1

- Information Memorandum -

Osotspa Public Company Limited (OSP) (the “Company”) 1

Head Office 348 Ramkhamhaeng Road

Hua Mak, Bang Kapi, Bangkok 10240

Tel 02-351-1000

Fax 02-351-1125

www.osotspa.com

Factory Location

Listing Date October 17, 2018 (trading commencement on October 17, 2018)

Listed Securities 3,003,750,000 ordinary shares with par value of THB 1.0 each, equivalent

to the total value of THB 3,003,750,000

Capital As of October 17, 2018 (the trading commencement date)

Registered and paid-up capitals equivalent to THB 3,003,750,000

The number ordinary shares offered at the IPO: 603,750,000 shares,

consisting of 506,750,000 newly-issued ordinary shares, and 97,000,000

existing ordinary shares of the Company’s existing shareholders namely,

Orizon Limited and Y Investment Ltd

Secondary Market The Stock Exchange of Thailand (SET)

Final Offering Price THB 25 per share

Offering Date October 1 – 4, 2018 to investors at the underwriters’ discretion, the Company’s

patrons, employees and related persons who are the Company’s directors or

executives

1 This document sets out a brief information memorandum in relation to Osotspa Public Company Limited only. For more information, please refer to the registration statement

and prospectus for the initial public offering of the Company’s shares.

2

October 8 – 10, 2018 to institutional investors (including domestic

cornerstone investors, offshore initial purchasers and offshore cornerstone

investors)

Use of Proceeds

Use of Proceeds

Approximate Amount to be

Used (Million Baht)

Expected to be

Used in

1 To finance our business expansion in Thailand and internationally including to develop and improve our production, distribution, product quality control capabilities, and internal business operations, including in particular:

5,394.0 2018 – 2019

construction of a new beverage production facility in Myanmar 2,424.0

construction of a new furnace at one of our glass factories 1,800.0

construction of a new powder plant factory for our personal care products

167.3

other projects including maintenance of machinery and equipment for enhancing our glass manufacturing process, building and land improvements, and pilot factories for testing the quality of new products before commencing commercial production

1,002.7

2 To repay existing indebtedness 5,700.0 2018

3 To finance our working capital requirements 1,198.2 2018 – 2019

Total 12,292.2

Overallotment - None -

Type of Business and Operation

Business Operation and Product Characteristics

We are a Thailand-based consumer products company, with a focus on non-alcoholic beverages and

selected personal care products. In Thailand and our core international markets in Southeast Asia

(Myanmar, Cambodia and Laos), we are one of the leading producers, marketers and distributors of non-

alcoholic beverages and baby care products, and we distribute our beverage products in 25 countries (in

total) globally through direct distributors. In addition, we provide other services such as supply chain

management services which consist of, among others, producing certain beverage products, glass bottles

and personal care products, under joint venture and OEM agreements and distributing products under our

joint venture agreements. Our home market is Thailand and we have a strong regional presence in

Myanmar, Cambodia and Laos, our core international markets.

The charts below represent the breakdown of revenue generated from our business segments in

2017 and for the six months ended June 30, 2018, represented as a percentage of our total revenue from

sales and services:

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1. Beverages Products

Our beverage products’ primary focus is on energy drinks, our sports drink M-Electrolyte, and our

ready-to-drink coffee M-Presso, with a secondary focus on functional drinks. The below table shows a

selection of our energy drinks, sports drinks and ready-to-drink coffee brands which are primarily sold in

Thailand:

• M-150 is our flagship energy drink brand.

• 150 mL bottles whose currently suggested retail price is THB 10 per unit.

• M-Storm 150 mL bottle and 180 mL can whose currently suggested retail price is THB 15

per unit.

• Lipovitan-D is our second most popular brand.

• Lipovitan-D 100 mL bottles and Lipo Plus 150 mL bottles whose currently suggested retail

prices are THB 12 per unit and THB 15 per unit, respectively.

• Chalarm 150 mL bottles whose currently suggested retail price is THB 10 per unit.

• Chalarm Black Galingale 100 mL glass bottles whose currently suggested retail price is

THB 10 per unit.

• Som In-Sum 100 mL glass bottles whose currently suggested retail price is THB 10 per unit.

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• M-Electrolyte (whose previous name was the M-Sport brand) 250 mL bottles whose

currently suggested retail price is THB 10 per unit.

• M-Presso ready to drink coffee 180 mL cans whose currently suggested retail price is THB

15 per unit.

• The M-Presso brand includes the Robusta variant and the Espresso variant.

The below table shows our core functional drinks:

• C-Vitt is sold in 140 mL glass bottles whose currently suggested retail price is THB 15 per

unit.

• Peptein 100 mL bottles whose currently suggested retail price is THB 38 per unit.

• Calpis is sold in 140 mL and 300 mL plastic bottles, and 245 mL cans, whose currently

suggested retail prices vary between THB 10 to 20 per unit, depending on the type and size

of packaging.

• The Calpis brand is sold in non-carbonated and carbonated versions.

• Cawaii is sold in 75 mL plastic bottles whose currently suggested retail price is THB 15 per

unit.

• Cawaii offers two fruit flavors which are the 7 Berries flavor which contains vitamins A, C and

E, and the Prune Plus Acerola Cherry.

The below table shows a selection of our energy drinks brands which are primarily sold in

international markets:

• Shark Cool Bite (also marketed as Shark in certain European countries) is sold in 250 mL

aluminum cans whose currently suggested retail prices range from THB 25 to 70 per unit.

• Shark is a special formulation for the Myanmar market.

• 250 mL steel cans whose currently suggested retail price varies from 600 to 650 Burmese

Kyat per unit (THB 14 to 15 per unit).

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• M-150 can was first introduced in Vietnam.

• 250 mL aluminum can whose suggested retail prices range from THB 15 to 30 per unit.

2. Personal Care Products

Our personal care products business line comprises a baby care products line and a women’s beauty

care products line. Key brands in this business line include Babi Mild (baby care products) and Twelve Plus

(women’s beauty care products).

The below table shows our core baby talcum products, baby bath products, baby lotion and

moisturizer products and baby homecare and fabric care products:

Our core baby talcum products:

• Babi Mild baby talcum is available in different variants, including Ultra Mild Pure Natural

and Ultra Mild White Sakura.

• Babi Mild baby talcum is sold in 50 g, 180 g, 400 g bottles, and two x 400g bottle packs,

whose currently suggested retail prices are THB 12, THB 29, THB 64 and THB 99 per

unit/pack, respectively.

Our core baby bath products:

• Babi Mild baby bath is available in different variants, including Ultra Mild Pure Natural and

Ultra Mild White Sakura.

• Babi Mild baby bath bottle sizes range from 125 mL to 850 mL, and currently have

suggested retail prices ranging from THB 39 to THB 199 per unit. Refill bags are also

available in 380 mL at the suggested retail price of THB 93 per unit.

• Babi Mild bar soap is available in different variants, including Ultra Mild Pure Natural and

Ultra Mild White Sakura.

• Babi Mild baby bar soap is sold in single 75 g units and its currently suggested retail price

is THB 12 or THB 48 for four-bar packs.

Our core baby lotion and moisturizer products:

• Babi Mild lotion and moisturizers are marketed in variants, such as lotion, oil, and creams.

Babi Mild lotion and moisturizers are available in different variants, including Ultra Mild Pure

Natural and Ultra Mild White Sakura.

• Babi Mild baby lotion and moisturizers bottle sizes range from 50 mL to 400 mL, and their

currently suggested retail prices vary from THB 39 to THB 189 per unit.

Our core baby homecare and fabric care products:

• Babi Mild homecare and fabric care products are available in different variants, including

being Ultra Mild Pure Natural and Ultra Mild.

• Babi Mild homecare and fabric care products are available, among others, as fabric wash,

fabric softener, and cleaners.

• Babi Mild fabric wash bottle sizes range from 900 mL to 3,000 mL, and currently suggested

retail prices range from THB 101 to THB 269 per unit. Babi Mild fabric wash is also available

in pouch pack size of 600 mL at a suggested retail price of THB 84 per unit, and 600 mL x

3 pack at a suggested retail price of THB 230 per pack.

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• Babi Mild fabric softener single bottle size is 3000 mL and retails for THB 198 per unit. Babi

Mild fabric softener is also available in pouch packs ranging from 600 mL to 1,500 mL and

its currently suggested retail price varies from THB 55 to THB 79 per pack. It is also

available in 600 mL x three pouch pack at a suggested retail price of THB 165 per pack.

• Babi Mild cleaner bottle sizes range from 650 mL to 1,600 mL and its currently suggested

retail price varies from THB 107 to THB 185 per unit. Babi Mild cleaner is also available in

300 mL x three pouch pack at a suggested retail price of THB 237 per pack.

The below table shows our main women’s beauty care products:

Our Twelve Plus fragrance products:

• Twelve Plus fragrance products are available in different collections, including pocket

cologne, moisturizing cologne, super natural, and eau de perfum. Bottle sizes range from

4 mL to 120 mL, and their currently suggested retail prices vary from THB 49 to THB 129

per unit.

Our Twelve Plus talcum products:

• Twelve Plus talcum is available in three key product ranges: whitening complex, extra

cool, and perfume fresh. Bottle sizes range from 50 mg to 300 mg, and their currently

suggested retail prices vary from THB 20 to THB 95 per unit.

Our Twelve Plus skin cleansing products:

• Twelve Plus skin cleansing bottle sizes range from 200 mL to 500 mL, and its currently

suggested retail price varies from THB 52 to THB 135 per unit.

Our Twelve Plus specialty products:

• Twelve Plus specialty products include deodorants and our Snail Whitening products.

• Twelve Plus deodorants are available in two key product ranges: whitening and nano-

antibacteria + collagen in roll on format, and cater to our female consumers looking for a

one-stop brand for their personal care needs.

• Twelve Plus roll on deodorant sizes range from 12 mL to 45 mL and their currently

suggested retail prices vary from THB 15 to THB 70 per unit.

• Twelve Plus Snail Whitening products are available in three key product categories: skin

cleansing, body lotion and deodorant.

• Twelve Plus Snail Whitening skin shower creams are available in 450 mL bottles which

currently retail for THB 135. Twelve Plus Snail Whitening body lotions are available in 150

mL bottles whose currently suggested retail price is THB 99. Twelve Plus Snail Whitening

deodorants are available in 22 mL and 40 mL bottles whose currently suggested retail

prices are THB 37 and THB 70, respectively.

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3. Supply Chain Services

Our supply chain services segment includes production and distribution of our products to third

parties through joint venture agreements and OEM agreements. In our consolidated financial statements

included elsewhere in this Information Memorandum, this reportable segment is named “original design

manufacturing, packaging and distribution.” In this Information Memorandum, we refer to this segment as

our “supply chain services” segment. The supply chain services we provide consist of: (i) producing health

and wellness products we sell to our joint venture Osotspa Taisho Pharmaceuticals Co., Ltd. (“Osotspa

Taisho”) such as Kirsnaklan Tra Kilen, Thumjai, Banner and Utaitip; (ii) producing and/or co-packing certain

beverage products and personal care products, under joint venture and OEM agreements, as applicable;

(iii) distributing products under our joint venture agreements (including our joint ventures House Osotspa

Foods Co., Ltd (“House Osotspa Food”) and Calpis Osotspa Co., Ltd (“Calpis Osotspa”), but excluding,

for the avoidance of doubt, sales of Lipoviton-D and Lipo-Plus (“Lipo beverages products”), the sales of

which are accounted for under our “beverage” business line); (iv) selling glass bottles to our joint ventures

and to third parties under OEM agreements; and (v) the distribution of Unicharm personal care products

before March 15, 2017 which the termination of our distribution agreement with Unicharm was effective on

March 15, 2017

4. Other Businesses

Our other businesses include minority investments in other companies and confectionary business,

including Botan mint ball and herbal mouth freshener under the Botan brand. Although we ceased

manufacturing Ole candies in 2016, having sub-contracted the production of these products to a third party,

we intend to expand our presence opportunistically in the confectionary market by leveraging the brand

recognition of the existing Ole and Botan brands. Our confectionary products are distributed to our

consumers through the traditional and modern trade channels.

