69
108
-
-
rate of 5.70% per annum, payable quarterly, commencing in June 2006.
Great Britain Pound (GBP)
46
74
-
-
1
6
-
-
2,249
2,276
-
-
Australian Dollar (AUD)
The borrowings are fully co-guaranteed by four subsidiaries with a negative pledge made by 17 subsidiaries whereby
Total
these subsidiaries agree not to sell, transfer, mortgage, pledge, encumber or grant any preferential right in relation to
their land, buildings, plant and machinery.
17. Other current liabilities
In 2006 and May 2007, the Company partially repaid long-term loans amounting to Baht 20,220 million and Baht 2,000
million, respectively, with accrued interest to seven financial institutions and the interest rate in the second year
Consolidated
Separate
2007
of Baht 4,500 million which is to be repaid monthly in 12 installments, Baht 375 million each, commencing in February
2009. Interest is payable monthly at 5.60% per annum for the first year and 5.75% per annum afterwards.
Subsequently on 19 October 2007, the Company has been granted the reduction of interest rate to be 4.50% per annum
for the first year and 4.75% per annum afterwards. The Company was charged an unwind fee of Baht 11.25 million for
this change.
2007
2006
(in million Baht)
decrease from 6% to 5% per annum.
During February 2007, the Company entered into a long-term loan agreement with a financial institution in the amount
2006
Accrued expenses
737
883
9
90
Value added tax payable
672
687
35
105
506
1,005
-
-
Assets payable
372
418
-
5
Outstanding cheque paid for excise tax
281
295
-
-
Accrued promotion expense
252
133
-
-
Withholding tax payable
128
79
30
22
Accrued interest expense
71
163
67
157
Deposits and retention payable
38
273
-
3
Advanced payments from
customers for purchase of goods
During December 2007, the Company entered into a long-term loan agreement with a financial institution in the amount
Others
of Baht 900 million which is to be repaid in 2009. The interest is payable monthly at 3.9625% per annum.
Total
146
167
21
12
3,203
4,103
162
394
Annual Report 2007
176
The currency denomination of other current liabilities as at 31 December was as follows:
177
The Company listed on the SGX-ST on 29 May 2006 received net proceeds of Baht 16,191.60 million from the issue
of 2,444.45 million new ordinary shares, sold to the public through an Initial Public Offering (the “IPO”) at a price of
Consolidated
Separate
Singapore Dollar 0.28 per share. Directly attributable expenses for the IPO amounting to Baht 676.49 million are
accounted for as a deduction from the premium on share capital received from the IPO. The Company registered the
2007
2006
2007
2006
change in paid-up capital with the Ministry of Commerce on 29 May 2006 from Baht 22,000 million to Baht 24,444.45
million.
(in million Baht)
Thai Baht (THB) and other functional currencies
of foreign subsidiaries
3,126
3,829
160
357
72
212
-
-
Great Britain Pound (GBP)
4
16
1
-
Singapore Dollars (SGD)
1
1
1
-
-
42
-
37
Others
-
3
-
-
3,203
4,103
162
394
Euro (EUR)
On 3 July 2006, an over allotment option was exercised related to its recent IPO, whereby the Company sold a further
665.58 million new ordinary shares, raising Baht 4,390.54 million in proceeds. The Company registered the change in
paid-up capital with the Ministry of Commerce on 3 July 2006 from Baht 24,444.45 million to Baht 25,110.03 million.
Total
19. Reserves
Share premium
Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received
in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available
18. Share capital
for dividend distribution.
Par value
per share
2007
Number
(in Baht)
2006
Amount
Number
Amount
The currency translation changes recognized in shareholders’ equity relate to foreign exchange differences arising
from translation of the financial statements of foreign operations to Thai Baht.
(million shares/million Baht)
Authorised
At 1 January and 31 December
1
29,000
29,000
29,000
29,000
Fair value changes and revaluation surpluses
Fair value changes and revaluation surpluses recognised in shareholders’ equity relate to cumulative net changes in the
fair value of available-for-sale investments and surpluses arising from the revaluations of land.
Issued and paid
At 1 January
1
25,110
25,110
22,000
22,000
Issue of new shares
1
-
-
3,110
3,110
At 31 December
1
25,110
25,110
25,110
25,110
Legal reserve
Section 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5% of its
annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this
account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available
for dividend distribution.
20. Segment information
Segment information is presented in respect of the Group’s business and geographical segments. The primary format,
business segments is based on the Group’s management and internal reporting structure.
Annual Report 2007
10,055
4,323
1,569
15,947
82,009
12,684
69,325
97,956
102
2006
10,383
4,847
1,047
16,277
84,562
13,689
70,873
100,839
41
257
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
100,541
2007
Total
56
179
97,798
178
(21)
34
(32)
(168)
7,945
9
3
2,325
(4)
62
38
34
39
(127)
11,472
1,202
(25)
(1,085)
(1,025)
1,172
1,112
38
178
140
6,740
40,210
(2)
(1,083)
(1,063)
994
972
1,211
985
51,682
4
18
2
1
1,205
8,815
2,652
731
12,198
40,979
7,055
33,924
2007
located in foreign countries.
53,177
directly or indirectly through foreign subsidiaries to external customers. Certain operating units of subsidiaries are
220
Spirits
Operating units of the Group are mainly located in Thailand. Portions of product produced from these units are exported
76
Geographic segments
30
Production and sales of alcohol (mostly outside the group)
17
Alcohol
966
Production and sales of branded spirits products (mostly outside the group); and
52,940
Spirits
2007
Production and sales of branded beer and water products (mostly outside the group);
2006
Beer/water
Alcohol
The Group comprises the following main business segments:
51,576
2006
Business segments
(in million Baht)
Inter-segment transactions are eliminated on consolidation.
33,470
(1,110)
(991)
(20)
(69)
(4)
-
2007
indication of the actual use of the liabilities.
(922)
to a particular segment are allocated on a percentage of net assets basis. Management believes this to be a fair
2006
Elimination
In preparing segmental information, those liabilities and related interest expense that are not specifically attributable
(1,086)
allocated on a reasonable basis.
In presenting information on the basis of geographical segments, segment revenue is based on the geographical
2,163
1,702
Net profit (loss)
1,989
2,192
Income tax expense
309
278
Interest expense
4,461
and income tax expenses
Profit (loss) before interest
4,172
41,712
43,496
Total expenses
5,768
6,456
expenses
35,944
37,040
Cost of sales
46,173
47,668
Total revenues
42
88
Other income
28
23
Interest income
46,103
47,557
Revenue from sales
Business segment results
2007
Beer/water
2006
location of customers. Segment assets are based on the geographical location of the assets.
Annual Report 2007
2006
28,315
49,428
7,837
85,580
24,123
8,903
33,026
4,039
13
4,481
171
28,057
43,216
8,254
79,527
16,153
8,464
24,617
1,697
686
4,923
51
181
Total
2007
180
Geographic segments
The segment financial information of the Group based on geographical segments for the year 2007 and 2006 was
-
126
-
69
743
50
693
3,051
567
2,209
2006
275
as follows:
Alcohol
Property, plant and
-
192
-
59
710
42
668
45
2,255
8
2,612
21,401
3,604
17,797
3,166
57,166
516
5,364
2,169
26,600
481
25,202
(in million Baht)
2007
2006
2007
2006
Thailand
97,200
95,106
41,613
47,928
Overseas
3,639
2,850
1,603
1,500
100,839
97,956
43,216
49,428
Total
47
Consolidated
Separate
126
2007
2006
2007
2006
(in million Baht)
Revenue from sales of scraps
42
32
-
-
Gain on disposal of assets
84
2
64
-
Others
102
44
26
5
Total
228
78
90
5
4
2,371
2,100
2,360
675
5
11
1,277
361
1,358
15,398
10,882
8,509
4,357
5,249
4,065
11,041
5,633
4,444
53,046
25,363
23,315
5,921
1,906
1,817
23,137
20,619
17,910
23,988
2,838
3,588
2006
2007
21. Other income
2007
Beer/water
equipment
(in million Baht)
Spirits
2006
2007
Revenue
22. Selling and administrative expenses
Consolidated
Separate
2007
2006
2007
2006
Amortisation
Depreciation
- Intangible assets
- Property, plant and equipment
Capital expenditure
Total liabilities
Other liabilities
Total debts
Total assets
Other assets
Inventories
Business segments financial position
(in million Baht)
Marketing and advertising expenses
4,205
3,993
144
98
Personnel expenses
3,498
3,095
577
522
Idle capacity
2,001
1,679
-
-
Vehicle and transportation expenses
1,228
1,118
24
19
467
516
29
24
Rental
325
282
10
5
Donation
274
241
73
77
1,691
1,760
297
198
13,689
12,684
1,154
943
Others
Total
Annual Report 2007
182
23. Personnel expenses
183
(a) the different treatments for accounting and taxation purposes of certain items of income and expense for 2007
amounted to Baht 233 million (2006: Baht (102) million).
Consolidated
Separate
2007
2006
(b) unutilised tax losses brought forward from the previous years have been utilised during the year to set-off against
2007
2006
the current year’s tax charge for 2007 amounted to Baht 64 million (2006: Baht 31 million).
(in million Baht)
3,548
3,265
342
321
(c) losses suffered by certain subsidiaries cannot be set-off against the profits of other subsidiaries for tax purposes
Bonus
721
637
171
154
for 2007 amounted to Baht 103 million (2006: Baht 144 million).
