rs public company limited annual report...

RS PUBLIC COMPANY LIMITEDANNUAL REPORT 2014

1. Message from the Chairman and Chief Executive Officer [001]

2. Management Team [005]

3. Policy and Business Overview [017]

4. Business Descriptions [021]

5. Risk Factors [031]

6. Property used in the business [035]

7. Legal disputes [039]

8. General information and other important information [041]

9. Securities and Shareholder Information [049]

10. Management Structure [053]

11. Corporate Governance [067]

12. Responsibilities toward society [081]

13. Internal Control and Risk Management [087]

14. Related Party Transactions [089]

15. Financial Highlight [095]

16. Management Discussion and Analysis [103]

17. Financial Statement [113]

CONTENT

01

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1Message from the Chairman

and Chief Executive Officer

02

Message from the Chairman and Chief Executive Officer

Dear Shareholders,

The year 2014 was considered as an important step for RS to re-designed corporate structure from an entertainment company into a full media company. This was the year when the Company had fully operated the digital television business after successfully received the operating license for broadcasting television business, or the operating license for television business as usually called the digital free tv from the National Broadcasting and Telecommunications Commission (NBTC).

The television industry in 2014 had intense competition from new operators entering into the industry with totaled 21 channels (excluding the original free TV of channel 3, 5, 7, 9, and 11). Each operator was ready to compete to for the share in advertising budget from the existing television media budget of Baht 89,000 million per year by investing in new contents in order to capture viewing audiences from original operators.

RS is considered as having vast experiences for a period of time in operating the satellite television business and is ready in every direction whether in the form of personnel, producing contents for variety, entertainment and documentary programs, including readiness on financial support. These give us confident in certainly establishing the Company as leader in the free television media.

Overall economic situation for Thailand in 2014 showed a slowdown trend when comparing to the previous year as economy for domestic market had a rapid setback from political turmoil starting in late October 2013. Other external factor such as economy of the USA and many countries in Europe which were our important trading partners

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encountered economic slowdown, thus, sending impact towards our economy as well. The advertising industry which had its growth rate in corresponding with the economic growth received these impacts too. However, the overall economic in 2015 has clearly shown recovering trend from intervention of the National Council for Peace and Order (NCPO) that stops the political violence and by receiving support from Government policy that generates consumers spending such as payment for farmers, etc. Additionally, as external economy also shows a recovering trend, the Bank of Thailand forecasts that in 2015 the national GDP will grow 4 – 5 % which will result in generating growing trend for the advertising industry as well.

In 2014, revenue from sales and services amounted to Baht 4,306.5 million which showed growth of 24% from previous year and was due from strength of contents that received well acceptance from audiences and advertising media buyers. Moreover, the Company also received additional special revenue from rights management of the FIFA World Cup 2014. The television business generated revenue of Baht 1,425 million or growth of 36% which resulted from continuous good performances from each of the channel. These could be seen from the success in audience rating of “Channel 8” which received number 4 rating in the digital television channel (data from AGB Nielsen Media Research in February 2015), and “Channel 2” , “Sabaidee TV”, and “YOU Channel” that received high ratings in the satellite television channels in their categories.

Radio business still had continuous growth even though the radio industry was near its saturating point but the Thai radio station “Cool Fahrenheit 93” and the country radio station “”Sabaidee Radio” were leaders in their categories. The “Cool Fahrenheit 93” still held number 1 rating in the easy listening category, and “Sabaidee Radio” held high ranking number from research data from the AGB Nielsen Media Research. Thus, the radio business of the Company still enjoyed continuous growth. In 2014 radio business generated revenue of Baht 554 million. Growth from both the television and radio business resulted in the overall growth for media business in 2014 with revenue registered at Baht 3,357 million, or growth of 69 % comparing to previous year.

For the overall picture of the media business in 2014, its revenue showed 78 % of the Company total revenue as will increase the percentage in future. In 2015, the Company has re-designed its organization in order to move forward as leader in the media industry.

The music distribution business registered revenue of Baht 457.8 million, decreased from previous year of 41 %, due to changing consumers’ behavior thus making the physical product sales value gradually decreasing. However, music business still had important role as it was the upstream for contents and most personnel in the entertainment side of the Company which could be further use for the Company’s media business as it could be seen from the success of the “Sabaidee TV” and “YOU Channel” channels. Moreover, in 2014, the Company also reorganized its music distribution business by combining both the business center of string and country to be under the same management which generated proficient operations and maximum efficiency.

04

The Event Management in 2014 generated revenue of Baht 458.5 million decreased 34 % from previous year due to intense political situation that delayed private corporations and Government agencies from business activities. However, the Company’s events still regularly generating revenue such as the “Kid Tung D2B” concert, “Sabaidee” Sunjorn, and “Looktung Festival” that received overwhelming responses.

For the part of cost of sales and services amounted to Baht 2,924.7 million, increased 39% from previous year which was due from cost realized from live broadcasting of the World Cup 2014, including cost increased from “Channel 8” digital TV for cost on the license operating of the digital television. Also, this included cost on service of the digital television network (MUX), cost on signal reception including investment in equipment, personnel, producing programs, and purchasing various copyrights programs for the development of contents’ quality in drama, news and variety programs to make them strong and interesting. Expenses on sales and administration amounted to Baht 866 million, decreased 2% from previous year from reduced expenses concerning personnel and the marketing plan adjustment which resulted in decreased cost on sales promotion. Thus, in 2014, net profit for the Company totaled Baht 371 million, decreased 6 % from previous year which mainly due from increased cost from “Channel 8”.

For social responsibility RS still emphasized in social activities together with the entertaining business. In 2014, the Company engaged in many social activities including the arrangement on some of the activities ourselves. The activities included “English Teach a Child” project under the “84 Schools Doing Good Deed for the King”, “Kamikaze Give & Share 2015”, “Share the Happy New Year for our Brothers and Sisters” year 2, “Channel 8 Share to Child” activity, Share our Love on Children Day to Nonthapoom House, and other activities such as “1 to 3 Blood” for you, and “Life is Beautiful” project for underprivileged patients.

Good corporate governance is always a very important factor in operating the RS business as indicates in the Corporate Governance of Thai Listed Companies 2014 that the Company has been listed in the very best CG scoring. The Company has reviewed its good corporate governance policy on the yearly basis and always instructs its Directors, Executives and employees to follow the policy. Apart from the goal in achieving the business success, we are determined to build sustainable society and balance that covers the economy, society and environment, including the building of long term benefit for our shareholders.

In 2015, RS still holds on to its original strategy as the media revolutionist similar to the past years. For the Company to fully change from the entertainment to the media business, the most important thing is that all employees must have the same goal and ready to change and develop in any aspects in order to guide our corporation to its planned target.Lastly, on behalf of the Company’s Board of Directors, we would like to thank shareholders, customers, government agencies, and sponsors who have confident, trust, and always support us all along, and most important of all are our employees and artists who dedicated their bodies and minds by uniting in moving our company forward strongly and firmly.

Mr. Surachai Chetchotisak

Chairman and Chief Executive Officer

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05 05

2Management Team

06

01 03

04 06

0907

05

02

081. Mr.Surachai Chetchotisak

2. Mrs. Pornpan Techarungchaikul

3. Mr. Darm Nana

4. Mr. Danaisidh Peslapunt

5. Mr. Sutthisak Prasatkarukarn

6. Mr. Sorat Vanichvarakij

7. Mr. Phisit Dachanabhirom

8. General Pairoj Panichsamai

9. Associate Professor Witaya Danthamrongkul

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06

Management Team

Mr.Surachai Chetchotisak

52 Years

Chairman / Chief Executive Officer

Education :

Honorary Doctorate Degree of Marketing, Chandrakasem Rajabhat University

Bachelor’s degree of Political Sciences, Ramkhamhaeng University

Thai Institute of Directors Training :

Director Accreditation Program (DAP) Year 2003

Experience :

• 2012 - present Chairman

RS Public Company Limited

• 2003 – present Chairman of the Executive Committee


• 1992 - present Chief Executive Officer


Directorships in other companies that are not owned by the RS Public Company Limited:

• Director of Chetchotisak Co.,Ltd.

• Director of SS2C Co.,Ltd.

• Director of Tiger Fun Co.,Ltd.

• Director of Primo Posto Co.,Ltd.

Shareholding at the beginning of the year 2014 (Shares) 309,100,000

Bought Shares during the year 2014 (Shares) 79,800,000

Sold Shares during the year 2014 (Shares) -

Shareholding at the end of the year 2014 (Shares) 388,900,000

Shareholding (%) 38.04

08

Mrs. Pornpan Techarungchaikul

44 Years

Director / Secretary to the Board of Directors and Company Secretary

Chief Operating Officer

Education :

Master degree (MBA) from Sasin Graduate institute of Business

Administration of Chulalongkorn University

Bachelor degree of Statistics

Chulalongkorn University


Director Certification Program (DCP) Year 2007


Experience :

• 2008 – present Secretary to the Board of Directors and Company Secretary RS Public Company Limited

• 2007 – present Chief Operating Officer


• 2004 – present Director


• 2003 – 2007 Executive Vice President


• 2001 – March 2003 Assistant Managing Director

Golden Land Property

Development Public Company Limited

• 1999 – July 2001 Assistant Vice President

SG Securities Co., Ltd.


None

Shareholding at the beginning of the year 2014 (Shares) -

Bought Shares during the year 2014 (Shares) -


Shareholding at the end of the year 2014 (Shares) -

Shareholding (%) -

09

08

Mr. Darm Nana

45 Years

Director / Chief Financial Officer

Education :

Master of Business Administration (MBA), University of Notre Dame, Indiana, U.S.A

Bachelor degree of Arts in Economics (BA Econ), Thammasat University




Experience :

• 2007 – Present Director


• 2007 – Present Chief Financial Officer


• 2002 – 2007 Senior Vice President

Corporate Banking, HSBC Thailand


None





Shareholding (%) -

010

Mr. Danaisidh Peslapunt

59 Years

Director / Executive Vice President – Central Legal Office

Education :

Thai Barrister at Law from The Institute of Legal Education Thai Bar Association

Bachelor of Law from Ramkhamhaeng University

Certificate of Intellectual Property and International Trade from The Institute of Legal Education

Thai Bar Association




Financial Statements for Directors (FSD) Year 2008

Experience :

• 2007 – present Director


• 2007 – present Executive Vice President – Central Legal Office RS Public Company Limited

• 1997 – 2007 Law Consultant



None





Shareholding (%) -

011

010

Mr. Sutthisak Prasatkarukarn

49 Years

Director / Managing Director, Thai Copyright Collection Co.,Ltd.

Education :

Master of Laws (LL.M.), Ramkhamhaeng University

Bachelor degree of Law, Ramkhamhaeng University

Certificate in Business Law, Ramkhamhaeng University



Experience :

2012 – present Director


2003 – present Managing Director

Thai Copyright Collection Company Limited


None





Shareholding (%) -

12

Mr. Sorat Vanichvarakij

41 Years

Director

Education :

Master of Business Administration (MBA)

Asian Institute of Technology (AIT)

Bachelor degree of Marketing Business Administration

Assumption University of Thailand (ABAC)



Experience :

• 2012 – present Director RS Public Company Limited

• 2003 – present Chief Executive Officer YT Group Company Limited

• 2003 – present Chief Executive Officer VRK Engineering Company Limited

• 2003 – present Chief Executive Officer Pan Asia Industrial Company Limited


• YT Group Company Limited

• VRK Engineering Company Limited

• Pan Asia Industrial Company Limited

Shareholding at the beginning of the year 2014 (Shares) 163,750,000.00

Bought Shares during the year 2014 (Shares) 19,302,900.00

Sold Shares during the year 2014 (Shares) 70,000,000.00

Shareholding at the end of the year 2014 (Shares) 113,052,900.00

Shareholding (%) 11.05

13

12

Mr. Phisit Dachanabhirom

73 Years

Independent Director and Audit Committee Chairman

Education :

Bachelor Degree of Accounting, Thammasat University

Bachelor Degree of Commerce, Thammasat University

Certified Public Account No.966



Audit Committee Program (ACP) Year 2005


Experience :

• 2007 – present Independent Director and Audit Committee Chairman RS Public Company Limited

• 2013 – present Director Don Muang Tollway Public Company Limited

• 2003 – present Director and Audit Committee Chairman Jaymart Public Company Limited

• 2002 – present Director and Advisor, Phuket International Hospital Company Limited

• 2001 – present Executive Chairman Professional Alliance Group Limited


• Don Muang Tollway Public Company Limited

• Jaymart Public Company Limited

• Phuket International Hospital Company Limited

• Professional Alliance Group Limited

• Polipharm Company Limited





Shareholding (%) -

14

General Pairoj Panichsamai

68 Years

Independent Director and Audit Committee

Education :

Master degree of Social Development

National Institute of Development Administration (NIDA)

Royal Military Academy Sandhurst U.K.

Bachelor of Law, School of law LL.B., Ramkhamhaeng University



Audit Committee Program (ACP) Year 2007


Finance for Non-Finance Director (FN) Year 2007

Experience :

• 2007 – present Independent Director and Audit Committee


• 2014 – present Member of the National Legislative Assembly of Thailand 2014

• 2006 Deputy Supreme Commander Supreme Command Headquarters (Army)

• 2005 Chairman of the RTA Advisory Board

• 2000 Commanding General Army Weapons Production Control Center


None





Shareholding (%) -

15

14

Associate Professor Witaya Danthamrongkul

52 Years

Independent Director and Audit Committee

Education :

Master of Business Administration (MBA.)

Oregon State University, USA

Bachelor degree of Economic (1st Honor)

Thammasat University, Thailand




Experience :

• 2007 – present Independent Director and Audit Committee RS Public Company Limited

• Present Associate Professor and Lecturer, Department of Human Resource and Organization Management, Faculty of Commerce and Accountancy Thammasat University

• Present Deputy Director of Human Resources Institute, Thammasat University

• 2009 – present Independent Director and Audit Committee Chairman Prinsiri Public Company Limited

• 2006 – 2007 Director, Journal of Business Administration

Faculty of Commerce and Accountancy

Thammasat University

• 2000 – 2001 Training Director Institute of Small and Medium Enterprises Development (ISMED)


Independent Director and Audit Committee Chairman, Prinsiri Public Company Limited





Shareholding (%) -

017

017

3Policy and Business Overview

018

Policy and Business Overview

RS was established in 1976, starting from the music business. Later, the company was converted into a public company. And has been listed on the Stock Exchange of Thailand in 2003 with registered capital of 560 million baht and changed its name to “RS Public Company Limited “. As of December 31, 2014, the Company had paid-up capital amount of 1,022,346,046 ordinary shares at one Baht par value. However, the company has continued to expand the music business to fully media including radio, television, film business and event management. At the end of 2013, the company won the Digital TV auction Standard Definition Type 1 channel. The Company has adopted the “Channel 8” that originally aired on the satellite TV platform. Switching to Digital TV broadcast since April 2014. The company has operated under the Vision and Mission as follows.

VisionThe revolutionist that creates entertainment products with social responsibility

MissionTo offer quality entertainment products that meet our customer’s needs through the force of excellent human resource that is poised to respond to any changes and always explore new opportunities by adhering to the

principles of modern management and technology.

Business overview of the Company and its subsidiaries.Current business of RS contain 3 main business such as media business, music distribution and event management.

which media business has the largest proportion. Media business consists of radio and television with Digital TV Channel 8 as a leader. Moreover the company also have 4 satellite TV channels such as Channel 2, YOU Channel,

Sabaidee TV and Sun Channel. Each channel of the company has been well received both in terms of audience and Media advertiser clients. This makes the media business is growing steadily. The Company has been invested

through various subsidiaries. The details are as follows.

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018


Media Music Distribution Event Management

RS PCL.

Starz (Thailand) Co.,Ltd.

RS Television Co.,Ltd.

Coolism Co.,Ltd.

RS PCL.

RS PCL.

The Copyright

Collection Co.,Ltd.

RS PCL.


Poema Co.,Ltd.

Blu Fairy Co.,Ltd.

Nagasia Co.,Ltd.

Aladdin House Co.,Ltd.

Yaak Co.,Ltd.

Dee Media & Production Co.,Ltd.

RS PCL.


RS International

Broadcasting and Sportt

Management Co.,Ltd.*

Television Radio Sport Management

Temporality suspended

- RS Film & Distribution Co.,Ltd.

- Avant Co.,Ltd.

- R.S. Sportmaster Co.,Ltd.

- Bangkok Organization Co.,Ltd.

- R Siam Co.,Ltd

- RS In-Store Media Co.,Ltd.

- S-One Sports Co.,Ltd.

* 83.33% Shareholder by RS Public

Company Limited

As at December 31, 2014

Subsidiaries of the company that owned 100 percent Contain

• RS Television Co.,Ltd operates television production and event management• Starz (Thailand) Co.,Ltd operates television production and event management• Coolism Co.,Ltd operates radio business and event management• Thai Copyright Collection Co.,Ltd operates copyright collection.• Poema Co.,Ltd operates event management• Aladdin House Co.,Ltd operates event management• Blu Fairy Co.,Ltd operates event management• Nagasia Co.,Ltd operates event management• Yaak Co.,Ltd. operater event management• Dee Media & Production Co.,Ltd. operates event management

Subsidiaries of the company that owned 83 percent Contain

• RS International Broadcasting and Sports Management Co.,Ltd operates television production and sports management

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4Business Descriptions

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Business DescriptionsAt present, RS Group has 3 main core businesses which are the Music Business, Show Business and Media Business.

Revenue Structure

Type of Business

2012Amount (Million Baht)

share in total revenue

(%)



(%)



(%)

Media Business 1,193.0 42% 1,986.3 57% 3,356.8 78%

Music Distribution 883.2 31% 777.2 22% 457.8 11%

Event Management 718.8 26% 692.6 20% 458.5 10%

Revenue from Other Business 17.4 1% 5.5 1% 33.3 1%

Total Revenues 2,812.4 100% 3,461.5 100% 4306.5 100%

Media BusinessRS media business consists of 2 major media i.e. TV, and Radio

TV Media Business

RS Public Company Limited operates 5 satellite television channels i.e. Sabaidee TV, YOU Channel, Channel 8, Star Max Channel, and Sun Channel La Liga which have different concepts and target groups as follow:

Channel 8 is operated under the concept of “Your Friend Everywhere, TV for Everyone” which presents its works to serve demands for all age and gender groups of audiences by producing and creating all forms of entertainment varieties. The laid out concept is similar to other free television channels which consists of variety of programs with its strength during the super prime time period for new television drama with its first run. In 2014, Channel 8 has 5 new first run dramas i.e. Dong Dok Ngew, Sap Sang, Pua Chua Kraw, Ching Rak Hak Sawart and Mia Thien.Moreover, there are many programs in various varieties such as the news program “ Kuikhao Chong 8”, and Kuikhao Yarmyen”, the entertainment programs “Bunthoeng 108”, the talk-show program “Pakpong”, the reality show program “Saengsawan Pichitfun”, the comedy, game-show and various concerts program including many foreign and domestic films that are being circulated in 24 hour broadcasting. New dramas and these programs have generated interesting trends among audiences and advertising agencies within a very short time which always reflects Channel 8’s rating as leader in the entertainment variety group from Nielsen Media Research.

Sabaidee TV channel focuses on the target group with appreciation of Thai songs not only limited to country music but also included songs for life, hit songs in the past, rare-to-hear old songs, string music, including underground music market where a music maker is given an opportunity to promote their work, under the slogan “various Thai style music, happy watching for the whole family”.

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The strengths of Sabaidee TV channel of which its contents are produced and managed under R Siam record label is capitalized on to present a wide variety of programs, both in depth and in width, by drawing and utilizing the full potential of artists in our care along with the selection of an emcee with unique identity, well remembered and liked by people of many different groups. All of the aforesaid characteristics make Sabaidee TV a channel of pleasure people can watch all day where people can communicate all the time via SMS which will be shown on TV screen.

YOU Channel is the channel with concept of “Channel of Thai music for all Thai” consisting of programs from live programs with variety of flavors and variety show programs that cannot be missed. This is to serve all gender and age group of audiences and listeners who love listening to music with main target aiming at audiences between 15 – 24 years, and the secondary target between 25 – 45 years. Presentation is in the forms of music video or concert of various artists, entertainment in various forms, generating popularity trend by inserting creative content, material to the target groups and acting as another channel in search for new artists.

The satellite television Channel 2, the no. 1 variety entertainment channel of Thailand that comes with spectacular entertainment full of flavors, characters, artists, entertainment, and variety programs. The quality contents are presented to group of all gender, and ages nationwide from 15 – 49 years who adore spicy entertainment taste from leading artists all over Thailand. These come with closely follow up on heated movements of artists who are under monitoring from all media. Promoting media that cover targeted audience group and including supports from all allies who give good response.

Sun Channel is a channel under the “Extreme Entertainment Variety” concept that consists of sport, news, information, and entertainment programs. Main target group consists of people in their early working lives, and the adult group who love sport. The new channel still emphasizes on life broadcasting of the La Liga Spanish football in order to serve the audience group who love football which is the strong point of RS in this sector, and to expand for more coverage in this audience base group as well. The “Sun Channel La Liga” contains variety of programs such as “Inside La Liga”, Sun Sport”, La Liga World”, and “La Liga Show programs, etc.

Moreover, add more variety program, “Arthit Lawan Tunkhao”, by using the professional news announcers such as Chaiwat Anutrakul, Akarapon Thongtaradol, Sasiwan Lertwiriyaprapa, and including many variety programs in order to cover more audiences.

Marketing and Competition

In 2014, the television media industry had a very important change. The National Broadcasting and Telecommunications Commission or NBTC announced the 24 licenses auction of the digital television. This created many new competitors and more intense competition than before to attract audiences and advertising budget. Channel 8 was considered a new

024

player in the digital television but had experiences in the television media for a long time as it had been in the satellite television for over 5 years. Thus, the Company was able to produce quality programs to satisfy audiences.