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The following diagram shows our group structure as at the date hereof:

100%

(1) Taisho Pharmaceuticals Co., Ltd. holds a 60% equity interest in Osotspa Taisho Pharmaceuticals Co., Ltd. (2) House Foods Corporation (now known as House Foods Group Inc.) holds a 60% equity interest in House Osotspa Foods Company Limited (3) Asahi Group Holdings Southeast Asia holds a 60% equity interest in Calpis Osotspa Company Limited (4) Dr. Sai Sam Htun and Mr. Stanley Steven Htun each holds a 24.5% equity interest in Osotspa Loi Hein (Thailand) Company Limited (5) Nihon Yamamura Glass Company Limited holds a 74% equity interest in Yamamura International (Thailand) Company Limited (6) Loi Hein Co., Ltd holds a 49% equity interest in Osotspa Loi Hein Company Limited (7) PT Anugerahtama Bina Citra holds a 50% equity interest in PT Osotspa ABC Indonesia (8) M-150 Company Limited, Union Drink Company Limited, PT Osotspa ABC Indonesia, Sawasdee Publishing Company Limited, FC (2017) Company Limited,

Osotspa Loi Hein (Thailand) Company Limited, Osotspa Europe Ltd., Lizu Trading Handels – GmbH, Edelpure de Beaute LLC, Myanmar Osotspa Company Limited, Shark AG and SAB Outsource Co., Ltd have ceased operations or are undergoing a liquidation process as at June 30, 2018

(9) Loi Hein Company Limited holds a 15% equity interest in Osotspa Myanmar Co., Ltd.

100%

(8)

(7)(8)

(1)

100%

26%

51%

40%

40%

40% 51%

100%

23%

100%

100% 50%

100%

100%

100%

100%

100%

100%

Glass Manufacturing

Siam Cullet Company Limited

Siam Glass Ayutthaya Company Limited

Siam Glass Industry Company Limited

Flavor

SSB Enterprise Company Limited

Wallgreen Company Limited

Beverage Distributor

Osotspa Beverages Company Limited

Personal Care Manufacturing and Distributing

Greensville Company Limited

Thai JVs

Osotspa Taisho Pharmaceuticals Co., Ltd.

House Osotspa Foods Company Limited

Calpis Osotspa Company Limited

Osotspa Loi Hein (Thailand) Company Limited (ceased operation)

Yamamura International (Thailand) Company Limited

International JVs

Osotspa Loi Hein Company Limited

PT Osotspa ABC Indonesia (ceased operation)

International or Export Business

PT M-150 Indonesia

Osotspa USA, INC.

Osotspa Europe Ltd. (ceased operation)

Lizu Trading Handels – GmbH (ceased operation)

Flash Power Do Brasil Ltda.

Edelpure de Beaute LLC (ceased operation)

Shark AG (ceased operation)

Oventure Pte. Ltd.

Osotspa Enterprise Company Limited

Others

White Group Public Company Limited

Osotspa Dairy Company Limited

Sawasdee Publishing Company Limited (ceased operation)

Osotspa Public Company Limited

(2)

(3)

(4)(8)

(5)

(6)

Myanmar Osotspa Company Limited (ceased operation)

FC (2017) Company Limited (ceased operation)

Osotspa Enterprises Singapore Pte. Ltd.

SAB Outsource Co., Ltd. (ceased operation)

(8)

100%

100%

100% Union Drink Company Limited (ceased operation)

M-150 Company Limited (ceased operation)

100% (8)

100%

(8)

(8)

100%

85% Osotspa Myanmar Co., Ltd.

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Revenue Structure

The table below shows, in THB and as a percentage of our total revenue from sales and services,

the revenue breakdown by main business line (including main product lines for our beverage and personal

care business lines) for the years/periods indicated:

Year Ended December 31, Six Months Ended June 30,

2015 2016 2017 2017 2018

THB millio

n %

THB millio

n %

THB millio

n % THB

million %

THB millio

n %

Beverage products:(1) Energy drinks, sports drinks and ready-to-drink coffee(2) .. 18,224.6 57.4 19,196.9 59.5 18,639.1 72.0 9,300.2 72.0 9,369.5 76.7 Functional drinks .............. 556.7 1.8 427.6 1.3 336.3 1.3 170.5 1.3 117.0 1.0

Total beverage products(3) ..... 18,781.3 59.2 19,624.5 60.8 18,975.4 73.3 9,470.7 73.3 9,486.5 77.7

Personal care products:(4) Baby care ....... 2,063.6 6.5 1,908.7 5.9 1,442.4 5.6 589.5 4.6 776.2 6.4 Women’s beauty care..... 983.2 3.1 990.9 3.1 640.3 2.5 312.1 2.4 348.4 2.8 Others(5) .......... 267.8 0.8 172.5 0.5 112.7 0.4 55.7 0.4 55.6 0.5

Total personal care products ........ 3,314.6 10.4 3,072.1 9.5 2,195.4 8.5 957.3 7.4 1,180.2 9.7

Total beverage and personal care products ........ 22,095.9 69.6 22,696.6 70.3 21,170.8 81.8 10,428.0 80.7 10,666.7 87.4

Supply chain services(1)(6) .... Unicharm distribution business ......... 4,895.6 15.4 5,064.9 15.7 578.9 2.2 578.9 4.5 - - OEM business(7) ...... 1,008.4 3.2 1,579.3 4.9 1,598.2 6.2 738.2 5.7 512.9 4.2 C-Vitt .............. 462.3 1.5 573.1 1.8 778.3 3.0 336.8 2.6 487.9 4.0 Calpis ............. 492.5 1.6 442.1 1.4 494.5 1.9 243.6 1.9 221.1 1.8 Others(8) .......... 433.7 1.4 237.6 0.7 194.7 0.8 75.6 0.6 74.2 0.6

Total supply chain services ......... 7,292.5 23.0 7,897.0 24.5 3,644.6 14.1 1,973.0 15.3 1,296.1 10.6 Other(9) ........... 1,197.0 3.8 713.7 2.2 211.4 0.8 93.5 0.7 100.1 0.8

Total revenue from sales ..... 30,585.4 96.4 31,307.3 97.0 25,026.8 96.7 12,494.5 96.8 12,062.9 98.8 Total revenue from services(10) ..... 1,153.1 3.6 959.5 3.0 850.7 3.3 417.3 3.2 151.4 1.2

Total revenue from sales and services . 31,738.5 100.0 32,266.8 100.0 25,877.5 100.0 12,911.7 100.0 12,214.3 100.0

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Notes:

(1) Sales of Lipo beverage products marketed pursuant to our joint venture agreement with Taisho Pharmaceutical Co., Ltd are also accounted for under sales of beverage products as we are responsible for the production, distribution, marketing and sale of these products. Sales of beverage products pursuant to our other joint venture agreements (C-Vitt, Calpis and Kagome functional drinks until the termination of our joint venture with Kagome in April 2016) are not accounted for under sales of beverage products but included under revenue from supply chain services because we are not responsible for marketing and promotional activities for these products. Consolidated revenue generated by international sales of our beverage products includes revenue from sales of energy drinks in Myanmar pursuant to our distribution agreement between our joint venture Osotspa Loi Hein Co., Ltd. and our joint venture partner Loi Hein.

(2) Including our sports drink M-Electrolyte (starting from September 2017 after the re-branding and re-packaging of M-Sport). From February 2018, this product line also includes our ready-to-drink coffee, M-Presso. Starting from August 2018, this product line will also include our new beverage product, Chalarm Black Galingale.

(3) Please note that our consolidated revenue generated by sales of our beverage products in this table is slightly different from our “external revenue” from our beverage segment as disclosed in Note 24 to our consolidated financial statements for the year ended December 31, 2017 and Note 12 to our consolidated financial statements as of and for the six months ended June 30, 2018 as our consolidated revenue generated by sales of our beverage products in this table excludes revenue from rendering services generated by our beverage segment corresponding to a royalty fee received by Flash Power Do Brasil Ltda., a subsidiary of the Company, for manufacturing of Shark beverage products in Brazil. Similar insignificant differences exist between our “external revenue” from our beverage segment as disclosed in Note 24 to our consolidated financial statements for the years ended December 31, 2015 and 2016, and our consolidated revenue generated by sales of our beverage products for the same financial years as disclosed in this table.

(4) Our international sales of personal care products comprised sales of baby care and women’s beauty care products into Myanmar, Cambodia and Laos.

(5) “Others” in the above table comprise personal care products under our Exit and Utip brands.

(6) Revenue from our supply chain services are accounted for under our “original design manufacturing, packaging and distribution” reportable segment in our financial statements. These supply chain services consist of: (i) producing health and wellness products we sell to our joint venture Osotspa Taisho such as Kirsnaklan Tra Kilen, Thumjai, Banner and Utaitip; (ii) producing and/or co-packing certain beverage products and personal care products, under joint venture and OEM agreements, as applicable; (iii) distributing products under our joint venture agreements (including our joint ventures House Osotspa Foods and Calpis Osotspa, but excluding, for the avoidance of doubt, sales of Lipo beverages products, the sales of which are accounted for under our “beverage” business line); (iv) selling glass bottles to our joint ventures and to third parties under OEM agreements; and (v) the distribution of personal care products for Unicharm before March 15, 2017.

(7) “OEM business” in the above table refers to OEM agreements with customers for glass bottles and personal care products we manufacture.

(8) “Others” in the above table comprises revenue from sales of Kagome functional drinks (until the termination of our joint venture with Kagome in April 2016), health and wellness products and revenue from supply chain services generated overseas.

(9) “Other” includes primarily sales of industrial chemical products by the White Group Public Company Limited (an entity which was fully consolidated into our consolidated financial statements in 2015, before being deconsolidated and accounted for under the equity method of accounting from July 1, 2016 and sales of our confectionary products.

(10) “Total revenue from services” includes revenue from media and advertising services from the Future Group (until the Future Group Sale in January 2018) and maintenance and other services relating to property rental by the White Group Public Company Limited (an entity which was fully consolidated into our consolidated financial statements in 2015, before being deconsolidated and accounted for under the equity method of accounting from July 1, 2016 and the fee relating to sale of one beverage product overseas.

Target Customers

• Beverage Products

The below list sets out target customers for our energy drinks, sports drinks and ready-to-drink coffee

brands which are primarily sold in Thailand.

The M-150 brand targets mass market customers aged 30 years and older.

The M-Storm brand targets younger premium customers whose ages range from 25 to 35 years.

The Lipo brand targets premium customers over the age of 40.

The Chalarm brand targets mass market consumers in the northern and southern regions of

Thailand.

Chalarm Black Galingale targets male consumers from the over 30 years old who usually

undertake physically strenuous tasks and who also believe in the benefits of Thai herbs.

The Som In-Sum brand targets mass market and female consumers.

The M-Electrolyte brand targets mass market consumers who need replenishment of electrolytes

lost due to sports activities.

The M-Presso targets consumers seeking the taste and aroma of freshly roasted coffee together

with its stimulating effects for long working hours.

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The below list sets out target customers of our certain energy drinks brands which are primarily sold

in international markets.

The Shark Cool Bite brand targets premium segment consumers whose ages range from 18 to

35 years and who seek a lifestyle refreshment beverage.

Shark brand targets premium market consumers in Myanmar.

M-150 can targets mass market consumers of over 18 years of age.

The below list sets out target customers for our core functional drinks brands.

The C-Vitt brand targets consumers who seek to obtain their daily vitamin C requirements in an

easy and drinkable way.

The Peptein brand targets consumers who are seeking enhanced cognitive and health benefits.

The Calpis brand is sold in non-carbonated and carbonated versions, and targets the casual

segment of the functional drinks (which comprises drinks generally served in larger sizes (equal

to or more than 250 mL) and which are sought after by consumers looking for refreshment and

additional benefits to their health from the lactobacillus contained in these drinks) and carbonated

drinks markets, respectively.

• Personal Care Products

Babi Mild products target 27 to 35-year old pragmatic mothers with children up to three years old.

Twelve Plus products target active and modern 18 to 25-year old women in the mass market.

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Marketing, Sales and Distribution

The below table shows our core distribution channel networks for our beverage products and

personal care products in Thailand:

We primarily distribute our products through the traditional and modern trade channels. We are also

expanding E-Commerce and M-Commerce platforms as our new complementary distribution channels.

Details of each distribution channel are as follows:

1. Traditional trade sales points include local stores, minimarts, local supermarkets and local gas

stations (most of which are family run businesses). We distribute our products to traditional trade stores

through distributors, wholesalers and cash and carry wholesale centers such as those of Siam Makro Public

Limited Company (known as “Makro”), which make them available to open trade retailers.