Overtime and perdiem allowance
266
246
13
11
11
9
6
5
557
541
45
31
5,103
4,698
577
522
Salaries and wages
Contribution to defined contribution plans
Others
Total
The current tax expenses in the separate statements of income are more than the amounts determined by applying
the Thai corporation tax rate to the accounting profit for the year principally because:
(a) dividends are not subject to tax for 2007 amounted to Baht 5,696 million (2006: Baht 2,417 million).
(number of employees)
Number of employees as at 31 December
22,590
22,412
366
335
(b) the different treatments for accounting and taxation purposes of certain items of income and expense for 2007
amounted to Baht 65 million (2006: Baht (180) million).
The defined contribution plans comprise provident funds established by companies in the Group for their employees.
Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging
from 2% to 3% of their basic salaries and by the Group at rates ranging from 2% to 3% of the employees’ basic salaries.
The provident funds are registered with the Ministry of Finance as juristic entities and are managed by a licensed Fund
26. Earnings per share
The calculation of basic earnings per share for the year ended 31 December is based on the net profit attributable to
ordinary shares and the weighted average number of shares outstanding during the year as follows:
Manager.
24. Interest expense
Note
Separate
2006
2007
Separate
2007
Consolidated
2007
Consolidated
2006
2007
2006
(Restated)
(in million Baht)
2006
Profit attributable to ordinary Shareholders (basic)
(in million Baht)
10,383
10,055
19,418
9,005
Interest expense relating to:
Related parties
5
66
109
732
885
Financial institutions
723
1,179
574
947
Others
271
435
271
421
1,060
1,723
1,577
2,253
Weighted average number of ordinary shares (basic)
Capitalised as cost of
assets under construction
Net
Consolidated
Separate
2007
12
(13)
1,047
(154)
1,569
-
-
1,577
2,253
25. Income tax expense
The current tax expenses in the consolidated statements of income are more than the amounts determined by applying
the Thai corporation tax rate to the accounting profit for the year principally because:
2006
2007
2006
(in million shares)
Issued ordinary shares at 1 January
25,110
22,000
25,110
22,000
Effect of shares issued on 29 May 2006
-
1,453
-
1,453
Effect of shares issued on 3 July 2006
-
332
-
332
25,110
23,785
25,110
23,785
Weighted average number of
ordinary shares (basic)
Annual Report 2007
184
27. Promotional privileges
185
At the annual general meeting of the shareholders of the Company held on 27 March 2006, the shareholders
approved the appropriation of dividends of Baht 0.24 per share, amounting to Baht 5,280 million. The dividend was
Promotional privileges from the Board of Investment
paid to shareholders during 2006.
By virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, a subsidiary has been granted
privileges by the Board of Investment relating to the production of alcohol and agricultural fuel. The privileges granted
29. Changes in accounting policy
include:
The following change of accounting policy by the Company has no effect on the consolidated financial statements
(a) exemption from payment of import duty on machinery approved by the Board;
of the Group.
(b) exemption from payment of income tax for certain operations for a period of eight years from the dates on which
the income is first derived from such operations;
Until 31 December 2006, the Company accounted for its investments in subsidiary companies and associates in its
financial statements using the equity method.
(c) a 50% reduction in the normal tax rate on the net profit derived from certain operations for a period of five years,
commencing from the expiry date in (b) above; and
During 2007, the FAP issued the following revised TAS which are effective for accounting periods beginning on or after
1 January 2007:
(d) exemption from income tax on dividends derived from the promoted business of its subsidiary during this eight
year period.
TAS 44 (revised 2007) Consolidated and Separate Financial Statements
TAS 45 (revised 2007) Investment in Associates
As a promoted company, the subsidiary must comply with certain terms and conditions prescribed in the promotional
certificate.
These revised TAS require a parent company which has an investment in a subsidiary company, or an associate
company, which is not classified as a “held for sale” investment, to record such investment in accordance with either
In 2007, the Board of Investment has granted same privileges as above mentioned to another subsidiary by virtue of the
provisions of the Industrial Investment Promotion Act of B.E. 2520 relating to the production of bio-gas.
the cost method or with the recognition and measurement basis for financial instruments (when a TAS on financial
instruments is issued and becomes effective), instead of the equity method currently used.
Privileges granted to business operator in Free Zone
Also in 2004 another subsidiary was granted approval from the Customs Department to operate in a “Free Zone”,
whereby the subsidiary obtains privileges related to the payment of import and export taxes, valued added tax and
excise tax. Various other privileges are also granted.
Starting from 1 January 2007, the Company has, accordingly, changed its accounting policy for its investments in
subsidiary companies and associate companies in its financial statements from the equity method to the cost method.
The change in accounting policy has been applied retrospectively and the Company’s 2006 financial statements,
which are included in the Company’s 2007 financial statements for comparative purposes, have been restated
28. Dividends
accordingly. The effects of the change in accounting policy on the Company’s annual 2007 and 2006 financial
statements are as follows:
At the Board of Directors’ Meeting held on 14 August 2007, an interim dividend payment for the first half of 2007 of
25,110 million ordinary shares, Baht 0.12 per share, totalling Baht 3,013 million was approved. The interim dividend
was paid to shareholders on 11 September 2007.
At the annual general meeting of the shareholders of the Company held on 20 April 2007, the shareholders approved
the appropriation of dividends of Baht 0.22 per share, totalling Baht 5,524 million. On 8 September 2006, the interim
dividend was paid of Baht 0.11 per share, totalling Baht 2,762 million. The remaining dividend payment of Baht 0.11
per share, totalling Baht 2,762 million was paid on 16 May 2007.
Annual Report 2007
186
187
30. Financial instruments
Separate
2007
2006
(in million Baht)
The Group is exposed to normal business risks from changes in market interest rates and currency exchange rates
Balance at 1 January before change in accounting policy
Decrease in retained earnings
Decrease in revaluation surpluses
Increase in currency translation changes
Increase in difference arising from common control transactions
Decrease in excess of share losses over cost of investment
Financial risk management policies
and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative
69,391
68,046
(15,567)
(14,494)
(6,452)
(6,450)
financial instruments for speculative or trading purposes.
Interest rate risk
20
5
Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s
17,141
15,979
operations and its cash flows because loan interest rates are mainly fixed. The Group is primarily exposed to interest
(938)
(1)
Net decrease
(5,796)
(4,961)
Balance at 1 January after change in accounting policy
63,595
63,085
rate risk from its borrowings (Note 15). The Group mitigates this risk by ensuring that the majority of its borrowings are
at fixed interest rates.
The effective interest rates of loans receivable as at 31 December and the periods in which the loans receivable mature
Retained earnings
or reprice were as follows:
Balance at 1 January before change in accounting policy
19,102
17,656
Increase in dividend income from subsidiaries and associates
14,358
6,302
Decrease in share of profits from investments accounted
for using the equity method, net
Net decrease
Balance at 1 January after change in accounting policy
Effective interest
Within 1 year
After 1 year but
(29,925)
(20,796)
rates
within 5 years
(15,567)
(14,494)
(% per annum)
(in million Baht)
3,535
3,162
Total
2007
Current
Net profit
Loans receivable - Related parties
Net profit for the year before change in accounting policy
10,383
10,079
Increase in dividend income from subsidiaries and associates
18,985
8,055
Decrease in share of profits from investments accounted
for using the equity method, net
Net increase (decrease)
Net profit for the year after change in accounting policy
Increase (decrease) in earnings per share (Baht)
5.96
3,548
-
3,548
5.96
-
9,411
9,411
3,548
9,411
12,959
5.68
9,367
-
9,367
5.68
-
5,501
5,501
9,367
5,501
14,868
Non-current
Total
(9,950)
(9,129)
9,035
(1,074)
19,418
9,005
0.36
(0.05)
2006
Current
Non-current
Total
Annual Report 2007
188
189
The effective interest rates of interest-bearing financial liabilities as at 31 December and the periods in which those
liabilities mature or reprice were as follows:
Effective interest
Effective interest
Within 1 year
After 1 year but
rates
within 5 years
(% per annum)
(in million Baht)
Total
Within 1 year
After 1 year but
rates
within 5 years
(% per annum)
(in million Baht)
Total
2007
Current
4.05
6,553
-
6,553
5.75
3,000
-
3,000
5.75
2,040
-
2,040
Loans payable - Financial institutions
4.41
-
5,400
5,400
Loans payable - Related parties
5.75
-
6,540
6,540
11,593
11,940
23,533
2007
guaranteed bonds
Current
Bank overdrafts
6.75
1,000
-
1,000
3.64
6,753
-
6,753
guaranteed bonds
5.75
3,000
-
3,000
Non-current
Non-current
Total
4.41
Total
-
5,400
5,400
10,753
5,400
16,153
2006
Current
2006
Bank overdrafts
8.28
30
-
30
Current
5.54
4,500
-
4,500
5.40
2,200
-
2,200
5.55
2,300
-
2,300
6.00
12,984
-
12,984
5.74
-
3,755
3,755
5.75
-
3,000
3,000
6.00
-
4,372
4,372
22,014
11,127
33,141
Bank overdrafts
7.16
1,883
-
1,883
5.41
6,370
-
6,370
5.40
2,200
-
2,200
guaranteed bonds
5.55
2,300
-
2,300
2.80
4,615
-
4,615
Non-current
5.75
-
3,755
3,755
5.75
-
3,000
3,000
17,368
6,755
24,123
Total
guaranteed bonds
Non-current
Total
Annual Report 2007
190
191
Foreign currency risk
The Group is exposed to foreign currency risk relating to purchases and sales which are denominated in foreign
Note
currencies. The Group primarily utilises forward exchange contracts to hedge such financial assets and liabilities
Consolidated
Separate
2007
2006
2007
2006
(in million Baht)
denominated in foreign currencies. The forward exchange contracts entered into at the balance sheet date also relate
Euro
to anticipated purchases and sales, denominated in foreign currencies, for the subsequent period.
