11 Connected Transactions

1.  Related Parties

Pepsi-Cola (Thai) Trading Co., Ltd.

Main Business Importing, producing, buying, selling, distributing,
packing in cartons, bottling, and exporting of all types of beverages,
including raw materials or ingredients used in production.

Relationship Major shareholder and incurs business transactions.

Seven-Up Nederland, B.V.

Main Business Foreign Investment

Relationship Major shareholder

Serm Suk Holdings Co., Ltd. – Direct Subsidiary

Main Business Share holding and investment management for Serm Suk group

Relationship Wholly owned subsidiary company of Serm Suk Public Co. Ltd.

Serm Suk Beverage Co., Ltd.– Indirect Subsidiary

Main Business Manufacture, distribution, and import and export agent for
all types of beverages

Relationship Wholly owned subsidiary company of Serm Suk Holdings Co.
Ltd. and incurs business transactions with Serm Suk Public Co. Ltd.

Petform (Thailand) Co., Ltd.

Main Business Manufacture and distribution of plastic containers and PET
polymers

Relationship An associated company of Serm Suk Public Co., Ltd. and a
supplier of plastic performs, PET bottles, and closures.

Crown Seal Public Co., Ltd.

Main Business Manufacture and distribution of crown seal, aluminum caps,
lids, and other metal products for local market and export.

Relationship A company in which Serm Suk Public Co., Ltd. has invested
and incurs business transactions.

Petpack Co., Ltd.

Main Business Buying and selling plastic and all plastic products both
raw materials and finished products, construction material, tools of all
kinds, paint, painting tools, and decorating materials.

Relationship A company in which Serm Suk Public Co., Ltd. has invested
and incurs business transactions.

The Pet Co., Ltd.

Main Business Manufacture and distribution of packaging products made
from plastic, PVC, metal, paper, foam, or other recycled materials.

Relationship A company in which Serm Suk Public Co., Ltd. has invested
and incurs business transactions.

Connected Transactions

-   A direct subsidiary company, Serm Suk Holdings Co., Ltd., was set up
    with Baht 500 million registered capital (50 million ordinary shares
    at par value of Baht 10 each) of which Baht 350 million shares were
    issued and paid up. The Company holds total 49,999,993 shares of the
    registered capital. Business objective of this newly set up company
    is to hold shares and manage investment of Serm Suk group of
    companies. In November 2006, the Company sold and transferred shares
    in Serm Suk Beverage Co., Ltd. (indirect subsidiary) to Serm Suk
    Holdings Co., Ltd. for Baht 337.9 million and incurred Baht 172.4
    million losses on the transaction.

-   Purchase of raw materials and finished products, subsidy of
    marketing expenses, and selling and administrative expenses in 2008
    = Baht 4,225 million.

-   Purchase of raw materials and finished products, marketing subsidy,
    and selling and administrative expenses were made according to the
    conditions and sum specified in the relevant agreements. These
    connected transactions with the major shareholders, the company
    where Serm Suk Public Co., Ltd. has an investment or joint
    directors/management, have been recorded according to the agreed
    amount and in accordance with the normal business norm.

-   Transactions with the indirect subsidiary company (Serm Suk Beverage
    Co., Ltd.) were the purchase of the manufactured or co-packed
    products such as Lipton Ice Tea in returnable glass bottles, Lipton
    in PET bottles, Tropicana Twister fruit juice both in the returnable
    bottles and non-returnable PET and glass bottles, Gatorade in the
    PET bottles, directly from the indirect subsidiary or through
    Pepsi-Cola (Thai) Trading Co. Ltd. Sales revenues of Serm Suk
    Beverage Co., Ltd. therefore derived from sales of the manufactured
    products to the Company or Pepsi-Cola (Thai) Trading Co., Ltd. for
    resale to the Company for distribution. The sales were recorded as
    cost of sales for Serm Suk Public Company Limited.

-   Transactions with the associated company in which the Company
    holding 40 per cent share were the purchases of raw materials which
    have been included as production costs of the Company.

-   Sales of products or services - none -

-   Purchase of assets - none -

-   Sales of assets to the related parties - none -

-   Borrowing, lending, or guaranteeing

- Loan to The Pet Co., Ltd. = Baht 5.0 million

Loans to the Pet Co., Ltd. represent loan under the subordinated loan
agreement with one year maturity bearing interest at 10% p.a. The
subordinated loan agreement shall continue to be in effect if there is
no change at the maturity date. Such subordinated loans of Baht 3
million can be converted to common stock upon the resolution of
shareholders of the borrower’s meeting. In addition, the related company
agrees to repay the principal after the related company repays all debts
to other creditors or upon the special resolution of the shareholders’
meeting to increase its share capital.

Interest income for 2008 = Baht 0.5 million

-   Guarantee on bank loans to the subsidiary - none –

-   Potential competing products or services - none -

-   Agreements for management or assistance: Advertising and marketing
    agreement, as per conditions and sum specified in the agreement.

-   Transactions with subsidiary and associated companies:

  Purchase of goods from indirect subsidiary company for distribution,
  and purchase of raw materials from associated company have been
  presented with amount combined.

1.  Necessity for the Connected Transactions

Serm Suk Public Co., Ltd. has been licensed to manufacture and
distribute the products under brand names belong to Pepsi-Cola
International Ltd., Pepsi Lipton International Ltd., and Strokely Van
Camp Inc. To maintain the quality of the products as specified by the
licensor, the Company needs to source major raw materials from the
licensor or its representative. In fixing the purchase price, the
Company has bargained and made agreements for reasonable prices and
support for marketing, and sales and administrative expenses from the
seller in order to maximize the Company benefits. The purchase from the
indirect subsidiary company is aiming for the expansion of product lines
distributed by the Company. Both parties negotiated and entered into a
distribution agreement for the acceptable prices and margin. Purchase of
raw materials and products with other related parties is to ensure the
uninterrupted and consistent supply of quality raw materials.

2.  Procedure for the Approval of Connected Transactions

Every connected transaction has been carefully considered and analyzed
by the management for its pros and cons before entering into an
agreement. All connected transactions with the related parties which
have significant legal implication, have to be proposed to the Board of
Directors for approval before any commitment is made.

3.  Policy or Trend for Future Connected Transactions

Trend for future connected transactions continue to be the purchase of
raw materials and finished products including the marketing supports
between the Company, its associate and subsidiary companies, as well as
the major shareholders, which were the normal business transactions of
the Company.