2. Modern trade sales points include hypermarkets, supermarkets, convenience stores, vending

machines and chained gas stations. We distribute our products directly to such retailers.

3. E-Commerce and M-Commerce platforms are also being explored as effective channels to

launch and/or distribute our brands. Certain E-commerce and M-commerce platforms could help us reach

our target consumer market more effectively, for instance where our products target younger or urban

consumers. Our products are already available from websites of certain of our customers such as Tesco,

Big-C and Tops. We have also recently expanded our personal care products distribution into one of

Thailand’s leading marketplace platforms, Lazada, through its website and mobile phone application. We

are actively exploring strategic partnerships with various E-commerce platforms with a strong presence in

certain overseas markets. In the longer run, we may also seek to add a new channel for the distribution of

our beverage products through hotels, restaurants and other catering businesses, which can allow us to

achieve more visibility in these markets quickly and increase our brand recognition and market penetration.

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In addition to Thailand, we also distribute our products through direct distributors in 25 countries (in

total) globally, including countries throughout Asia, Africa, Eastern Europe, North America and South

America. Our core international markets are Myanmar, Cambodia and Laos, with a secondary focus on

Indonesia and Vietnam. Our revenue generated by international sales could be briefly described as follows:

For 2017

• Our revenue generated by international sales of beverage and personal care products accounted

for 15.3% and 0.8% of our total revenues, respectively.

• Our core international markets accounted for 75.3% and 4.6% of our revenue from international

sales of beverage and personal care products, respectively.

• Our beverage products business line contributed 95.2% of our revenue from international sales

of beverage and personal care products, with the balance coming from personal care product

sales.

For the six months ended June 30, 2018

• Our revenue generated by international sales of beverage and personal care products accounted

for 16.0% and 1.0% of our total revenues respectively.

• Our core international markets accounted for 76.3% and 5.9% of our revenue from international

sales of beverages and personal care products, respectively.

• Our beverage products business line contributed 94.0% of our revenue from international sales

of beverage and personal care products, with the balance coming from personal care product

sales.

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The below map shows the countries in which our products are distributed as at December 2017.

Key features of our international marketing activities

As Myanmar, Indonesia, Vietnam, Laos and Cambodia already have exposure to our M-150 brand,

we will continue to market and sell M-150 in these countries (as well as Shark, in Myanmar). In addition,

our Babi Mild brand exists in Myanmar, Cambodia and Laos and we will continue to market and strengthen

these brands in these countries. In addition, we also sell Shark Cool Bite in Cyprus, Slovenia and Bulgaria

and we intend to grow our presence in the region by capitalizing on opportunities in neighbouring Eastern

Europe countries.

We engage in marketing in our international markets with the support of our local distribution partners

as we seek to increase the market penetration of our products. We engage in above-the-line and below-

the-line marketing activities in most of the international markets in which our products are sold. These

marketing activities are guided and strategized by our headquarters in Thailand and tailored and adapted

by our local teams and/or partners according to the local culture and context. Our international products

pricing takes into account the expected purchasing power of our target consumer groups and selling prices

of substitutes or competing products available in any of the overseas markets where our products are

distributed. We conduct product placement audits in retail stores in our key international markets on a

regular basis.

Key features of our international distribution agreements

Our sales of beverage and personal care products to local distributors in our international markets

are generally done on the basis of purchase/import orders.

However, we do enter into framework distribution agreements with local distributors on a case-by-

case basis. These framework distribution agreements are typically entered into for terms ranging from one

to three years and most of them are entered into for renewable one-year periods. Under these agreements,

our distributors agree to purchase pre-agreed minimum volumes for the duration of the agreements and

distribute certain of our beverage products within one country or specific locations within one country (such

as in Indonesia and Cambodia where we have several distributors of our M-150 products). The purchase

price of our beverage products is subject to adjustments, and depends, for instance, on variations in

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production costs. Under our distribution agreements, distributors agree to work with our marketing teams

to support our promotional and advertising efforts in the relevant region or country.

Purchase orders we receive from our distributors pursuant to these distribution agreements include

specifications we have to comply with once we accept the order. We are subject to indemnification

provisions relating to product liability, recalls and defects and we are bound to provide to our distributors

guarantees as to the quality of our products. Unless the products we deliver are defective or damaged (or

if we recall products) and the distributors put us on notice as agreed under the relevant distribution

agreement, distributors may not return goods once they have been delivered. These distribution

agreements may be terminated by either party upon prior written notice under certain circumstances such

as bankruptcy or cessation of activities. We and our distributors may also terminate these distribution

agreements or any specific purchase order if we breach specific contractual obligations. Upon expiry or

termination of our distribution agreements, we generally have an option to, but are not obliged to, purchase

back from our distributors our beverage products which are part of their inventory at a price to be mutually

agreed on.

Going forward, to harmonize our distribution arrangements across all regions, subject to adjustments

for local laws, regulations and market practices, we intend to enter into framework distribution agreements

based on our in-house template.

Procurement of Supply and Services

• Production Facilities and Capacity

We own and operate 10 production facilities for our beverage products and personal care products,

all of which are in Thailand. These facilities comprise three beverage mixing and filling factories for both

glass and cans, three glass bottle plants, one cullet treatment plant (which is used for the collection and

cleaning of glass cullet we use for producing glass bottles), one label printing factory, and two personal

care products factories – one for liquids and one for powders. We own all of the land, buildings and

machinery for our production facilities except for the land of the label printing factory. In aggregate, the

practical capacity of our bottling lines is 3,595 million bottles per year and the practical capacity of our

canning line is 122 million cans per year, for a total beverage filling factory practical capacity of

approximately 3,717 million units per year. Our bottling lines can produce non-carbonated beverages

packaged from 75 mL to 250 mL bottles. Our canning line can produce both carbonated and non-

carbonated beverages packaged from 180 mL to 330 mL cans.

All of our beverage products are contained in glass bottles, aluminum or steel cans, and all bottle and

can filling activities are done internally, except for our coffee products. Depending on our needs and the

capacity of our production facilities, however, we may in the future use third-party manufacturers. We and

our subsidiaries, Siam Glass Industry Co., Ltd (“Siam Glass”) and Siam Glass Ayutthaya Co., Ltd (“Siam

Glass Ayutthaya”), manufacture our own glass bottles. We also clean cullet (as raw material for glass

bottle production) in our Siam Cullet Co., Ltd (“Siam Cullet”) plant. However, we source bottle caps and

aluminum or steel cans for our beverage products from third-party suppliers. We sell the majority of our

beverage products in 100 mL and 150 mL glass bottles. Cans are popular with consumers in countries such

as Myanmar, Cambodia, and European countries.

• Raw Materials and Packaging Materials

Raw materials

We source our raw materials primarily from Thai suppliers, with approximately 93.0% by value of our

raw materials sourced from Thai suppliers in 2017. This allows for lower cost of raw materials, low currency

risk, shorter procurement lead time, and allows us to keep inventories low and reach markets quickly. We

believe we are not dependent upon any particular supplier that cannot be readily replaced as we believe

16

the raw materials we use are available from various suppliers and manufacturers located both in Thailand

and abroad.

We typically do not enter into long-term supply agreements with our suppliers, except for natural gas

which is primarily used in our glass factories. We purchase most of our supplies on the basis of purchase

orders with the period stated for purchasing whether a fixed or a minimum quantity of goods and materials

generally being one year. Terms and conditions of each agreement may be different. We believe our main

supplies can be sourced from several suppliers and we therefore regularly re-examine our relationship with

our suppliers and their competitors in order to optimize costs. The short-term nature of most of our supply

agreements and arrangements enables us to fix the price of most of our raw materials on a yearly basis,

providing cost certainty while allowing us to renegotiate for better terms on a yearly basis.

Packaging materials

The principal packaging materials used in our beverage production are glass bottles, bottle caps,

cans, labels and shrink-wrapping. We manufacture all of our glass bottles used for our beverage products,

as well as the majority of our labels and shrink-wrapping needs in-house, while we source bottle caps for

our beverage products from third-party suppliers. The principal packaging materials used in our personal

care production are plastic bottles and caps, pumps and spray nozzles, plastic shrink, sticker labels, flexible

packaging, shrink film and cartons. We source the packaging materials for our personal care products from

third-party suppliers. In 2017 and for the six months ended June 30, 2018, we sourced almost all of our

packaging materials for our personal care products locally and purchased no packaging materials from

related parties.

The production of glass bottles accounts for a significant portion of the cost of our beverage products.

The main raw materials that we use to produce glass bottle products are glass cullet, sodium carbonate,

silica sand, limestone and feldspar which are sourced locally.

We also provide certain of our beverage products in cans. All our aluminum and steel cans (180 mL

and 250 mL) are sourced domestically.

Competition

We operate in a highly competitive environment. Competition in the Thai energy drinks market is

generally based on factors including price, brand name and image, product quality and taste, distribution

coverage, marketing campaigns, ingredients, labelling and packaging, and development of new brands,

products and product extensions. Due to price elasticity of demand from end-consumers (in particular, mass

market end-consumers) and downward pressure on retail prices caused by a highly competitive

environment, market participants have had limited pricing ability and retail selling prices of energy drinks in

general have remained relatively stable in Thailand over the past 30 years.

Local and international companies compete in the Thai personal care products industry, and a wide

variety of personal care products are available. Market participants use product differentiation strategies to

attract mass-and premium-consumers. Competition varies by product and is generally based on price,

additional benefits claimed by manufacturers, product innovation, product reliability and safety and brand

image.

17

The below chart shows our retail sales value and our primary competitors’ in energy drinks, functional

drinks and personal care products markets in Thailand.

Impact on Environment

The primary environmental issue for our production facilities is wastewater. We treat wastewater

through a non-aeration process and an aeration process until the concentration of pollutants are reduced

to Government-specified acceptable levels, at which point the wastewater is disposed of in public

waterways. We recently invested in a large wastewater treatment system at our beverage production facility

in Ayutthaya that has capacity to treat all of our wastewater from this facility, and that has excess capacity,

to allow us to expand these facilities without environmental concerns.

We generate small amounts of hazardous and non-hazardous waste products during our production

processes. We ship out our hazardous waste products via a registered third-party waste disposal company

and handle all other waste products in-house. Non-hazardous packaging waste is shipped out via

registered suppliers and reported to the Department of Industrial Works.

We reduce our environmental impact by using the waste heat from our glass factories to power our

beverage mixing and filling factories. In addition, we can recycle rejected glass bottles from our production

process into glass cullet. Our glass factories can use a high proportion of recycled glass (up to 90.0%)

which is environmentally friendly and has the additional benefit of reducing our energy costs.

Our production facilities are required to treat wastewater at the facility. For our production facilities

located in the industrial estate, we treat wastewater at the facility and then transfer it to the industrial estate

center, which further treats the wastewater. Our operations teams monitor our wastewater quality on a daily

basis. In addition, the Government uses sensors installed at our facilities to monitor our wastewater quality

on a real-time basis (every 30 minutes) and will warn us to take immediate corrective action when the

wastewater quality falls below applicable standards. We believe that we have all relevant environmental

licenses and that our production facilities are in compliance with Government standards for wastewater and

hazardous waste disposal and air pollution.

18

Description of Material Agreements

1. Joint Venture Agreements

Parties Date Shareholding percentage

Objectives

The Company and

House Foods Group Inc

(“House”)

July 4, 2011 The Company

60.0%

House 40.0%

Joint Venture Agreement relating to the

establishment and management of House

Osotspa Foods Company Limited in Thailand

for manufacturing and sale of (i) vitamin C

focused and enriched processed food and

drink products and (ii) spice-based processed

food and drink products.

The Company and

Taisho Pharmaceutical

Co., Ltd (“Taisho”)

June 25, 2012

(Ten years from the date of this agreement, with automatic renewals under the same terms and conditions, unless the parties agree otherwise)

The Company

40.0%

Taisho 60.0%

Joint Venture Agreement relating to the

establishment and management of Osotspa

Taisho Pharmaceutical Company Limited in

Thailand for manufacturing, importing and

distributing: (i) health drinks under Taisho

brand (Lipovitan-D) and its derivative products

e.g. Lipo-Plus; (ii) drug products, dietary

supplements and other products which are

developed and acquired by Taisho; (iii) drug

products, dietary supplements and other

products which are developed and acquired

by Osotspa; and (iv) other drug products and

dietary supplements which may be developed

by Osotspa Taisho.

The Company and

Asahi Group Holdings

Southeast Asia Pte. Ltd.