6
-
6
-
-
At 31 December, the Group and the Company were exposed to foreign currency risk in respect of financial assets and
8
-
30
-
-
liabilities denominated in the following currencies:
16
(69)
(108)
-
-
17
(72)
(212)
-
-
(141)
(284)
-
-
Estimated forecast purchase of assets
(25)
(137)
-
-
Estimated forecast purchase of goods
(1,158)
(454)
-
-
Gross exposure
(1,324)
(875)
-
-
1,173
773
-
-
(151)
(102)
-
-
Note
Gross balance sheet exposure
Consolidated
Separate
2007
2006
2007
2006
(in million Baht)
United States Dollars
6
174
15
-
-
8
90
24
-
-
10
1
1
-
-
16
(94)
-
-
(104)
Forwards to buy foreign currency
Net exposure
Great Britain Pound
amount due to related parties
5
-
(216)
-
17
-
(42)
-
(37)
171
(322)
-
(37)
Estimated forecast sale of goods
286
-
-
-
(2,994)
(1,917)
-
Gross exposure
(2,537)
(2,239)
-
2,508
1,929
-
Currency forwards
Net exposure
(29)
(310)
-
-
(37)
16
(46)
(74)
-
-
17
(4)
(16)
(1)
-
(50)
(90)
(1)
-
(288)
(462)
-
-
Gross exposure
(338)
(552)
(1)
-
287
472
-
-
Net exposure
(51)
(80)
(1)
-
(37)
Australian Dollar
8
1
-
-
-
16
(1)
(6)
-
-
Gross exposure
-
(6)
-
-
1
25
-
-
Net exposure
1
19
-
-
Annual Report 2007
192
Note
Consolidated
Separate
2007
2006
2007
Fair values
The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
2006
willing parties in an arm’s length transaction. In determining the fair value of its financial assets and liabilities, the Group
takes into account its current circumstances and the costs that would be incurred to exchange or settle the underlying
(in million Baht)
financial instrument.
Singapore Dollars
193
17
Estimated forecast proceed from loans
Gross exposure
Net exposure
(1)
(1)
-
-
208
1,484
(1)
(1)
207
1,484
-
-
(1)
(1)
(1)
(208)
(1)
-
31. Commitments with non-related parties
(1,484)
-
Consolidated
Separate
2007
2006
2007
2006
(in million Baht)
Capital commitments
Japanese Yen
(5)
-
-
-
Contracted but not provided for
5
-
-
-
Land, buildings and other constructions
217
392
-
-
Net exposure
-
-
-
-
Machinery and equipment
218
846
-
-
-
11
-
11
435
1,249
-
11
Estimated forecast purchase of assets
Computer software
Others
Exposure
Total
8
-
5
-
-
17
-
(3)
-
-
Non-cancellable operating lease commitments
-
2
-
-
Within one year
165
142
9
-
After one year but within five years
157
70
14
1
Total
322
212
23
1
86
332
-
-
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial
and contractual obligations to the Group as and when they fall due.
Other commitments
Unused letters of credits
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit
Forward contracts to sell foreign currencies
524
1,505
217
1,505
evaluations are performed on all customers requiring credit over a certain amount. At the balance sheet date there
Forward contracts to buy foreign currencies
5,036
3,330
-
-
were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying
Bank guarantees
247
102
31
154
amount of each financial asset in the balance sheet. However, due to the large number of parties comprising the Group’s
Goods and raw materials purchasing agreements
4,386
2,815
-
-
customer base, management does not anticipate material losses from its debt collection.
Molasses purchasing agreements
296
1,596
-
-
53
96
53
96
154
105
-
-
60
43
1
-
10,842
9,924
302
1,755
Computer system installation agreements
Liquidity risk
Advertising services and sponsorship agreements
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by
Others
management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.
Total
Annual Report 2007
194
195
(a) During 2004, the Company and four subsidiaries entered into production and blending control agreements with
(b) On 31 January 2008, Pan Alcohol Co., Ltd. the Company’s indirect subsidiary has entered into a memorandum of
a specialist for a period of 40 years from 1 August 2004 to 1 August 2044. Under the agreements, the Company and
understanding to acquire majority of ordinary shares in Carabao Tawandang Co., Ltd. who is engaging in the production
its subsidiaries are obliged to pay monthly service fees of Baht 4.3 million which are to be annually increased by 5%
and sales of energy drink. The completion of the acquisition is being in the process.
for the first 20 years from 1 August 2004 to 1 August 2024. Afterwards, the Company and its subsidiaries have to pay
monthly service fees of Baht 250,000 until the expiration of the agreements. Service fee under the agreements totaled
(c) The Executive Board of Directors’ Meeting held on 18 February 2008 unanimously passed the following resolutions:
Baht 1,766.2 million. Subsequently, the addendums were made on 5 January 2006, under which the Company and its
subsidiaries have to pay additional amount to this specialist amounting to Baht 2,000 million. Therefore, the total service
fees under the agreements both outstanding and already paid by the Company and its subsidiaries amounted to
Baht 3,766.2 million.
- Approval in principle of the decrease of authorised share capital of S P M Foods and Beverages Co., Ltd. twice at 75%
each and the increase of authorized share capital afterwards. The authorised share capital will be decreased from
Baht 100 million to Baht 25 million firstly and from Baht 25 million to Baht 6 . 25 million secondly. After that the
authorised share capital will be increased by Baht 600 million to Baht 606.25 million.
As at 31 December 2007 the remaining commitments to be paid, relating to these agreements, amounted to Baht 1,579
million.
- Approval in principle of the increase of authorised share capital of International Beverage Holdings Limited from HKD
(b) During 2005, a subsidiary renewed a sponsorship agreement with Everton Football Club, in the United Kingdom, for
1,470 million to HKD 1,490 million to increase in capital of International Beverage Holdings Limited USA, Inc.
a period of three years as from 1 June 2005 to 31 May 2008 in order to promote the Group’s businesses globally. Under
the agreement, the subsidiary is obliged to pay a minimum amount of GBP 0.5 million and a maximum amount of GBP
2.9 million per year, dependent on the performance of Everton football team in each year.
(d) The Board of Directors’ Meeting held on 27 February 2008 unanimously agreed to propose a dividend payment of
Baht 0.29 per share, totalling Baht 7,282 million. The interim dividend was paid of Baht 0.12 per share, amounting to
Baht 3,013 million. The remaining is a dividend payment of Baht 0.17 per share, amounting to Baht 4,269 million.
Subsequently, on 17 January 2008, the sponsorship agreement was extended to another period of three years as from
1 June 2008 to 31 May 2011. The subsidiary is obliged to pay a minimum amount of GBP 0.5 million and a maximum
34. Thai Accounting Standards (TAS) not yet adopted
amount of GBP 3.5 million per year, dependent on the performance of Everton football team in each year.
The Group has not adopted the following TAS that have been issued as of the balance sheet date but are not yet
32. Litigation
effective. These TAS will become effective for financial periods beginning on or after 1 January 2008.
A subsidiary filed the application to the Central Tax Court to withdraw the assessment of the property tax of 2002 up
TAS 25 (revised 2007)
Cash Flows Statements
Leases
Inventories
Borrowing Costs
Presentation of Financial Statements
Accounting Policies, Changes in Accounting Estimates and Errors
Interim Financial Reporting
Business Combinations
Construction Contracts
TAS 51
Intangible Assets
to 2007. Subsequently, on 12 and 13 February 2008, the Supreme Court has sentenced that the above subsidiary can
receive the property tax back in the amount of Baht 128 million from the paid amount of Baht 128.5 million.
33. Events after the balance sheet date
(a) On 25 January 2008, Maharas Agri Co., Ltd. the Company’s subsidiary increase its authorised share capital from
Baht 2 million to Baht 200 million by issuing 19.8 million ordinary shares with a Baht 10 par value, totaling Baht 198
million.
Subsequently, on 28 January 2008, the Company’s subsidiary has entered into a sale and purchase agreement to
acquire assets in the production and sale of energy drink and ready-to-drink coffee owned by Wrangyer Beverage
Co., Ltd. at a consideration of Baht 420 million. Part of the fund will be derived from the increase of the authorised
The adoption and initial application of these TAS is not expected to have any material impact on the consolidated or
share capital in the amount of Baht 200 million.
separate financial statements.
Annual Report 2007
196
35. Reclassification of accounts
197
Retirement benefits are recognised as a liability, being the net total of the present value of the obligation at the balance
sheet date less the fair value of any plan assets and recognised as an expense the net total of current service costs,
Certain accounts in the 2006 financial statements have been reclassified to conform with the presentation in the 2007
interest costs, past service costs and any actuarial gains and losses.
financial statements.
(c) Financial instruments
36. Significant differences between Thai GAAP and IFRS (unaudited/ unreviewed)
Thai GAAP has certain disclosure requirements for financial instruments, but only limited guidance on the recognition
and measurement of financial instruments. The Group has decided not to recognise derivative financial instruments on
These consolidated financial statements have been prepared in accordance with generally accepted accounting
the balance sheet. However, foreign currency assets and liabilities hedged by these contracts are translated into Thai
principles in Thailand (“Thai GAAP”), which differ in certain significant respects from International Financial Reporting
Baht at exchange rates prevailing on the balance sheet date.
Standards (“IFRS”). The following disclosure provides a summary of certain significant differences between Thai GAAP
and IFRS, as applicable to the consolidated financial statements of the Group, and a reconciliation of net profit and total
Under IFRS, derivative financial instruments are recognised on the balance sheet as either an asset or a liability initially
shareholders’ equity from Thai GAAP to IFRS. Neither the narrative summary nor the reconciliation should be construed
at cost, which is the fair value of consideration given (in the case of an asset) or received (in the case of a liability).
as being exhaustive or presented fairly in all material respects and are provided for information purposes only.