Even though the birth of digital television in Thailand attracts interest in many business sectors whether from the audiences or advertising clients who invest their advertising budget into the digital television industry, at present, the main audiences, approximately 70% still watch their television channels through satellite television. Hence, the Company has realized the opportunity and importance of satellite television business. In 2015, the Company plans to build Channel 2 as leader in the satellite television business of Thailand.

Marketing

1. Product Branding and Program Positioning

The Company clearly set the market position of the business in each type of program. The communication of an image of the Company and the design of programs are aimed at responding to specific needs of individual target groups, by taking into consideration the pattern of behaviors of viewers in each group and hot trends which correspond to the strategies of RS Group of companies possessing strength and high competitiveness in the market.

2. Capitalization on the competitive strength of RS Group as a major element of production to obtain a top-quality program

In addition to clearly determine target viewers, the Company capitalizes on the competitive strength of our organization, in the teen market of large scale and high purchasing power, in the design and production of work to obtain top-quality programs, using talented artists/performers/singers/teen emcees in our care, our music and other contents as a major element to create work, upon combined with the strength of our crew members who are highly skilled and experienced in the production of TV programs and videos, top-quality work is produced and great feedback is achieved.

3. Formulation of sale patterns to create maximum value for customers

The design of sale patterns of advertising media to respond to the needs of and create maximum value for customers in a package deal i.e. the sale of loose spot airtime in tandem with marketing activities to repeat and create brand awareness among customers by placing emphasis on the creation of marketing activities in a CSR concept (Corporate Social Responsibility) to encourage conscience and publicize knowledge about the social responsibility towards consumers, presented in a way that blends into with the program content and is able to communicate the properties of the product in an effective manner to make the spending of advertising budget of customers most value for money.

4. Creation of overall quality to gain customer recognition

The Company focuses on the creation of overall quality in every work unit to gain customer trust and recognition, not only limited to production quality for customer satisfaction but also included before and after sale services such as the response to customer needs in a prompt and proper manner, listening to their problems and coming up with solutions for them.

5. Program development to meet the tastes of target viewers

An analysis of target viewer requirements is conducted on a regular basis from which the results are used to develop production style and technique in line with the requirements of target viewers and customers to steadily boost program ratings and sales.

6. Administrative and cost management

A structure has been laid to give flexibility in administrative and cost management by using our employees to produce work of some parts and hiring outsiders to produce work of other parts (outsourcing).

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Radio Business

RS operates the F.M. 93.0 MHz. frequency under the brand name “Cool Fahrenheit 93” and “F.M. 88.5 Sabaidee Radio” with the following details:

Radio Station COOL Fahrenheit 93 Sabaidee Radio

Concessioner Navy Radio Station Navy Radio Station

On Air Date and Time 24 hours 24 hours

Signal Coverage Bangkok and vicinity Bangkok and vicinity

Program Concept 50 Minutes Music Freeze Your Mind Various Thai music

For the family

Target Audience Students and working people aged

20 - 34 years old

Students and working people aged

15 - 45 years old

Radio Station: COOL Fahrenheit 93 (F.M. 93.0 MHz)

COOL Fahrenheit 93 proceeds as per the Company’s policy in conducting the fully commercialized business of radio operation. Emphasize is still on maintaining its original popularity, and increasing its audience base. At present, it still maintains clear audience base, and popularity, and manages to receive the most popularity vote in each of the audience base from surveying data of Nielsen Media Research. This, results in confidence in using media for advertising purpose from the Company’s clients of advertising agencies, and products; owners.

Procurement of Products and Services

After the birth of digital television, there are many new players in the market, thus, tussle for qualify and knowledgeable persons are intense and unavoidable. However, the Company has the protection against such risk by signing contracts with many personnel such as script writers, directors, and artists. Personnel who work up-front and in the background with capabilities, experiences, and acceptable to the targeted audience group are selected. The up-front personnel are based on artists under the RS group and others come from selected artists, and freelance artists. The background personnel that cover creative and production control works is under the Company’s management team, while production procedure itself is partly under internal employees and partly under hiring from external production company.

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Radio Station Theme

Radio Station: COOL Fahrenheit 93

Cool Fahrenheit 93 offers easy-listening Thai songs which are favored by their audience. It is the first radio station, hosted by accepted professional PJs, that allows the audience to listen to voted songs for 50 minutes continuously. Activities that respond to the audience’s lifestyles and challenge the working group listeners are also part of the program, which enhances Cool Fahrenheit 93 to become number one radio for working people in a short period and by mutual consent according to AGB Neilsen Media Research polls.

For these reasons, Cool Fahrenheit 93 has proved to be a popular radio station according to the AGB Neilsen Media Research popularity poll, 10 years frequencies from 2002 to present (data as of December 2014). It has been ranked

as the top station in the Easy Listening category for working group aged between 20 -34 years old.

Radio Station Theme

Radio Station : Sabaidee RADIO

Sabaidee radio receives overwhelmingly acceptable rating from listeners as it is the radio program that creates good mood to its listeners with variety of hit music. Entertainment activities contain many styles of the interactive type similar to a saying as “Sabaidee radio Frequency of Out-of-the-Box Hit Music”.

The music emphasizes on many style of Thai music with no infinite style and type but all songs must be popular that are selected from music chart or having top downloading rating. The DJ team with good nature DJs who are acceptable to the listeners group, and including variety of activities that make listeners happy, and dashing at all time. Concert, excursion tour, play, party, good food, lucky draw that serve listeners lifestyle, and building relationship with the old fan club group as well as constantly expanding the new fan club all the time. These actions result in love and acceptance from listeners and create brand royalty among listeners as well.

From above reasons, Sabaidee radio has the top popular rating from popularity research data from AGB Nielsen Media Research, and receiving high popularity rating since its creation in July 2011 up to the present date in the radio listening group of student and working group (15-45 years).


At present, even though behavior of the listening group through radio seems to be lesser, but listeners’ volume through websites and smartphone is increasing. The number of listeners using websites and applications through COOL Fahrenheit 93, and Sabaidee radio increases gradually which includes communication channels of the “follow up” and “view” channel through social media have increased gradually.

Market and competition of the radio media business are still high due to limited budget. Customers prefer to buy the advertising airtime by taking high popularity as their priorities while pricing strategy is important to decision into buying the advertising airtime as customer can buy more airtime or receiving variety of advertising package. These depend on

selling strategy of each company to show how the customers’ budget is well spent or not.

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Marketing Strategies

1. Value for Money strategy: Maximizing benefit with the existing customer’s budget for advertising in the form of package sales i.e. selling advertising airtime together with the marketing activity that results in tangible sales promotion and worth the investment.

2. Sales promotion strategy: Due to intense competition of the radio industry that need to differentiate the existing programs in order to add value to radio frequency, customers, and product that participates in the sales promotion, hence, selling advertising airtime is not enough to satisfy customer requirement and towards brand building, and the radio frequency. Then, the Company has improved its operating strategy by prioritizing towards the sales promotion activity into the synergy strategy by combining allies from many businesses into media partner for activity or concert that has the same customers’ target group. This also includes adding value to products by having coordinated sales promotion together between the program and listeners.

For all sales promotion strategies, the Company will emphasize quality activity that gives substance and entertainment to those participants and will serve the customer’s marketing policy efficiently, clearly, and directly at the target group. The Company will result in generating revenue for customer from the sales promotion activity.

Moreover, the Company can use capability of its advertising and public relation channel to inform public about the activity of its radio program, and activity of its customer to be accepted and widely known in the form of public relation news, and advertising in other media such as television, magazine, outdoor media, moving media, etc.

3. Advertising Plan Servicing Strategy: The Company’s team who has been working in the radio business for a long time with experiences, knowledge, and good understanding in the radio media business can advise customer with the most efficient media planning. Advertising airtime or advertising package that is suited to customers’ objective and listeners’ target group is to be selected. The Company’s advertising plan has been created by using specially designed events in order to serve customers’ requirement and limitation on certain type of products. The synergy policy with allied trade partners is considered in the advertising plan with all supporting products to create motivation

and good value for money by using the Company’s media.

Procurement of Product or Service

1. DJ and Production and Creative Personnel

The Company has successfully brought about the innovation to the radio circle by employing the new marketing strategy,

“PJ MARKETING” after the accomplishments in the program production of 93 Cool Fahrenheit and other affiliated radio

frequencies by moving the DJ era into the PJ (Program Jockey) one. Each PJ is required to enhance one’s own potential

by possessing the basic marketing knowledge and optimal technology utilization in particular. PJs are the key factor

contributing to the reputation of the radio station as they are responsible people who have a good understanding of the

music, and the ability to communicate with the listeners. With training, they can improve their knowledge of technology

in order to be able to handle state-of-the-art equipment and software. They host their programs in a style that meets the

taste of the target listener, and may also work externally as program hosts for sales promotion activities.

2. Broadcasting System

The Company uses a computer system for automatic broadcasting control which is the technology of international

standards by which its software is regularly updated to keep up with the ever-changing trends and achieve top

broadcasting quality.

028

Music Distribution

RS music distribution business operates in the comprehensive nature in all processes, starting from artist selection,

music composition, promotion, strategy on media and marketing plan, artist management, and administration of

the music content in the form of artist, music format in the form digital content and distribution of musical disc. Details

on the operating procedures are listed below:

1. RS Group employs a fully integrated business model managing all types of related business. As a company associated with a number of artists, RS Group has produced a variety of music with continuous releases onto the market. The targeted market and music genre is presented to the music committee and each music label works on each album independently until the music album is finished. Subsequently, the music production process will be independently undertaken by the teams in each music label. The public relations plan and promotion Products and Services Descriptions strategy will also be created by those teams to be combined with the plans of Media Management Division and Distribution Division. Finally, the music marketing unit will lay-out the promotion strategy, conduct the public relation campaign and coordinate with the distributor to ensure the alignment of product’s quality and market’s popularity.

2. It is RS Group’s policy to generate products in an appropriate quantity and of good quality. As a result, each album’s investment yields a satisfactory outcome.

3. Utilization benefits through all media channels for both Free TV and Satellite TV, radio, printed media, internet media through the Company and its affiliated company’s websites and social media channels to facilitate efficiency of the public relations programs, and utilize all media for maximum efficiency.

4. Efficient distribution transfers products to end customers thoroughly in both forms of digital and physical contents. Set up the management and follow up system for closely monitor the distribution channels.

5. Efficient and systematic music copyright management creates added revenue for the business.

6. The policy in opening opportunities to new group of artists, song writers, and new creative channel of songs in order to develop and improve the quality of RS Group’s songs to be updated and covering the target groups at all time.

Music Distribution acquires most of its revenue from the following 3 sources:

1. Revenue from music products through Digital Content in the forms of Download, Ringtone, Ring-Back Tone, downloading of full song through various channels such as iTunes, the www.rsonlinemusic.com website, or Wireless Application Protocol , and music listening in the form of on line streaming through “Deezer” system and Youtube. In year 2015, The company is preparing to join the many potential platform partners.

2. Income from the sale of music products in forms of CD, MP3 in the forms of new and old hit singles in various formats, including VCDs and DVDs recording the concerts of Thai modern or country music artists through their new single albums, and/or their hits collection versions and so on.

3. Revenue from copyright collection through RS affiliated company called “Thai Copyright Collection Co., Ltd.” or “TCC” which collects all commercially viable copyright fees.

029

028

Affiliated Artist/Singer

RS Group has both String Music singers and Country Music singers. Each music style has both solo singers and groups whom have different styles. RS artists and singers include:

String Music singer such as Four - Mod, 321, Timethai, Neko jump, Alarm9, Karamail

Country Music singer such as Baitoey R-siam, Ja R-siam, Kung Suthiraj, Kratae R-Siam, Jintara Poonlarp and BowVee.


At present, consumers’ music listening behavior have changed from the past as the important variable comes from internet, and widely spreading usage of the smartphone. Then, consumers turn to listening more to the on-line music through various websites and the smartphone, and resulting in decreasing sales of the musical disc. The Company realizes more on the importance of distribution channel as variety of distribution channel is needed to penetrate thoroughly to consumers without the need for musical disc as before.

Moreover, the widely spreading problem on the copyrights infringement through the on-line or digital system due to advance in technology, enables consumers to easily and rapidly reach the illegal downloading websites. Music distribution business worldwide encounters yearly decreasing trend especially revenue on sales of the musical discs. Retail or small music distribution businesses have difficulty in operating their business and some have to close down their business.

Nevertheless, in 2014, the Company has overhauled its music distribution business by grouping the string and country music together and manages under the same management. Raw materials are shared in order to reduce some expenses, while stock on hand of the musical discs in the warehouse has been reduced in correspondent with the altering change in consumers’ behavior.

Event Management

Event Management income derives from 2 parts i.e. 1) the organization of concerts and events for public and private sectors and 2) artist management.

The organization of concerts and events for public and private sectors

Shows and events are another business that is rapidly growing in Thailand because products, services and advertising agencies has turned to allocate more budget for below-the-line activities over the past years as a result of a rising cost of airtime for TV commercials compounded by a larger number of competitors selling products in the same category.

RS is specialized in organizing concerts and events to fulfill marketing plans of agencies, for the promotion of products and services, that have turned to invest in non-media or below-the-line activities in forms of shows and events, and a series of plans for the organization of entertainment activities that can obtain long-term positive effects on business will be presented.

030


The business of organizing concerts and events in Thailand can be divided into three main groups as follows:

1. Presentation and event organizers providing services on the organization of general events to promote products and services for customers.

2. Local event promoters providing services on the organization and marketing of stage performances, shows and concerts with their own investments and/or in cooperation with other local companies.

3. International event promoters providing services on the organization of shows and concerts as well as on the formulation of marketing plans thereof, with their own investments and/or in cooperation with other companies, by selecting live performance products for marketing in the country.

The competition for the organization of concerts and events in Thailand is rather high because there is a large number of enterprises at all scales, whether small, medium or large. However, on the plus side, this business has a high prospect because most marketing plans for product promotion set aside more budgets every year for below-the-line activities.

Being a large-scale entertainment company gives RS an advantage over others in the organization of concerts and events, that is because we have lots of artists under our care and we run integrated media business of all kinds such as TV, radio and other media channel. These qualities can give assurance that concerts and events organized by the Company can fulfill customer needs.

Artist Management

RS’s long-time engagement in the business of integrated entertainment results in loads of artists and actors/actresses under the care of the Company. These personnel are valuable assets who create value for the Company and be a representative of the Company in joining activities with other organizations, and taking jobs to appear in public events after their albums are released and promoted.

Artist management is an arrangement of all affairs to add value to artists, create jobs to boost income for artists in addition to the launch of music work or performances as usual i.e. organization of concerts inside and outside the country, appearance in public events for singing, fashion show performance, interview, sports playing, and so on, stage show performance in a fenced area with the sale of admission tickets, made-to-order production in accordance with individual customer requirements, and presentation show.


The Company employs both mass customization strategies and Customization Strategy as a major policy (depending on each category of product or service) by emphasizing the importance of direct customers as the main focus but never forgets to take care of customers in the group of advertising agencies. With regard to the technique of work presentation, the Company aims to make customers aware that any work presented by the Company is a marketing tool to help individual customers achieve success in fulfilling their pre-determined marketing objectives by building on the principle of entertainment marketing to approach consumers.

The Company reformats the management of performing artists by allowing artists to take jobs by themselves at the standard remuneration rate fixed by the Company and those artists have to deduct and share a part of revenues, at a specified rate, to the Company. This new format helps increase jobs and boosts income for artists and contributes to greater flexibility of artist management.

031

031

5Risk Factors

032

Risk Factors

RS Group has evaluated the risks that might affect its Companies and subsidiaries that may result in impacts toward its business operations as follows:

Risks from copyright violation Impacts of music industry from copyright violations of music contents are in various forms such as distribution of pirated physical discs (CD, VCD, DVD, MP3), downloading music from unauthorized websites, using music contents to earn revenue through karaoke shops, arranging of activities and concerts, etc. These copyright violations result in unrealistic revenue from music contents thus does not reflect the real consumer demand.

The Company has realized the importance of this problem, and has adjusted its sales strategy to correspondence with changing behavior of consumers such as changing the sales format of the music CD into the digital form, changing the distribution channel into the modern trade channel and convenient store type, the development of digital system and downloading channel of the music contents for easier services, the adjustment of product packaging and additional new services, etc. Moreover, arrangements have been made to protect and suppress the copyright violations with support and coordination from the Government using law enforcement procedures against operators who violate the Company’s copyrights.

Risks from concessions renewal

Concession for Radio Business

Normally, the leasing period for the radio station’s broadcasting is about 2 years, if the leasing time has not been extended, it will result on impacts on the broadcasting continuity and the Company’s revenue. This will include risk on any changes in the contract conditions which may result in the inferior condition from original contract. Moreover, searching for the new radio broadcast’s airing time as replacement may result in losing business continuity, and in building similar popularity rating as the previous program, or may cause higher cost as well. However, the Company truly believes that due to its continuously producing good quality performances and receiving high popularity with constant listeners’ base group, including as an important business operator who abides with standard payment and strictly conforms to payment conditions on airing time as well as on building good relationship with the concession provider, the Company will receive some trust and, thus, reduce some risk that may happen during concession renewal. Nevertheless, the Company will consider value of the concession renewal by comparing with investment cost. If the concession renewal does not beneficial to the Company, investment on concession renewal may not be considered.

Concession for Satellite Television Business

The Office of the National Broadcasting and Telecommunications Commission (NBTC) has made announcements on the regulations and methods in giving permission for radio and television broadcasting in order to organize the satellite television, and cable television operators into its regulatory mechanisms. The NBTC will issue licenses to operators periodically in which the initial permits will have 1 year duration, and after that consideration will be made to issue licenses of no more than 2 years at a time. NBTC will take into consideration, complaints on violation of inappropriate contents, or advertising that contravene with the law, or any actions that contrary or inconsistent with the regulations on consumers’ protection , including other new regulations that NBTC will introduce in future, as the basis to consider the issuing of the renewal licenses to each operator. The periodic issuing of licenses with a rather short operating time may limit business operations, manufacturing plans, and revenue generating of the Company, however, the Company realizes the importance of strictly complying with rules and regulations in order to create confident that continuous renewal of license on satellite television will be granted.

033

032

Risks from announcements on regulations from the Office of the National Broadcasting and Telecommunications Commission (NBTC)

The Company operates television business in the digital terrestrial television and the satellite television business. The television business is considered as a mass communication business that is very influential to the people as people can reach and receive information thoroughly more than any other mass media channels, hence, business operations of the television business is essentially operated under the laws. Office of the National Broadcasting and Telecommunications Commission (NBTC) is the Government agency that supervises television business operators in Thailand with its main duty in supervising, and issuing various regulations in order to control free and fair competition among television business operators with ethical standards. Consumers are to be protected on their benefits, and not to be exploited by business operators such as supervision on the content to have suitable quality with the target group, suitability rating on contents for children and youth, advertising, etc. At present, NBTC still makes regular new announcements in accordance with its policy, and problem concerning business operators, hence, announcements from the NBTC still exist together with all the television business operators. Hence, all the announcements that will be issued to control the television business operations, will not be stable, and will require a period of time to realize any impact on business operations of the Company, and eventually reflect risks on business operations.

Risks from intense competition in the television media businessIn the past years, the television industry encounters more intense competition from the start of digital television broadcasting in mid. 2014; including many existing channels in the satellite and local cable television. These can be seen from continuous programs adjustments of each channel operators for more interesting programs with improved quality in order to attract more rating from consumers and more budgets from the advertising market. The advertising agencies will have more choices for their advertising media by having “rating” and “value for money” as criteria in placing the advertising media which will result in more difficulty for selling the advertising time. However, from the Company experiences in the production of television programs, and in managing its own satellite television for a long time, having clear cut target audience group, strong content directly matching with its audience’s taste, having quality and experienced personnel and working team, including various types of marketing promotion activities to constantly activate audiences for continuous following, the Company’s satellite television is in the top ranking position of the Nielsen Media Research (the survey and market research company that is recognized worldwide) will eventually enable it to capture and maintain its market share from competitors in the industry.

Risks from occasional huge marketing events The Company has continuous plan to expand its business, and some acquired project may require a rather high investment cost which may encounter some risk if revenue management cannot be reach according to plan. Causes may derive from many factors such as from rapid change in technology, changes in consumers’ behavior, various changing trends, more intensified competitive situation in the industry as well as contract termination, or the occurrence of any event that make it impossible to continue, etc. However, the Company has stipulated the screening process, evaluating its usefulness, and cost effectiveness prior to investment. Study on the project feasibility has to be conducted prior to signing any contract or any other binding condition by using experts from related fields to jointly consider for cautiousness and conciseness of the project. Moreover, advanced planning and early preparation have to be conducted by the arranging of pre-sale from supporting sponsors when the project is still in its production process. Additionally, large project has to be approved by the Company’s Board of Directors in order to reduce any risk that may occur from the investment.

035

035

6Property used in

the business

036

Property used in the business

Address Renter Contract termRental fee/month

(Million Baht)

431/2-5

Soi Ladphrao 15

Jatujak, Bangkok

RS Public Company

Limited

3 years

(Aug 2014 – July 2017)

0.41

Address Renter Contract termRental fee/month

(Million Baht)

1. 9/102 Phaholyothin Road,

Klongluang, Pathumthani

RS Public Company

Limited

1 Year

(agreement expire

on Jan 2015)

0.20

2. 9/26, Building phaholyothin

klongluang pathumthani

Starz Co.,Ltd.