(“Asahi”)

March 14, 2013 The Company

40.0%

Asahi 60.0%

Joint Venture Agreement relating to the

establishment of Calpis Osotspa Company

Limited for manufacture and management of

and sale of lacto-acid beverages and other

acid beverages containing material originating

from milk in Thailand by using the technical

information supplied by Asahi and marketing

know-how supplied by Osotspa.

The Company and

Nihon Yamamura Glass

Company Limited

(“NYG”)

October 6, 2009 The Company 26.0%

NYG 74.0%

Osotspa and NYG wish to establish

Yamamura International (Thailand) Company

Limited in Thailand to sell and distribute glass

bottles, aluminum cans and other packaging

materials in Japan and the Southeast Asia

region

The Company and

Loi Hein Co., Ltd (“LH”)

March 3, 2015

(Ten years from April 1, 2015 (or any other date as mutually agreed between the parties))

The Company 51.0%

LH 49.0%

Osotspa and LH wish to establish Osotspa Loi

Hein Co., Ltd in Myanmar to provide

marketing, promotion and distribution services

and/or marketing, promotion and distribution,

to the extent permitted by applicable law, in

relation to (i) energy drinks to be produced in

Myanmar and (ii) energy drinks and functional

products to be imported from Thailand.

Osotspa Enterprises

Singapore Pte. Ltd., a

subsidiary of the

Company (“Osotspa

SG”)

Loi Hein Co., Ltd (“LH”)

and

Dr. Sai Sam Htun

May 16, 2018 Osotspa SG 85.0%

LH 15.0%

The agreement between shareholders to

establish Osotspa Myanmar Co., Ltd. in the

Thilawa Special Economic Zone Yangon in

Myanmar to manufacture, sell, market,

promote and distribute any non-alcoholic

beverage products excluding drinking water to

customers in Myanmar, to export to

customers outside of Myanmar and to conduct

any other related businesses and services,

subject to the terms and conditions of this

agreement and to the extent permitted by

applicable laws and regulations of Myanmar.

19

2. OEM Agreements

Parties Date Term Objectives

The Company and

House Osotspa

Foods Company

Limited (“HOF”)

June 1, 2012 The term of the agreement is

five years from June 1, 2012.

However, if neither party

makes any request to the other

party at least six months before

the expiration, the agreement

shall be renewed for a further

period of one year, and the

same term will apply for the

subsequent year.

HOF delegates to Osotspa and Osotspa

undertakes the manufacture of Vitamin

C enriched functional drinks that are sold

in Thailand as product name “C-Vitt”.

The Company and

Osotspa Taisho

Pharmaceutical

Company Limited

(“Osotspa Taisho”)

March 29, 1996 Ten years from the date of this

agreement.

However, this agreement will

be automatically extended

under the same terms and

conditions, unless the parties

agree otherwise.

Osotspa Taisho as the exclusive

licensee of food product called Lipovitan-

D granted by Taisho Pharmaceutical

Company Limited wishes to appoint

Osotspa and Osotspa accepts such

appointment as the manufacturer to

produce, manufacture, process and

pack the products.

The Company and

Calpis Osotspa

Company Limited

(“Calpis Osotspa”)

August 23, 2013 Three years from June 10,

2013.

The agreement shall be

automatically extended for a

period of one year, unless

either party notifies the other

party otherwise in writing at

least six months prior to the

expiry of the agreement or any

extension thereof.

Osotspa agrees to manufacture and

supply lacto-acid beverages and other

acid beverages containing ingredients

originating from milk as specified in the

agreement to Calpis Osotspa and Calpis

Osotspa agrees to pay to Osotspa

consideration for manufacturing of the

products.

The Company and

Malee Group Public

Company Limited

(“Contractor”)

November 28,

2017

Three years from November

28, 2017.

Osotspa wishes to appoint Malee as the

manufacturer of ready-to-drink coffee

products under the “M-Presso”

trademark of Osotspa and the quality,

quantities and purchasing prices of such

products are specified in the agreement.

3. Distribution Agreements

Parties Date Term Objectives

House Osotspa

Foods Company

Limited (the

“Seller”) and

Osotspa Beverages

Co., Ltd. (the

“Distributor”)

June 1, 2012 Five years from June 1, 2012,

provided that, if neither party

gives written notice to the other

party of its intention to

terminate the agreement at

least six months before the

expiration of the agreement or

any subsequent renewed term,

the agreement shall be

automatically renewed for the

period of one year.

The Seller wishes to grant to the

Distributor the exclusive rights to sell C-

Vitt, vitamin C focused and enriched

drink products, through the Distributor’s

distribution channels in Thailand.

Osotspa Taisho Pharmaceutical Company Limited (the “Seller”) and

Osotspa Beverages Co., Ltd. (the “Distributor”)

March 29, 1996 Ten years from the date of this

agreement.

However, this agreement will be automatically extended under the same terms and conditions, unless the parties agree otherwise.

The Seller wishes to appoint the

Distributor to sell and distribute

Lipovitan-D and Lipo-Plus, which are

the products under the exclusive license

granted by Taisho Pharmaceutical

Company Limited, through distribution

channels in Thailand on an exclusive

basis and the Distributor agrees to

accept such appointment.

20

Parties Date Term Objectives

Calpis Osotspa Company Limited (the “Seller”) and

Osotspa Beverages Co., Ltd. (the “Distributor”)

August 26, 2013 Three years from the signing date.

The agreement shall be renewed automatically for a successive period of one year, unless either party notifies the other party by giving at least three months’ written notice prior to the expiry of the agreement or any extension thereof.

The Seller agrees to grant the

Distributor an exclusive right to sell

lacto-acid beverages and other acid

beverages containing ingredients

originating from milk through the

Distributor’s distribution channel in

Thailand and the Distributor agrees to

accept such exclusive right.

Loi Hein Co., Ltd (the “Seller”) and

Osotspa Loi Hein Co., Ltd (the “Distributor”)

March 27, 2015 One year from April 1, 2015.

The agreement shall be automatically renewed upon the expiry of each term for one year unless either party sends a written notice of termination to the other party at least 90 days prior to the expiry of each term.

The Seller wishes to sell the following

beverages, namely Shark, M-150, M-

Storm and Royal Lipo (the “Products”)

to the Distributor for marketing,

promotion and distribution in Myanmar

and/or provide the Distributor services

for marketing, promotion and

distribution of the Products in Myanmar.

4. Licensing Agreements between Taisho Pharmaceutical Co., Ltd and Osotspa Taisho

Pharmaceutical Company Limited

Osotspa Taisho Pharmaceutical Company Limited (the “Licensee”), a joint venture of the Company,

entered into a licensing agreement with Taisho Pharmaceutical Co., Ltd (the “Licensor”), dated March 29,

1996. The Licensor is the owner of know-how regarding the process, formula and other specification with

respect to manufacture of vitamin tonic, including Lipovitan-D, Lipo-Plus and other products of the Licensor

as agreed by the parties from time to time (the “Products”) and wishes to grant the Licensee the right to

manufacture and sell the Products under the know-how and trademark of the Licensor in Thailand under

the terms and conditions of the agreement. The term of this agreement is ten years from the date of this

agreement. However, this agreement will be automatically extended under the same terms and conditions,

unless the parties agree otherwise.

5. Gas Supply Agreements with PTT Public Company Limited

Entity Date Term

The Company June 21, 2007 The original term of this agreement was from July 1, 2005 to June

30, 2015.

The current term of this agreement is from January 1, 2018 to March

31, 2018 (this contract period is automatically extended by three

months for each period until a new contract is entered into between

the relevant parties).

Siam Glass July 5, 2006 The original term of the agreement with Siam Glass was from

November 1, 2005 to October 31, 2015.

The current term of the agreements is from January 1, 2018 to March

31, 2018 (this contract period is automatically extended by three

months for each period until a new contract is entered into between

the relevant parties).

Siam Glass Ayutthaya January 13, 2012 From January 1, 2012 to December 31, 2018.

If a party wishes to extend the term of the agreement, it shall inform

the other party in writing not less than one year prior to the expiration

date of the agreement. The parties shall complete the negotiation

within 90 calendar days before the expiration date of the agreement.

21

6. Sugar Supply Agreement with Nakornphet Sugar Company Limited

The Company (the “Purchaser”) had entered into a sugar supply agreement with Nakornphet

Sugar Company Limited (the “Seller”) dated January 5, 2018. The Purchaser agrees to purchase refined

white sugar (Quota C) from the Seller to manufacture products for exportation at the price, quantity and

quality as agreed between the parties under the agreement. The term of the agreement is from January

2018 to December 2018

Feasibility Study: - None -

Technical and Management Assistance: - None -

Planned Capital Expenditure

We are currently implementing strategic programs for the purposes of increasing our revenue from

sales and efficiencies with a specific focus on investment returns. As at June 30, 2018, our planned capital

expenditures in relation to commencing the projects which have been approved internally amounted to

approximately THB 2,664 million for 2018 and approximately THB 2,730 million for 2019.

We have designed three main strategic capital expenditure projects:

• Construction of a new beverage production facility in Myanmar: expected capital expenditures

for the first phase of this project amount to THB 2,424 million. The first phase of this project is expected to

end when our new manufacturing facility in Myanmar will start operations, which is anticipated to be in the

fourth quarter of 2019. The planned capital expenditures for this project amount to THB 771.0 million for

2018 (being part of carry forward capital expenditures for 2017) and THB 1,653.0 million for 2019. Additional

capital expenditures are planned to be incurred in a second phase of this project, depending on market

demand for our beverage products in Myanmar: increased demand would require investment in

manufacturing capacity expansion. This project will be undertaken through our new subsidiary incorporated

in Myanmar, Osotspa Myanmar Co., Ltd., in which we and Loi Hein Co., Ltd (“Loi Hein”) hold ownership of

85% and 15%, respectively. With this manufacturing facility in Myanmar, we will retain control over our

investment and have more flexibility to capture and adapt to market demand, for instance by better

monitoring and conducting advertising and promotional activities and increasing production as necessary.

This will also enable us to apply our expertise in cost optimization to our business in Myanmar and capture

any benefit stemming from the upstream integration of our manufacturing facility in Myanmar together with

the distribution of our beverage products manufactured locally.

• Construction of a new furnace at one of our glass factories at Rojana Industrial Park: expected

capital expenditures for this project amount to THB 1,800 million. The planned capital expenditures for this

project amount to THB 873 million for 2018 and THB 927 million for 2019. We plan to decommission two

existing furnaces located at our factory in Samutprakarn upon completion of the construction of the new

furnace. The new furnace will enable us to manufacture lighter glass bottles in an effort to optimize raw

material and production costs. The use of the new furnace is also expected to lower our logistic costs since

the location of the new furnace reduced the distance of delivery of cullet from the cullet treatment plant and

delivery of glass bottles to the beverage filling factory. The new furnace is also expected to enable us to

achieve better cost management by using either cullet or silica more efficiently in our glass manufacturing

processes. We have received an investment promotion certificate for this project from the Thailand Board

of Investment.

22

• Building a new talcum factory for our personal care products business: the location of this new

manufacturing facility will be at Lat Krabang Industrial Estate (Thailand) and this factory is expected to have

a production capacity of 14,400 tons per year with five production lines. Expected capital expenditures for

this project amount to THB 167.3 million, including THB 16.7 million capital expenditures planned for 2018

and THB 150.6 million planned for 2019.

In addition, as at June 30, 2018, total planned capital expenditures in 2018 also include capital

expenditures for maintenance of machinery and equipment (THB 295.2 million), capital expenditures in the

amount of THB 85.0 million for more efficiently using cullet in our glass manufacturing processes, and

capital expenditures for building and land improvement (primarily for factories and our office buildings, in

the aggregate amount of THB 338.8 million) and other capital expenditures, including for new plant and

pilot projects (THB 284.1 million in aggregate) which will be used to test the quality of new products before

commencing commercial production of such products.

23

Key Related Party Transactions

Set out below is a summary of the Company’s related transactions with persons who may have conflict of interest for the year ended December 31, 2017 and six

months ended June 30, 2018 which remained outstanding as at the end of the six months ended June 30, 2018. For further details on the Company’s related party

transactions, please see the Thai prospectus.

Individual/Entity which

may have conflict of

interest

Nature of Related Transaction

Transactional Value (THB)

Necessity and Reasonableness of

Transaction Opinion of Audit Committee

2017

Six months

ended June 30,

2018

Mr Ratch Osathanugrah The land and structure located

at No. 15/3 Moo 2, Vibhavadi-

Rangsit Road, Lat Yao Sub-

district, Chatuchak District,

Bangkok is leased by the

Company from Mr Ratch

Osathanugrah to be used as the

publishing and packaging

factory.