Transaction costs are included in the initial measurement. Subsequent to initial recognition, derivative financial
instruments are stated at fair value. Movements in fair values are recognised in the consolidated statement of income.
(a) Deferred tax
There is no Thai accounting standard currently effective in relation to accounting for deferred taxes. Whilst not
specifically addressed in Thai GAAP, provisions for income taxes of the Group are typically based on corporate
income taxes currently payable in the period under the Revenue Code of Thailand. The Group does not, therefore,
recognise deferred tax assets and liabilities for the current period.
Under IFRS, provision is made for deferred tax using a balance sheet approach, with deferred tax calculated on
temporary differences, being the differences between the tax and the book values of assets and liabilities. The deferred
tax charge or credit is the change in the period in deferred tax liabilities and assets. Deferred tax assets are recognised
(d) Investment in property
In 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 the
revaluation 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. 40 Investment Property. IAS No. 40 allows enterprises to choose either a fair value model or a cost model to
measure investment property.
to the extent that it is probable that future taxable profits will be available against which the temporary differences
can be fully utilised.
(b) Employee benefits
There is currently no Thai accounting standard in relation to accounting for employee benefits, including termination,
In accordance with the fair value model, an enterprise should measure all of its investment property at its fair value.
A gain or loss arising from a change in the fair value of investment property should be included in net profit or loss
for the period in which it arises.
retirement and post-retirement benefits. The Group’s primary obligations in respect of employee benefits are
contributions on behalf of employees to provident funds and the payment of statutory severance benefits on retirement
and terminating employment involuntarily. Severance termination and retirement benefits vary according to various
In accordance with the cost model, land and buildings held as investment property should be measured at cost less
any accumulated impairment losses.
factors, including the employee’s service life and salary. Whilst not specifically addressed in Thai GAAP, contributions
are charged as an expense as incurred.
For the purposes of disclosure under IFRS, the Group has adopted the cost model for investment property consisting
of both land and buildings. For Thai GAAP, the land has been revalued while the buildings have not.
Under IFRS, employee benefits are accounted for in accordance with IAS No. 19 Employee Benefits. Accordingly,
termination benefits are recognised as a liability and an expense when, and only when, the enterprise is demonstrably
(e) Business combination (Goodwill)
committed to either terminate the employment of an employee or group of employees before the normal retirement date
Thai GAAP requires goodwill acquired in business combination to be systematically amortised over its estimated useful
or provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.
life, although its useful life should not exceed 20 years from initial recognition.
Annual Report 2007
198
199
Interested Persons Transactions
Audited results for the year ended 31 December 2007
Under IFRS, acquired goodwill is measured after initial recognition at cost less any accumulated impairment losses.
Therefore, goodwill is not amortised and must be tested for impairment annually, or more frequently if events or
Interested Persons Transactions for the year ended December 31, 2007
changes in circumstances indicate that it might be impaired.
Aggregate value of all interested
Aggregate value of all
persons transactions during
interested persons
the year ended December 31, 2007
transactions conducted
under review (excluding transactions
under the mandate
Consolidated net profit
2007
2006
(in million Baht)
As reported in these consolidated financial
less than S$100,000* and transactions
(excluding transactions
conducted under Shareholders’ Mandate)
less than S$100,000*)
Baht ‘000
Baht ‘000
10,383
10,055
(a) Deferred tax
107
16
1 Pisetkij Co., Ltd.
-
21,780.45
(60)
(62)
2 PS Recycle Co., Ltd.
-
100,526.82
82
(45)
3 Oishi Trading Co., Ltd.
17,422.58
-
3
-
-
3,424.38
29
19
3,506.41
-
10,544
9,983
1 Pisetkij Co., Ltd.
-
11,369.29
2 Thai Glass Industries PCL
-
3,843.76
22,069.48
-
-
1,185,082.81
2 The Chonburi Sugar Corp. Ltd.
-
31,293.89
3 The Maewang Sugar Industry Co., Ltd.
-
21,587.07
4 The Suphanburi Sugar Industry Co., Ltd.
-
53,596.63
5 Dhipaya Sugar (1999) Co., Ltd.
-
15,601.26
6 Southeast Capital Co., Ltd.
-
7,612.98
7 T.C.C. Technology Co., Ltd.
-
30,923.00
8 Thai Beverage Can Co., Ltd.
-
1,211,761.35
9 Berli Jucker PCL.
-
2,247,081.29
10 The Southeast Insurance (2000) Co., Ltd.
-
111,024.07
11 The Southeast Life Insurance Co., Ltd.
-
4,020.37
12 The Utaradit Sugar Industry Co., Ltd.
-
29,223.90
13 New Noble Property And Loan Fund
-
14,071.60
14 BJC Industrial and Trading Company Limited (***)
-
2,723.56
2,884.82
-
44,880.40
-
9,795.79
-
14,984.00
-
statements under Thai GAAP
Add (less) : Thai GAAP/IFRS differences (net of tax effect)
Under IFRS
A Revenue from sales and service income
4 The Chonburi Sugar Corp. Ltd.
5 TCC Hotel Collection Co., Ltd. (**)
B Other income
Consolidated total
shareholders’ equity
2007
(in million Baht)
C Cost of sales
As reported in these consolidated financial
statements under Thai GAAP
1 PS Recycle Co., Ltd.
54,910
52,554
Add (less) : Thai GAAP/IFRS differences (net of tax effect)
(a) Deferred tax
(636)
(1,429)
(581)
(521)
12
(70)
(47)
(51)
102
73
53,760
50,556
Under IFRS
3 Liquorland Limited
2006
16 Dynamic Assets Property and Loan Fund
17 T.C.C. Ningbo Best Spirits Co., Ltd.
18 Siam Food Products Public Co., Ltd.
Annual Report 2007
200
Aggregate value of all interested
Aggregate value of all
persons transactions during
interested persons
the year ended December 31, 2007
transactions conducted
under review (excluding transactions
under the mandate
less than S$100,000* and transactions
(excluding transactions
conducted under Shareholders’ Mandate)
less than S$100,000*)
Baht ‘000
Baht ‘000
161,024.95
-
D Interest expenses
1 Great Oriole Limited
201
Appexdix
Renewal of Shareholders’ Mandate for Interested Person Transactions
1. Background
The Board of Directors of Thai Beverage Public Company Limited (the “Company”) refer to (a) the Notice of Annual
General Meeting of the Company dated April 10, 2008 (the “Notice”), accompanying the Annual Report 2007, convening
the Annual General Meeting (“AGM”) of the Company to be held on April 28, 2008, and (b) Resolution No. 9 under the
heading “Special Business” set out in the Notice.
E Other expenses
1 Southeast Capital Co., Ltd.
-
109,629.64
2 T.C.C. Technology Co., Ltd.
-
44,969.75
2. Shareholders’ Mandate
3 The Southeast Insurance (2000) Co., Ltd.
-
30,661.14
Pursuant to the Company’s Prospectus dated May 19, 2006 (the “Prospectus”), approval of the Shareholders was
4 The Southeast Life Insurance Co., Ltd.
-
5,136.26
deemed obtained for a shareholders’ mandate to enable the Company and its subsidiaries which are considered to be
5 Plaza Athenee Hotel (Thailand) Co., Ltd.
-
30,706.72
“entities at risk” within the meaning of Rule 904(2) of the listing manual (the “Listing Manual”) of the Singapore
6 Regent Gold Property Fund
-
5,331.15
7 North Park Golf And Sport Club Co., Ltd.
-
10,581.56
5,218.50
-
25,251.67
-
10 Dynamic Assets Property and Loan Fund
4,135.36
-
11 Best Wishes co Ltd
5,494.44
-
made to the said shareholders’ mandate at last year’s annual general meeting held on April 20, 2007 in the manner set
12 T.C.C. International Limited
3,399.86
-
out on page 180 of our annual report for the financial year ended December 31, 2006 (the shareholders’ mandate as
8 T.C.C. Capital Land Limited
Exchange Securities Trading Limited (“SGX-ST”), in their ordinary course of businesses, to enter into categories of
transactions with specified classes of the Company’s interested persons, provided that such transactions are entered
into on an arm’s length basis and on normal commercial terms. The details of the interested person transactions and
shareholders’ mandate were disclosed in pages 124 to 148 of the said Company’s Prospectus. An amendment was
amended, the “Shareholders Mandate”).
F Sales of assets
819,000.00
-
3. Proposed Renewal of the Shareholders’ Mandate
The Shareholders’ Mandate was expressed to take effect until the conclusion of the next AGM. Accordingly, the Directors
G Purchase of assets
1 Siam Realty Co., Ltd.
30,810.06
-
propose that the Shareholders’ Mandate be renewed at the forthcoming AGM on April 28, 2008, to take effect until the
next AGM of the Company.
*
Exchange rate Baht 23.00 per 1 SGD.
**
Formerly : Queen’s Park Hotel Group Co., Ltd.
*** Formerly : BJC Engineering Co., Ltd.
4. Details of the Shareholders’ Mandate
Details of the Shareholders’ Mandate, including the rationale for, and the benefits to, the Company, the review procedures
for determining transaction prices with interested persons and other general information relating to Chapter 9 of the
Listing Manual, are set out in the Annexure to this Appendix.