(Thailand)

1 Year

(agreement expire

on Dec 2014)

0.10

Company Equipment and machinery Ownership

Book Value

Year 2013

(million Baht)

Obligation

1. RS Public Company

Limited

Studio recording and

Broadcast equipmentOwner 77.14 Nil

2. COOLISM Co.,Ltd. Studio recording Owner 4.20 Nil

3. Yaak Co.,Ltd. Studio recording Owner 1.92 Nil

Property used in the business operations of the Company and subsidiaries company (Group RS) detailed as follows.

Land

The Company and subsidiary company rented the land from the Chetchotisak Company Limited. Detail are described in Related party transactions subject. Moreover in 2014, the Company and its subsidiaries have leased land from individuals outside the group, as detailed below.

Equipments

Equipments used in the business of RS group. The details are as follows

Warehouse

Warehouse of the Company and its subsidiaries are as follows.

037

036

Station Station Owner Contract term

1. F.M. 93.0 MHz Navy Radio Station 1 Jan 2014 – 31 Dec 2015

2. F.M. 88.5 MHz Navy Radio Station 1 Jan 2014 – 31 Dec 2015

3. F.M. 91.5 MHz Army Radio Station 1 Mar 2014 – 31 Dec 2014

Service Providers Contract term

1. Thai Public Broadcasting Service agreement expire on 16 Jun 2028

2. Thaicom Public Company Limited 1 Aug 2013 – 1 Jul 2023

3. TC Broadcasting Company Limited 25 Apr 2014 – 24 Apr 2017

4. Symphony Communication Public Company Limited 1 Aug 2014 – 1 Aug 2015

5. Interlink Communication Public Company Limited 1 Aug 2015 – 31 Jul 2015

Concession and Radio leasesThe Company and its subsidiaries lease radio stations from government agencies and third parties. As follows :

Broadcast transmission service agreement

The Company has entered into a Broadcast transmission service agreement. And other services are as follows:

Trademark / service

“Company” registered trademark / service “RS” for 2 types. The date of Registration is 10 November 2005 and 2 February 2007. Each Trademark has 10 years duration from the date of registration. The trademarks / service that expired, Company has been renewed by the law.

Each subsidiary companies separately registered trademarks.

039

039

7 Legal disputes

040

Legal disputes

Company and the subsidiaries had no legal dispute that significantly affected the Company’s business or posed negative effects on the Group’s assets of which its overall value, as at 31 December 2014, was higher than 5% of shareholders’ equity. The Company and the subsidiaries had no legal dispute arisen from an out-of-the-ordinary course of business of the Group either.

041

041

8General information

and other important

information

042

General information and other

important information

General information

Name : RS Public Company LimitedType of business : Current business of RS contains 3 main business. Such as Media Business including Television and Radio. Music Distribution and Event Management

Address : 419 /1 Soi Ladphrao 15, Ladphrao Road, Chomphon, Jatujak, Bangkok 10900Registration No. : 0107546000016Website : www.rs.co.th

Tel. : 02-511-0555Fax : 02-511-2324

Registared Capital : Baht 1,026,000,280 including 1,026,000,280 ordinary shares at one Baht par value Paid-up Capital : Baht 1,022,346,046 including 1,022,346,046 ordinary shares at one Baht par value Share register : Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110Tel : 02-229-2800 Fax : 02-654-5427 Website : www.tsd.co.th

Auditor : Karin Audit Company Limited 6Fl., Room B1, Boonmitr Building, 138 Silom Road, Bangrak, Bangkok 10500 Tel 02-634-2484-6 Fax 02-634-2668

Website : http://www.karinaudit.co.th

Legal : LegalOffice,RSPublicCompanyLimited 419/1 Soi Ladphrao 15, Ladphrao Road, Chomphon, Jatujak, Bangkok 10900 Tel : 02-511-0555 Fax : 02-938-5622

043

042

General Informations of the subsidiary that the company holds more than 10 percent.

Company Name Location Type of BusinessType of

Share

Registered

Capital

(Baht)

Paid-up

Capital

(Baht)

Hold (%)

1. Thai Copyright

Collection Co.,Ltd

203/34-36 Soi

Ladphrao 15,

Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-9388000

Fax. 02-9385583

Copyright

Collection

Ordinary

shares

5,000,000 5,000,000 99.99

2. Starz (Thailand)

Co.,Ltd

419/3 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-9021933 ,

02-5110555

Fax. 02-9385621

Television

Production

and Event

Management

Ordinary

shares

200,000,000 200,000,000 99.99

3. Poema Co.,Ltd 203/34-36 Soi

Ladphrao 15,

Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

80,000,000 80,000,000 99.99

4. Blu Fairy Co.,Ltd 419/3 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

5,000,000 5,000,000 99.99

044


Share

Registered

Capital

(Baht)

Paid-up

Capital

(Baht)

Hold (%)

5. Nagasia Co.,Ltd. 431/3 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-511-2324

Event

Management

Ordinary

shares

4,000,000 4,000,000 99.99

6. Aladdin House

Co.,Ltd

431/2 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

5,000,000 5,000,000 99.99

7. R Siam Co.,Ltd 419/2 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

1,000,000 1,000,000 99.99

8. Dee Media &

Production Co.,Ltd

419/1 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok Tel. 02-

5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

37,000,000 37,000,000 99.99

045

044


Share

Registered

Capital

(Baht)

Paid-up

Capital

(Baht)

Hold (%)

9. Yaak Co.,Ltd 431/3 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-9385630-2

Fax. 02-5112324

Event

Management

Ordinary

shares

2,500,000 2,500,000 99.98

10. Coolism Co.,Ltd 419/2 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-9385694

Radio Business Ordinary

shares

25,000,000 25,000,000 99.99

11. RS Television

Co.,Ltd

431/4 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Television

Business

Ordinary

shares

200,000,000 200,000,000 99.99

12. RS In-store

Media Co.,Ltd

419/2 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Modern Trade

Media

Ordinary

shares

30,000,000 30,000,000 65.00

046


Share

Registered

Capital

(Baht)

Paid-up

Capital

(Baht)

Hold (%)

13. S-One Sports

Co.,Ltd

1706 Bangna - trad

road, Bangna

Bangkok

Tel. 02-5110555

SportฺBusiness Ordinary

shares

15,000,000 15,000,000 99.99

14. RS International

Broadcasting and

Sports Management

Co.,Ltd

419/3 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Sport

Management

Ordinary

shares

150,000,000 150,000,000 83.33

15. RS Film &

Distribution Co.,Ltd

203/34-36 Soi

Ladphrao 15,

Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Event

Management

Ordinary

shares

5,000,000 5,000,000 99.99

16. Avant Co.,Ltd 431/1 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

4,000,000 4,000,000 99.98

047

046


Share

Registered

Capital

(Baht)

Paid-up

Capital

(Baht)

Hold (%)

17. R.S. Sportmaster

Co.,Ltd

419/2 Soi Ladphrao

15, Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

4,500,000 4,500,000 75.98

18. Bangkok

Organizer Co.,Ltd

419/2 Chetchotisak

Buiding

Soi Ladphrao 15,

Ladphrao Road,

Chomphon, Jatujak,

Bangkok

Tel. 02-5110555

Fax. 02-5112324

Event

Management

Ordinary

shares

3,000,000 3,000,000 99.98

Others Information

-Nil

049

049

9Securities and

Shareholder Information

050

Securities and Shareholder Information

No. List 0f Shareholders Shares Percentage

1 Chetchotisak Group * 389,465,000 38.09

2 Vanichvarakij Group ** 130,846,500 12.79

3 Thai NVDR Company Limited 81,090,937 7.93

4 Mr. Santi Kovitchindachai 24,650,000 2.41

5 Mr. Chanyuth Laoraddecha 19,100,000 1.86

6 SIX SIS LTD 18,468,240 1.80

7 RS Public Company Limited 17,700,000 1.73

8 Mr. Chairat Kovitchindachai 13,000,000 1.27

9 Mr. Wirot Tossiraporn 7,100,000 0.69

10 Mr. Kasem Ngamekaur 6,560,000 0.64

Registered Capital and Paid-up Capital

As of December 31, 2014, the Company has the registered capital of Baht 1,026,000,280 including 1,026,000,280 ordinary shares at one Baht par value. The Company has the paid-up capital of Baht 1,022,346,046 including 1,022,346,046

ordinary shares at one Baht par value.

Shareholders

The 10 major shareholders as at the book closure date on January 30, 2015 are as follows:-

Remark * Chetchotisak Group such as 1. Mr.Surachai Chetchotisak holds 388,900,000 shares (38.04%) 2. Mr. Chet Chetchotisak holds 565,000 shares (0.05%) ** Vanichvarakij Group such as 1. Mr. Sorat Vanichvarakij holds 113,052,900 shares (11.05%) 2. Mr. Yothin Vanichvarakij holds 13,110,300 shares (1.28%) 3. Mr.Chaitat Vanichvarakij holds 4,575,800 shares (0.45%)

4. Mr.Sukrit Vanichvarakij holds 107,500 shares (0.01%)

List of major shareholders who, according to their conducts, were able to assert their influences towards the management policy and operation procedure of the company with ulterior motives (Shareholding groups or shareholders who owned over 10% and holding position as the company’s director or sending representative as the company’s director).

Warrants

Warrants of RS Public Company Limited #2 (RS-W2)

The Stock Exchange of Thailand has granted a listing of certificates representing the rights to purchase shares (warrants RS-W2) of the Company from June 14, 2010 (Trade date) with the following details:

Type of Securities RS Public Company Limited Warrants # 2

(RS-W2)

051

050

Detail of Exercise is shown below

Detail of Warrants of RS Public Company Limited #2 (RS-W2) Unit

No. 1 June 30 , 2011 No exercise user -

No. 2 December 30, 2011 No exercise user -

No. 3 June 29, 2012 2 exercise users 38,000

No. 4 Dec 28, 2012 10 exercise users 9,065,700

No. 5 June 28, 2013 29 exercise users 62,108,688

No. 6 December 27, 2013 25 exercise users 15,821,612

No. 7 May 19, 2014 285 exercise users 52,657,618

This has been exercised to purchase shares of the total 139,691,618 units. And There are users who don’t use the right amount of 308,651 units. As a result, the warrants are not exercised in the last exercise date on May 19, 2014 Will cease

to be listed Securities on May 20, 2557.

Dividend payment policy

The company and its subsidiaries will pay a dividend not less than 50 per cent of net profit after tax and legal reserve. However, the Board of Directors may consider and decide not to follow this policy, or adjust it in order to maximize the benefit to the shareholders.

Secondary Market Main Market

Number of Warrants 140,000,269 units

Underlying Shares 140,000,269 shares

Issuer RS Public Company Limited. The warrants were offered to existing shareholders whose names appeared in the shareholder register on May 12, 2010 in accordance to Section 225 of Securities and Stock Exchange of Thailand Act regarding the closing method of the shareholders register book and determining the rights of the Shareholders on May 13, 2010, at a ratio of 5 existing ordinary shares to 1 unit of Warrant for free.

Rights of Warrants The Warrant holders certificates have rights to purchase ordinary shares of RS Public Company Limited at the Exercise Ratio of 1 unit of Warrant for 1 ordinary share at an Exercise Price of Baht 1.90 per share. However, the Exercise Price and Exercise Ratio are subject to any adjustment in the Exercise Price and Exercise Ratio.

Type of Warrants Transferable named certificate

Term of Warrants 4 years from the issued date (Date of Issuance is on May 20, 2010, Date of Maturity and Last Exercise Date is on May 19, 2014 and warrants will be delisted on the next day.)

Offering Price Baht 0 (Baht Zero)

Exercise of Warrants: Warrant Holders can exercise the right to purchase ordinary shares of the Company on the last Business Day of June and December of each year. The first exercise date is on June 30, 2011 and the last exercise date is on May 19, 2014.

053

053

10Management Structure

ประธานเจ้าหน้าที่ฝ่ายปฏิบัติการ(Chief Operating Officer)

Human Resource and Administration Finance & Accounting Legal Office

Corporate Client Management

Event Management

Corporate Communication Information Technology

Broadcast BusinessCorporate Branding

Radio

Music Distribution

Television

ประธานเจ้าหน้าที่ฝ่ายการเงิน(Chief Financial Officer)

ส�านักกฎหมาย(Legal Office)

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Management Structure

Nomination and Remuneration Committee

Risk Management Committee

Corporate Governance Committee

Human Development Committee

Board of Directors

Executive Board

Internal AuditCEO

Audit Committee

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Management structure of the company consists of 7 set of committees and subcommittees including: Board of Directors, Audit Committee, Nomination and Remuneration Committee, Executive Committee, Risk Management Committee, Good Corporate Governance Committee and Human Development Committee. Details are as follows:

Boardof DirectorsAs at December 31, 2014. The Board of Directors consists of the following qualified persons:

1. Mr.Surachai Chetchotisak Chairman2. Mrs. Pornpan Techarungchaikul Director, Executive Committee, Risk Management Committee

Chairman, Good Corporate Governance Committee Chairman, Human Development Committee Chairman and Company Secretary 3. Mr. Darm Nana Director, Executive Committee Risk Management Committee Good Corporate Governance Committee4. Mr. Danaisidh Peslapunt Director 5. Mr. Sutthisak Prasatkarukarn Director6. Mr. Sorat Wanichwarakij Director7. Mr. Phisit Dachanabhirom Independent Director Audit Committee Chairman Nomination and Remuneration Committee Chairman8. General Pairoj Panichsamai Independent Director and Audit Committee Nomination and Remuneration Committee9. Associate Professor Witaya Danthamrongkul Independent Director and Audit Committee Nomination and Remuneration Committee


Media Music Distribution Event Management

RS PCL.

Starz (Thailand) Co.,Ltd

RS Television Co.,Ltd

Coolism Co.,Ltd

RS PCL.

RS PCL.

Thai Copyright Collection

Co.,LtdCollection Co.,Ltd

RS PCL.


Poema Co.,Ltd

Blu Fairy Co.,Ltd

Nagasia Co.,Ltd

Aladdin House Co.,Ltd

Yaak Co.,Ltd.

Dee Media & Production Co.,Ltd.

RS PCL.


RS International Broadcasting

and Sports Management Co.,Ltd

Television Radio Sport Management

Temporality suspended

- RS Film & Distribution Co.,Ltd

- Avant Co.,Ltd

- R.S. Sportmaster Co.,Ltd

- Bangkok Organizer Co.,Ltd

- RSiam Co.,Ltd.

- RS In-store Media Co.,Ltd.

- S-One Sports Co.,Ltd.

*83.33 % Shareheld by RS Public

Company Limited

As at December 31, 2014

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Definition of Independent Directors

Independent Directors are defined as external director, not involving in Executives, company staff, Executive Director or authorized signatory director, and be independent from major shareholders, Executives and related parties. In addition, Independent Directors are able to consider equitable treatment to shareholders and to preempt any possible conflict of interest between the company and related parties. Independent Directors shall possess the qualifications as follows:

1. Hold shares not exceeding 0.5% of the total number of shares entitled to voting rights in the Company, the parent company, the subsidiary companies, the associated companies or any corporations that may cause a conflict of interest, which shall be inclusive of the shares held his/her related parties*.

2. He/she has been neither Executive directors** nor been an employee/staff member/advisor getting salary paid, both in present time and two years before the appointment, of/by the Company, the subsidiary companies, the associated companies, the affiliated companies*** or any corporations that may cause a conflict of interest.

3. No relationship by blood or legal registration as parent, spouse, sibling, son/daughter and/or son/daughter in-law of an executive officer or a major shareholder with controlling power, or a candidate who will be nominated as an executive or a person in charge of the operations of the Company or the subsidiary companies.

4. Business relations can be divided as follows: (a) Relationship types

• Relationship between professional service providers and users - Features: Auditors, other professional service providers such as legal consultants, financial advisors, property appraisers, etc.

- Significant levels that are categorized non-independence. - Auditors: be prohibited in all cases - Other professional service providers: Transaction value exceeds Baht 2 million a year.

• Trade/Business Relations (apply the similar guidelines to the Stock Exchange’s requirements regarding related party transactions:

- Features: Business transactions in all types including normal transactions, real property leases/out-leases, asset/service-related transactions, and financial assistance grants or receipts.

- Significant levels that are categorized non-independence: - Transaction value is ≥ Baht 20 million or ≥ 3% of the Company’s NTA (net tangible assets), whichever

is lower. While considering a value in each time of transaction, the total value of previous transactions over the past 6 months shall be inclusive.

(b) The same relationship as Type (a) with corporations that are categorized non-independence such as major shareholders, directors (except independent/audit directors) and executives or partners of those corporations.

(c) Prohibited period for no relationship in both types (a) and (b): In present time and two years before the appointment.

(d) Exemptions: In a necessary and reasonable case which does not happen frequently or constantly, an independent/audit director may bear a relationship beyond the significant levels, as set out above, during his or her term in office, provided that a prior and unanimous approval from the board of the Company is obtained. Furthermore, the board of the Company must provide the disclosure of information regarding the aforesaid relationship in a registration statement for a public offering or securities placement (filing form), an annual information disclosure (Form 56-1) and an annual report (Form 56-2). If that independent/audit director is nominated for another term, the board of the Company shall provide a description of the said relationship in the notice of the shareholders’ meeting on an agendum for the election of director.

5. Be not appointed as a representative of any board members or major shareholders of the company, as well as being not appointed as a representative of other shareholders who bear relationship with major shareholders of the Company.

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6. No restrictions that make him/her unable to freely express his/her opinions.

7. An independent director, with the complete qualifications, as stated in clauses 1-6, may be designated and authorized by the board of the Company to make a decision regarding the operations of the Company, the parent company, the subsidiary companies, the associated companies, the affiliated companies and/or other corporations that may cause a conflict of interest, which such decision can be collectively made (collective decision).

If an independent director of the Company also holds office as an independent director for the parent company, the subsidiary companies and/or the affiliated companies, the board of the Company shall provide the disclosure of such information as well as the disclosure of overall remuneration that certain independent director gets paid, in the filing form, Form 56-1 and Form56-2 respectively.

Notes* Related parties mean persons under Section 258 of Securities and Exchange Act.** Executive directors mean persons who involve in the management of the Company, hold office and are in charge of the Company as an executive,

and are authorized signatories to execute a binding document on behalf of the Company, except a specified person in any transaction already been approved by the Board to sign a binding document jointly with other director(s).

*** Affiliated companies mean subsidiaries of two and up having the same parent company.

Directors with Authority to Sign for the CompanyDirectors authorized to sign for the company are Mr. Surachai Chetchotisak, Mr. Danaisidh Peslapunt, Mrs. Pornpan Techarungchaikul, Mr. Darm Nana and Mr. Sutthisak Prasatkarukarn. Two of above directors can jointly sign and affix the company seal.

Roles of Board of Directors The Extraordinary General Meeting of Shareholders No. 1/2003 held on January 13, 2003 had the resolution to determine the scope of Board of Directors’ authority in that Board of Directors is authorized to commit any acts necessary for or related to the normal business operation of the company. The Board of Directors is in charged with overseeing the company’s operations to be in compliance with the country’s laws and regulations as well as the policies and resolutions of shareholders’ meetings. The Board of Directors can appoint the committee or assign any other persons to take any or several actions under the control of the Board of Directors except for the actions stated below. Those actions can be performed after receiving the approval from the shareholders’ meeting. In cases where the committee or any person has a conflict of interest with the company or its subsidiaries, the committee involved in that conflict may not vote on that case.

(A) Any case that the laws mention must be in compliance with the resolution of the shareholders’ meeting. (B) Performing cases where the committee gains the interest or where the laws and regulations the Stock Exchange

of Thailand are mentioned must be approved by the shareholders’ meeting. The following cases must be approved by the Board of Directors’ meeting and the shareholders’ meeting with

a voting score of three-fourths of the number of shareholders attending the meeting and voting:(A) Trading or transferring the company’s businesses or an important part of the business. (B) Acquiring or receiving transferred business from other companies or private entities. (C) Making, rectifying or terminating the renting contracts for the entire business of the company or an important

section of it. Appointing any person to run the company’s business or form a merger with any person for the purpose of profit and loss sharing.

(D) Amending the Articles of Association or Memorandum of Association. (E) Increasing or reducing capital, issuing debentures, forming mergers or closing the company. (F) Any actions mentioned in the Securities Act or announcements by the Stock Exchange of Thailand requiring

the approval of the shareholders’ meeting, such as the acquisition or disposal of assets of the listed company or any related items.

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The Company’s Board of Directors is responsible for consideration the list of new Directors who have been screened and presented by the Nomination and Remuneration Committee. The listed Directors must be ready to dedicate their times, knowledge, and capabilities for the company, and understand the duties and responsibilities of Director as well. The company has in place the procedure to keep new directors informed about its business and operation for them to possess profound knowledge and understanding in the company’s business.

In addition, the Board of Directors conduct the annual assessment of their performance in line with the self-assessment form to inspect, as well as enhance the efficiency of, their performance.

Roles of ChairmanServed as president in Board of Directors Meeting and Casting vote in case of Equal votes in the meeting. Including to call the Board of Directors Meeting and Served as president in Shareholders Meeting.Including legal officiate which specific Chairman Duty.

Board of Directors Meeting Attendance for year 2013

Name Title No. of Attendance

1. Mr. Surachai Chetchotisak Chairman 5/52. Mrs. Pornpan Techarungchaikul Director 5/53. Mr. Darm Nana Director 5/54. Mr. Danaisidh Peslapunt Director 5/55. Mr. Sutthisak Prasatkarukarn Director 5/56. Mr. Sorat Wanichwarakij Director 5/57. Mr. Phisit Dachanabhirom Independent Director 5/58. General Pairoj Panichsamai Independent Director 4/59. Associate Professor Witaya Danthamrongkul Independent Director 5/5

General Pairoj Panichsamai didn’t attend the Board of Directors Meeting 3/2014 on 14 May 2014 due to the urgent task.