Rental for land and structure

9,600,000.00

4,800,000.0

• The Company leases the land

and structure of area of 9 rai

and 51 square wah (14,604

square meters excluding land

frontal area of 30 x 30 m.)

located at No. 15/3 Moo 2,

Vibhavadi-Rangsit Road, Lat

Yao Sub-district, Chatuchak

District, Bangkok to be used as

the publishing and packaging

factory of the Company.

• The Company executed the

lease agreement on 30 August

2016 for a term of 3 years as

from August 1, 2016 to July 31,

2019 at the rent of THB

800,000.00 per month.

• The rental and terms and

conditions for the lease of land

and structure as agreed by the

parties are corresponding to the

leases of land in the same

area.

• The transaction is the lease

of real estate executed by

the Company at the rental

rate, terms and conditions

as agreed by the parties

and such rental rate, terms

and conditions are on an

arm’s length basis;

therefore, it is opined that

the transaction is

appropriate and reasonable.

Note: Value of the transactions which are revenues and expenses from the consolidated statements of comprehensive income are shown as a value exclusive of the 7% VAT.

24

Obligations

1. Payment obligations under our borrowings

June 30, 2018

Total

Less than

1 year Years 1-5

More than

5 years

(THB million)

Short-term loans from financial institutions

.................................................................... 5,700.0 5,700.0 — —

Current portion of long-term loans from

financial institutions

....................................................................

20.6

20.6

— —

Lease agreements and other

....................................................................

135.1

28.9

106.2

—

Total

....................................................................

5,855.7

5,749.5

106.2

—

2. Obligations to make payments relating to operating leases, and payments relating to certain

buildings and other constructions, machinery and equipment, fixture and office equipment,

vehicles and software/computers

As at June 30, 2018, we have obligations to make payments relating to operating leases, and

payments relating to certain buildings and other constructions, machinery and equipment, fixture and office

equipment, vehicles and software/computers amounted to THB 2,013.1 million in aggregate, having details

as follows:

With respect to operating commitment, the main recurring charges are for security services and

warehouse services. Future minimum operating lease payments as at June 30, 2018 under non-cancellable

operating leases were THB 108.4 million. Of these payments, THB 66.5 million fall due within one year,

with the balance of THB 41.9 million falling due after one year but within five years.

1) In addition, as at June 30, 2018, we also had other commitments of THB 411.9 million,

comprising unused letters of credit of THB 320.7 million and THB 91.2 million of bank guarantees.

2) Arrangements relating to buildings and other constructions, machinery and equipment, fixture

and office equipment, vehicles and software/computers, as disclosed in the below table:

Six Months Ended June 30, 2018

(unaudited)

(THB million)

Capital Commitments

Buildings and other constructions .................

66.6

Machinery and equipment ............................ 1,411.9

Fixtures and office equipment ...................... —

Vehicles ....................................................... —

Computer software ....................................... 14.3

Total ............................................................ 1,492.8

25

3. Obligations under agreements for the purchase of raw material, packaging and finished

goods

As at June 30, 2018, our commitments under these agreements represented THB 2,709.4 million

in aggregate.

We have entered into three technical assistance agreements with a Japanese company that

provides us with information and technical assistance for production. The original term of the agreement

was three years until February 2021 and has been automatically renewed for another term of three years,

unless either party terminates the agreement or requests otherwise. In consideration for this assistance,

we have agreed to pay an annual fee ranging from JPY 37.5 to JPY 40.0 million.

Siam Glass Ayutthaya has entered into a natural gas purchase agreement for the supply of natural

gas for our glass factories with a company located in Thailand for a period of seven years. This natural gas

supply contract with PTT Natural Gas Distribution Co., Ltd., requires Siam Glass Ayutthaya to purchase at

least a pre-agreed minimum amount of natural gas per year, subject to adjustments based on actual volume

of natural gas used. This agreement will terminate in December 2018 and is in the process of being renewed

by both parties.

4. Obligations under other agreements

Other agreements we have entered into that created contractual obligations on our part as at June

30, 2018 include a Global Positioning System (GPS) rental agreement for a period of three years that

requires periodic rental payments and a forward exchange contract which matured in July 2018 for

managing our exposure to foreign exchange rate fluctuations of the Thai Baht against the United States

dollar in the amount of U.S.$1.3 million as at June 30, 2018. Our payment obligations under these contracts

are not or were not, as applicable, significant.

Certain of Significant Risk Factors

1. Changes in consumer preferences or any inability on our part to innovate or market our

products to effectively respond to such changes could adversely affect demand for our

products.

Our success depends on, among other things, our ability to anticipate, identify and effectively

respond to shifts in consumer trends, including increased demand for products that meet the needs of

consumers who are concerned with health and wellness and convenience; our product quality; our ability

to develop or acquire new products or new variants of existing products that are responsive to consumer

preferences; our ability to develop a broader portfolio of product choices, successfully reposition existing

products to capture new consumption habits or new consumer targets and phase out obsolete products;

our ability to improve the production and packaging of our products; our ability to respond to competitive

product and pricing pressures; and our ability to effectively advertise and market our products in a rapidly

changing media environment, for instance through the use of social media and online advertising

campaigns and marketing programs. Any of the above factors could materially adversely affect our

business, financial condition, results of operations and prospects.

2. The price volatility of key material supplies and energy, together with our potential inability

to pass onto customers all or part of resulting increased production costs could negatively

impact our cost efficiencies and profit margin.

Raw materials that we use for the manufacturing and packaging of our products (including glass

cullet) that are commodities are subject to price volatility caused by many factors beyond our control,

including changes in global supply and demand, market shortages, weather conditions, disease,

agricultural uncertainty, governmental incentives and controls, taxes and tariffs, overall economic

26

conditions, political uncertainties and governmental instability. For instance, sugar, one of the key raw

materials for our beverage products and used for our domestic products, was until recently subject to price

controls by the Thai Office of the Cane and Sugar Board, and such measures have been lifted in February

2018. As a result, the price of sugar is subject to variations in global market prices. Should the price of

sugar increase, we could be subject to a material adverse impact on the cost of sales for our beverage

products.

Most of our energy consumption relates to the manufacture of glass bottles at our Siam Glass

Industry plants, which primarily use natural gas. The price of natural gas is linked to the global market price

of crude oil and is therefore subject to volatility. Although we have in the past entered into a 10 year

renewable natural gas supply contract with PTT Public Company Limited (a Thai state-owned company)

(“PTT Pcl”), the purchase price we pay under this contract is subject to a price indexation clause based on

the global market price of crude oil. This agreement expired on March 31, 2018 and has since been renewed

on a short-term basis of three-months, which we expect will be the case until the Thai Energy Regulatory

Commission approves the new pricing structure. We are uncertain whether the prices of electricity (due to

changes in regulated tariffs) and natural gas (due to volatility of the global market price of crude oil) will rise

in the future, and this could materially increase our cost of sales of goods.

We may be unable to pass to our clients through adjustments of prices, increased costs of raw

materials, packaging materials or energy we use to manufacture our products, this would have a significant

impact on our margins for these products and, therefore our operating results.

There can be no assurance that we will be able to maintain or increase our margins, and our

production costs may increase, due to factors beyond our control. Our ability to pass on our production

costs is generally dependent upon market conditions and cost position compared to competitors. If we are

unable to pass, partly or fully, increases in our production costs due to increased prices of our material

supplies or energy onto our customers through increased retail prices for our beverage products, maintain

or decrease production costs through cost efficiency initiatives, our business, financial condition, results of

operations and prospects could be materially and adversely affected.

3. Increased competition in the beverage products and personal care products segments,

could adversely affect our businesses.

The beverage and personal care products industries are highly competitive. The principal areas of

competition for both industries are brand recognition, taste or scent, price, quality, product variety, product

innovation, distribution, product convenience, advertising, marketing and promotional activity, packaging,

convenience, service and the ability to anticipate and effectively respond to consumer trends and market

conditions. Our products compete with a wide range of beverages and personal care products produced

by a relatively large number of local and international manufacturers, some of which have substantially

greater financial, production, research and development, marketing and distribution and other resources

than we do. We may also face new and heightened competition in expanding our product offering to new

markets or target new consumer groups. If we are unable to compete effectively which may materially

adversely affect our business, financial condition, results of operations and prospects.

An increase in the number of competitors, the level of marketing or investment undertaken by our

competitors, more aggressive competitors’ pricing policies, an increase in the volume of cheaper competing

products produced locally or imported into Thailand, or other changes in the competitive environment in our

markets could also cause a reduction in the consumption of our products and in our market share (based

on sales value), and could lead to a decline in our revenues, price erosion and an increase in our marketing

or investment expenditures since general marketing and packaging are essential in capturing consumer

attention and driving energy and functional products sales in a competitive market. Any of these changes

could have a material adverse effect on our business, financial condition, results of operations and

prospects.

27

Historically, sales of our energy drinks, sports drinks and ready-to-drink coffee accounted for 72.0%

and 76.7% of our revenue from sales and services in 2017 and for the six months ended June 30, 2018,

respectively. The competitive environment significantly varies depending on the relevant country in each of

our Southeast Asian key or target markets. Internationally, our energy drinks compete with other products,

such as Red Bull, Rockstar, Monster, Burn, Sting, Bacchus and numerous local and private label brands

and other brands. In Thailand, our key competitors that sell energy drinks are Carabao Dang and Krating

Daeng.

We derive a substantial portion of our sales from our personal care products, and, in particular, our

Babi Mild talcum and bath products and Twelve Plus deodorants. Our personal care products business line

represented 8.4% and 9.4% of our total revenues for 2017 and for the six months ended June 30, 2018,

respectively. We sell our personal care products in Thailand, Myanmar, Cambodia and Laos, and we

compete in these markets with international companies which may have greater financial, technical and

product portfolio resources than we have, such as Johnson & Johnson, Unilever, Beiersdorf and Procter &

Gamble. Failure to compete successfully, and competitive pressures in the personal care product

categories in which we compete, could impact our sales revenues and/or we could experience price erosion

and/or erosion of our share of sales (based on sales value), any of which could have a material adverse

effect on our business, financial condition, results of operations and prospects.

4. Sales of a number of our key products historically accounted for a significant portion of our

total revenues, and any reduction in sales of these products could have a material adverse

effect on our business, financial condition, results of operations and prospects.

Our revenue and profitability are, and will remain in the foreseeable future, substantially dependent

upon sales of our key top five brands by sales value (M-150, Chalarm, Lipovitan-D, Babi Mild, and Twelve

Plus) which accounted for, in aggregate, 68.6% and 71.5% of our revenue from sales and services for 2017

and for the six months ended June 30, 2018, respectively. Our brands M-150, Lipovitan-D and Chalarm

beverage products accounted for 60.6% and 62.3% of our revenue from sales and services for 2017 and

for the six months ended June 30, 2018, respectively. In addition, we make the majority of our sales of

beverage and personal care products in Thailand which accounted for, in aggregate, 65.5% and 69.8% of

our revenue from sales and services for 2017 and for the six months ended June 30, 2018, respectively.

Accordingly, any factor adversely affecting the production and/or sale of our key products (in particular, our

M-150 beverage products), individually or collectively, would have a material adverse effect on our

business, financial condition, results of operations and prospects.

5. Risks inherent to the implementation of our business strategy in Myanmar.

Current business model, licenses and permits

Our joint venture currently has all the relevant certificates, permits and authorizations for engaging

in distribution activities of beverage products in Myanmar. There is no guarantee, however, that it will

successfully maintain these certificates, permits and authorizations, or, assuming we are unable to

complete our manufacturing facility in Myanmar on schedule or at all, and/or obtain all required licenses,

permits and authorizations to build and operate this facility, and manufacture beverage products and market

them in Myanmar before expiry of our current certificates, permits and authorizations, be able to

successfully and timely renew them upon expiry in 2020. Whereas we have no indication that the

Directorate of Investment and Company Administration intends or will consider to do so, there is no

guarantee that our joint venture’s permit to trade in Myanmar will not be revoked or suspended, temporarily

or indefinitely, before we have successfully completed our manufacturing facility in Myanmar and obtained

all relevant permits, licenses and authorizations for manufacturing, marketing and distributing beverage

products in Myanmar. Any of the above would have a material adverse effect on our business and prospects

in Myanmar, as well as on our net sales and results of operations.