5. Audit Committee Statement
The Audit Committee has reviewed the terms of the Shareholders’ Mandate and confirms that:-
Annual Report 2007
202
(a) the review procedures for determining the transaction prices under the Shareholders’ Mandate have not changed
since May 19, 2006, date of the Company’s prospectus; and
203
For the reasons set out in the Annexure to this Appendix, the Independent Directors recommend that Shareholders to
vote in favour of Resolution No. 9, being the Ordinary Resolution relating to the proposed renewal of the Shareholders’
Mandate at the 2008 AGM.
(b) the review procedures referred to in the Annexure are sufficient to ensure that the transactions will be carried
out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority
9. Directors’ Responsibility Statement
Shareholders.
The Directors collectively and individually accept responsibility for the accuracy of the information given herein and
confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the
If, during the periodic reviews by the Audit Committee, it is of the view that the established review procedures are no
opinions expressed herein are fair and accurate and that there are no material facts the omission of which would make
longer appropriate or adequate to ensure that the Interested Person Transactions will be transacted on normal
any statement herein misleading.
commercial terms and will not be prejudicial to the interests of the Company and minority Shareholders, the Company
will seek a fresh mandate from Shareholders based on new review procedures.
10. Action To Be Taken By Shareholders
Any Shareholder who is not able to attend the AGM in person should please duly complete a proxy form and submit to
6. Directors’ and Substantial Shareholders’ Interests
the Chairman of the Meeting prior to his proxy attending the Meeting.
The interests of the directors and substantial shareholders of the Company in the issued shares in the capital of the
Company as at January 21, 2008 and March 12, 2008 respectively can be found in the Annual Report in respect of the
11. SGX-ST
financial year ended December 31, 2007 to be, or which has been, distributed to shareholders.
The SGX-ST takes no responsibility for the accuracy of any statements or opinions made in this Appendix.
7. Abstention from Voting
Mr. Charoen Sirivadhanabhakdi, Khunying Wanna Sirivadhanabhakdi, Mr. Thapana Sirivadhanabhakdi and Mr. Panote
Sirivadhanabhakdi, who are Directors of the Company, have interests in the shares of the Interested Persons
(as described in the Annexure to this Appendix), and also hold directorships and/or executive positions in them.
They and their respective associates will abstain from voting on Resolution No. 9 being the Ordinary Resolution
relating to the proposed renewal of the Shareholders’ Mandate in respect of their shareholdings in the Company, if any,
at the forthcoming AGM.
8. Directors Recommendation
The Directors who are considered independent for the purposes of the proposed renewal of the Shareholders’ Mandate
are Mr. Komen Tantiwiwatthanaphan, Mr. Narong Srisa-an, Mr. Samut Hatthasing, Ms. Kanoknart Rangsithienchai,
Mr. Chukiet Tangpongprush, Mr. Ueychai Tantha-Obhas, Mr. Sithichai Chaikriangkrai, Dr. Pisanu Vichiensanth,
Mr. Vivat Tejapaibul, Mr. Puchchong Chandhanankij, Gen. Dr. Choo-Chat Kambhu Na Ayudhya, Prof. Pornchai
Matangkasombut, Mr. Michael Lau Hwai Keong, Mr. Sakthip Krairiksh, Mr. Staporn Kavitanon, Prof. Kanung Luchai,
Mr. Manu Leopairote and Mr. Ng Tat Pun (the “Independent Directors”). The Independent Directors are of the
opinion that the entry into of the Mandated Transactions described in the Annexure to this Appendix and those
Interested Persons (as described in the Annexure to this Appendix is in the ordinary course of its business will be
entered into to enhance the efficiency of the Group and are in the best interests of the Company.
Annual Report 2007
204
Annexure
General Mandate for Interested Persons Transactions
We anticipate that we would, in the ordinary course of business, continue to enter into certain transactions with
our interested persons, including but not limited to those categories of transactions described below. In view of the
time-sensitive nature of commercial transactions, it would be advantageous for us to obtain a shareholders’ mandate
205
Entities At Risk
For 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 the Group or the Group and interested persons has control over the associated company.
to enter into certain interested persons transactions in our ordinary course of business, provided that all such
transactions are carried out on normal commercial terms and are not prejudicial to the interests of our Company
Classes of Mandated Interested Persons
and our minority Shareholders.
The Shareholders’ Mandate will apply to our Group’s transactions with the list of interested persons as set out in the
Schedule – List of Our Interested Persons and Mandated Interested Persons (the “Mandated Interested Persons” and
Chapter 9 of the Listing Manual allows a listed company to obtain a mandate from its shareholders for recurrent
each a “Mandated Interested Person”).
interested persons transactions which are of a revenue or trading nature or for those necessary for its day-to-day
operations. These transactions may not include the purchase or sale of assets, undertakings or businesses which are
Transactions with Mandated Interested Persons which do not fall within the ambit of the Shareholders’ Mandate shall
not part of our day-to-day operations.
be subject to the relevant provisions of Chapter 9 of the Listing Manual.
Pursuant to Rule 920(2) of the Listing Manual, our Company may treat a general mandate as having been obtained from
Mandated Transactions
our Shareholders (“Shareholders’ Mandate”) for us to enter into interested persons transactions with our interested
persons, if the information required under Rule 920(1)(b) of the Listing Manual is included in this document. In relation
to us, the information required by Rule 920(1)(b) is as follows:
The 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 of
business of our Group or which are necessary for the day-to-day operations of our Group (but not in respect of the
purchase or sale of assets, undertakings or businesses which are not part of our day-to-day operations) are as follows:
(a) the class of interested persons with which the Entity At Risk (as defined below) will be transacting;
(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
ensure that the transactions will be carried out on normal commercial terms and will not be prejudicial to the
interests of our Company and our minority Shareholders;
(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 tissue
paper 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
and facilities 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;
(f) an opinion from our Audit Committee if it takes a different view to the independent financial advisor; and
(e) obtaining from interested persons of leases or subleases of office space, warehouses, passenger cars and land;
(g) a statement from us that we will obtain a new mandate from our Shareholders if the methods or procedures in (d)
above become inappropriate.
(f) provision to interested persons of services including procurement services, property improvement services,
advertising and sales services and manufacturing services;
The Shareholders’ Mandate, if renewed, will be effective until the next annual general meeting.
(g) lease or sub-lease to interested persons of office space, warehouses, passenger cars and land;
Annual Report 2007
206
207
(h) sale to interested persons of by-products including fertilizer, used bottles, and factory remnants such as
aluminium and 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
the provision or obtaining of products and/or services in sub-paragraphs (a) to (i) above.
Review Procedures for Interested Persons Transactions
Our Audit Committee has oversight of all interested persons transactions undertaken by our Group including, the review
Approval Limits
Relevant Approving Authority
Interested person transaction not exceeding
Baht 500,000 in value
A deputy managing director
or officer of equivalent rank
Interested person transaction above
Baht 500,000 but not exceeding Baht 5 million in value
A managing director or officer
of equivalent rank
Baht 5 million but not exceeding Baht 10 million in value
A vice-chairman or officer of
equivalent rank
Baht 10 million but not exceeding Baht 20 million in value
A chairman or officer of
equivalent rank
Baht 20 million but not exceeding 3% of the latest audited
net tangible assets of the Group in value
Any two vice-chairmen
and/or chairmen or officers
of equivalent rank
Interested person transaction above 3% of the latest audited
net tangible assets of the Group in value
Any two Audit Committee members,
one of whom must be the Lead
Independent Director for IPTs
and 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 in
respect of interested persons transactions undertaken by our Group (the “Lead Independent Director for IPTs”).
We have also established the following procedures to ensure that the interested persons transactions are undertaken
on an arm’s length basis and on normal commercial terms.
Review Procedures and Threshold Limits
In general, there are procedures established by our Group to ensure that interested persons transactions, including the
Mandated Transactions with the Mandated Interested Persons, are undertaken on an arm’s length basis and on normal
commercial terms consistent with our Group’s usual business practices and policies, and on terms which are generally
no more favorable to the interested persons than those extended to or obtained from unrelated third parties.
In particular, the following review procedures have been implemented:
In 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
(1) Procurement and purchase of goods and obtaining services
assess and approve that the proposed transaction is one which is incidental to or in connection with the
provision or obtaining of products and/or services in sub-paragraphs (a), (b), (c) and (d) above under
(a) All procurement and purchases made by our Group of a recurring nature which are in the ordinary course
of business of our Group or which are necessary for the day-to-day operations of our Group, including
“General Mandate for Interested Persons Transactions-Mandated Transactions.”
procurement and purchases which 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”) will be governed by internal control procedures,
which detail matters such as the constitution of internal approving authorities, their approval limits,
(b) In the event that we cannot obtain competitive quotations (for instance, if there are no unrelated third party
vendors of similar products and services (taking into account quantum, specifications and delivery schedules
among others), or if the product is proprietary in nature), based on the value of the proposed interested
the number of vendors (minimum of two) who provide us quotes, and the review procedures. The guiding
persons transaction, the corresponding Relevant Approving Authority as set out above (not being an
principle is to objectively obtain the best goods and/or services on the best terms through competitive
interested person or his associate) and who does not have any interests, direct or indirect, in relation to the
quotations, if appropriate. In determining whether the price and terms offered by interested persons are fair
transaction, will determine whether the price and terms offered by the interested person are fair and
and reasonable, factors such as, but not limited to, delivery schedules, specification compliance, track record,
reasonable.