Audit Committee As at December 31, 2014. The members of the Audit Committee are :

1. Mr. Phisit Dachanabhirom1 Chairman 2. General Pairoj Panichsamai Director 3. Associate Professor Witaya Danthamrongkul Director

Remark : 1 Mr. Phisit Dachanabhirom is the Audit Committee Member that has knowledges and experiences in reviewing the Financial Statements. He is the certified auditor CPA License No. 966. He renders his audit services for non-listed company.

Responsibilities of Audit Committee (1) Attend the Board of Directors Meetings as to participate in policy determination, business decision making and

corporate governance issues.

(2) Consider and recommend the appointment and withdrawn of the auditor and the proposed audit fee including the following issues :• To ensure the independence of the external auditor, the Audit Committee shall consider any factors that may

conflict with the auditor’s efficient and professional operations.

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• To freely discuss significant matters, the Audit Committee shall meet privately with the external auditor once a year, without the management team being present.

(3) Consider the policy and code of conduct of the internal audit department as to ensure their continual appropriateness and effectiveness.

(4) Review the annual audit plans of the internal audit department.

(5) Review the internal control and internal audit system as to ensure their appropriateness and effectiveness by coordinating with the internal and external auditors. The Audit Committee shall consider the following issues :• To strengthen the independence of the internal audit department, the Audit Committee shall approve any

selection, promotion, rotation or termination of the department head.• To ensure the independence of the internal audit department, the Audit Committee shall consider other factors

that might impact its independent performance, including reporting and supervision processes.

(6) Consider the quarterly audit report and recommendations of the internal and external auditors as well as follow up the action taken according to such recommendations.

(7) Review the quarterly Company and subsidiaries financial reports as to ensure that they are accurate, credible and have adequate information disclosures according to the good corporate governance principle.

(8) Ensure that the Company is in compliance with the rules or regulations prescribed by the Stock Exchange of Thailand and any other laws related to its business.

(9) Review the related transactions of the Company, its subsidiaries and any persons that may cause the conflict of interest, to ensure that the related transactions are in appropriate conditions without any benefit embezzlement.

(10) Coordinate with the external auditor to consider any problems or restrictions encountered in performing financial statements audit.

(11) Prepare the Audit Committee report. The report must be signed by the Chairman of the Audit Committee and disclosed in the Company’s Annual Report. Its report should include the following information :

• The number of committee meetings and attendance of each member. • Comments on : - Accurateness, completeness and creditability of the company’s financial report. - Adequacy of the firm’s internal control system. - Compliance with SEC’s and SET’s laws and regulation and other laws relevant to the company’s business. - Suitability of the external auditor. - Transactions that may cause conflicts of interest. - Other concerns that have arisen as the audit committee performed its duties as defined in the committee’s charter. • Anything else which should be made available to shareholders and general investors within the scope of duties

and responsibilities assigned by the Board of Directors.

(12) The Audit Committee is authorized to invite the executive directors, Management or concerned persons to either provide necessary information or attend the meeting.

(13) Consider any other matters as assigned by the Board of Directors with the consent of the Audit Committee.

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Nomination and Remuneration CommitteeAs at December 31, 2014. Nomination and Remuneration Committee consists of 3 qualified persons:

1. Mr. Phisit Dachanabhirom Chairman 2. General Pairoj Panichsamai Director 3. Associate Professor Witaya Danthamrongkul Director

Remark Mr. Danaisidh Peslapunt Has resigned from Nomination and Remuneration Committee on 3 February 2014

Duties and responsibilities of the Nomination and Remuneration Committee(a) Establish criteria and procedures for selecting a person who is qualified to hold office as a director, select

best candidate in adherence to the procedures set out, and make the recommendation to the board who shall subsequently propose the nominee for appointment by the meeting of the shareholders of the Company. The duties and responsibilities can be outlined as follows:

• Determine qualifications of a director in accordance with the structure, size and composition set forth by the board, by taking the following steps:

- Consider a combined suitability of knowledge, experience and expertise to determine desired qualifications - Assess the independence of each candidate to see whether he/she is completely or incompletely qualified

as an independent director, and to consider whether or not it is necessary to find a new independent director in the case that the number of independent directors do not reach the numbers as stated in the board’s policy.

- Consider each candidate’s promising dedication of time. • Select and nominate a suitable candidate for the board to consider and propose that nominee for final consideration

and appointment by the meeting of the shareholders of the Company. - Determine a method of director selection that suits the Company’s characteristics. - Go through the list of candidates, and select the best one who meets the qualification requirements set out. - Conduct a careful check to make sure that the best candidate who will be nominated for the appointment

by the shareholders’ meeting is duly qualified in accordance with the rules and regulations established by the authorities.

- Approach that qualified candidate to make sure that he/she agrees to accept the position as director when he/she is appointed by the shareholders of the Company.

- Propose his/her name for consideration and approval by the board. Upon the board’s approval, a notice of the meeting of the shareholders of the Company in this regard will be made and sent to the shareholders calling them to meet, discuss and consider whether or not to appoint that nominee .

(b) Develop a model and guidelines on the payment of directors’ remuneration which will be recommended to the Board who will then propose them to the meeting of the shareholders of the Company for approval.

(c) Establish guidelines for evaluating CEO performance.

(d) Determine the annual remuneration of directors

(e) Offer new ESOP (or warrants) to directors and employees under diverse conditions that will induce directors and staff members to perform duties with their best effort, add a long-time value to the shareholders, and truly enable to retain efficient and competent personnel; however, such incentive scheme should not cost too much and should be fair to the shareholders of the Company.

The Board of Directors’ Meeting No. 3/2007 on 26 February 2007 has approved the appointment of the Nomination and Remuneration Committee. And the scope of authority of the Board Nomination and Remuneration Committee.

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Executive CommitteeAs at December 31, 2014: The members of Executive Committee are:

1. Mr. Surachai Chetchotisak Chairman

2. Mrs. Pornpan Techarungchaikul Director

3. Mr. Darm Nana Director

4. Mr. Komsan Chetchotisak Director

Remark Mr. Komsan Chetchotisak Has resigned from Executive Committee on 1 January 2015

Responsibilities of the Executive CommitteeThe Board of Directors Meeting No. 1/2003 held on January 28, 2003 and the Board of Directors Meeting No. 5/2005 held on 31 October 2005 had the resolution to determine the scope of Executive Committee’s authority in that Executive Committee is authorized to commit any acts necessary for or related to the normal business operation of the company.

(A) To approve loans or apply for credit from financial institutions as well as acting as surety or making payments for general activities of the company. The credit limit of each item must be less than 50 million baht or equivalent.

(B) To appoint and remove the company employees who are ranked below Managing Director (currently changed to Chief Executive Officer).

(C) To initiate, suggest and formulate policy for the business direction and business strategy of the company and present it to the Board of Directors.

(D) To form corporate and management structures and Executive Committee. To oversee all aspects of the recruiting, training, employment and removal of company employees.

(E) To formulate business plans and management powers. To approve the annual budget for business operations and expenses. To run the company following the business plan and strategy as well as the policy and business direction presented to the Board of Directors.

(F) To be responsible for other duties assigned by the Board of Directors in each period.

Approval for carrying out the activities mentioned above would not be granted in cases where the Executive Committee, or parties authorized by the Executive Committee, is authorized to approve activities that may conflict with the company’s interests under the regulations and announcements of the Stock Exchange of Thailand. Exceptions would be made for those activities carried out under policies and regulations approved by the Board of Directors, whereby the Board of Directors has the authority to amend or change the responsibilities of the Executive Committee whenever necessary.

Risk Management Committee

As at December 31, 2014, the Risk Management Committee consists of 3 qualified persons: 1. Mrs. Pornpan Techarungchaikul Chairman 2. Mr. Darm Nana Director 3. Mr. Komsan Chetchotisak Director

Remark Mr. Komsan Chetchotisak Has resigned from Risk Management Committee on 1 January 2015

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Duties and responsibilities of the Risk Management Committee

The Company’s Board of Directors meeting no. 5/2010 on August 16, 2010, has the resolution to appoint the Risk Management Committee, and has authorized its scope of duties and responsibilities as follows:

(a) Consider the policy, framework, and procedure on the risk management which includes giving advice to the Company’s Board of Directors and management team on risk management.

(b) Supervise and support the risk management so that it is according to plan, and results in achievements for the organization as well as in the project level.

(c) Consider the Company’s important risks on the organization level, and evaluate the risk management procedures to be in accordance with the Company’s strategy and business plan.

(d) Report performance to the Audit Committee and the Company’s Board of Directors.

Good Corporate Governance Committee

As at December 31, 2014, the Good Corporate Governance Committee consists of 3 qualified persons:

1. Mrs. Pornpan Techarungchaikul Chairman

2. Mr. Darm Nana Director

3. Mr. Komsan Chetchotisak Director

Remark Mr. Komsan Chetchotisak Has resigned from Good Corporate Governance Committee on 1 January 2015

Duties and responsibilities of the Good Corporate Governance Committee

The Company’s Board of Directors meeting no. 1/2011 on February 23, 2011, has the resolution to appoint the Good Corporate Governance Committee, and has authorized its scope of duties and responsibilities as follows:

(a) Propose guideline or policy on the good corporate governance to the Audit Committee and the Company’s Board of Directors

(b) Review or improve guideline or policy on the Company’s good corporate governance

(c) Give suggestions on good corporate governance to the Audit Committee and the Company’s Board of Directors

(d) Supervise Directors and the Management team to comply with the good corporate governance’s policy

Human Development CommitteeAs at December 31, 2014, the members of Human Development Committee are:

1. Mrs. Pornpan Techarungchaikul Chairman

2. Miss Praornsri Udompol Director

3. Miss Prangthip Sailektim Secretary

Remark The Board of Directors Meeting No.1/2015 on February, 24 2015 had appoint Miss Praornsri Udompol to be Director of Human Development Committee instead Mrs. Napaporn Treepayak who resigned.

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Responsibilities of Human Development CommitteeHuman Development Committee’s responsibilities are as follows :

(a) To present human resource policy and management direction

(b) To draw techniques and strategies for human resource development

(c) To oversee and supervise human resource operation

(d) To consider and make decisions on human resource development issues based on the direction approved by the company’s committee

Management TeamAs at December 31, 2014, the members of Management Team are as follows :-

1. Mr. Surachai Chetchotisak Chief Executive Officer

2. Mrs. Pornpan Techarungchaikul Chief Operating Officer

3. Mr. Darm Nana Chief Financial Officer

4. Mr. Komsan Chetchotisak Chief Commercial Officer

5. Mr. Danaisidh Peslapunt Senior Vice President

6. Mr. Soopachai Nilawan Senior Vice President

7. Ms. Chutima Tichachart Senior Vice President

Remark 1. Executive refers to executive as per definition from announcement of the Securities and Exchange Commission (SEC) no sor.jor 14/2540 2. Mr. Komsan Chetchotisak Has resigned from Management Team on 1 January 2015

Roles and Responsibilities of the Chief Executive Officer

The Board of Directors Meeting No. 1/2003 held on January 28, 2003 and the Board of Directors Meeting No. 5/2005 held on 31 October 2005 had the resolution to determine the scope of Managing Director’s authority in that Managing Director (presently called “Chief Executive Officer”) is authorized to approved commit any acts necessary for or related to the normal business operation of the company. The Managing Director (presently called “Chief Executive Officer”) is concerned with the company in general and has the authority to carry out any activity that is necessary. The credit limit of each item must be less than 25 million baht or equivalent. However, the Managing Director (presently called “Chief Executive Officer”) has no authority to deal with important assets received or sold out of the company; or matters concerning persons who may be in conflict with, or have conflict of interest with the activities of the company or affiliated companies. In such instances, the Audit Committee and/or the Board of Directors, depending on the case, will consider the matter.

Nomination of Directors and Executives

The Board of Directors Meeting No. 3/2007 held on February 26, 2007 had its resolution to appoint the Nomination and Remuneration Committee and also approved the responsibilities of the Nomination and Remuneration Committee. Hence , personnel selection for the company’s Director must proceed through the Nomination and Remuneration Committee. The Director’s selection procedures must be done by the Nomination and Remuneration Committee whose consideration will be based as per qualification in section 68 of the Public Company Limited Act B.E. 2535 (1992) and the related announcements of the Securities and Exchange Commission. Moreover, considerations will be based on ability, experiences, knowledge, and specific skill for the benefit and development of company’s business, and dedicating their times and efforts in conducting their duties. Then, the list will be submitted to the Board of Directors and shareholders’ meeting for approval.

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To appoint the Board of Directors, the shareholders’ meeting appoints the director based on majority scores with the following regulations and guidelines:

(A) The voting score of each shareholder is equal: one share equals one score

(B) Shareholders can vote for each directorial appointment.

(C) Persons who receive the highest scores will be appointed to the committee. In the case of any persons receiving equal scores, the nomination president will make the final decision.

Company Secretary

The Board of Directors has appointed the Chief Operating Officer to be the Company Secretary. The present Company Secretary is Mrs. PornpanTecharungchaikul. The Company Secretary duty is to ensure that the Company complies with the Good Corporate Governance of the Stock Exchange of Thailand.

Name Mrs. Pornpan Techarungchaikul Director, Executive Committee Risk Management Committee Chairman Good Corporate Governance Committee Chairman Human Development Committee Chairman and Company SecretaryAge 44 Years Education Master degree (MBA) from Sasin Graduate institute of Business Administration of Chulalongkorn University Bachelor degree of Statistics Chulalongkorn University Executive Development Program 4 (EDP 4) Year 2009 Thai Listed Companies AssociationRelationship between None Management. None Experience 2004 – present Director RS Public Company Limited 2008 – present Secretary to the Board of Directors and Company Secretary RS Public Company Limited 2007 – present Chief Operating Officer RS Public Company Limited

Executive RemunerationCash Remuneration(A) Directors

ListYear 2014

No Amount of money (Baht) Detail of Remuneration

Directors 9 905,000 Fixed remuneration and Meeting allowance

Audit Committee 3 1,788,250 Fixed remuneration and Meeting allowance

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Detail of Remuneration and Meeting allowance are as follows:

No. Board of Director

Year 2014

Fixed remuneration (Baht) Meeting allowance

(Baht)

1 Mr. Surachai Chetchotisak - 125,000

2 Mrs. Pornpan Techarungchaikul - 100,000

3 Mr. Darm Nana - 100,000

4 Mr. Danaisidh Peslapunt - 100,000

5 Mr. Sutthisak Prasatkarukarn Director 1/1 - 100,000

6 Mr. Sorat Vanichwarakij - 100,000

7 Mr. Phisit Dachanabhirom - 100,000

8 General Pairoj Panichsamai - 80,000

9 Mr. Witaya Danthamrongkul - 100,000

Total 905,000

Note: Director remuneration is the benefit paid to the company’s directors in accordance with Section 90 of the Public Company Limited Act B.E.2535 (1992) (excluding salary and relevant benefits paid to the directors who also hold the title of the company’s executives). There is no remuneration for the directors of subsidiaries.

(B) Executive Directors and Management Team

List Year 2014

No. Amount of money (million baht) Detail of remuneration

Executive Directors 4 - -

Management team 7 87.54 Salary/bonus/ other allowance

In 2014, the Company has paid provident fund to 6 Executives at approximate amount of Baht 1.78 million.

Other Remuneration

-Nil- Personnel

The number of employees in the company and its subsidiaries as of 31 December 2014 is 1,200 persons of which categorized into RS employees of 1,032 persons and subsidiaries’ employees of 168 persons. The total rewards of company staff as of the year 2014 amounted to Baht 654 million, paid in the form of salaries, overtime and welfare payments, bonus and provident fund, as well as provident fund for employees totaling about Baht 19 Million.

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Human Resources Development Policy

1. The Company realizes the importance of employees as human capital, the most valuable factor that is instrumental in steering the organization towards growth on a sustainable basis. Hence, annual operational plan and budget have been clearly specified and arranged accordingly. Human resources development is divided into three levels i.e. Organization Development, Career Development and Training Development.

1.1 Organization development has promoted the creation of corporate culture within companies under the RS Public Company Limited since orientation of new employees through Welcome Day Activity.

1.2 Employees’ Career Development that defines progressive career path and stipulates the promotion path

1.3 Training Development is stipulated by using the Competency Base Training together with research on the Training Need with development methods on both Public Training, and In-House Training. These trainings cover on the Knowledge Development, Attitude Development, and Skill Development such as Getting through a Revolution, Leading a Revolution, Positive Thinking and Conflict Management Through form of Management Theatre Which provided training to staff from the level PG2 to PG6. The Company also organizes training Service Mind & Effective Communication which helps develop communication skills and the services of the employees. Including Safety training courses such as Occupational and Environmental Health, Safety course the Management level, Safety course the supervisor level, etc. The Company also organizes non-training activities and knowledge-sharing programs in which employees are allowed to attend if they are interested which are in the form of special lectures by successful executives and speakers from external organizations such as special lecture concerning knowledge on revenue tax.

2. The Company indicates the importance in continuously building employee engagement through diverse activities such as the New Year party and The Futsal competition to make relationship of the various departments within the organization, etc.

3. The Company also realizes in building appreciation towards corporate social responsibility (CSR) to employees, and to be continuously in accordance with the corporate vision by promoting and arranging for activities such micro marathon ‘Mega Go Glow Run 2014’ To earn money donated to the Foundation for The Blind in Thailand under the Royal Patronage of H.M. the Queen.

4. Moreover, the Company also emphasizes on safety and health in the office by communicating knowledge, and news within the organization through various media, and organizes training activities on fire extinguishing and fire escaping methods.

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11Corporate Governance

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Corporate Governance

The Company has stipulated its policy on corporate governance by emphasizing on the control and internal audit system, and corporate governance of Management to efficiently following its policy. This is for long term benefits of shareholders, including transparency on business operations, information disclosure, and with proper risk management as well as the Social and Environment Responsibility for sustaining development.

In 2014, the Company has been continuously granted the Very Good CG Scoring from Thai Listed Companies Good Corporate Governance Survey Year 2014.

Summarization on corporate governance practices in 2014 is as follows:

Good Corporate Governance Policy

The Company’s Board of Directors stipulates policy on good corporate governance in a written format, and considers reviewing the good corporate governance policy and code of conduct manual for the Company Group. Follow up on evaluation of policy compliance is set to at least once a year. The Company publishes manuals to Directors and employees for references and practices and announced in the Company’s intranet.

The Company’s Board of Directors Meeting No. 1/2015 on February 24, 2015 reconsidered, improved, and had its resolution to approve the good corporate governance policy and code of conduct manual for the Company Group, and followed up on evaluation of policy compliance.

Moreover, the Company has comply with the good corporate governance policy for listed companies in the Stock

Exchange of Thailand as states in the 5 following guidelines:

• Shareholder rights

• Equal Right to Shareholders

• Rights of Stakeholders

• Information Disclosure and Transparency

• Responsibilities of the Board of Directors and Sub-Committees

Shareholder Rights

The Company stresses the importance of respecting the shareholders’ right by following regulations as stipulated by law. In 2014, the Company had ordinary shareholders’ meeting on April 24, 2014. All Directors attended the meetings except General Pairoj Panichsamai didn’t attend due to the urgent task (list of the Company’s Board of Directors attendances could be checked at the minutes of the shareholders’ meeting).

The Company has policy on equal treatment of shareholders by realizing on the importance of shareholders’ right on sufficient and timely information disclosure. Concerning shareholders’ meeting, the Company will issue notice of meeting which includes details on different meeting’s agendas at least 7 days prior to the meeting date as stipulated by law.

In 2014, Thailand Securities Depository Co., Ltd., which was the Company’s registrar, issued notice of meeting to shareholders at least 7 days in advanced, or 14 days as stipulated by law.

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In 2014, the Company had issued notice of meeting which included details on different meeting’s agendas prior to the meeting date as stipulated by law, and each agenda contained principles, and reasons and suggestions of the Board of Directors. Moreover, the Company also published shareholders’ notice of meeting, and documents for the meeting in Thai and English language at the Company’s website on http://www.rs.co.th/corporate/th/meeting.htm, and http://www.rs.co.th/corporate/eng/meeting.htm , at least 30 days before the meeting date and the Annual Report was posted in the website at least 7 days before the meeting date, as to facilitate rapid access for shareholders. Minutes of the meetings in 2014 were posted in the website 14 days afterwards. Prior to the start of meeting, Chairman of the meeting had authorized the Company’s Secretary to explain voting procedure to the meeting, and during the meeting, the Chairman gave equal opportunity to shareholders in asking additional questions, and making suggestions prior to vote casting in each agenda. Support was also given in using voting paper in case of important agenda for transparency and accountability. Minute of the meeting was written correctly and completely within the specific timeframe as stipulated by law, and had good filing system for shareholders’ checking.

In 2014, the Company gave shareholders’ right much more than stipulated by law such as publishing important and updated information through its websites, and not curtailing the shareholders’ right on the Company’s information that had to be disclosed by regulations. Concerning the meeting, no additional meeting agenda, or changing of important information would be conducted without prior notification to shareholders, including additional important information would not be distributed abruptly in the meeting, and not limiting shareholders’ right to come in late for the meeting. During the meeting, the Chairman opened equal opportunity to shareholders to ask questions, giving ideas, and making suggestions on operating results of the Company. Moreover, shareholders were given opportunity to send in their questions in advanced of the meeting date through the Company’s websites, or by mail to the Board of Directors. Thus, rights given to shareholders, and supporting shareholders to exercise their rights were in accordance with good

corporate governance policy.

Equal Right to Shareholders

For shareholders who cannot attend the meeting, the Company proposes proxies to be given to the Independent Director, who is Chairman of the Audit Committee, to vote on their behalves in the meeting. In the 2014 shareholders meeting, there were 4 shareholders who gave proxy to Chairman of the Audit Committee.

On November 26, 2014, the Company published information through its websites for minority shareholders to propose agenda for the ordinary shareholders’ meeting. This included clear cut regulations in advanced for consideration on additional agenda for minority shareholders to make proposal. The Company also regulated procedures for minority shareholders to propose person’s names for consideration as Director, and including assisting information on qualifications, and agreement of the proposed person. However, no shareholder proposed on new agenda, and person’s name for Director.