Any disagreement with the relevant authorities, for instance alleged violations of the scope of our

existing permit of trade, may result in our current permit of trade not being renewed, being revoked or could

28

result in the required new permits and licenses for our planned manufacturing business not to be obtained

on a timely basis or at all. We are currently not aware of any such disagreement with the Directorate of

Investment and Company Administration or with any other relevant authorities in Myanmar. Any future

disputes could arise with the relevant authorities in Myanmar, including regarding the scope of our existing

permits, that could have an adverse effect on our ability to maintain or renew (as necessary) our joint

venture’s permit to trade, our current business in Myanmar, or our ability to implement our manufacturing

business model in Myanmar.

Any of these factors and uncertainties could have a material adverse effect on the implementation

of our business strategy and prospects in Myanmar, and on our net sales and results of operations.

Risks related to the construction and operation of a new manufacturing facility

Construction of a new beverage manufacturing facility involves various risks and uncertainties such

as risks associated with the engineering, construction, design, operations and other such challenges;

including availability of project management expertise. Potential increased costs for, or shortages of,

equipment and skilled labor; regulatory and environmental compliance issues; Myanmar, regional and

international economic and political conditions, may all significantly delay or prevent the completion of this

project. The issuance of required permits in Myanmar is subject to the approval of local authorities and

agencies. Due to these risks, the actual capital expenditure for the construction and start-up of this new

manufacturing facility may significantly exceed the expected total capital expenditures of approximately

THB 2.0 billion for the first phase of this project (which will complete upon start of commercial operations

which is currently expected to be in the fourth quarter of 2019). During the construction phase, we will rely

on local contractors and workforce in Myanmar who may or may not have experience acting on similar

projects in the past. Therefore, we cannot ensure that the level, scope and quality of their services and

support will be sufficient to commence operations as currently scheduled, and therefore successfully

implement our strategy in Myanmar. Moreover, given the nature and complexity of this project, we may

encounter engineering problems, equipment or input supply constraints, land and water transportation

problems, difficulties in properly staffing this new manufacturing facility and providing on-site training to its

future workforce, retaining qualified personnel, or other challenges in bringing and keeping this new facility

in operation.

As a result of the foregoing, our business and results of operations may be materially and adversely

impacted.

Litigation and Investigation Proceedings2

Civil Litigation

In August 2018, a Thai company which claims to have certain contractual rights for distributing

energy drinks marketed under several of our brands in certain parts of Thailand and that it previously

purchased from M-150 Company Limited and Union Drink Company Limited, filed a lawsuit before the Civil

Court (Thailand) against Osotspa Public Company Limited. This company requests Osotspa Public

Company Limited to cease selling energy drinks to other distributors in certain parts of Thailand and to sell

these beverage products only to it for further distribution and is asking for damages in the amount of THB

2 million per month starting from June 2018 and for approximately THB 228 million in case we fail to comply

with their requests, on the basis of tortious and contractual claims. We disagree with these allegations and

believe we did not breach any of our contractual obligations, if any, or committed any torts. We will take all

appropriate actions in connection with these proceedings, including responding to these allegations.

2 Please see the registration statement and prospectus for our other litigation and investigation proceedings.

29

Number of Employees

As of June 30, 2018, we employed 3,677 permanent staff, with 3,418 of them located in Thailand

and 259 overseas. We also employed 978 outsourced personnel, particularly for our unskilled and semi-

skilled roles.

Company Background

1891 Teck Heng Yoo was established as a small pharmacy in Bangkok

1949 Osotspa (Teck Heng Yoo) Company Limited was established

1965 We expanded into the non-alcoholic beverage market by obtaining a license from Taisho Pharmaceuticals Co.,

Ltd. (“Taisho”) of Japan to produce, market and distribute the energy drink Lipovitan-D in Thailand

1974 Osotspa (Teck Heng Yoo) Company Limited was amalgamated with New Tech Co., Ltd., a Thailand-based

distributor of non-alcoholic beverage products

1977 We established Siam Glass, our glass manufacturing company

1981 We transitioned our in-house marketing department into an independent advertising agency, SPA Advertising

Co., Ltd. (which later changed its name to Spa-Hakuhodo Co., Ltd.), a subsidiary of Future Marketing

Communications Group Company Limited (the “Future Group”) in which we divested our investment in the Future

Group Sale in January 2018

1984 We established Greensville Co., Ltd., our personal care products manufacturing company

1985 We launched the energy drink M-150 that is now our flagship energy drink and the leading energy drink in

Thailand based on domestic retail sales value (according to Nielsen, 2017)

1991 We expanded into baby care products by launching the Babi Mild brand

1992 We expanded into women’s beauty care products with the launch of our Twelve Plus brand

1995 We changed our name from “Osotspa (Teck Heng Yoo) Company Limited” to “Osotspa Company Limited”

1996 We established Osotspa Taisho Co., Ltd. (now known as Osotspa Taisho Pharmaceuticals Co., Ltd.) as a joint

venture with Taisho Pharmaceuticals Co., Ltd to sell beverages in Thailand

2007 We expanded into the functional drinks market with the launch of the Peptein brand

2011 We established House Osotspa Foods as a joint venture with House Foods Corporation (now known as House

Foods Group Inc.) of Japan to sell beverages in Thailand

We established an additional glass manufacturing company, Siam Glass Ayutthaya Co. Ltd.

2012 We entered into a new joint venture agreement with Taisho regarding beverage products under our Lipo brand

as well as other health and wellness products

2013 We established Calpis Osotspa Co., Ltd. (“Calpis Osotspa”) as a joint venture with Calpis Co., Ltd. of Japan to

sell beverages in Thailand.3

2015 We established Osotspa Loi Hein Co., Ltd. as a joint venture with Loi Hein of Myanmar to sell beverages in

Myanmar

2016 We implemented our business transformation initiatives (People, Portfolio and Operations), as described below

and terminated our joint venture agreement with Kagome Co., Ltd (“Kagome”) in April 2016

2017 Effective termination of our distribution agreement with Uni-Charm (Thailand) Co., Ltd. (“Unicharm”) that was

initially entered into in November 1999

2018 We completed the strategic divestment of our investment in the Future Group. We sold our equity stake to a third

party who is an existing business partner of the Future Group.

We launched our new ready-to-drink coffee, M-Presso, in February 2018 under our iconic “M” brand

The 2018 annual general meeting of the shareholders of the Company, held in March, resolved to (i) approve a

conversion of the Company’s status from private to public company, (ii) a change of par value of shares to THB 1 each

and (iii) an increase of the Company’s registered share capital in the amount of THB 2,772,750,000 by issuing

2,772,750,000 ordinary shares resulting in the Company’s registered share capital increasing from THB 231,000,000

to THB 3,003,750,000. Pursuant to the increase of the Company’s registered share capital, 2,266,000,000 newly issued

shares were allocated to the existing shareholders of the Company in proportion to their respective shareholdings and

up to 506,750,000 newly issued shares will be allocated as part of the initial public offering.

3 In 2016, Calpis Co., Ltd. merged with Asahi Drinks, a subsidiary of Asahi Group Holdings Co., Ltd. and consequently, Asahi Group Holdings Southeast Asia (“Asahi”) became

our joint venture partner in Calpis Osotspa

30

Investment in subsidiaries, associates and related company

According to the Company’s separate financial statements, our investments in subsidiaries, joint

ventures and associate companies as of June 30, 2018 are as set out below:

Subsidiaries

Subsidiaries Type of Business

Ownership Interest

(%)

Paid-up Capital

(THB million)

Net Investment Value as at June 30, 2018

(THB million)

Siam Glass Ayutthaya Co., Ltd. Manufacturing and distribution of glass

100.00 780.00 780.00

Siam Glass Industry Co., Ltd. Manufacturing and distribution of glass

100.00 400.00 429.78

Siam Cullet Co., Ltd. Distribution of cullet 99.98 1.00 1.00

Wallgreen Co., Ltd. Manufacturing of Beverage concentrates and premixes

99.98 1.00 1.00

SSB Enterprise Co., Ltd. Manufacturing of beverage concentrates and premixes

99.98 1.00 1.00

Osotspa Beverages Co., Ltd. Distribution of beverage 100.00 354.95 354.95

Greensville Co., Ltd. Manufacturing and distribution of personal care products

100.00 6.50 6.50

Osotspa Loi Hein Company Limited Retail and wholesale of beverages in Myanmar

51.00 33.91 16.65

PT. M-150 Indonesia Importation and distribution of beverages

99.00 4.07 -

Osotspa USA, Inc. Providing of marketing services 100.00 105.16 -

Osotspa Loi Hein (Thailand) Co., Ltd.(1) Ceased operation 50.99 1.00 0.51

Osotspa Europe Limited Ceased operation 100.00 266.24 -

LIZU Trading Handels GmbH Ceased operation 100.00 324.11 -

Edelpure de Beauté Sàrl Ceased operation 100.00 0.69 -

Myanmar Osotspa Company Limited Ceased operation 100.00 9.77 -

Osotspa Enterprise Co., Ltd. Invest in other companies 99.98 1.00 1.00

Osotspa Dairy Co., Ltd. Property renting 100.00 463.57 90.00

SAB Outsource Co., Ltd. Ceased operation 99.98 1.00 1.00

Sawasdee Publishing Co., Ltd. Ceased operation 100.00 1.00 1.00

FC (2017) Co., Ltd. (formerly Osotspa M-150 Football Club Co., Ltd.)

Ceased operation 100.00 5.00 -

Total Net Investment Value 1,684.39

Note: (1) In December 2017, we terminated the joint venture agreement with respect to Osotspa Loi Hein (Thailand) Co., Ltd.

31

Associate Company

Associate Company Type of Business

Ownership Interest

(%)

Paid-up Capital

(THB million)

Net Investment Value as at June 30, 2018

(THB million)

White Group Public Company Limited Import and sale of industrial chemical products

23.37 178.50 306.69

Subsidiaries of the subsidiaries of our Company

Subsidiaries of the subsidiaries of our Company

Type of Business

Ownership Interest

(%)

Paid-up Capital (THB

million)

Net Investment Value as at June 30, 2018

(THB million)(1)

Flash Power Do Brasil Ltda. (the shares of which are held by LIZU Trading Handels GmbH)

Obtaining licensing fee for use of Flash Power trademark from clients

100.00 2.81 –

M-150 Company Limited (the shares of which are held by Osotspa Beverage Company Limited)

Ceased operation 100.00 1.00 –

Union Drink Company Limited (the shares of which are held by Osotspa Beverage Company Limited)

Ceased operation 100.00 5.00 –

Oventure Pte. Ltd.(2) (the shares of which are held by Osotspa Enterprise Co., Ltd.)

Invest in other companies 100.00 0.33 –

Osotspa Enterprises Singapore Pte. Ltd. (the shares of which are held by Osotspa Enterprise Co., Ltd.)

Invest in other companies 100.00 1,004.26 –

Osotspa Myanmar Co., Ltd. (3) (the shares of which are held by Osotspa Enterprises Singapore Pte. Ltd.)

Manufacturing and Distributing beverage in Myanmar

85.00 1,003.93 –

Shark AG (the shares of which are held by Osotspa Beverages Company Limited)

Ceased operation 100.00 346.30 –

Notes: (1) Net investment value of subsidiaries of subsidiaries of the Company does not appear on the separate financial statement as at June

30, 2018 (2) Incorporated on June 14, 2018 (3) Incorporated on June 22, 2018

32

Joint Ventures

Joint Venture Type of Business

Ownership Interest

(%)

Paid-up Capital

(THB million)

Net Investment Value as at June 30, 2018

(THB million)

Calpis Osotspa Co., Ltd. Distribution of food and beverages

40.00 720.00 75.82

House Osotspa Foods Co., Ltd. Distribution of food and beverages

40.00 167.00 41.49

Osotspa Taisho Pharmaceutical Co., Ltd. Distribution of medicine and beverages

40.00 100.00 40.00

Yamamura International (Thailand) Co., Ltd. Distribution of packaging, machinery, spare part and equipment

26.00 15.00 2.03

PT Osotspa ABC Indonesia Ceased operation 50.00 34.48 -

Total Net Investment Value 159.33

Increase (Decrease) of Capital in the past 3 years

Fiscal year January 1 – December 31

Auditors Mr. Ekkasit Chuthamsathid

KPMG Phoomchai Audit Ltd.