experience and expertise, preferential rates, discounts or rebates offered for bulk purchases, will be taken
into consideration. In addition, each interested person transaction entered into by our Group will be monitored
as an individual transaction and based on the value of the transaction, will require the prior approval
of the corresponding approving authority who is a Director or management employee of the Group (not being
an interested person or his associate) and who does not have any interests, whether direct or indirect,
in relation to the transaction (the “Relevant Approving Authority”) as follows:
Annual Report 2007
208
209
(c) Purchases under the prevailing terms of the Glass Bottle Purchase Agreement dated May 24, 2007 entered
into between Bang-Na Logistic Co., Ltd. and Berli Jucker Public Company Limited (the “Glass Bottle Purchase
Agreement”) will be covered under the Shareholders’ Mandate, provided that any amendment to the
material provisions of the Glass Bottle Purchase Agreement, including any adjustment authorized by the
Approval Limits
Interested person transaction not exceeding Baht
200,000 in value
A deputy managing director
or officer of equivalent rank
Interested person transaction above Baht 200,000 but
not exceeding Baht 500,000 in value
A managing director or
officer of equivalent rank
not exceeding Baht 5 million in value
A vice chairman or officer
of equivalent rank
Interested person transaction above Baht 5 million but
not exceeding 3% of the latest audited net tangible
assets of the Group in value
equivalent rank
Interested person transaction above 3% of the latest
audited net tangible assets of the Group in value
Any two Audit Committee
members, one of whom must
be the Lead Independent
Director for IPTs
agreement to the purchase price for glass bottles pursuant to and any renewal or extension of tenure
of the Glass Bottle Purchase Agreement, requires the approval of our Board 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 a recurring nature and that occur in the ordinary course of business of our Group. These transactions
are necessary for the day-to-day operations of our Group and include the sale of products and provisions
of services to interested persons and lease or sub-lease of property to or from interested persons and the
Mandated Transactions with Mandated Interested Persons referred to in paragraphs (e), (f), (g), (h), (i)
and (j) under “General Mandate for Interested Persons Transactions - Mandated Transactions” above.
We intend to conduct these transactions at the prevailing market rates or prices of the product or service
to be provided, and at prevailing market rentals for leases and sub-leases of property, on terms no more
favorable to the interested person than the usual commercial terms extended to or, where applicable, by
unrelated third parties (including, where applicable, preferential rates, discounts to favored customers or for
bulk purchases) or otherwise in accordance with applicable industry norms, provided that:
In 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 the proposed transaction is one which is incidental to or in connection with the provision or
obtaining of products and/or services in sub-paragraphs (e), (f), (g), (h) and (i) above under “General Mandate
(i) in relation to the sale of products and provision of services which are not contemporaneously in time
for Interested Persons Transactions - Mandated Transactions.”
as the proposed interested person transaction being sold or provided to an unrelated third party, quotes
from at least two other suppliers who are unrelated third parties not being the relevant interested person
or his associates of similar products or services will be obtained; and
(b) Where the prevailing market rates or prices are not available, whether due to the nature of products to be
sold or services to be provided, the unavailability or impracticality of obtaining quotes from third party
sources or otherwise, our Group’s pricing for these products and services will be determined in accordance
(ii) in relation to the lease or sub-lease of property, we are required to obtain enquiries with at least two
landlords and/or tenants who are unrelated third parties not being the relevant interested person or his
associates of similarly sized and located properties put to similar use.
with the Group’s usual business practices and pricing policies, consistent with the usual margin our Group
will obtain for the same or substantially similar type of transaction with unrelated third parties. In determining
the transaction price payable by Mandated Interested Persons for these products or services, factors such as,
but not limited to, quantity, volume, consumption, customer requirements, specifications, duration of contract
In addition, each interested person transaction entered into by our Group will be monitored as an individual
transaction and based on the value of the transaction, will require the prior approval of the corresponding
Relevant Approving Authority who is a Director or management employee of the Group (not being an
interested person or his associate) and who does not have any interests, whether direct or indirect,
in relation to the transaction as follows:
and strategic purposes of the transaction will be taken into account. In relation to leases and sub-leases
of property, where prevailing market rentals are not available, whether due to the unavailability or impracticality
of obtaining rental comparisons or otherwise, rental will be determined according to the Group’s usual business
practices and policies. In addition, based on the value of the proposed interested person transaction,
the corresponding Relevant Approving Authority as set out in paragraph (a) above (not being an interested
person or his associate) and who does not have any interests, direct or indirect, in relation to the transaction,
will determine whether the price and terms offered by the interested person are fair and reasonable.
Annual Report 2007
210
(3) Non-recurring interested persons transactions
211
Other Review Procedures
Our Audit Committee led by the Lead Independent Director for IPTs will also review all interested persons transactions
We may from time to time also conduct interested persons transactions not covered by paragraphs (1) and (2)
including, Mandated Transactions to ensure that the prevailing rules and regulations of the SGX-ST (in particular,
above and which do not form part of the Shareholders’ Mandate. These transactions are not of a recurring nature
Chapter 9 of the Listing Manual) are complied with.
or occur outside the ordinary course of business of our Group or which may not be necessary for the day-to-day
operations of our Group and include the purchase or sale of assets, undertakings or businesses which are not
Our Group has also implemented the following procedures for the identification of interested persons transactions
part of our day-to-day operations. We intend to conduct such transactions in accordance with the SGX-ST Listing
(including Mandated Transactions) and interested persons (including Mandated Interested Persons) and the recording
Manual, including the threshold, approval and other requirements under paragraphs 905 and 906 of the SGX-ST
of all our interested person transactions:
Listing Manual. In addition, we will monitor each transaction on an individual basis, and each transaction will
require the prior approval of the corresponding Relevant Approving Authority below who is a Director or
(a) our Group Chief Financial Officer will maintain a register of all transactions carried out with interested persons,
management employee of the Group (not being an interested person or his associate) and who does not have
including the Mandated Interested Persons (and the basis, including the quotations obtained to support such basis,
any interests, whether direct or indirect, in relation to the transaction. The Relevant Approving Authority will also
on which these transactions are entered into), whether mandated or non-mandated; and
review the transaction to ensure that they are carried out on normal commercial terms and not prejudicial to the
interests of our Company and minority Shareholders:
(b) on a quarterly basis, our Group Chief Financial Officer will submit a report to our Audit Committee of all recorded
interested persons transactions, and the basis of all recorded interested persons transactions, entered into by
our Group. Our Company’s annual internal audit plan will incorporate a review of all interested persons transactions,
Approval Limits
including the established 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
Interested person transaction not exceeding Baht
200,000 in value
A deputy managing director or
officer of equivalent rank
not exceeding Baht 500,000 in value
A managing director or officer
of equivalent rank
the current financial year, pursuant to the Shareholders’ Mandate.
In addition, our Audit Committee led by the Lead Independent Director for IPTs will review, on a quarterly basis,
internal controls and review procedures for interested persons transactions to determine if they are adequate and/or
commercially practicable in ensuring that the transactions between our Group and interested persons are conducted
not exceeding Baht 5 million in value
A vice chairman or officer of
equivalent rank
Interested person transaction above Baht 5 million but
not exceeding 3% of the latest audited net tangible
assets of the Group in value
equivalent rank
Interested person transaction above 3% of the latest
audited net tangible assets of the Group in value
Any two Audit Committee
members, one of whom must
be the Lead Independent
Director for IPTs
on normal commercial terms and are not prejudicial to the interests of our Company and our minority Shareholders.
In conjunction with this review, our Audit Committee will also ascertain whether we have complied with the established
review procedures. Further, if during these periodic reviews by our Audit Committee, our Audit Committee is of the view
that the internal controls and review procedures for interested persons transactions are inappropriate or not sufficient
to ensure that the interested persons transactions will be on normal commercial terms and not prejudicial to the
interests of our Company and our minority Shareholders, our Audit Committee will (pursuant to Rule 920(1)(b)(iv) and
(vii) of the Listing Manual) revert to our Shareholders for a new Shareholders’ Mandate based on new internal controls
and review procedures for transactions 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 Committee
In the event that these interested persons transactions require the approval of our Shareholders, additional
who is not considered independent will abstain from participating in the Audit Committee’s review of the internal
information may be required to be presented to Shareholders and an independent financial adviser may be
controls and review procedures.
appointed for an opinion
.
Our Audit Committee will have overall responsibility for determining the review procedures with the authority to
delegate to individuals or committees within our Group as they deem appropriate.
Annual Report 2007
212
213
Accounting Manual Policy
Schedule
List of our Mandated Interested Persons
Accounting Manuals
Mandated Interested Persons
ThaiBev and all subsidiaries in Thailand have already implemented the use of the accounting manuals which were
assisted to develop by Deloitte Touche Tohmatsu Jaiyos Advisory (Deloitte), part of one of the world’s top four auditing
1. TCC Holding Co., Ltd.
23. Pisetkij Co., Ltd.
2. Bang-Na Glass Co., Ltd.
24. Plastic Agachon Co., Ltd.
3. Berli Jucker Cellox Co., Ltd.
25. Plaza Athenee Hotel (Thailand) Co., Ltd.
4. BJC Industrial and Trading Company Limited
(1)
firms, to assist. The accounting manuals will be used eventually to aid in the uniform understanding and utilization of
of accounts, organization chart, accounting process flow, samples of documents and reports received and generated in
26. Queen’s Park Hotel Co., Ltd.
the accounting process and etc.
5. Berli Jucker Foods Co., Ltd.
27. Regent Gold Property Fund
6. Berli Jucker Logistics Co., Ltd.
28. Siam Realty Co., Ltd.
7. Berli Jucker Public Company Limited
29. Southeast Capital Co., Ltd.
8. Berli Jucker Special Co., Ltd.
30. The Southeast Insurance (2000) Co., Ltd.
9. BJC Marketing Co., Ltd. ,
31. The Southeast Life Insurance Co., Ltd.
10. BJC Healthcare Co., Ltd.
(2)
the accounting system throughout companies in ThaiBev group. They formally comprises our accounting policy, chart
All subsidiaries outside Thailand will apply and implement the use of these accounting manuals within 2008.