The Company has established the measure in a written statement to prevent directors, executives, staff members and employees from abusing insider information in the interests of their own or their related parties. By this measure, the Company’s directors, executives, staff members and employees are required to report a transaction that may cause a conflict of interest between the organization and them or their related parties via the designated law office to screen and forward such report completed with its comments to the Board, and the Board is fully authorized to make a decision on any transaction, which may cause a conflict of interest, for the Company’s overall benefit. The Company’s directors and/or executives with their interests in any transactions shall be banned from participating in a decision making process on those transactions, as detailed in the topic of insider information protection; moreover, related party transactions shall be made in accordance with relevant requirements established by Stock Exchange of Thailand, as detailed in the topic

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of precautionary measures or procedures for the approval of related party transactions. The certain policy has been implemented since the year 2008 for banning directors and top executives(**) from buying and selling their shares in the Company three weeks before the publication of financial statements and two days after that.

The Company has regulation in prohibiting the using of opportunity or information by Director, Executive, or employee for their own benefits, or conducting business competition with the Company, or with related business. This includes using of inside information for the Company’s stock trading. All regulations have been stated in the code of conduct

manual, and discloses in the topic of using of internal information.

Remark: (**) means Executive as per definition of the Securities and Exchange Commission who is responsible for changes in shareholding as stipulated by law.

Rights of Stakeholders

The Company recognizes the importance of rights for all groups of stakeholders whether from internal stakeholders such as employees, the Company’s Management, and its subsidiaries, or external stakeholders such as competitors, creditors, Government agencies, and other related parties. The Company realizes the supporting pressure from stakeholders especially from communities and public, in which it always gives significance to the causes (example can be seen from the Role and Social Responsibility and Human Resources Development Policy). Regulations and procedures are in written format, including rules on disciplinary punishment, so that there will be guideline procedures for related persons i.e. Directors, Management and employees of RS Group etc. to follow when performing duties for the Company with honesty and ethics towards the Company and groups of stakeholders. Details in the Code of Conduct manual which

covers business and employee’s code of conduct are as follows:

Responsibilities toward social and environment

The Company has the policy to conduct its business for the benefits of the economy, society, and environment by considering its duties and responsibilities towards the nation, society and environment. Businesses must be operated and controlled completely under the laws and regulations, as well as determinations to press on developing trends for social quality and environment internally or cooperation with Government agencies and communities. Responsibilities toward social and environment must be whole heartedly and consistently promoted to all levels of employees on becoming good citizens who make beneficial contributions toward communities and societies. Employees must also be supported to jointly participate in constantly creating activities for communities and societies in order to create good corporate culture in the future. These have to be reviewed, evaluated, and followed up consistently on progress of the company’s operations to ensure that policies on social and environment have been executed as planned (example can be seen

from the Role and Social Responsibility and Human Resources Development Policy).

Customer

The Company is determined to distribute quality products and provide quality services to its customers, as well as having

the service units to take care, explain all enquiries, and recommend solutions on problems to customers.

Shareholders

The Company is run with a good and efficient expertise. The current and future risk is carefully assessed for the benefit of shareholders, and controlled to be certain that the operational results and financial situations of the company as well

as information to shareholders are completely reported.

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Employee The Company considers employees its precious assets and acknowledges the value of employees. The appropriate welfare and remuneration are arranged in line with the knowledge, ability, responsibility and performance of each employee. RS group also realizes the importance in healthcare, safety, and working environment as safe precaution against life and property of its employees, and follows on the labor laws’ regulations. Hence, the Company has arranged for health check, life and health insurances for employees, and consistently checks safety in the work place too.

The Company supports knowledge training for its employees, Directors and executives. (Examples are under topics

Social Role and Responsibilities, and Human Resources Development Policy)

Trading Partner and Creditor

The Company adheres to honesty and justice towards its trading partners by taking into consideration for the best benefits to the Company, and bases on justified remunerations on both sides, and avoids bias or any circumstances that give rise to the conflict of interests and upholds and complies with contracts, terms of agreement, and obligations towards trading partners and creditors. This also includes anti-corruption and anti-bribery payment to obtain benefit

for the Company’s business.

Competitor

The Company supports free and fair trade competition as well as treating competitors professionally.

Virtue

The Company is engrossed in doing the rightful things and performing its duties with honesty and straightforwardness in accordance with legislations and regulations. This conduct is applied to any activities and decision-making. The company operates its business with honesty and takes into account the influencing risks.

Equality and Human Rights for All Parties Concerned

The Company neither hinders or withholds the privileges from, nor discriminates against any persons who are different in races, nationalities, religious, genders, age, or education, including non-involvement on any human rights infringement.

Copyright

“The Company has the policy on non-violation of any copyright”The Company’s Board of Directors reviews and makes improvement on Code of Conduct manual of RS Group at least once a year. In 2015, the Company’s Board of Directors meeting No. 1/2015, has reviewed, improved and approved RS Group’s Code of Conduct manual, and publishes in the Company’s website. It includes information on new employee’s training for all employees’ acknowledgement, and controlling process for strict compliance on the Code of Conduct.

The Company has had the policy that directors, executives and staff members at all levels are required to strictly observe and follow the best practices described in the Group’s ethics handbook. In the past year, the Company and the subsidiaries had no legal dispute that significantly affected the Company’s business or posed negative effects on the Group’s assets of which its overall value, as at 31 December 2014, was higher than 5% of shareholders’ equity. The Company and the subsidiaries had no legal dispute arisen from an out-of-the-ordinary course of business of the

Group either.

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The Company has anticipated in sharing the development mechanism with stakeholders in strengthening operating results of the Company. This is to build business security with information transparency, listening to comments, complaints, or suggestions, etc. Action that may lead to fraud or suspected behavior within the organization either from employee or from stakeholder can be reported directly to the Management, Internal Audit unit, Investor Relation unit, Company Secretary or Audit Committee as to pass to the Board of Directors through website http://www.rs.co.th/investor.html or through telephone numbers 0-2511-0911 and 0-2511-0555 ext. 1505 or to the stated units above. All information will be collected and checked through the Company’s stipulated process, and will be reported to the Board of Directors.

Complaint concerning financial and accounting reports, internal control, risk management, compliance with law and code of conduct can be done through the Company’s secretary who receives and summarizes all topics, and quarterly submits to the Audit Committee, and Board of Directors. The Company gives importance to the secrecy of information received in order to build confidence to sender, and complaint will only be known to assigned and related persons.

Information Disclosure and TransparencyThe Company gives the importance to efficient internal control system on the Management and operational levels, by clearly stipulated the Management’s business authorizations. Assets’ usages are controlled, and responsibilities of operator, controller, and evaluator are separated from each other to create suitable check and balance system. Moreover, there is internal control on the financial system with financial report system reporting directly to the responsible management unit.

The Company’s internal control unit reports directly to the Audit Committee to be certain that the main operations and important financial activities proceed efficiently within the directed guidelines. The Company has its policy on Compliance

Control in correspondence with the concerned law and related regulations.

Sub – Committees

The Company’s Board of Directors appoints the Sub - Committees to make details screening by regulating their responsibilities and scope of duties within each committee.

Most members of the Sub - Committees are Independent Directors except the Executive Committee, Risk Management Committee, Good Corporate Governance Committee and Human Development Committee and the Chairman of the Board will not hold positions as member in all committees. Moreover, it also regulates Independent Directors as Chairman of each committee with exception in the Executive Committee, Risk Management Committee, Good Corporate Governance Committee and Human Development Committee. At present, the Company has 6 Sub - Committees of the Audit Committee, Nomination and Remuneration Committee, Executive Committee, Risk Management Committee, Good Corporate Governance Committee and Human Development Committee.

Details concerning the member’ names, duties, and responsibilities are in topic “Shareholding Structure and Management”.

The Company’s Board of Directors appoints sub-committees in order to assist on corporate governance as follows:-

§Audit Committee has duration of 3 years, and consists of 3 Independent Directors. Names and duties of the Audit Committee are listed in topic “Shareholding Structure and Management”.

The Company’s Board of Directors is in agreement and appoints Mr. Phisit Dachanabhirom, the Independent Director, who has vast knowledge and experiences in financial and accounting field, to become Chairman of the Audit Committee.

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In 2014, the Audit Committee had 5 meetings in which all members attended all meetings except General Pairoj Panichsamai didn’t attend due to the urgent task, and consistently reported their operating results to the Company’s Board of Directors. There was one meeting that the Audit Committee met privately with the external auditor without the

management team being present.

§Nomination and Remuneration Committee

The Company’s Board of Directors meeting No. 3/2007, on February 26, 2007, has appointed the Nomination and Remuneration Committee, its scope of authority, and remuneration. The committee consists of 3 qualified persons which has 3 Independent Directors in which one of them is the Chairman of the Nomination and Remuneration Committee, the committee has 3 years duration (details in the “Shareholding Structure and Management”).

*In 2014, the Nomination and Remuneration Committee consisted of 3 members in which all of them were Independent Directors.

In 2014, the committee had 2 meetings in which all members attended all meetings. The committee consistently reported their operating results to the Company’s Board of Directors.

Details of important performances in 2014 could be summarized as follows:- 1. Considered the nomination and selection of qualified and suitable person as replacement for Board of Directors

retired member. 2. Considered, reviewed and approved the charter of the Nomination and Remuneration Committee. 3. Considered and reviewed the appropriateness of the pattern and criteria of the remuneration. 4. Reviewed the annual Directors’ remuneration. 5. Considered the Chief Executive Officer evaluation criteria. 6. Evaluate the performance of the Nomination and Remuneration Committee in 2014. 7. Reported the performances of the Nomination and Remuneration Committee to the Board of Directors on regular basis.

The Nomination and Remuneration Committee commented that the stated items were suitable to the utmost long-term benefit for the Company, Shareholders and Stakeholders.

§ The Executive Committee consists of 4 qualified persons, and their names are listed in the “Shareholding Structure and Management” topic. In 2014, the Executive Committee had total 12 meetings.

§Risk Management CommitteeThe Company’s Board of Directors meeting No. 5/2010 on August 16, 2010 had the resolution to appoint, authorize the scope of responsibilities and consider remuneration of the Risk Management Committee. The Committee consisted of

3 qualified persons.

In 2014, the Company’s Risk Management Committee had 1 meeting which was to plan, reviewing the system, or

evaluate efficiency of the risk management.

§Good Corporate Governance CommitteeThe Company’s Board of Directors meeting No. 1/2011 on February 23, 2011 had the resolution to appoint, authorize the scope of responsibilities and consider remuneration of the Good Corporate Governance Committee. The Committee

consisted of 3 qualified persons.

In February 2015, Good Corporate Governance Committee has reviewed and improved the Good Corporate Governance Policy and Code of Conduct. The Committee also followed up the compliance of such policies.

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§ The Human Development Committee consists of 2 qualified persons, and their names and responsibilities are listed

in the “Shareholding Structure and Management” topic.

Company Secretary

The Board of Directors has appointed the Chief Operating Officer to be the Company Secretary. The present Company Secretary is Mrs. Pornpan Techarungchaikul. The Company Secretary duty is to ensure that the Company complies with the Good Corporate Governance of the Stock Exchange of Thailand. The major role and duty of the Company Secretary are as following:-

• Advice the legal, accounting and tax issue and necessary regulations to the Board of Directors.• Oversee the Board of Directors’ activities.• Coordinate the concerned party as to ensure the implementation of the resolutions of the Board of Directors.• Functioning investor relation, coordinate and communicate regulators such as the Securities and Exchange

Commission and the Stock Exchange of Thailand etc.

The Company secretary has knowledge in both the accounting and legal aspect, however, the Company also promotes people who support the work of the Company secretary and the Company’s Board of Directors to attend the “Company Secretary Program” (CSP) of the Thai Institute of Directors (IOD). Moreover, the legal office has been assigned by the Company to help with the works of the Board of Directors to be in accordance with rules, regulations, or law but has not

been established as a specific supervisory operational unit.

Director Meeting

The Director meetings are arranged at least quarterly and extraordinary meetings in between as deemed necessary. All meetings have apparently set-out agenda and planned meeting date and are intended to consistently monitor company’s performance. In case that the Company does not have a monthly meeting, the Company has the policy to send the monthly operational report to the Board of Directors, so that the Board of Directors can supervise, and control management’s operations consistently and effectively. Invitation, agenda and information hand-outs are duly distributed 7 days prior to the meeting so directors have a chance to familiarize themselves to the issues. Chairman of the Board of Directors and the Chief Executive Officer make decision on agendas for the Board of Directors’ meeting with emphasizing that important subjects have to be in the meeting agendas. Directors can freely submit agenda and the Board of Directors can access necessary information from the Chief Executive Officer. Independent Directors/ Audit Committee (the definition and qualification shown in Management Section) have attended all meetings. In 2014, there have been 5 meetings at the Company premises. Every director attends all meetings except General Pairoj Panichsamai didn’t attend due to the urgent task..

If any director has significant conflict of interest in any agenda, such director shall not attend the meeting during the

consideration of that agenda.

The Company’s Board of Directors has its policy in allowing the non-executive Directors to conduct their own meeting as deem necessary. This is to debate all issues concerning the Management without their present, and the Chief Executive

Officer will be informed of the meeting result.

Self - Evaluation on the Performance of the Board of Directors

The Company’s Board of Directors arranges for its self - evaluation annually by using the Company’s self - evaluation form. The Board of Directors will individually and jointly consider their performances for their joint consideration in order

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to improve for more efficient operations.

Self – evaluation elements consist of the structure and qualification; roles, duties and responsibilities; meeting; and duties of the Board of Directors, relationship with management, self - development of the Board, and development of Executives.

Moreover, the Nomination and Remuneration Committee will supply suggestions on regulations for the evaluation on performance of Chief Executive Officer and propose for the approval of the Board of Directors. Results of the performance will be evaluated by the evaluation form specified by the Nomination and Remuneration Committee and to be evaluated by the Company’s Board of Directors which only consists of Independent Directors for further improvement.

The Company’s Board of Directors arranged for its self-evaluation every year. On February 24, 2015 in the Company’s Board of Directors’ meeting No. 1/2015, had made annual consideration on self-evaluation of the Company’s Board of Directors of 2014, so that the Company’s Board of Directors could jointly consider the performances, and problems for further improvement. Results on performance of the Chief Executive Officer for the year 2014 had been evaluated by the Company’s Board of Directors which consisted of only Independent Directors for further consideration and improvement.

Moreover, the Board of Directors has arranged for performance evaluations for other committees such as the Audit

Committee, and the Nomination and Remuneration Committee.

Remuneration

The Company has clearly and transparently stipulated policy on remuneration for Directors and Executives. During the

ordinary shareholders’ meeting No. 1/2003 and the Company’s Board of Directors’ meeting No. 5/2003, remuneration for

Directors was approved to be within the similar level of the same industry which was high enough to attract and protect

thequalifiedDirectorsandbeinaccordancewiththeCompany’soperatingresults.TheExecutivesremunerationwould

be in accordance with the Company’s operating results, and individual Executives performance. For Chief Executive

Officer’sperformanceevaluation,theNominationandRemunerationCommitteesuppliedinputsonregulationsforthe

evaluationonperformanceofChiefExecutiveOfficerandproposefortheapprovaloftheBoardofDirectors.Resultson

the performance were evaluated by the Company’s Board of Directors which only consisted of Independent Directors.

(Details on remuneration for Directors and Executives were shown in “Shareholding Structure of the Company).

Directors and Executives’ Development

The Company’s Board of Directors has the policy on assigning the present Director to introduce new Director to the

Company, and lecturing on the summarization of the Company’s business plan, operating results, strategy, competitive

situations, vision, corporate culture, corporate governance, business ethics and other details concerning the Company’s

operation etc.

The Company’s Board of Directors has the policy to create and develop new knowledge for Directors and Executives

by encouraging them to attend seminars and meetings which provide useful topics that have been arranged by the

ThaiInstituteofDirectors,andotherrelatedorganizationsinordertosupportefficientoperations,withallcoststobe

financiallysupportedbytheCompany(detailswereshownin“DescriptionofManagementTeamandotherpersons

overseeing the Company”).

Succession plan for the Chief Executive Officer and high level Executives

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The Company’s Board of Directors supports the arrangement of succession plan that will assist in smooth operation of the Company. Moreover, the Board of Directors also makes preparation for the executive development program for the succession plan of the Chief Executive Officer and high level Executives (**) in case that they cannot perform their duties. This is to reduce risks from dis-continuation in corporate management with the following procedures:

1. The Executive Board and Human Development Committee have to consider and select high potential Executives for further development and preparation.

2. The Human Development Committee is to develop the assigned group by preparing for the high level development plan for high level Executives.

3. The Executive Board and Human Development Committee will together make the appropriate selection on candidates for the positions of the Chief Executive Officer and high level Executives. For the selected position of the Chief Executive Officer, the selection will precede to the Nomination and Remuneration Committee, and the Company’s Board of Directors for consideration.

4. The Nomination and Remuneration Committee will make consideration on the proposed person concerning the suitability, knowledge, and competency that will benefit the Company with other necessary related information for proposal in the Company’s Board of Directors meeting and further appointment.

Investor Relation

The Company’s Board of Directors realizes that financial and non-financial information result in decision making impact on investors and stakeholders. Then, disclosure on information must be importantly correct, complete, and adequate through various media channels of the Stock Exchange of Thailand, and the Company’s website. Moreover, meetings have been arranged between the Company’s Management team and securities analysts, and general investors in order to have question and answer sessions equally.

Hence, the Company assigns the “Investor Relation Unit” to communicate and provides services on information, corporate news, and Company’s various activities to institutional investors, shareholders, analysts, related Government agencies,

and the general public. Investors can contact this unit at

Telephone No. : 0-2511-0911 and 0-2511-0555 ext 1503, 1505Website : http://www.rs.co.th/investor.html Facebook : http://www.facebook.com/pages/Rs-ir/256459961140733 Twitter : https://twitter.com/RS_IR

E-mail : Address: [email protected]

Moreover, in 2014, the Company published information through many activities such as:-• Analyst Meeting to announce the Company’s operating results in every quarter. The analysts had opportunity

to ask questions on various topics with the Management with the meeting’s documents to be published in the Company’s website.

• Participate in events organized by the Stock Exchange of Thailand and finance companies for meetings with institutional , and foreign investors such as Thailand Focus 2014, TISCO Corporate Day and Thanachart Exclusive Lunch Talk, etc. To reports operating results including provides an opportunity for investors to meet the Executives and question Executives on various issues. Minute of the meeting was published in the Company’s website. Report on annual form F 56-1, and the annual report F 56-2 were published through SET Community Portal (SCP) system of the Stock Exchange of Thailand, and through the Company’s website. The annual report will be delivered to shareholders and general public annually.

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Nomination of Directors and Executives

The Board of Directors Meeting No. 3/2007 held on February 26, 2007 had its resolution to appoint the Nomination

and Remuneration Committee and also approved the responsibilities of the Nomination and Remuneration Committee.

Hence, personnel selection for the company’s Director must proceed through the Nomination and Remuneration

Committee. The Director’s selection procedures must be done by the Nomination and Remuneration Committee whose

considerationwillbebasedasperqualificationinsection68ofthePublicCompanyLimitedActB.E.2535(1992)andthe

related announcements of the Securities and Exchange Commission. Moreover, considerations will be based on ability,

experiences,knowledge,andspecificskillforthebenefitanddevelopmentofcompany’sbusiness,anddedicatingtheir

times and efforts in conducting their duties. Then, the list will be submitted to the Board of Directors and shareholders’

meeting for approval.

To appoint the Board of Directors, the shareholders’ meeting appoints the director based on majority scores with the

following regulations and guidelines:

(A) The voting score of each shareholder is equal: one share equals one score

(B) Shareholders can vote for each directorial appointment.

(C) Persons who receive the highest scores will be appointed to the committee. In the case of any persons receiving

equalscores,thenominationpresidentwillmakethefinaldecision.

Board of Directors Structure Policy

TheBoardofDirectorshasdefinedtherequiredqualificationsofDirectorstobeinlinewithcompanystrategy.Considering

on the lack of necessary skills on the current Board of Directors. Including professional expertise and gender.

The Board of Directors Independence from Management

The Company’s Board of Directors consists of 3 non-Executive Directors (3 Independent Directors), and 6 Executive

Directors, details of each Directors are shown in topic “Description of Management Team and Other Persons Overseeing

the Company”

Chairman of the Board of Directors is the same person as the Chairman of Executive Committee, and represents major

group of shareholders. However, as structure of the Company’s Board of Directors consists of 1/3 of Independent

Directors, there is check and balance in business operations.

TheCompany’sBoardofDirectorsacknowledgesthatthe3IndependentDirectorshavequalifiedasperregulations

stipulated by the Company as in details from “Management Structure of the Company”. The Company’s Board of

Directors is in agreement and appoints Mr. Phisit Dachanabhirom, the Independent Director, who has vast knowledge

andexperiencesinfinancialandaccountingfield,tobecomeChairmanoftheAuditCommittee.

Suitability of the Board of Directors

The Company’s Board of Directors has stipulated suitable qualifications for persons to hold this position as person with knowledge, experiences, and specific capability for Company’s benefit. This includes donating time, knowledge, capability, and effort in performing duty for the Company. There is also regulations for all Directors and high level Executives (**) to report their securities holding consistently to the Company’s Board of Directors.

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Director, in the Company’s Board of Directors, is not allowed to hold position as Director in the registered companies of more than 3 companies, and Executive Director is not allowed to hold position as Director in other registered companies of more than 2 companies. This includes holding position as Director of the Company’s Chairman of Executive Committee, and high level Executive (**) in other registered companies must be approved by the Company’s Board of Directors beforehand.