Share registrar Thailand Securities Depository Co., Ltd.

Financial advisors 1. Bualuang Securities Public Company Limited

2. Phatra Securities Public Company Limited

Underwriters 1. Bualuang Securities Public Company Limited

2. Phatra Securities Public Company Limited

Dividend Policy

Dividend policy of the Company

Our board of directors may recommend annual dividends, subject to the PLCA, our articles of

association and approval of our shareholders. Our board of directors may by resolution decide to pay to

our shareholders such interim dividends as appear to the directors to be justified based on our profits and

other considerations. Distribution of an interim dividend must be reported to the shareholders at the next

general meeting of shareholders following the meeting of our board of directors approving such interim

dividend.

Date Total amounts of capital

increase (decrease) Capital after increase

(decrease) Use of proceeds

March 22, 2018 Registered capital

THB 2,772,750,000

Registered capital

THB 3,003,750,000

To facilitate (i) the allocation of newly issued shares to the existing shareholders of the Company in proportion to their respective shareholdings and (ii) the initial public offering and right offering

33

Our current dividend policy is to recommend to our shareholders distribution of an annual dividend

of at least 60.0% of our net profit as shown in our consolidated financial statements and subject to meeting

the legal reserve requirement under the Public Limited Companies Act B.E. 2535 (1992)

(as amended) and our Articles, and depending upon our results of operations and financial condition, cash

flow and contractual obligations (such as repayment of indebtedness), reserve for working capital, future

investment including business expansion, market condition and other relevant considerations as our board

of directors may deem relevant or appropriate, as well as applicable law and other necessary matters.

Investment Promotion Certificate

We currently receive rights and benefits under an investment promotion certificate for our existing

furnace at the Siam Glass Ayutthaya facility. The key benefits in relation to the existing furnace under this

investment promotion certificate include exemptions for Siam Glass Ayutthaya Co., Ltd. from payment of (i)

corporate income tax for a period of seven years from the date on which the furnace starts generating

revenue; (ii) tax on dividends payable by its shareholders for the same period; and (iii) import duties for

machinery imported before February 10, 2014. We have also obtained another investment promotion

certificate for our planned additional furnace at the Siam Glass Ayutthaya facility. We are in the process of

building this new furnace which is expected to be completed in 2019. The investment promotion certificate

provides the following key benefits to Siam Glass Ayutthaya Co., Ltd. in relation to the new furnace: (i)

exemption from payment of corporate income tax for a period of eight years from the date that the new

furnace starts generating revenue; (ii) exemption from tax on dividends payable by its shareholders for the

same period; (iii) reduction of corporate income tax rates by 50.0% on net taxable profit for three years after

the expiry the eight-year period from the date on which the furnace starts generating revenue; and (iv)

exemption from import duties for machinery imported before September 3, 2016.

Number of Shareholders As of October 11, 2018 are as follows;

Number of shareholders

Number of shares Percent of total paid-up capital

1 Strategic shareholders

1.1 Director, manager and executive including

related person 32 2,139,602,500 71.23

1.2 Shareholders including their related

person holding shares > 5% 4 219,708,000 7.31

1.3 Controlling person - - - 2 Free floats holding not less than 1 trading

unite 13,926 644,439,500 21.45

3 Shareholders holding less than 1 trading unit - - - Total shareholders 13,962 3,003,750,000 100.00

34

Major shareholders

Shareholding structure of the Company as of (i) before the initial public offering; and (ii) after the initial public offering:

Shareholders

Before the offering of ordinary shares

After the offering of ordinary shares

Number of shares

Shareholding (%) Number of shares Shareholding (%)

1. Mr. Niti Osathanugrah(1) 624,250,000 25.00% 624,250,000 20.78%

2. Orizon Limited(2) 604,148,600 24.19% 537,148,600 17.88%

3. Merrill Lynch Singapore Pte.Ltd(3) - 0.00% 211,500,000 7.04%

4. Petch Osathanugrah 149,735,700 6.00% 149,735,700 4.98%

5. Ratch Osathanugrah 149,735,700 6.00% 149,735,700 4.98%

6. Sub. Lt. Seri Osathanugrah 126,098,500 5.05% 126,098,500 4.20%

7. Y Investment Ltd(3) 120,000,000 4.81% 90,000,000 3.00%

8. Ms. Quesara Osathanugrah 87,395,000 3.50% 87,395,000 2.91%

9. Mr. Tasharin Osathanugrah 87,395,000 3.50% 87,395,000 2.91%

10. Mr. Pasuree Osathanugrah 87,395,000 3.50% 87,395,000 2.91%

11. PJ Spring Investment Limited(5) 64,850,000 2.60% 64,850,000 2.16%

12. CLMV Thailand Investment Limited(6) 64,850,000 2.60% 64,850,000 2.16%

13. Mr. Thana Chaiprasit 51,188,500 2.05% 51,188,500 1.70%

14. Mr. Nopananta Pradistsuwana 43,697,500 1.75% 43,697,500 1.45%

15. Ms. Srisuma Osathanugrah 43,697,500 1.75% 43,697,500 1.45%

16. Mr. Purat Osathanugrah 30,037,500 1.20% 30,037,500 1.00%

17. Mr. Puree Osathanugrah 30,037,500 1.20% 30,037,500 1.00%

18. Mr. Katha Osathanugrah 30,037,500 1.20% 30,037,500 1.00%

19. Mr. Natee Osathanugrah 30,037,500 1.20% 30,037,500 1.00%

20. Mr. Krit Chaiprasit 24,970,000 1.00% 24,970,000 0.83%

21. Mr. Nathakorn Chaiprasit 24,970,000 1.00% 24,970,000 0.83%

22. Ms. Sutita Osathanugrah 22,473,000 0.90% 22,473,000 0.75%

Note: (1) Mr. Niti Osathanugrah intends to sell 135,168,700 existing ordinary shares at the offering price of this public offering (i.e. THB 25) on the first day the

shares of the Company are traded through a trade report – big lot transaction on the SET. In the event that Mr. Niti Osathanugrah sells all of such existing shares, the total shares he holds in the Company will be 16.28% of the total issued and paid-up shares of the Company.

(2) Orizon Limited is a limited company incorporated under the laws of Hong Kong and wholly owned by Orizon Holding Limited, in which Mr. Petch Osathanugrah, Mrs. Narumon Osathanugrah, Mr. Puree Osathanugrah and Mr. Purat Osathanugrah are collective beneficiaries of 50% and Mr. Ratch Osathanugrah, Mr. Natee Osathanugrah and Mr. Katha Osathanugrah are collective beneficiaries of 50%.

(3) Merrill Lynch Singapore Pte. Ltd is an initial purchaser who will subsequently procure the purchase of the offered shares by international investors. None of these international investors is each allocated more than 5.0% of the total shares of the Company after this offering.

(4) Y Investment Ltd is a limited company incorporated under the laws of the British Virgin Islands, in which Ms. Pimpan Srisawadi holds 58% of the total shares, Mr. Somsak Teraphatanakul holds 34% of the total shares and PJ Spring Investment Limited holds 8% of the total shares.

(5) PJ Spring Investment Limited is a limited company incorporated under the laws of the British Virgin Islands, in which Mr. Somsak Teraphatanakul holds 50% of the total shares and Ms. Pimpan Srisawadi holds 50% of the total shares.

(6) CLMV Thailand Investment Limited is a limited company incorporated under the laws of the British Virgin Islands, in which Y Investment Ltd holds 50% of the total shares and PJ Spring Investment Limited holds 50% of the total shares.

Foreign shareholders As of October 11, 2018, the Company has 96 foreign shareholders, holding

1,091,326,700 shares in total, calculated as 36.33 percent of total paid-up

capital.

35

Remark: The Company has foreign shareholding restriction according to

Articles 11 of articles of association "the Company’s shares can be

transferable without any restriction, except the transfer of shares causes

foreigner)s) holding the Company’s shares more than 49% of total paid-up

capital."

Board of Directors

As of September 13, 2018, the Board of Directors of the Company consists of 15 members with details as

follows:

Name Position Date of Appointment

1 Mr. Surin Osathanugrah Chairman of the Board of Directors February 24, 1982

2 Sub. Lt. Seri Osathanugrah Vice Chairman of the Board of Directors September 4, 1974

3 Mrs. Kannikar Chalitaporn Vice Chairman of the Board of Directors March 29, 2016

4 Mr. Somprasong Boonyachai* Independent Director, Vice Chairman of

the Board of Directors

March 29, 2016

5 Mr. Ratch Osathanugrah Vice Chairman of the Board of Directors November 1, 1994

6 Mr. Petch Osathanugrah Director and Chairman of the Executive

Committee and CEO

June 20, 1983

7 Mr. Thana Chaiprasit Director September 18, 1984

8 Mr. Pratharn Chaiprasit Director October 11, 1996

9 Mr. Tasharin Osathanugrah Director October 17, 2008

10 Mr. Niti Osathanugrah Director July 1, 1991

11 Mr. Sethaput Suthiwartnarueput Director March 29, 2016

12 Mr. Salin Pinkayan Independent Director March 27, 2008

13 Ms. Penchun Jarikasem Independent Director March 29, 2016

14 Mr. Krirk Vanikkul Independent Director March 29, 2016

15 Mrs. Sinee Thienprasiddhi Independent Director March 29, 2016

The secretary of the Board of Directors is M.L. Kanidha Devakul.

*Mr. Somprasong Boonyachai is a director having duty to jointly set the Board of Director’s meeting agenda

with the chairman.

Audit Committee

As of September 13, 2018, our Audit Committee consists of three independent directors who are

qualified as prescribed in the company’s charter of Audit Committee and the SEC regulations. The details

of the Audit Committee members are as follows:

Name Position Date of appointment

1 Ms. Penchun Jarikasem Chairman of Audit Committee April 27, 2016

2 Mr. Krirk Vanikkul Audit Committee Member April 27, 2016

3 Mrs. Sinee Thienprasiddhi Audit Committee Member April 27, 2016

36

Ms. Penchun Jarikasem has sufficient knowledge and experience to perform the duties as an Audit

Committee member.

The secretary of the Audit Committee is Ms. Chulaluk Suwannikkakul.

Scope of Work, Duties and Responsibilities

The Audit Committee is required to carry out the following duties:

1. to review the Company’s financial reporting process to ensure accuracy and adequacy;

2. to review the Company’s internal control system and internal audit system to ensure that they are

suitable and efficient, to determine an internal audit unit’s independence, as well as to approve the

appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge

of an internal audit;

3. to review the Company’s risk management system to ensure that it is suitable and efficient;

4. to review the performance of the Company to ensure its compliance with the securities and

exchange laws, the regulations of the SET or the laws relating to the business of the company,

including to review the performance of the Company’s subsidiaries to ensure their compliance with

the subsidiary governance policy as prescribed in the Company’s good corporate governance

policy;

5. to consider, select and nominate an independent person to be the company’s auditor, and to

propose such person’s remuneration and dismissal, as well as to attend a non-management

meeting with an auditor at least once a year;

6. to review connected transactions, or transactions that may lead to conflicts of interest including the

acquisition and disposition of assets, to ensure that they are in compliance with the laws and the

SET’s regulations, and are reasonable and primarily benefit the company;

7. to perform any other act assigned to it by the board of directors with the approval of the Audit

Committee;

8. to prepare and disclose any other reports under its scope of work and responsibilities as authorised

by the board of directors, which the shareholders and investors should be acknowledged of;

9. to prepare its report and disclose such report in the Company’s annual report and to consistently

report to the board of directors to acknowledge the activities of the Audit Committee;

10. the Audit Committee must report to the board of directors for a remedy, within the period of time as

it deems appropriate, in case where it detects or suspects any transactions or actions during the

performance of its duties, which could have a material adverse effect on the Company’s financial

conditions and results of operations. Types of such transactions or actions are as follows:

a) transactions with conflicts of interest;

b) fraud, abnormality or material defect in the internal control system; and

c) noncompliance with the securities and exchange laws, the regulations of the SET or the laws

relating to the business of the company

The terms of Audit Committee

The terms of the Audit Committee shall be in accordance with the term of the Board of Directors

(that is, at every annual general meeting, one-third of the Directors shall retire; if the number of Directors is

37

not a multiple of three, then the number nearest to one-third shall retire). A member of the Audit Committee

who retires may be re-elected.