32. The Suphanburi Sugar Industry Co., Ltd.
(3)
11. Chalitlarp Co., Ltd.
33. T.C.C. Service Apartment Co., Ltd.
12. Dhipaya Sugar (1999) Co., Ltd.
34. Terragro Co., Ltd.
13. Golden Wealth Co., Ltd.
35. T.C.C. Capital Co., Ltd.
14. Indara Insurance Public Company Limited
36. T.C.C. Commercial Property Management Co., Ltd.
15. Lake View Golf and Yacht Club Co., Ltd.
37. T.C.C. Technology Co., Ltd.
16. Lake View Land Co., Ltd.
38. Thai Beverage Can Co., Ltd.
17. Mae Ping Hotel (1988) Co., Ltd.
39. Thai Charoen Insurance Public Company Limited
18. N.C.C. Management and Development Co., Ltd.
40. The Chonburi Sugar Corporation Limited
19. New Noble Property and Loan Fund
41. Thai Glass Industries Public Company Limited
20. Nongkhai Country Golf Club Co., Ltd.
42. The Maewang Sugar Industry Co., Ltd.
21. North Park Golf and Sports Club Co., Ltd.
43. The New Imperial Hotel Public Company Limited
22. P.S. Recycle Co., Ltd.
44. The Utaradit Sugar Industry Co., Ltd.
SAP System
(4)
Implementation and Status of ThaiBev’s SAP Project (for this year)
In 2001, Beer Thai (1991) Public Company Limited, a subsidiary of ThaiBev, started SAP implementation for its brewery
group and realized benefits from data consistency and cooperation across departments/companies. Even though the
existing system could support financial and management operations and enable ThaiBev to close its accounting book
efficiently and in a timely manner, ThaiBev wished to further realize the benefits of collaboration across business
units and consistent business processes via SAP implementation. In the initial phase, ThaiBev approved a budget
in 2006 to implement the SAP system for holding company and 33 core subsidiaries in Thailand.
2006
2007
Plan in 2008
- Direct subsidiaries
51
52
54
- Indirect subsidiaries
10
9
9
- Overseas subsidiaries
2
11
11
- Overseas subsidiaries
-
11
11
-
3
3
No of Companies
Note (1) Its former name was BJC Engineering Co., Ltd.
(2) Its former name was BJC Trading Co., Ltd.
(3) Its former name was Tara Hotel Co., Ltd.
(4) Its former name was T.C.C. Agro Co., Ltd.
(currently non-trading)
- Overseas indirect associates
Annual Report 2007
214
2006
ThaiBev
Direct subsidiaries
2007
Existing System
Plan in 2008
Announcement to SGX 2007
Existing System
1
SAP System
2
SAP System 34
SAP System 42
The Company recognizes how important of the transparency of information disclosure. In 2007, the Company made
Existing System 49
Existing System 18
BC-Account 12
two hundred and sixty-five announcements via SGX-NET categorized as follows:
1
SAP System
215
1
Compliance with Singapore Exchange Regulations and Best Practices
w interface to SAP
1. Six announcements of quarterly financial statements and dividend declaration.
Indirect subsidiaries
Existing System 10
Existing System
9
SAP System
9
2. Two hundred and two notices of substantial shareholders’ and directors’ interests and changes in interest.
Overseas subsidiaries
Existing System
2
Existing System 11
Existing System 11
When the Company Secretary was informed of the changes in interest of any director(s), the Company Secretary
also reported such information to other directors.
Overseas subsidiaries
(currently non-trading)
-
Existing System 11
Existing System 11
Overseas Indirect associates
-
Existing System
Existing System
3
3
3. Three announcements/report involving with occupying the positions of Directors and Executives
(1) Mr. Panote Sirivadhanabhakdi was appointed as Director of Thai Beverage Public Company Limited to
replace Mr. Paisal Chevasiri who resigned from the position.
The SAP implementation for ThaiBev in this initial phase is slightly ahead of the original schedule and covers more
companies in its scope than that in the proposed plan. In 2007, ThaiBev successfully went live using the SAP system in
32 subsidiaries in Thailand, including sixteen distilleries, one industrial alcohol distillery, five beer and spirits’ agencies,
and 10 related business companies. In addition, ThaiBev is going live with the SAP system in another 3 companies,
including Thai Beverage Logistics Co., Ltd., Cosmos Brewery (Thailand) Co., Ltd. and ThaiBev on the January 1, 2008.
To aid in the uniform understanding and utilization of the standardized processes, ThaiBev plans to extend SAP
implementation to another 15 direct and indirect subsidiaries in Thailand, including recently acquired distillery in 2008.
(2) Mr. Kasemsan Veerakul resigned from the position of Vice President of Office of Corporate Communications
of Thai Beverage Public Company Limited and also resigned from the position of director of subsidiary
companies.
(3) Report of persons occupying a managerial position who are related to a director, CEO, or substantial
shareholder.
4. One announcement of acquisitions and realizations of assets of other companies resulting from acquisitions by
Company’s subsidiary.
In addition, the key sales and accounting information from BC-Accounting systems used in 12 distribution companies
will also be interfaced to the SAP system to better provide integrated view of overall operations in Thailand. The extension
5. Fifty three miscellaneous announcements to either conform to the regulations of the SGX or to give information to
of the project scope in 2008 will mainly be implemented by the ThaiBev IT team with some support from the existing
investors, involving details of capital increases of the Company’s subsidiaries, the change of the name of Company’s
consulting team and its implementation costs will still be within the originally approved budget.
subsidiaries, a summary of business performance results for each quarter for investors, a clarification of news
about the Company, and disclosure of connected transactions among interested persons.
Because of the diversity of ThaiBev’s overseas business, ThaiBev will consider IT investment in these subsidiaries
based on their existing IT system, size of business, local regulations and social environment. Meanwhile, ThaiBev will
continuously improve its financial consolidation process by utilizing the Consolidated Performance Management
System, based on the current SAP implementation in Thailand, to collect key accounting and operational information
from both the SAP and existing systems used in subsidiaries.