Director or the high level executive of the Company must not be employed as employee or partner of the Company’s

external auditor company during the past 2 years.

Remark: (**) means Executive under definition of the S.E.C.

The Board of Directors’ Efficiency in Performing Its Duties

Policy Stipulation

The Company’s Board of Directors participates in regulating vision, mission, duty, strategy, target, business plan, and budget of the Company. This also includes supervision on the Management team to proceed as business plan, and agreed budget efficiently and effectively, arrangement on good corporate governance policy, internal control system, internal auditing and suitable risk management and policy, including consistently follow up on operating performances in the Board of Directors’ meeting. Moreover, the Board of Directors has to make consideration on regulations and separation of duties, and responsibilities clearly among the Board of Directors, Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Good Corporate Governance Committee, Executive Committee, Human Development Committee and the Chief Executive Officer.

In The Board of Directors Meeting No. 1/2015 on 24 February 2015. The Board of Directors has to review, and approve

the Company’s vision and mission at least once in every year.

Management Supervision

The Company’s Board of Directors has to make evaluation on adequacy of internal control, and result on risk management and compliance with the good corporate governance policy at least once a year. On February 24, 2015, the Company’s Board of Directors meeting No. 1/2015 has evaluated on the adequacy of internal control, result on risk management

and compliance with the good corporate governance policy.

Supervision on the Operations of subsidiaries and associated companies

For the appointment of Directors for subsidiaries and associated companies, the nomination and voting are under the management from 2014 onwards, and has to receive approval from the Company’s Board of Directors. Persons who are appointed as Directors for subsidiaries and associated companies have the duties to operate for the best interest of the subsidiaries and associated companies. The appointed Directors require approval from the Company’s Board of Directors prior to making resolution, or voting on important issue that is on the same level that requires approval from the Board of Directors if this is operated by the Company itself.

Moreover, in case of the subsidiaries, the appointed persons have to oversee that the subsidiaries have regulations concerning transactions of related companies, with data collection, and accounting record that can be verified, and complied for the financial statement on time, as well as appropriate and concise internal control system.

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During 2014, the Company has conformed to the Good Corporate Governance except for the following instant:

(1) The Director, Executive, staff members and the employees of the company are obliged to treat the internal information of the Company with confidentiality.

(2) The Director, Executive, staff members and the employees of the Company should not directly or indirectly disclose confidential or internal information of the Company for the personal benefit of any individual.

(3) The Director, Executive, the staff members and the employees of the Company should not buy, sell, transfer or receive the company’s assets by using the confidential or internal information that may cause direct or indirect damage to

the Company.

The above mentioned regulations include the spouses and children who are considered minors of the Board of Directors, the staff members and employees of the company. Any violation of the Company’s regulations would be considered as a serious breach of those regulations which could lead to a penalty ranging from a verbal warning to being asked to leave the company.

Since 2008, the Company’s Board of Directors has specified the policy forbidding Directors, and high level Executives (**) to trade the Company stock during the periods of 3 weeks before publishing of the financial statements, and 2 days

after disclosing of the financial statements.

Auditor Remuneration

Remuneration from auditing service

The Company and its subsidiaries have paid the audit fees to Karin Audit Co., Ltd., the Company’s auditing company for the year 2014, that includes person or business related to the auditors and auditing office under the auditing company during the past year, to the amount of Baht 2.95 Million which separates into Baht 0.82 Million from the Company, and

Baht 2.13 Million from its subsidiaries.

Non-Audit Fee

-Nil-

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12Responsibilities toward

society, environment, and related persons

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Responsibilities toward society, environment,

and related persons

1. Equitable business practices

The Company strives for legitimacy practice, and performs its duties with honesty and straight forwardness under the Company’s rules and regulations and performs the business ethics in all its activities and decision makings of the Company.

2. Complying with laws and human rights

The Company stresses the importance on complying with laws and human rights by adhering on its business practises to be in accordance with laws. This also includes the human rights which is the basic rights of all human beings who are born with equality with the same honour, and privilege without deprivation or non-allowance of any special rights, or any discrimination due to their differences on races, nationalities, religions, sexes, colour of their skins, ages, languages, or

educational institutions, and including other items unrelated to the discrimination on human rights.

3. Equal treatment to the labour force

The Company is well realized that all employees are the most valuable asset of the Company, and are the most important factor in pushing the Company to achieve its goals. Hence, the Company has emphasized on fair treatment and practice in terms of opportunity, remuneration, promotion, job transfer, dismissal, as well as defining plan for human development into 3 levels such as the organization development, career development, and training development.

1. Organization Development The Company promotes the building of corporate culture within its group of companies starting from new employee orientation and through continuous external education on all year round activities such

as “RS Team Building” activity for employees, and “RS Team Leader” for management.

2. Career Development The Company has stipulated the career path and promotion path for employees, including stipulation on duration for management training hours for each group of employees to be promoted as management. Employees’ preparation has been conducted through the management e-learning project which is the On-Line training and testing on topic of “Management Competency” of the organization for lower and middle management group.

3. Guideline for the training development has been specified by using “Competency Base Training” together with the research result that necessarily required for the training need. Development methods are based on the public training and in-house training that cover on topics of knowledge development, attitude development, and skill development such as sale and marketing training courses on “Presentation for Success”, and on topic of image building and sale personality development etc. The Company also offers other non-training, and knowledge sharing activities that open opportunities for interested employees to participate in the form of special lectures by other successful executives, and speakers from other organizations such as special lecture on tax benefits, etc.

Moreover, during 2014, activities to promote and develop its human resources in many important aspects have been arranged by the Company and subsidiaries such as:

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1. Appropriate health check-up program for employees’ annual health check-up that includes negotiation with hospital for special price on additional health check items and including health check-up by hospital at the Company’s office.

2. Employee’s welfare benefits such as medical expenses’ welfare through life and accident group insurance, financial welfare, and others, such as financial welfare for funeral, in case of death, and in case of death for employee’s father, mother, child, or lawful spouse, financial help for marriage, ordination, etc.

3. Engagement activities for employees such as the New Year activity, football matches in order to build relationship among departments within the organization etc.

4. Arrangement on seminar concerning safety and sanitation in the work place by supplying knowledge, news through various media within the organization, and also activity on the annual fire drills.

4. Responsibilities toward customer and consumer

The Company determines to create and produce all types of media and entertainment portfolios for continuous satisfaction to the customers, distribution of quality products and services to customers as well as supplying the working unit to give

services, care, explanation on queries and various problem-solving for customers.

5. Roles and Responsibilities toward Community, Environment, and the General Public.

The Company adheres to conduct its business for benefit of the economy, society, and environment with consideration on its duty and responsibility towards the country, society, and environment as well as operating and controlling its business completely under the scope of laws and other related regulations. This also includes determination in driving trend for the quality development of society, and environment on its own and by cooperation with the government and community. Responsibility towards society and environment must wholeheartedly and continuously be promoted to all levels of employees into becoming good and valuable citizen of the communities and society. Supports are to be given constantly to employees for participation in various activities for the communities and society in establishing good corporate culture in future.

‘English Teach a Child’ Under the program, 84 schools for the children to do well for King

Jack - Jarupong Kluaymaingarm, Ambassador of Thailand Foundation / artists of Yes Music, a subsidiary of RS Public Company Limited inviting donations of English books, both new and old, with the English Teach a child Activity to give to children in underprivileged schools across the country. Under the program, 84 schools for the children to do well for King. For the children to practice english skill to meet the pace of AEC.

084

Kamikaze Give & Share 2015

Happy New Year Season 2

Others Activity in Year 2014

Channel 8 Share to Child

Kamikaze, a subsidiary of RS Public Company Limited under Kamikaze Give & Share Program led by Four - Mod, Fay Fang Kaew, 321 and the NEWCOMER band. By this time the Kamikaze artist feeding the children together, play games and giveaways. Including a donation to the Foundation, aphasia and intelligence. (Rachawadee Home) with Miss Wimonpun, administrators of Rachawadee Home is the recipient.

Led by Dr. Ong-Art Sinlumpong, Managing Director of Television Business, RS Public Company Limited along with the actors and newscaster such as a Fluke - Jira Danbavornkiat, Lala - Lulu R-Siam, Poppy 321 (Chatchaya Songcharoen),etc. Presented the donation of a fun lunch. And Join feed to 150 children at Pakkret Home for Children with Disabilities (Baan Nontapum).

Baitoey and Kung, Singers of R-Siam, a subsidiary of RS Public Company Limited attached the Red Ribbon “World AIDS Day” to General Prayuth Chan-ocha, Prime Minister of Thailand.

085

084

Activity “1 to 3blood This pain for you”

Sale Mahidol Flag in “Life is Beautiful” Program to help poverty patients.

RS launches campaign to urged people to forward the good things. By invite blood donation and post text and images

then Hashtag # 1to3blood This pain for you via social media such as Instagram, Facebook and Fanpage.

The Company has promoted in establishing campaign and building conscious among employees on conservation, and using resources and energy cleverly and efficiently. This also includes support and creates activities that are beneficial for the preservation, conservation, and on continuously consuming natural resources, environment, and various energy sources. This is executed by promoting on campaigns and building joint conscious into realizing the benefit, value, and efficiently consuming resources which includes electricity usage conservation by switching off light switches, and electrical appliances after each usage, turn off light switches during lunch break, turn off the air conditioning units half an hour before leaving office, using stairs instead of the elevator, water conservation by having official to monitor leakages of equipment, oil conservation by prior planning before any journey, using e-mail instead of using paper document delivery, and also including other energy reservation in the work-place such as using 2 sides of paper, etc. Apart from constant public relation campaign by supplying information to employees, energy conservation campaigns are used for stimulation under the “OFFICE No. 5” campaign with award to be presented to the working unit with the most outstanding achievement on energy conservation as well.

086

Dr. Ong-Art Sinlumpong, Managing Director of Television Business Channel 8 received award for “ Mekhala Star 2014” held the 2nd time. which was held under the program “national media unite glorify the king”

Office of National Buddhism Appointed Four - Mod, Actress from Channel 8 to be the “Ambassador of Buddhism”.

R-Siam singers received award for “Diamond in Music” is in Thailand in 2557, organized by the National Bureau of literature and history.

Awards received during 2014

Mrs. Pornpan Techarungchaikul, the Chief Operating Officer, RS Public Company Limited received award for “Outstanding Investor Relations Awards 2014” under the “SET Awards 2014” campaign in which the Stock Exchange of Thailand, in coordination with the “Money & Banking” magazine, had organized the event to announce distinctions with awards to the listed companies with distinctive results in various fields.

087

087

13Internal Control and Risk

Management

088

Internal Control and Risk Management

The Company emphasizes the importance of promoting the internal control to be sufficient and suitable for its business operations in order to protect against damage or improper beneficial usage. The audit department is responsible for auditing important operations and financial activities, and submitting the audit report directly to the Audit Committee. This is to give the audit department enough independence in its operations.

At present, chief of the internal control is Miss Korapin Naksuprangsi, the Assistant Vice President of the Audit Department.

Education / Training :

• Bachelor degree in Accounting Chulalongkorn University

• Master degree in Business Administration Thammasat University

• Participated in various training and seminar courses from the Federation of Accounting Professions, Institute of Internal Auditors of Thailand, Thai Institute of Directors (IOD), and Stock Exchange of Thailand.

Experiences :

• 1993 – 2001 Assistant Manager of “KPMG Phoomchai Audit Co., Ltd.”

• Dec. 2001 – present Assistant Vice President of the Audit Department – RS Plc.

During the committee meeting no. 1/2558 on February 24, 2015 in which 3 members of the Audit Committee were presented, the Audit Committee had evaluated the sufficiency of internal control system by checking information from the Executives, and reply from questionnaires on sufficiency of the Company’s internal control system by themselves. Evaluation on the Company’s internal control system could be summarized into 5 parts as follows:

1. Corporation and environment : The Company recognizes good environment in the work place by stipulating on good corporate governance policy and using code of conduct booklet of the Company’s group of companies. These are publicised as references and guidelines for operations, and to be followed up and evaluated on the result of the policy. Moreover, the Company’s Board of Directors has to clearly stipulate the business operations’ target, review the business plan, and give suggestion to the management for consideration and operation.

2. Risk Management : The Company emphasizes the importance of risk management by appointing the Risk Management Committee to specify the policy, regulation, and with support to be given to ensure that the risk management is in accordance to policy, or plan and with successful implementation.

3. Operational control of the management : The Company has the policy, regulation, operational guideline, authorization, approving power in order to have strict control.

4. Information systems and data communications : The Company has arranged for the information systems that systematically relating to the accounting, and financial reporting operations, and is in accordance with the controlling policy and regulations.

5. Monitoring System : The Company’s Board of Directors acknowledges the operating results comparing to targets for every quarter, and having the internal control department that evaluates the sufficiency, and efficiency of the existing control system, and monitoring the internal control system of various work-units to be in accordance with the approved controlling plan from the Audit Committee.

Hence, the Board of Directors has the opinion that, at present, the Company has sufficient internal control system concerning transactions with major shareholders, directors, executives, or persons related to the stated persons. On the internal control under other topics, the Board of Directors has the opinion that the Company already has sufficient

internal control.

089

089

14Related Party Transactions

090

Related Party Transactions

Details and information of related party transactions of the Company, subsidiary companies, and related companies are illustrated in the note of the financial statements as of December 31, 2014. The Company’s Audit Committee had examined the related party transactions and made a remark that those related party transactions are in accordance with general commercial conditions, and rules and regulations of the Stock Exchange of Thailand with complete evidence of all transactions as well as adequate disclosure of the financial statements.

In 2014 from January 2014, the Company and its subsidiaries underwent related party transactions with individuals who may possess a conflict of interest as follows:

Person who may encounter conflicts Relationship

Mr. Surachai Chetchotisak She is also wife of Mr. Surachai Chetchotisak, a director and shareholder of

the 38.04 % of the shares with voting rights of the company.

Chetchotisak Company Limited Mr. Suwat Chetchotisak is a director and shareholder holding 14.35% of the

paid-up capital of Chetchotisak Co., Ltd.

He is a shareholder holding 4.63% of the Company’s paid-up capital and he

is also Mr.Surachai Chetchotisak’s brother.

Miss Malee Chetchotisak is a director and shareholder holding 14.50% of

the paid-up capital of Chetchotisak Co., Ltd.

She is a sibling of Mr. Surachai Chetchotisak and Mr. Suwat Chetchotisak.

Mr. Surachai Chetchotisak He is a director and shareholder holding 38.04% of the Company’s paid-up

capital.

Mr. Surachai Chetchotisak is a director and shareholder holding 30.00% of

the paid-up capital of SS2C Co., Ltd.

Mrs. Sujeera Chetchotisak is a shareholder holding 30.00% of the paid-up

capital of SS2C Co., Ltd.

She is also wife of Mr. Surachai. Chetchotisak, a director and shareholder of

the 38.04 % of the shares with voting rights of the company.

SS2C Co., Ltd. Mr. Chot Chetchotisak is a shareholder holding 20.00% of the paid-up capital of SS2C Co., Ltd. He is a shareholder holding 0.01% of the Company’s paid-up capital and he is also Mr.Surachai Chetchotisak’s son.Mr. Chet Chetchotisak is a shareholder holding 20.00% of the paid-up capital of SS2C Co., Ltd. He is a shareholder holding 0.17% of the Company’s paid-up capital and he is also Mr.Surachai Chetchotisak’s son.

Remark: The shareholding proportion of persons who may encounter conflicts was dated on 31 December 2014.

14.1 Nature of Related Party Transactions and Pricing Conditions and Policy

The pricing of related party transactions was principally concentrated on the assets rental and appropriate determined based on the market price and other conditions insignificantly different from those in the market. The related party transactions comprised of:

091

090

14.1.1 Office Rental

In the financial statements for the year ended December 31, 2014, the Company and subsidiaries made payment of the office rental, common service fee, public utilities expense and other rentals to Chetchotisak Company Limited and SS2C Company Limited (representing the party with whom the conflict of interest may arise) in the amount of Baht 67.66 million, Baht 8.76 million and Baht 0.24 million respectively.

The Company also rented the Chetchotisak building 1 – 4 from Chetchotisak Company Limited with the purpose for using them as office buildings and park building by paying rental and common service fee at the rate of Baht 230 – 545 per square meter which is reasonable when comparing to nearby buildings which charged the rental and common service fee at Baht 420 – 700 per square meter.

For other building rental fee, near to the vicinity of to Chetchotisak Company Limited and SS2C Company Limited (as per details in chart 14.1.1 on items 4, 5, and 6), the rental and common service fee were to be paid as flat rate (the flat rate service fee means the rental and common service fee will be charged for the whole building rather than the number of square meters based on the conditions of each building), with the purpose for using them as office and car park buildings.

However, the office the Company rented from Chetchotisak Company Limited (as per details in chart 14.1.1 on items 5, and 6) was the office Chetchotisak Company Limited rented from the Mr.Kriengkrai Chetchotisak and improved the townhouse utility space into the office. The Company provided facilitation of public utilities and charged the rental/service fees at the charter rate, with an average rate about Baht 265 per square meter (calculate from rental / service charge as total package cost divided by average usage area of the building) which was at lower average rate than the Chetchotisak building 1-3. This was reasonable rate as in the detailed comparison in previous section. Moreover, reason that the Company had to sub-rent from the Chetchotisak Company Limited, because this company was an expert in office rental management.

Building / Address Renter Rent byRented space

(square metre)

Rental fee,Central

Service fee / month

(million Baht)

Contract period

Approved by (**)Start End ( * )

1. Chetchotisak Building 1

419/1 Soi Ladphrao 15, Jatujak, Bangkok

ChetchotisakCo.,Ltd.

RS Public CompanyLimited 3,766 1,102.48 June 2012 May 2015 Board of Directors



Chetchotisak Co.,Ltd.

RS Public Company LimitedCOOLISM Co.,Ltd.Starz (Thailand) Co.,Ltd.

4,6451,200

200

132,754.00 35,640.00

5,940.00

June 2012June 2012Jan 2013

May 2015May 2015May 2015

Board of DirectorsBoard of DirectorsBoard of Directors



Chetchotisak Co.,Ltd.

RS Public Company Limited 2,242 65,299.00 July 2013 July 2015 Board of Directors

4. 419/4 Soi Ladphrao 15, Jatujak, Bangkok Jatujak, Bangkok SS2C Co.,Ltd.

RS Public Company Limited (Lump sum price) 68,825.00

August 2012 Dec 2015 Board of Directors

5. 203/18-20 Soi Ladphrao 15, Jatujak, Bangkok

Mr.KriengkaiChetchotisak /Chetchotisak Co.,Ltd.

Thai Copyright Collection Co.,Ltd.RS Public Company Limited

(Lump sum price) (Lump sum price)

4,820.00 12,460.00

June 2012June 2012

May 2015May 2015

Board of DirectorsBoard of Directors

6. 203/34-36 Soi Ladphrao 15, Jatujak, Bangkok

Mr.KriengkaiChetchotisak /Chetchotisak Co.,Ltd.

Thai Copyright Collection Co.,Ltd. (Lump sum price) 14,060.00 June 2012 May 2015 Board of Directors

Note :* The rental agreement may be renewed at expiry. (The rental agreement renewal may not be automatically enabled and the reconsideration at any

renewal shall be made).** The Related Party Transactions were approved as per the regulations of the Capital Market Supervisory Board, and were disclosed as per the Stock

Exchange of Thailand’s announcements.

092

14.1.2 Land Rental

In the financial statements for the year ended December 31, 2014, the Company and subsidiaries made payment of land rental to Chetchotisak Company Limited in the amount of Baht 0.30 million.

The Company and subsidiary company rented the land from the Chetchotisak Company Limited while this land had been subleased from Mr.Kriengkai Chetchotisak for using as equipment storage building by charging the land rental at the rate of Baht 95 - 135 per square wah, which was considered reasonable when compared to the rental of nearby land. The rental details were as follows:

14.1.3 Purchase of Fixed Assets

-Nil-

14.1.4 Guarantee

-Nil-

14.2 The Necessity and Rationale of the Related Party Transactions

All related party transactions are done under the necessity and rationale of the transactions to optimize the firm benefit. 2014, the related party transactions between the Company and the subsidiary companies and related parties, the core transaction of which are Land rental, Office rental and Guarantee, were under normal course of business, no special condition and no transfer of interest. Pricing, fee rate and/or interest rate could be compared with other entities’ transactions and has been disclosed in the notes to financial statements of 2014.

The Audit Committee has reviewed the related party transactions such as sales and purchase of goods or assets, copyright, production service, organizing concerts and marketing activities, sales of advertising, services, loan interest, and etc., disclosed in the notes to financial statements of 2014 and has the following comments.

The mentioned transactions occurred under normal course of business, necessity and rationale of the connected transactions to optimize the firm benefit.

14.3 Measures or Steps of Approval in Related Party Transactions

The Company has set a policy for the approval of related party transactions. The related party transactions has rooted in necessity, rationale and optimal of the firm benefit and conditions are indifferent to the transaction with external parties. In case of the significant related party transactions, conducted in accordance with the rule governing listed securities, all approval must be consented by the Audit Committee, the Board of Directors and Shareholders’ meeting excluding

Type Renter Rent by Rented space

Rental fee/

month

(Baht)

Contract termApproved by

(**)เริ่ม สิ้นสุด ( * )

1. Land

Soi Ladphrao 15

Jatujak, Bangkok

Chetchotisak

Commitee /

RS Public

Company

Limited

152

square wah

20,000 Feb 2013 May 2015 Management

(**)

2. Land

Soi Ladphrao 15

Jatujak, Bangkok

Chetchotisak

Co.,Ltd.

Starz (Thailand)

Co.,Ltd.

52

square metre

5,000 Jan-56 May-58 Management

(**)

093

092

votes of the related persons. Nevertheless, all procedures must be in line with concerned regulations of the Capital Market Supervisory Board.