Securities listing conditions -None-

Silent period for disposal of shares Existing shareholders before the initial public offering

consists of 19 existing shareholders holding in total of

1,625,062,500 shares or 55.00% of total paid-up shares

after the initial public offering certifies to the SET that they

will not dispose such shares during the period of one year

from the first day trade of the Company’s shares on the SET.

When the period of six months passes, such shareholders

may be allowed to dispose the restricted shares for 25

percent of the restricted shares.

Waiver by SET -None-

Significant Financial Statistics

Year Million Baht Baht/Share %

Revenue from sales

and services

Net Profit(1)

Earning per Share(1)(2)

Dividend per

Share(1)(2)

Book Value per Share

(1)(3)

Dividend Payout Ratio

2015 31,738.5 2,091.9 9.1 14.3 34.9 157.8

2016 32,266.8 2,811.6 12.2 27.7 19.7 227.6

2017 25,877.5 2,833.7 12.3 17.8 14.4 145.0

Six months ended June 30, 2018

12,214.3 1,444.4 1.1 2.1 1.7 190.5

Par value equals to THB 1 per share.

Notes: (1) Particularly with respect to the Company’s or the Company’s shareholders’ equity. (2) As at April 2, 2018, the par value of the Company’s shares has changed from THB 100 per share to THB 1 per share, we therefore

adjusted number of weighted average ordinary shares used in calculation, as if there had been such change since the first day of 2015. (3) Par value changed from THB 100 per share to THB 1 per share is used in the calculation

38

The summary consolidated financial statements for the year ended December 31, 2015, 2016 and

2017 and the for the six months ended June 30, 2017 and 2018

1. Consolidated statements of financial position

Consolidated statements of financial position

As at December 31, As at June 30,

2015 2016 2017 2018

Million Baht

% Million Baht

% Million Baht

% Million Baht

%

Assets Current assets Cash and cash equivalents 993.4 5.2 579.7 3.5 375.7 2.5 1,408.9 9.3

Current investments 815.5 4.3 22.2 0.1 9.0 0.1 8.0 0.1

Trade accounts receivable 4,136.0 21.8 3,635.0 21.8 2,502.5 16.5 2,387.7 15.8

Other current receivables 1,256.9 6.6 1,125.8 6.8 334.6 2.2 417.8 2.8

Short-term loan - - - - - - 43.0 0.3

Inventories 2,277.8 12.0 1,703.2 10.2 1,743.5 11.5 1,790.5 11.8

Other current assets 97.1 0.5 127.7 0.8 136.4 0.9 114.5 0.8

Non-current assets classified as held for sale

- - - - 1,186.1 7.8 - -

Total current assets 9,576.7 50.4 7,193.5 43.2 6,287.9 41.4 6,170.4 40.8

Non-current assets

Investments in associates 14.9 0.1 653.8 3.9 621.5 4.1 617.6 4.1

Investments in joint ventures 1,080.3 5.7 1,172.6 7.0 544.8 3.6 502.9 3.3

Other long-term investments 205.1 1.1 80.9 0.5 55.9 0.4 52.5 0.3

Investment properties 514.3 2.7 204.5 1.2 206.2 1.4 210.2 1.4

Property, plant and equipment 7,276.3 38.3 6,906.3 41.5 6,933.2 45.6 6,933.1 45.8

Intangible assets 109.4 0.6 181.0 1.1 191.7 1.3 205.6 1.4

Deferred tax assets 197.3 1.0 223.8 1.3 224.6 1.5 171.7 1.1

Other non-current assets 30.6 0.2 34.8 0.2 131.8 0.9 258.6 1.7

Total non-current assets 9,428.2 49.6 9,457.8 56.8 8,909.7 58.6 8,952.3 59.2

Total assets 19,005.0 100.0 16,651.3 100.0 15,197.6 100.0 15,122.7 100.0

Liabilities and shareholders’ equity

Current liabilities

Short-term loans from financial institutions 1,912.4 10.1 5,400.0 32.4 6,020.0 39.6 5,700.0

37.7

Trade accounts payable 3,560.7 18.7 3,042.7 18.3 1,901.9 12.5 2,040.8 13.5

Other current payables 2,374.8 12.5 2,447.0 14.7 2,436.6 16.0 2,015.4 13.3

Current portion of long-term loans from financial institutions

437.6 2.3 82.4 0.5 61.7 0.4 20.6 0.1

Current portion of finance lease liabilities

0.8 0.0 2.1 0.0 26.9 0.2 28.9 0.2

Income tax payable 315.1 1.7 311.2 1.9 239.0 1.6 375.3 2.5

Other current liabilities 34.1 0.2 24.3 0.1 11.9 0.1 18.5 0.1

Liabilities included in non-current assets classified as held for sale

- - - - 394.0 2.6 - -

Total current liabilities 8,635.5 45.4 11,309.7 67.9 11,091.9 73.0 10,199.4 67.4

Non-current liabilities

Short-term loans from financial institutions 287.6 1.5 61.7 0.4 - -

- -

Financial lease liabilities 0.3 0.0 8.3 0.0 100.7 0.7 106.3 0.7

Provisions for employee benefits 602.9 3.2 557.0 3.3 432.6 2.8 459.2 3.0

Deferred tax expenses 2.3 0.0 - - 132.0 0.9 - -

Other non-current liabilities 36.8 0.2 1.0 0.0 1.0 0.0 1.1 0.0

Total non-current liabilities 929.9 4.9 628.0 3.8 666.3 4.4 566.6 3.7

Total liabilities 9,565.5 50.3 11,937.7 71.7 11,758.2 77.4 10,765.9 71.2

Shareholders’ equity

Share capital

Registered share capital 231.0 1.2 231.0 1.4 231.0 1.5 3,003.8 19.9

Issued and paid-up share capital 231.0 1.2 231.0 1.4 231.0 1.5 2,497.0 16.5

Retained earnings

Appropriated to legal reserve 23.1 0.1 23.1 0.1 23.1 0.2 23.1 0.2

Unappropriated 6,183.1 32.5 4,215.0 25.3 2,988.2 19.7 1,738.7 11.5

Surplus on business combination under common control

1,952.2 10.3 1,964.5 11.8 328.0 2.0 328.0 2.2

Equity reduction from dividends paid from retained earnings before business restructuring under common control

- - (1,636.4) )9.8) - - - -

39

Consolidated statements of financial position

As at December 31, As at June 30,

2015 2016 2017 2018

Million Baht

% Million Baht

% Million Baht

% Million Baht

%

Other components of shareholders’ equity (326.0) )1.7) (236.0) )1.4) (239.5) )1.6) (295.9)

-2.0

Equity attributable to owners of the parent 8,063.4 42.4 4,561.2 27.4 3,330.8 21.9

4,291.0 28.4

Non-controlling interests 1,376.1 7.2 152.4 0.9 108.6 0.7 65.7 0.4

Total shareholders’ equity 9,439.5 49.7 4,713.6 28.3 3,439.4 22.6 4,356.7 28.8

Total liabilities and shareholders’ equity 19,005.0 100.0 16,651.3 100.0 15,197.6 100.0

15,122.7 100.0

2. Consolidated statements of comprehensive income

Consolidated statements of

comprehensive income

For year ended December 31, For six months ended June 30,

2015 2016 2017 2017 2018

Million Baht

% Million Baht

% Million Baht

% Million Baht

% Million Baht

%

Revenue Revenue from sales 30,585.4 95.4 31,307.3 94.9 25,026.8 95.5 12,494.5 95.1 12,062.9 96.2

Revenue from services 1,153.1 3.6 959.5 2.9 850.7 3.2 417.3 3.2 151.4 1.2

Investment income 60.4 0.2 32.0 0.1 17.5 0.1 8.8 0.1 6.5 0.1

Gain on change in status from subsidiary to associated company

- - 228.1 0.7 - - - - - -

Gain on disposal of investment(1)

- - - - - -

18.0 0.1

64.3 0.5

Other income 245.3 0.8 476.8 1.4 315.7 1.2 195.3 1.5 258.0 2.1

Total revenues 32,044.2 100.0 33,003.7 100.0 26,210.7 100.0 13,133.8 100.0 12,543.2 100.0

Expenses

Cost of sales of goods 21,560.9 67.3 21,898.8 66.4 16,764.4 64.0 8,391.3 63.9 8,242.0 65.7

Cost of rendering of services 775.8 2.4 680.6 2.1 666.1 2.5 323.7

2.5 93.5

0.7

Selling and distribution expenses 4,571.5 14.3 4,147.7 12.5 3,380.8 12.9 1,660.2

12.6 1,766.7

14.1

Administrative expenses 2,281.4 7.1 2,757.6 8.4 1,941.5 7.4 712.4 5.4 715.6 5.7

Finance costs 53.5 0.2 76.8 0.2 97.5 0.4 47.5 0.4 50.3 0.4

Total expenses 29,243.1 91.3 29,561.5 89.6 22,850.3 87.2 11,135.2 84.8 10,868.0 86.6

Share of profit from investments in associates and joint ventures

160.2 0.5 213.9 0.7 299.1 1.2 155.9 1.2 88.4 0.7

Profit before income tax expense 2,961.3 9.2 3,656.1 11.1 3,659.5 14.0

2,154.6 16.4 1,763.6 14.1

Income tax expenses (625.3) )1.9) (675.6) )2.1) (720.3) )2.8) (359.2) )2.7) (291.7) )2.3)

Profit for the year/period 2,336.0 7.3 2,980.5 9.0 2,939.2 11.2 1,795.4 13.7 1,471.9 11.7

Profit attributable to:

Owners of the parent 2,091.9 2,811.6 2,833.7 1,733.8 1,444.4

Other group companies before business restructuring

44.8 - - - -

Non-controlling interest

199.3 168.9 105.5 61.6 27.5

Profit for the year/period 2,336.0 2,980.5 2,939.2 1,795.4 1,471.9

Basic earnings per share (Baht)(2) 905.6 1,217.2 1,226.7

7.5 1.1

Basic earnings per share (adjusted) (Baht)(2)

9.06 12.17 12.27 7.5 1.1

Notes: (1) Gain on disposal of investment for the year ended December 31, 2017 is included in other income. (2) As at April 2, 2018, the par value of the Company’s shares has changed from THB 100 per share to THB 1 per share, resulting in the change

in number of ordinary shares used in earnings per share calculation. The Company therefore shows the basic earnings per share (adjusted) for comparison purposes, as if such change in par value occurred at the first place.

40

Consolidated statements of comprehensive income

For year ended December 31, For six months ended June 30,

2015 2016 2017 2017 2018

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Other comprehensive income Items that will be reclassified to profit or loss Currency translation differences (49.5) 81.4 (3.7) (9.0) (6.5)

Gain (losses) on remeasuring available for sale investments

(1.7) 6.9 (4.1) (2.3) (3.2)

Share of profit or loss from associates and joint ventures

1.1 (1.7) (1.2) (0.6) (0.5)

Income taxes of items that will be reclassified to profit or loss

0.3 (1.4) 0.8 0.5 0.6

Total items that will be reclassified to profit or loss (49.7) 85.2 (8.1) (11.4) (9.5)

Items that will not be reclassified to profit or loss

Defined benefit plan actuarial losses (0.5) (18.5) 64.2 - -

Income taxes of items that will not be reclassified to profit or loss

0.1 3.6 (12.8) - -

Total items that will not be reclassified to profit or loss

(0.4) (14.9) 51.4 - -

Other comprehensive income for the year/period, net of income taxes

(50.1) 70.3 43.2 (11.4) (9.5)

Total comprehensive income for the year/period 2,286.0 3,050.8 2,982.5 1,783.9 1,462.4

Comprehensive income attributable to

Owners of the parent 2,045.9 2,885.5 2,879.6 1,725.8 1,436.5

Other group companies before business restructuring 44.8 - - -

-

Non-controlling interest 195.3 165.3 102.8 58.1 25.9

Total comprehensive income for the year/period 2,286.0 3,050.8 2,982.5 1,783.9 1,462.4

3. Consolidated statements of cashflow

Consolidated statements of cashflow

For year ended December 31, For six months ended June 30,

2015 2016 2017 2017 2018

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Net cash from operating activities 4,381.4 4,040.3 4,317.2 2,252.3 1,637.0

Net cash from (used in) investing activities (1,258.3) (601.3) (632.5) 105.4 263.5

Net cash (used in) financing activities (3,183.8) (3,727.0) (3,807.0) (2,136.2) (949.1)

Cash and cash equivalents at the end of the period 993.4 579.7 375.7 801.2 1,408.5