Annual Report 2007
216
217
General Corporate Information
Company Name
Address
Post Code
Telephone
Fax
Remark
Alcohol Group
1. Thai Alcohol Public Company Limited
Pomprab Satru-pai District, Bangkok
10100
(02) 223 6679
(02) 223 6626
(02) 225 4205
2 Moo 5, Tambon Bang Sai Pa,
Amphoe Banglen Nakhon Pathom
73130
(034) 391 021-4
(034) 234 909
Chatuchak District, Bangkok
10900
(02) 127 5555
(02) 617 9545
349 Moo 2 Tambon Mae Lad,
Amphoe Klong Klung, Kempaengphet
62120
(055) 728 400-15
(055) 728 416
10900
(02) 127 5555
(02) 617 9546
68 Moo 2, Tambon Namtoa,
Amphoe Bangban, Ayutthaya
13250
10900
77 Moo 1 Phaholyothin Road KM. 54,
Amphoe Wangnoi, Ayutthaya
13170
Company Name
Address
Post Code
Telephone
Fax
Remark
315 Moo 4, Tambon Mae Faek,
Amphoe San Sai, Chiangmai
50290
(053) 849 550-3
(053) 849 555
10900
(02) 127 5383
(02) 272 2330
(02) 272 2295
50 Moo 7, Tambon Wangkhanai,
Amphoe Thamuang, Kanchanaburi
71110
(034) 611 783-5
(034) 611 786
Vibhavadi Rangsit Road,
10900
(02) 127 5386
(02) 272 2330
488 Moo 1, Tambon Wangdong,
Amphoe Muang, Kanchanaburi
71190
(034) 527 100
(034) 527 111
Factory
82 Moo 3, Tambon Bang Khoo Wat,
Amphoe Muang, Pathum Thani
12000
(02) 598 2850-9
(02) 598 2858
Factory
170 Moo 11, Tambon Nikhom,
Amphoe Satuek, Buri Rum
31150
(044) 627 200-3
(044) 681 011-2
(044) 627 202
101 Moo 8, Tambon Kaeng Dom,
King Amphoe Sawang Wirawong,
Ubon Ratchathani
34190
(045) 202 210-1
(045) 442 006-8
(045) 202 212
10900
(02) 127 5555
(02) 272 2321
(02) 272 2295
309 Moo 6, Nampong-Kranuan Road,
Tambon Nampong, Amphoe Nampong,
Khon Kaen
40310
(043) 441 013-5
(043) 441 017,
441 438
99 Moo 4, Tambon Hat Kham,
Amphoe Muang, Nong Khai
43000
(042) 462 657
(042) 012 521
(042) 012 525
(042) 012 524
10900
(02) 127 5555
(02) 272 2330
8 Moo 5, Setthakit 1 Road,
Tambon Nadee Amphoe Muang,
Samut Sakhon
74000
(034) 830 213-6
(034) 830 213-6
10900
(02) 127 5555
(02) 272 2321
(02) 272 2334
(034) 331 954
(034) 227 754-7
(034) 331 955
Factory
Factory
Brewery Group
6. Sura Piset Thipharat Co., Ltd.
1. Beer Thai (1991) Public Company Limited
(035) 289 333-47
(02) 127 5555
(035) 362 175-8
(035) 289 371
Factory
Factory
(02) 617 9685
(035) 362 179
Factory
Distillery Group
10900
(02) 127 5384
49 Moo 4, Tambon Hormkret,
Amphoe Sampran, Nakhon Pathom
73110
37/3 Moo 7, Tambon Wangkhanai,
Amphoe Thamuang, Kanchanaburi
71110
(034) 611 053
(034) 611 778
333 Moo 1, Tambon Tha Toom,
Amphoe Si Maha Phot, Prachin Buri
25140
(037) 285 016-20
(037) 285 237
10900
(02) 127 5382
(02) 272 2330
149 Moo 5, Wangseesoob
Ngew-Ngam Road, Tambon Phajud,
Amphoe Muang, Uttaradit
53000
(055) 449 126-30
(055) 449 131
(034) 321 777-9
(02) 272 2330
(034) 321 777
Factory 1
Factory 2
Factory
54 Moo 2, Sukhaphiban Road,
73120
Tambon Nakhonchaisri,
Amphoe Nakhonchaisri, Nakhon Pathom
Factory
Factory
Factory
Annual Report 2007
218
Company Name
Address
Post Code
Telephone
Remark
1 Moo 6, Tambon Ban Daen,
Amphoe Banphot Phisai,
Nakhon Sawan
60180
10900
1 Moo 2, Highway No. 41 Road,
Tambon Tharongchang,
Amphoe Punpin, Surat Thani
84130
46 Moo 1, Tambon Nong Klang Na,
Amphoe Muang, Ratchaburi
70000
(032) 321 791-2
(032) 313 611-2
(032) 321 793
17. Sura Piset Pattharalanna Co., Ltd.
10900
(02) 127 5555
(02) 272 2330
Dormant
56 Moo 2, Sukhaphiban Road,
Tambon Nakhonchaisri,
Amphoe Nakhonchaisri,
Nakhon Pathom
73120
(034) 331 157
(034) 331 787
Factory
79 Moo 3, Tambon Lumlookbua,
Amphoe Dontoom, Nakhon Pathom
73150
19. SPM Foods and Beverages Co., Ltd.
(056) 279 088-9
Fax
(02) 127 5555
(077) 357 170-3
(034) 302 194
(056) 350 660
219
Company Name
(034) 302 194
Post Code
Telephone
Fax
Liquor Marketing Group
95/390-391 Trok Nokkhet,
10120
Rama III Road, Chong Nonsi Sub-District,
Yannawa District, Bangkok
(02) 291 9711-5
(02) 289 4751
51/40-41 Moo 3, Sukhumvit Road,
Chon Buri
20000
(038) 287 268-9
(038) 272 525
Tambon Tha Wasukri,
Amphoe Phra Nakhon Si Ayutthaya,
Ayutthaya
13000
(035) 242 691
(035) 242 691
149/3 Chulachomklao Road,
Tambon Tha Kham,
Amphoe Phun Phin, Surat Thani
84130
(077) 224 771-4
(077) 224 775
1/7-8 Phraya Surasi Road,
Phitsanulok
65000
(055) 241 132
(055) 243 610
1, 3, 5 Trok Wat Muang,
Suranaree Road, Tambon Nai Muang,
Amphoe Muang, Nakhon Ratchasima
30000
(044) 242 496
(044) 241 747
10900
(02) 127 5555
(02) 272 2584
10900
(02) 127 5555
(02) 272 2584
10900
(02) 127 5555
(02) 272 2584
4. Sunthornpirom Co., Ltd.
10900
(02) 127 5555
(02) 272 2584
10900
(02) 127 5555
(02) 272 2584
10900
(02) 127 5203
(02) 617 9600
(02) 272 2330
(02) 272 2295
(077) 357 174
Address
Factory
Factory
Distribution Agent Group
Beer Marketing Group
2194 Charoen Krung Road,
Wat Phraya Krai Sub-District,
Bang Kho Laem District, Bangkok
10120
(02) 291 9711
(02) 289 4751
2. Pomkit Co., Ltd.
48, 50, 52 Suranaree Road,
Nakhon Ratchasima
30000
(044) 242 496
(044) 241 747
Tambon Tha Wasukri,
Amphoe Phra Nakhon Si Ayutthaya,
Ayutthaya
13000
(035) 241 678
(035) 241 313
135/3 Moo 4, Kanchanavithi Road,
Tambon Bang Kung, Amphoe Muang,
Surat Thani
84000
80/13-14 Ekathosarot Road,
Phitsanulok
65000
51/42 Moo 3, Sukhumvit Road,
Chon Buri
20000
5. Pomklung Co., Ltd.
(077) 224 774
(055) 241 132
(077) 224 775
(055) 243 610
Import - Export & Logistics Group
(038) 287 268
(038) 272 525
Remark
Annual Report 2007
220
Company Name
Address
Post Code
10900
Telephone
(02) 127 5840
(02) 127 5555
Fax
(02) 617 9619
Remark
221
Company Name
Address
Post Code
3 Philip Street # 13-04 Commerce Point,
Singapore
048693
140 Nehru (Street # 215)
Sankat Vealvong, Khan 7 Makara,
Phnom Penh, Kingdom of Cambodia
No 9-1, Jalan USJ 1/1B,
Regalia Business Centre,
47620 Subang Jaya, Selangor,
Malaysia.
Related Business Group
195 Empire Tower, 25th Floor,
10120
Sathon Tai Road, Yannawa Sub-District,
Sathon District, Bangkok
(02) 670 2525
10900
(02) 127 5555
10900
10900
10900
(02) 127 5555
(02) 617 9647
10900
(02) 127 5323-4
(02) 617 9688
10900
949/6-8 Nakhon Chaisi Road,
Thanon Nakhon Chaisi Sub-District,
Dusit District, Bangkok
10300
(02) 241 0127
(02) 241 0858
(02) 243 1607
9. Bang-na Logistics Co., Ltd.
10900
(02) 127 5511
(02) 617 9549
10900
(02) 127 5555
(02) 617 9500-29
Fax
(65) 6435 2880
(65) 6436 9930
(855) (23) 881 484
(855) (23) 881 484
47620
(603) 8023-4923
(603) 8023-5923
10165
(646) 896 3800
(1) 646 896 3801
Remark
(02) 670 2551
(02) 617 9685
5. International Beverage Holdings Limited USA, Inc. 60 East 42nd Street, Suite 2134,
New York, NY
(02) 127 5555
Telephone
(02) 272 3038
Kowloon, Hong Kong
(852) 2375 6648
(852) 2375 6188
7. International Beverage Holdings (UK) Limited
Scotland
(44) 1236 769377
(44) 1236 779001
Scotland
(44) 1236 769377
(44) 1236 769781
9. Blairmhor Distillers Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Scotland
(44) 1236 769377
(44) 1236 769781
8 Westbank Road, Belfast, BT3 9JL,
Northern Ireland
(44) 289 077 3990
(44) 289 037 0566
Dormant
ul. Obodrzyców 34 A/1, 81-812 Sopot,
Poland
(48) 585 502 111
(48) 585 502 111
Dormant
Scotland
(44) 1236 769377
(44) 1236 769781
14. Inver House Distribution SA
Avenue des Tilleuls, 62140 Marconne,
France
(33) 2 181 6170
(33) 2 181 1321
Dormant
15. Moffat & Towers Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
16. The Knockdhu Distillery Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
17. Speyburn-Glenlivet Distillery Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
18. The Pulteney Distillery Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
(02) 272 2432
Dormant
(02) 617 9530
Non-Alcohol Group
1. Wrangyer Beverage (2008) Co., Ltd.*
(02) 127 5497
(02) 272 2584
Remark: * Registered the change of the company’s name from
“Maharas Agri Co., Ltd.” on February 19, 2008.
Overseas Group
Kowloon, Hong Kong
(852) 2375 6648
(852) 2375 6188
Annual Report 2007
222
Company Name
Address
Post Code
Telephone
Fax
Remark
19. The Balblair Distillery Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
20. Glen Calder Blenders Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
21. Hankey Bannister & Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
22. R. Carmichael & Sons Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
23. J. MacArthur Junior & Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
24. Mason & Summers Limited
10 Foster Lane, London, EC2V 6HH,
England
(44) 1236 769377
(44) 1236 769781
Dormant
25. James Catto & Company Limited
Scotland
(44) 1236 769377
(44) 1236 769781
Dormant
Others
10900
(02) 127 5555
(02) 272 2584
10900
(02) 127 5555
(02) 272 2584
10900
(02) 127 5555
(02) 272 2584
4. Muangkij Co., Ltd.
9 Dao Khanong-Chom Thong Road,
Bang Kho Sub-District,
Chom Thong District, Bangkok
10120
(02) 127 5328
(02) 272 2584
5. Banglen Agriculture Co., Ltd.
10100
(02) 223 3125
(02) 225 4205
Dormant
6. Sint Ek Panich Co., Ltd.
10100
(02) 223 3125
(02) 225 4205
Dormant
7. Vidhayathan Co., Ltd.
10900
(02) 617 9500-29
(02) 617 9530
10900
(02) 127 5555
(02) 272 2330
Company Name
Address
Telephone
Fax
Remark
10900
(02) 127 5555
(02) 272 2330
Dormant
10. Thai Thum Distillery Co., Ltd.
10900
(02) 127 5555
(02) 272 2330
Dormant
11. Pan Alcohol Co., Ltd.
10900
(02) 127 5555
(02) 272 2330
Dormant
Company Compliance Advisor
Venture Law LLC
50 Raffles Place #31-01
Singapore Land Tower
Singapore 048623
Dormant
Post Code
9. Sura Piset Samphan Co., Ltd.
Company Legal Advisor
White & Case (Thailand) Limited
22nd floor, Mercury Tower
540 Ploenchit Road
Lumpini, Pathumwan
Bangkok 10330
1. T.C.C. Cosmo Corporation Limited
8. Sura Piset Sahasan Co., Ltd.
223
Certified Public Accountant
Mr. 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 April 20, 2007.

Annual Report 2007 - Thai Beverage

Transcription

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