14.4 Policy and Future Potential of Related Party Transactions, including acquisition and disposal of

assets

The Company still maintains the policy for transactions between the Company and the subsidiary companies such as office rental, land rental and guarantee of loan from bank by the Company and the Company’s directors. However, the Company has no policy that may lead to conflict of interests between the related persons (such as loan and guarantee of loan etc.), except for the case that will optimize the firm benefit, and conditions are indifferent or better than the transaction with external parties. The Company will ensure that all related party transactions according to concerned regulations of the Capital Market Supervisory Board, will be consented by the Board of Directors and Shareholders’ meeting.

095

095

15Financial Highlight

096

Financial Highlight

15.1 Statement of Financial Position For the Year Ended December 31, 2012 - 2014

(Thousand baht)

Detail

2012 2013 2014

(Audited) % (Audited) % (Audited) %

ASSETS

CURRENT ASSETS :

Cash and cash equivalents 313,597 12.3% 572,147 19.2% 381,535 7.9%

Temporary investment - fixed deposit with

maturity of twelve months 4,306 0.2% 4,391 0.1% 4,465 0.1%

Trade accounts receivable-Others-net 652,953 25.6% 756,169 25.3% 863,143 17.9%

Trade accounts receivable-Related parties-net 11,155 0.4% 19,730 0.7% - -

Inventories - net 140,564 5.5% 63,312 2.1% 159,856 3.3%

Accrued income 244,965 9.6% 233,716 7.8% 147,699 3.1%

Other current assets 152,697 6.0% 98,823 3.3% 169,515 3.5%

Total Current Assets 1,520,237 59.5% 1,748,288 58.5% 1,726,213 35.9%

NON-CURRENT ASSETS :

Investments in subsidiaries - net 5,606 0.2% 5,496 0.2% 5,406 0.1%

Property plant and equipment - net 259,520 10.2% 310,016 10.4% 313,235 6.5%

Deposit for broadcasting system eauipment - - - - 74,996 1.6%

License for operation right in spectrum of

digital television - - - - 2,161,817 44.9%

Advance payment of license for operation right

in spectrum of digital television - - 38,000 1.3% - -

Intangible assets - net 643,320 25.2% 720,771 24.1% 304,327 6.3%

Deferred tax assets 64,554 2.5% 73,119 2.4% 97,723 2.0%

Other non-current assets 61,830 2.4% 90,520 3.0% 129,812 2.7%

Total Non-Current Assets 1,034,830 40.5% 1,237,922 41.5% 3,087,316 64.1%

TOTAL ASSETS 2,555,067 100.0% 2,986,210 100.0% 4,813,529 100.0%

LIABILITIES AND EQUITY

CURRENT LIABILITIES :

Short-term loans from financial institutions 86,000 3.4% - - - -

Trade accounts payable and others payable 195,324 7.6% 185,015 6.2% 152,569 3.2%

Trade accounts payable and others - related 1,697 0.1% 1,659 0.1% - -

Current portion of liability under financial lease

agreements

4,587 0.2% 5,140 0.2% 7,655 0.2%

Current portion of payable for cost of license

for operation

right in spectrum - - - - 302,500 6.3%

Current portion of employee benefit obligations - - 11,011 0.4% 4,407 0.1%

097

096

(Thousand baht)

Detail

2012 2013 2014


Current portion of long-term loan 240,000 9.4% 286,915 9.6% - -

Short-term loans from related parties - - 8,000 0.3% - -

Unearned revenues - others 74,880 2.9% 196,725 6.6% 206,545 4.3%

Accrued expenses 324,454 12.7% 463,323 15.5% 563,155 11.7%

Other current liabilities 164,678 6.4% 164,382 5.5% 152,319 3.2%

Total Current Liabilities 1,091,619 42.7% 1,322,170 44.3% 1,389,151 28.9%

- - -

NON-CURRENT LIABILITIES :

Liabilities under financial lease agreements 16,684 0.7% 12,759 0.4% 5,103 0.1%

Payable for cost of license for operation right in

spectrum - net - - - 1,584,000 32.9%

Long-term loans 81,000 3.2% - - - -

Employee benefit obligations 32,537 1.3% 38,756 1.3% 60,945 1.3%

Deferred tax liabilities 21,134 0.8% 30,874 1.0% 6,102 0.1%

Other non-current liabilities 10,626 0.4% 11,394 0.4% 9,694 0.2%

Total Non-Current Liabilities 161,981 6.3% 93,783 3.1% 1,665,844 34.6%

Total Liabilities 1,253,600 49.1% 1,415,953 47.4% 3,054,995 63.5%

EQUITY

Share capital :

Authorized share capital

1,026,000,280 ordinary shares : Baht 1 per

share 1,026,000 40.2% 1,026,000 34.4% 1,026,000 21.3%

Issued and paid - up share capital 882,692 34.5% 953,867 31.9% 1,022,346 21.2%

Treasury shares (74,672) (2.9%) (74,672) (2.5%) (74,672) (1.6%)

Premium on share capital 129,536 5.1% 193,593 6.5% 255,225 5.3%

Advance receipts for share subscription 17,225 0.7% 30,061 1.0% - -

Difference between the purchase price of

investment in subsidiaries under common

control and their net book value (16,594) (0.6%) (16,594) (0.6%) (16,594) (0.3%)

Retained earnings (Deficits) :

Appropriated - Legal reserve 32,312 1.3% 52,995 1.8% 69,910 1.5%

Appropriated - Treasury share reserve 74,672 2.9% 74,672 2.5% 74,672 1.6%

Unappropriated 251,060 9.8% 353,342 11.8% 397,586 8.3%

Equity attributable to owners of the Company 1,296,232 50.7% 1,567,264 52.5% 1,728,473 35.9%

Non - controlling interests 5,235 0.2% 2,993 0.1% 30,061 0.6%

Total equity 1,301,467 50.9% 1,570,257 52.6% 1,758,534 36.5%

TOTAL LIABILITIES AND EQUITY 2,555,067 100.0% 2,986,210 100.0% 4,813,529 100.0%

098

15.2 Statement of Comprehensive Income For the Year Ended December 31, 2012 - 2014

(Thousand baht)

Detail

2012 2013 2014


Revenues

Revenue from media 1,192,979 42.4% 1,986,275 57.4% 3,356,835 77.9%

Revenue from music distribution 883,216 31.4% 777,175 22.5% 457,817 10.6%

Revenue from event management 718,826 25.6% 692,561 20.0% 458,514 10.7%

Revenue from other services 17,370 0.6% 5,452 0.1% 33,285 0.8%

Total sales and services income 2,812,391 100.0% 3,461,463 100.0% 4,306,451 100.0%

Cost of sales and services 1,751,614 62.3% 2,109,271 60.9% 2,924,664 67.9%

Gross profit 1,060,778 37.7% 1,352,192 39.1% 1,381,787 32.1%

Other income 60,201 2.1% 22,354 0.6% 26,620 0.6%

Gross profit before expenses 1,120,978 39.9% 1,374,547 39.7% 1,408,407 32.7%

Selling expenses 151,472 5.4% 213,511 6.2% 207,554 4.8%

Administrative expenses 556,744 19.8% 659,219 19.0% 649,935 15.1%

Amortization of employee benefit expenses 8,598 0.3% 8,705 0.3% 8,591 0.2%

Total expenses 716,813 25.5% 881,435 25.5% 866,080 20.1%

Profit before finance costs and income tax 404,165 14.4% 493,112 14.2% 542,327 12.6%

Finance costs 7,509 0.3% 17,294 0.5% 26,686 0.6%

Profit before income tax 396,656 14.1% 475,818 13.7% 515,641 12.0%

Income tax 122,824 4.4% 83,561 2.4% 118,016 2.7%

Profit for the year 273,832 9.7% 392,257 11.3% 397,625 9.2%

Other comprehensive income

Defined benefit plan actuatal gain - - - - 1,567 0.0%

Other comprehensive income for the year - - - - 1,567 0.0%

Profit and comprehensive income for the year 273,832 9.7% 392,257 11.3% 399,192 9.3%

Attributable profit for the year to

Owner of the Company 284,273 10.1% 394,492 11.4% 370,957 8.6%

Non - controlling interests 10,442 0.4% (2,235) (0.1%) 26,669 0.6%

273,832 9.7% 392,257 11.3% 397,625 9.2%

Attributable Other comprehensive income to

Owner of the Company - - - - 1,157 0.0%

Non - controlling interests - - - - 410 0.0%

- - - - 1,567 0.0%

Earnings per share

Owner of the Company (Baht) 0.326 0.436 0.377

Number of ordinary shares (Shares) 873,049 903,953 983,958

Diluted earnings per share

Owner of the Company (Baht) 0.299 0.412 0.377

Weighted average number of diluted ordinary

shares (Shares) 950,440 958,410 983,958

099

098

15.3 Statement of Cash Flows For the Year Ended December 31, 2012 - 2014

(Thousand baht)

Detail

2012 2013 2014


CASH FLOWS FROM OPERATING ACTIVITIES

Net profit 273,832 87.3% 392,257 68.6% 397,625 104.2%

Adjustments to reconcile net profit to net cash provid-

ed by (used in) operating activities:

Depreciation and amortization 92,930 29.6% 278,242 48.6% 880,392 230.7%

Allowance for doubtful accounts (reversal) and written

off withholding tax (2,913) (0.9%) (13,720) (2.4%) 4,496 1.2%

Reversal allowance for decline in value of inventory 2,425 0.8% (12,402) (2.2%) (7,435) (1.9%)

Reversal allowance for sales return - net 38,701 12.3% (10,973) (1.9%) (37,733) (9.9%)

Allowance for impairment of assets (18,694) (6.0%) 28,296 4.9% 19,719 5.2%

Reversal allowance for impairment - investment in

associate

(4,148) (1.3%) - - - -

Share of loss from investments in associated company

accounted for under the equity method

- - 110 0.0% 90 0.0%

Provision for loss on investment in subsidiaries (rever-

sal) - - (2,253) (0.4%) - -

Provision for damage from litigation case 2,001 0.6% - - 1,756 0.5%

Loss (gain) on sales and written off equipment 20,538 6.5% 515 0.1% 313 0.1%

Loss on sales of intangible assets 167 0.1% - - - -

Provision for employee benefits 16,566 5.3% 17,230 3.0% 17,151 4.5%

Unrealized gain on exchange rates (507) (0.2%) (67) (0.0%) (2) (0.0%)

Interest income (2,395) (0.8%) (4,761) (0.8%) (2,957) (0.8%)

Interest expenses 7,509 2.4% 17,294 3.0% 26,686 7.0%

Income tax 122,824 39.2% 83,561 14.6% 118,016 30.9%

Profit from operating activities before changes in

operating assets and liabillities 548,837 175.0% 773,329 135.2%

1,418,118 371.7%

(INCREASE) DECREASE IN OPERATING

ASSETS:

Trade accounts receivable (36,670) (11.7%) (94,808) (16.6%) (86,614) (22.7%)

Inventories (105,597) (33.7%) 89,721 15.7% (88,999) (23.3%)

Other current assets (141,397) (45.1%) 62,002 10.8% (936) (0.2%)

Other non - current assets (23,442) (7.5%) (9,163) (1.6%) 10,578 2.8%

INCREASE (DECREASE) IN OPERATING

LIABILITIES:

Accounts payable and others payable (37,222) (11.9%) (6,047) (1.1%) (51,991) (13.6%)

Other current liabilities 80,368 25.6% 300,943 52.6% 70,520 18.5%

Decrese in employee benefit obligations - - - - - -

Other non - current liabilities 4,030 1.3% 3,020 0.5% (3,456) (0.9%)

Proceed from refunding witholding tax 42,516 13.6% 11,775 2.1% 883 0.2%

Payment of income tax (119,527) (38.1%) (146,492) (25.6%) (155,763) (40.8%)

0100

(Thousand baht)

Detail

2012 2013 2014


Net Cash Provided by (used in) Operating Activities 211,895 67.6% 984,281 172.0% 1,112,340 291.5%

CASH FLOWS FROM INVESTING ACTIVITIES:

Interest income 2,685 0.9% 4,570 0.8% 3,139 0.8%

Increase in short-term loans to related parties and related persons (8,040) (2.6%) - - (91,000) (23.9%)

Receipts from short-term loans to related parties and related persons 18,040 5.8% - - 91,000 23.9%

Decrease in short-term loans to others 1,531 0.5% 1,309 0.2% 100 0.0%

Cash received from decreasing in registered share capital 2,610 0.8% - - - -

Payment of investments in subsidiaries (2,610) (0.8%) - - - -

Temporary investments - fixed deposit with maturity of twelve months (98) (0.0%) (85) (0.0%) (74) (0.0%)

Increase (decrease) in payable for purchase on assets 2,149 0.7% (2,149) (0.4%) 17,887 4.7%

Purchase of fixed assets (191,636) (61.1%) (121,262) (21.2%) (85,721) (22.5%)

Proceeds from disposal of fixed assets 8,996 2.9% 1,267 0.2% 465 0.1%

Advance payment of license for operation right in spectrum of digital Television - - (38,000) (6.6%) - -

Deposit for broadcasting system eauipment - - - - (74,996) (19.7%)

Increase in intangible assets (221,589) (70.7%) (313,590) (54.8%) (298,759) (78.3%)

Net Cash Used in Investing Activities (387,963) (123.7%) (467,940) (81.8%) (437,958) (114.8%)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of interest expenses (6,860) (2.2%) (17,452) (3.1%) (13,523) (3.5%)

Receipt of short-term loans from financial institutions 166,000 52.9% 25,000 4.4% 755,000 197.9%

Repayment of short-term loans from financial institutions (80,000) (25.5%) (111,000) (19.4%) (755,000) (197.9%)

Receipts of long-term loans from financial institutions 321,000 102.4% 205,915 36.0% 65,000 17.0%

Repayment of long-term loans from financial institu-tions - - (240,000) (41.9%) (351,915) (92.2%)

Repayment of liability under financial lease (4,364) (1.4%) (4,787) (0.8%) (5,140) (1.3%)

Increase in subsidiary's share capital 800 0.3% - - - -

Increase in short-term loans from related parties - - 8,000 1.4% - -

Decrease in short-term loans from related parties - - - - (8,000) (2.1%)

Repayment to payable for cost of license for operation right in spectrum - - - - (340,500) (89.2%)

Dividend paid (131,430) (41.9%) (271,535) (47.5%) (310,965) (81.5%)

Increase in share capital (74,672) (23.8%) - - - -

Advance receipts for share subscription 17,225 5.5% 30,061 5.3% - -

Increase in share capital 72 0.0% 118,007 20.6% 100,049 26.2%

Net Cash Used in Financing Activities 207,772 66.3% (257,792) (45.1%) (864,994) (226.7%)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 31,704 10.1% 258,550 45.2% (190,612) (50.0%)

SUBSIDIARY'S CASH AT INVESTMENT SALES - - - -

SUBSIDIARY'S CASH AT INVESTMENT PURCHASE - - - -

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEARS 313,597 54.8% 572,147 150.0%

CASH AND CASH EQUIVALENTS AT THE ENDING OF THE YEARS 572,147 100.0% 381,535 100.0%

0101

0100

(Thousand baht)

Detail

2012 2013 2014


ADDITION INFORMATION

1. Purchases of vehicle for under lease agreement. 12,165 1,415 -

2. Cost of license for peration right in spectrum payable - - 2,227,000

3. In 2Q2012, the company sold some shares in the

RS Television Co.,Ltd. which Cash received from

sale of investments in subsidiaries are as follows.

Proceeds from sale of investments in subsidiaries.

2,610

(less) Cash and deposits with financial institutions (4,634)

net (2,024)

(less) Other assets less other liabilities 284

Reclassification to investment in associates

as sales of investments at book value. (1,740)

3) In 4Q2012 The company invested in the RS Tele

vision Co.,Ltd. Cash received from investment in

such companies are as follows. Purchase of

investments in subsidiaries

(2,610)

(plus) Cash and deposits with financial institutions 4,353

net 1,743

(plus) Other assets less other liabilities (3)

The book value of investments in subsidiaries at

the date of acquisition. 1,740

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15.4 Key Financial Ratios As at 31 December

Financial Ratio 2012 2013 2014

Liquidity Ratios

Liquidity Ratios (time) 1.39 1.32 1.24

Quick Ratio (time) 0.90 1.02 0.90

Cash Flows Ratio (time) 0.24 0.82 0.82

Account Receivable Turnover (time) 4.35 4.81 5.25

Average Debt Collection Period (day) 84 76 70

Inventory Turnover (time) 14.49 16.37 22.76

Average Number of Days Sales (day) 26 23 17

Account Payable Turnover (time) 9.28 12.71 19.53

Credit Period (day) 40 29 19

Cash Cycle (day) 70 70 68

Profitability Ratio

Gross Profit Margin (%) 37.72% 39.06% 32.09%

Operating Profit Margin (%) 12.23% 13.60% 11.98%

Operating Cash Flows to Operating Profit Ratio (%) 61.60% 209.08% 215.69%

Net Profit Margin (%) 9.90% 11.32% 8.56%

Return on Equity (%) 22.77% 27.55% 22.51%

Efficiency Ratios

Return on Asset (%) 18.09% 17.80% 13.91%

Return on Fixed Asset (%) 178.44% 162.63% 153.96%

Assets Turnover (เท่า) 1.29 1.10 1.11

Leverage Ratios

Debt/Equity Ratio (time) 0.97 0.90 1.77

Interest Coverage (time) 53.82 28.51 20.32

Debt Service Coverage (Cash basis)(time) 0.53 1.32 0.74

Dividend Payment Rate (%) 76.83% 83.86% 86.62%

Per Share

Book Value per Share (baht) 1.485 1.734 1.757

Earning per Share (baht) 0.326 0.436 0.377

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0103

16Management Discussion

and Analysis

0104

Board of Directors’ Report

To Shareholders,

R.S. Public Company Ltd.

The Board Of Director Is Responsible For The Reporting Of The Consolidated Financial Statements On The Company And Subsidiaries, Contents Of Which Have Been Consistently Prepared With Respect To The Thai Generally Accepted Accounting Standards Where Prudence Are Duly Exercised And Information Disclosed In The Notes Accompanying The Statements.

The Extraordinary General Meeting Of Shareholders No. 1/2546 Has Approved An Audit Committee Comprising Independent Directors Who Are Not Involved In The Day-To-Day Operations To Take Responsibility Over The Quality Of The Financial Reports And Internal Controls, Which The Audit Committee’s Opinion Was Described In Audit Committee Report Shown In This Annual Report.

The Board Of Director Has Considered That The Company Has Good Internal Control And Has Concurred With The Audit Committee, The Executives And The Authorised Auditors For The Consolidated Financial Statements Of 2014 On The Company And Subsidiaries That The Company’s The Financial Position And The Result Of Operation Presents Fairly In Conformity With Generally Accepted Accounting Principles.

(Surachai Chetchotisak)

Chairman/ Chief Executive Officer

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0104

Audit Committee Report

To Shareholders,

RS Public Company Ltd.

In 2014, the Audit Committee performed its duties in accordance with the Audit Committee Charter approved by the Board of Directors and encouraged all related practices to ensure good corporate governance. This included strengthening the conformity of transparency, ethics, and code of conduct compliance to create confidence towards shareholders, and other stakeholders. The financial statements of 2014 had been reviewed by the Audit Committee, executives and the authorized auditors to ensure that the company’s financial statements and financial data disclosure are entire, sufficient and meet the general accounting standard. The Audit Committee also suggested the improvements of internal control system to align the system with rules, and good corporate governance policies, especially those concerning with conflict of interest.

The Audit Committee also held meetings with external auditors and internal audit department in order to discuss the issues on risk assessment and prevention , audit results and the adequacy of the internal control systems. Moreover, the Audit Committee brought into close consideration the internal audit plans and major company’s operations to ensure transparency and compliance with laws and regulations. In 2014 the Audit Committee held 5 meetings , including those with external auditors without executives or management presence, in order to be well-informed all problems and concerns from audit findings. In addition, the Audit Committee has self-assessed the Audit Committee performance for 2014.

The Audit Committee also nominated PricewaterhouseCoopers ABAS Ltd. to be chosen as external auditor for 2015 upon closely considered the company's qualification, independence, experience and audit fee. This has been proposed to the Board of Directors for further approval in Shareholders’ Meeting.

(Phisit Dachanabhirom)

Chairman of the Audit Committee

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Management Discussion and Analysis

The management discussion and analysis has been prepared from the performances of RS Public Company Limited and the companies within RS Group (“subsidiaries”) in accordance with the financial statements examined by the auditor for the year ending December 31, 2012, 2013 and 2014 respectively. To clearly illustrate the overall performance of RS Group of Companies, the operations are divided into 3 categories i.e., media business, music distribution business, and contract and event management.

16.1 The economic and industrial situations that reflect the results of operation and policy, strategy, or business decision.

Television is regarded as the main revenue generating business with good return on investment for the Company. In 2014, “RS” has become one of the important operators in the television industry by receiving an operating license for the digital television service in the general category of the standard definition system which is regarded as the national business service. The Company has transferred its “Channel 8” which was originally broadcasted on the satellite television system into broadcasting in the digital system instead and has officially started the broadcasting in the 2nd quarter of 2014. However, the Company still has 4 satellite television channels i.e. “Channel 2”, “Sabaidee TV”, “YOU Channel”, and “Sun Channel”.

Main factor that has important impact towards growth on the overall picture of the television industry is the advertising expense of the industry which will increase or decrease depending on many factors such as the economic and political situation, the local consumers’ expenditure, competition among operators who place the advertising, and decision in choosing various media channels etc. In 2014, the overall advertising budget through the digital, analogue, satellite and cable television has increased higher than in 2013 by starting to spread from the analogue and satellite to the digital television channels (reference from the ABG Nielsen Media Research (Thailand) Ltd.

By having 24 digital television channels including the existing channels in the satellite and local cable television, intense competitive situation in the television industry has been created. This can be seen from changes in programs and strategies of each channel by continuously adjusting their programs, development on quality and format of the program to be more interesting, increasing number of contents for TV show, Dramas, sports, game show, foreign program, and variety shows, etc. This is by inviting famous artists to join the channel with the main point of gaining rating and the advertising budget in the limited market into their channel as much as possible.

The Company realizes the importance of quality content to build rating for the program. Marketing strategy has been adjusted to compete and correspond with the present market situation and to be able to compete evenly with others including the strategy adjustment for future growth. Program in each channel will have important strategy such as branding, positioning with clear target group, and development on the creation of program to correspond with trend and taste of the target group, and the using of RS group strong point as the main factor in producing quality program as well as suitable cost management etc. The Company has foreseen that these strategies will help build rating and attract advertisers for more interest and will allocate their budgets through the Company’s channels as value for limited budget will be worthwhile.

16.2 Summary of operating results by business category

The consolidated financial statements of RS Public Company Limited and its subsidiaries (“the Company”) for the year ended December 31, 2014 shows Total Sales and Services Income of Baht 4,306.5 million, Cost of Sales and Services of Baht 2,924.7 million, and Selling and Administrative Expenses and Other Expenses of Baht 866.1 million. Net Profit for the period Attributable to the Owner of the Company was Baht 371.0 million, which represents a decrease from that of the same period last year of Baht 23.5 million, or 6.0 percent. This change can be explained primarily due to:

0107

0106

16.2.1 Revenue :

Revenue from sales and services at the end of fiscal year December 31, 2014, amounted to Baht 4,306.5 million, a net increase of Baht 845.0 million comparing to 2013, or at 24.4 percent, which could be separately explained as per each business group as follows:

1) Revenue from Media Business

Revenue from the overall media business was comprised of earnings from television and radio media. In 2014, the company earned 3,356.8 million baht from its media business, which represented an increase of 1,370.6 million baht from that of 2013, or 69.0 percent.

- Television Media Business : Revenue from the main television media businesses primarily resulted from the operations of terrestrial digital telvision in the general category with standard resolution, such as “Channel 8” (which officially began to air during Quarter 2/2014); and 3 channels in the satellite TV system, including “Channel 2”, “Sabaidee TV” and “You Channel”. Revenue also came from sports licensing via the “Sun Channel”, as well as from sales of the “Sun Box” set-top boxes. This year, there was also revenue generated from live broadcasts of the FIFA World Cup 2014. In 2014, revenue from the television media business comprised 65.0 percent of the revenue derived from overall sales and services; this represented an increase compared to that of the previous year, which was 41.0 percent.

On the whole, revenue from the television media business in year 2014 increased from that of the year before, especially from “Channel 8” and “Channel 2”, which enjoyed higher utilization rates and benefitted from increased average advertising costs per minute. The latter reflected an adjustment that was implemented during the middle of the past year. The programs that were the most popular included “Siang Sawan Pichit Fan” and dramas. There were 5 drama series that began airing in 2014, including “Sap Sang”, “Dong Dok Ngiw”, “Pua Chua Krao”, “Ching Rak Hak Sawat” and “Mia Teuan” on “Channel 8”. Also, “Kon Dang Nang Clear”, “Show Muan Duan Mike” (which began to air at the end of 2014) and “Game Dara Cha-la-la” were broadcasted on “Channel 2”. Also, from market survey results from AGB Nielsen Media Research (Thailand) Ltd., it was found that, since the official launch of digital TV, “Channel 8” was among the top channels out of 30 digital television channels (including 6 analog TV channels), and “Channel 2” ranked among the top satellite television channels in the variety and entertainment category (rankings do not include digital TV channels). The same case applied to Sabaidee TV and You Channel.

- Live Broadcasts of World Cup 2014 : This year, there was revenue from the final round of the World Cup 2014, with live broadcasts of the final 64 matches. Every match was shown live on free-to-air channels; live broadcasts were shared among various television stations, including “Channel 5”, “Channel 7”, “Channel 8” and “Channel 11”. Live broadcasts were offered via subscription (Pay TV) on the “World Cup Channel” through the “Sun Box – World Cup version” model. Most of the revenue was derived from sales of advertising, sales of the “Sun Box” set-top boxes, subscription sales, platform (bundling) sales and subsidies received from the Office of the National Broadcasting and Telecommunications Commission (NBTC).

- Radio Media Business : Revenue derived from the radio media business came from the operation of 3 stations: “COOL Fahrenheit 93”, “Sabaidee Radio 88.5” and “COOL Celsius 91.5”. In 2014, revenue from the radio media business comprised 12.9 percent of the revenue derived from overall sales and services; this represented a decrease compared to that of the previous year, which was 16.0 percent. On the whole, the revenue for the year did not change from that of the previous year. The “COOL Fahrenheit 93” station continued to remain in the number one spot in the Easy Listening category and “Sabaidee Radio 88.5” enjoyed a ranking among the top stations. There results were from a market survey conducted by AGB Nielsen Media Research (Thailand) Ltd.

2) Revenue from Music Distribution Business

Revenue from the music distribution business consisted of revenue from physical sales, digital business and copyright collection. In 2014, the company earned revenue from the music distribution business in the amount of 457.8 million baht, representing a decrease of 319.4 million baht from that of 2013, or 41.1 percent. Revenue from

0108

this business comprised 10.6 percent of the revenue derived from overall sales and services; this represented a decrease compared to that of the previous year, which was 22.5 percent. The main causes included a decrease in the revenue from physical album sales and music downloads. This reflects the contraction of the market due to changing consumer behavior spurred by technological advances and the growth of smartphone usage. Presently, consumers, especially those in the target market, are able to listen to music and watch music videos on the Internet, which does not require them to spend any money. Also, the political situation contributed to the country’s economic slowdown, which dampened consumers’ spending behavior. However, the company’s share of advertising revenue increased from content sharing through Youtube.

3) Revenue from Event Management Business

Revenue from the event business consisted of revenue from concert organization and marketing activities, artists’ management and contract productions. In 2014, revenue from the event business amounted to 458.5 million baht, a decrease of 234.0 million baht from 2013, or 33.8 percent. Revenue from this business comprised 10.7 percent of the revenue derived from overall sales and services; this represented a decrease compared to that of the previous year, which was 20.0 percent. This decrease in revenue was mainly due to the decline of contract production volumes. Some programs slowed operations due to the impact of the political situation. Also, the amount of concerts and marketing events dropped, compared to the previous year. The main concerts and activities that were held included “Kid Tueng D2B Concert 2014”, “Kamikaze Dance Nayramit Concert 2014”, “Concert Khon Tai Hua Jai Suea”, “Sabaidee Sunjorn 57”, “Sabaidee Road Show” and “School Music Lover”, among others.

16.2.2 Cost of Sales and Services

Cost of sales and services of 2,924.7 million baht increased by 815.4 million baht from last year, or 38.7 percent. This was mainly due to realized costs from the World Cup 2014 live broadcasts, as well as increased costs from “Channel 8” digital television, which reflected rising costs related to digital TV license cost, multiplexer cost and transmission cost, as well as investments in equipment, staffing, content production and the purchase of various program licenses in order to enhance the quality of content, including dramas, news and variety shows. The main goals were to boost overall average viewership, as well as strengthen competitiveness in the television industry. In addition, the company recorded the amortization of other sport media rights in the proportion of revenue that increased.

16.2.3 Selling and Administrative Expenses, Other Expenses and Finance Costs

Selling and administrative expenses, and other expenses amounted to 866.1 million baht, a decrease of 15.4 million baht from that of the previous year, or 1.7 percent. This was mainly due to the decrease in expenses related to staffing; it also reflects the company’s shift in marketing plans and the lowering of promotional expenses.

Finance costs amounted to 26.7 million baht, a 9.4 million baht increase from that of the last year, or 54.3 percent. This is mainly attributed to fees tied to the guarantees pledged by financial institutions to the NBTC and TPBS – the multiplexer service provider.

16.2.4 Gross Profit Margin, Net Profit Margin and Return On Equity (ROE)

2012 2013 2014

Gross Profit Margin 37.7% 39.1% 32.1%

Net Profit Margin 9.9% 11.3% 8.6%

Return On Equity (ROE) 22.8% 27.6% 22.5%

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0108

The Company gross margin, net margin and rate of return on equity decreased from last year due to revenue decreased from the digital business and revenue from distribution of musical discs including the increased cost of television media business from both digital and satellite television.

16.3 Assets

16.3.1 Asset components

As at December 31, 2014, the Company had the total assets of Baht 4,813.5 million of which 35.9 % was current assets and 64.1 % was non-current assets.

Total assets as at December 31, 2014 amounted to Baht 4,813.5 million increased from 2013 by 61.2 % which was mainly caused from record of the operating license of digital television in 2014 as asset as a whole contract at net Baht 2,161.8 million or at 44.9 % of total asset. The net non-current asset reduced at 57.8 % from the termination of sport copyrights as cost during the year.

16.3.2 Quality of the assets

1) Account receivables – other - net

(million baht) 2012 2013 2014

Account receivables – other - net

Not Due 387.7 487.7 408.0

Over Due :

Less than 3 months

3 - 6 months 184.2 240.9 401.9

6 - 12 months 41.7 8.8 49.2

6 - 12 เดือน 37.8 18.5 6.2

More than 12 months 54.5 36.2 34.6

Total 705.9 792.1 899.9

Less Allowance for doubtful accounts (52.9) (35.9) (36.7)

Total Account receivables – other - net 653.0 756.2 863.1

Account receivable turnover (time) 4.35 4.81 5.25

Average debt collection period (day) 84 76 70

Allowance for doubtful accounts / Account receivables – other - net 7.5% 4.5% 4.1%

As at December 31, 2012, 2013, and 2014, the Company had net account receivables from person or juristic person at amount of Baht 635.0 million, Baht 756.2 million, and Baht 863.1 million respectively. Amount of the increased account receivables in 2014 was because the Company had business expansion and higher income, thus, the account receivables had increased which was mainly from account receivables from normal trading activities in which the Company might have agreement in collecting some advanced payments, or giving the average credit terms in the period of 60 – 90 days depending on the type of products or services.

0110

Consideration from the table of timing periods, most of the outstanding overdue payments over 80% were not due or less than 3 months overdue which were within the credit allowance of the Company. Moreover, the average trade receivables turnover ratio from the last 3 years was at 4 – 5 times which had the average collection period of 70 – 85 days and was close to the average credit term policy of the Company at about 60 – 90 days.

The Company had policy in recording allowance for doubtful accounts for customer with overdue payment in order to reflect on risk of unpaid debt. Consideration would be used on total amount of unpaid account of customer who might have payment problem and problem in debt collection by considering on the total amount of debts unpaid to the Company.

However, the Company had strict debt collection with debtors and would constantly reviewed on allowance for doubtful accounts in every accounting periods in order to reflect the remaining account receivables in the financial statement with the expected receiving amount. In 2014, average allowance for doubtful accounts was at 4.1% of account receivables which was similar to 4.5 % in 2013.

2) Inventory - net

(million baht) 2012 2013 2014

Inventories 173.7 84.0 173.0

(Less) Allowance for decline in value of inventory (33.1) (20.7) (13.1)

Inventories - net 140.6 63.3 159.9

Inventory Turnover (Time) 14.49 16.37 22.76

Average Number of Days Sales (day) 26 23 17

Allowance for decline in value of inventory / Inventories 19.1% 24.6% 7.6%

As at December 31, 2012, 2013, and 2014, the Company’s net inventory amounted to Baht 140.6 million, 63.3 million, and 159.9 million respectively as the remaining inventory in 2014 increased from 2013 was mainly from selling of the satellite signal receiver “Sun Box”.

At the end of 2014, main inventory consisted of “SUN BOX” at 55%, work in progress such as drama, concert, and marketing activity, and contract production, etc., at 36%, and the finished goods of physical discs and others at 9%.

The above table indicated that the Company’s average sales period for the last 3 years was at 15 – 30 days as majority of work in progress did not have a long period of delivery time such as drama, concert, and marketing activity, etc. Moreover, the Company had the policy in managing inventory at suitable level as well as controlling the level of products to be at the suitable requirement of consumers. For the unsold and remaining inventory in the warehouse, or work in progress with long delivery period, the Company had policy in constantly reviewing the expected net value of inventory in every accounting periods in order to reflect the real expected value for sale in accordance with the ever changing economic and market situations. In the year 2013, and 2014, the Company had average allowance for inventory at 24.6% - 7.6% of total remaining inventory which was mainly for physical product i.e. CD, VCD, and DVD.

3) Intangible Assets - net

(million baht) 2012 2013 2014

Intangible assets 924.9 1,031.1 634.8

(Less) Allowance for impairment of assets (281.6) (310.3) (330.5)

Intangible assets - net 643.3 720.8 304.3

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0110

As at December 31, 2012, 2013, and 2014, the Company’s net intangible assets were Baht 643.3 million, Baht 720.8 million, and Baht 304.3 million respectively as value of the intangible assets in 2014 decreased from 2013 was mainly from payment for sport copyrights.

At the end of 2014, the intangible assets consisted of sport copyrights of more than 50%, music copyrights at 23%, while the remaining was from copyrights of movies, dramas, etc.

From the above table, allowance for impairment at the end of 2012, 2013, and 2014 amounted to Baht 281.6 million, Baht 310.3 million, and 330.5 million respectively which came mainly from copyrights of music, and movies with long duration of time. The Company had the policy to constantly review the expected net value in every accounting period in order to reduce risk from value shown in the financial statement that might be higher than actual receiving value in accordance with the economic benefits expected to be received in the future.

16.4 Liquidity

16.4.1 Cash Flow

(million baht) 2012 2013 2014

Cash flow from operating activities 211.9 984.3 1,112.3

Cash flow from investing activities (388.0) (467.9) (437.9)

Cash flow from financing activities 207.8 (257.8) (865.0)

Net increase (decrease) in cash and cash equivalents 31.7 258.5 (190.6)

Cash and cash equivalents at the end of the year 313.6 572.1 381.5

For the year ending December 31, 2014, the Company’s net cash and cash equivalents was at Baht 381.5 million, a decrease of Baht 190.6 million comparing to the previous year. The reasons for decrease in cash flow from financing activities at Baht 865.0 million were from payment on long term debt from financial institution, payment on the operating license of the digital television system, and dividend payment, and also from cash in the investment activities of Baht 437.9 million, from payment of sport copyrights, and investment in production equipment.

16.4.2 Key Liquidity Ratios

(million baht) 2012 2013 2014

Liquidity Ratio (time) 1.39 1.32 1.24

Quick Ratio (time) 0.90 1.02 0.90

Average Debt Collection Period (day) 84 76 70

Average Number of Day Sales (day) 26 23 17

Credit Period (day) 40 29 19

Cash Cycle (day) 70 70 68

Overall picture of the Company’s liquidity during the past 3 years showed current assets at higher level than the current liabilities, average debt collection period was in accordance with the Company policy, and product sales or delivery of contracts to customers including debt payments were in accordance with normal business operation of the Company. Thus, the Company enjoyed continuous cash flow and sufficient working capital for business operations.

However, in case of business expansion, high investment may be necessary; the Company can use its remaining working capital for the operation and including readiness in sourcing capital from the short and long term loans that is suitable with the asset type already.

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16.5 Sources of Funds

16.5.1 Liabilities, Shareholders’ Equity and Debt to Equity Ratio

(million) 2012 2013 2014

Short-term loan from financial institutions 86.0 - -

Current portion of long-term loan 240.0 286.9 -

Long-term loans 81.0 - -

Other current liabilities 765.6 1,035.3 1,389.2

Other non-current liabilities 81.0 93.8 1,665.8

Total liabilities 1,253.6 1,416.0 3,055.0

Equity attributable to owners of the company 1,296.2 1,567.3 1,728.5

Debt to Equity Ratio (time) 0.97 0.90 1.77

Total liabilities for 2012, 2013, and 2014 amounted to Baht 1,253.6 million, 1,416.0 million and Baht 3,055.0 million respectively while the increased liabilities in 2014 when comparing to 2013 were from recorded liabilities for permit license to operate the digital television business at net Baht 1,886.5 million or at 61.8 % of total liabilities. Moreover, during 2014,the Company had made all payments on loans from financial institutions in full.

As at December 31, 2012, 2013, and 2014, the Company’s shareholders’ equity of the majority interest were Baht 1,296.2 million, Baht 1,567.3 million and Baht 1,728.5 million, respectively. The shareholders’ equity of the majority interest in 2014 increased from the year 2013 due to payments from the exercise of warrants RS-W2 at Baht 100.0 million including the increase from business operation during the year while dividend payment to shareholders was at Baht 311.0 million.

In 2014, shareholders’ equity of shareholders was 1.77 times, an increase of 0.90 times from 2013 due mainly to recorded liabilities for permit license to operate the digital television business.

16.6 Key factors and influence that may affect the performance and financial position of the Company

in the future

-none-

01130113

17Financial Statement

0114

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of RS Public Company Limited

I have audIted the accompanyIng consolIdated and separate fInancIal statements of rs publIc company lImIted and Its subsIdIarIes,

and of rs publIc company lImIted, respectIvely, whIch comprIse the consolIdated and separate statement of fInancIal posItIon

as at december 31, 2014, the consolIdated and separate statements of comprehensIve Income, changes In equIty and cash flows

statements for the year then ended, and a summary of sIgnIfIcant accountIng polIcIes and other notes.

Management’s Responsibility for the Consolidated and Separate Financial Statements

management Is responsIble for the preparatIon and faIr presentatIon of these consolIdated and separate fInancIal statements

In accordance wIth thaI fInancIal reportIng standards, and for such Internal control as management determInes Is necessary

to enable the preparatIon of consolIdated and separate fInancIal statements that are free from materIal mIsstatement, whether

due to fraud or error.

Auditor’s Responsibility

my responsIbIlIty Is to express an opInIon on these consolIdated and separate fInancIal statements based on my audIt.

I conducted my audIt In accordance wIth thaI standards on audItIng. those standards requIre that I comply wIth ethIcal

requIrements and plan and perform the audIt to obtaIn reasonable assurance about whether the consolIdated and separate

fInancIal statements are free from materIal mIsstatement.

an audIt Involves performIng procedures to obtaIn audIt evIdence about the amounts and dIsclosures In the fInancIal statements.

the procedures selected depend on the audItor’s judgment, IncludIng the assessment of the rIsks of materIal mIsstatement of the

fInancIal statements, whether due to fraud or error. In makIng those rIsk assessments, the audItor consIders Internal control

relevant to the entIty’s preparatIon and faIr presentatIon of the fInancIal statements In order to desIgn audIt procedures that are

approprIate In the cIrcumstances, but not for the purpose of expressIng an opInIon on the effectIveness of the entIty’s Internal

control. an audIt also Includes evaluatIng the approprIateness of accountIng polIcIes used and the reasonableness of accountIng

estImates made by management, as well as evaluatIng the overall presentatIon of the fInancIal statements.

I belIeve that the audIt evIdence I have obtaIned Is suffIcIent and approprIate to provIde a basIs for my audIt opInIon.

Opinion

In my opInIon, the consolIdated and separate fInancIal statements referred to above faIrly, In all materIal respects, the fInancIal

posItIon as at december 31, 2014, and the fInancIal performance and cash flows for the year then ended of rs publIc company

lImIted and Its subsIdIarIes, and of rs publIc company lImIted, respectIvely, In accordance wIth thaI fInancIal reportIng standards.

(wImolsrI jongudomsombut)

certIfIed publIc accountant

regIstratIon no. 3899

karIn audIt company lImIted

bangkok

february 24, 2015

01150114

RS

PU

BLI

C C

OM

PAN

Y LI

MIT

ED A

ND

SU

BS

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S

STA

TEM

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L P

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AND

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ated

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es 2

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2013

2014

2013

ASSE

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REN

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SETS

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h an

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alen

ts6

381

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0116

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01170116

RS

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IDIA

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0118

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

The accompanying notes are an integral part of these ffinancial statements.

Baht

Consolidated Separated

Notes 2014 2013 2014 2013

Revenues 5, 28

Revenue from media 3,356,834,828.71 1,986,274,871.39 883,264,568.72 877,926,179.65

Revenue from music distribution 457,816,855.99 777,175,118.49 405,395,848.35 718,297,721.50

Revenue from event business 458,514,472.14 692,561,390.30 321,838,996.38 388,666,279.14

Revenue from other services 33,285,277.26 5,451,570.64 105,535,214.67 5,451,570.64

Total sales and services income 4,306,451,434.10 3,461,462,950.82 1,716,034,628.12 1,990,341,750.93

Cost of sales and services 5, 28 (2,924,664,109.26) (2,109,270,664.75) (1,419,941,766.28) (1,271,369,794.66)

Gross profit 1,381,787,324.84 1,352,192,286.07 296,092,861.84 718,971,956.27

Other income 5 26,619,606.55 22,354,459.07 534,624,870.70 258,044,444.07

Gross profit before expenses 1,408,406,931.39 1,374,546,745.14 830,717,732.54 977,016,400.34

Other expenses

Selling expenses 5 (207,553,837.62) (213,511,313.84) (69,752,854.25) (119,485,795.16)

Administrative expenses 5 (649,935,128.48) (659,218,688.96) (503,645,674.55) (521,634,781.55)

Reversal of provision for (loss) on investment in

subsidiaries - net

- - 54,659,082.41 120,176,393.95

Amortization of employee benefit expenses (8,591,009.77) (8,705,066.60) (7,930,865.21) (7,864,998.96)

Total expenses (866,079,975.87) (881,435,069.40) (526,670,311.60) (528,809,181.72)

Profit before finance costs and income tax 542,326,955.52 493,111,675.74 304,047,420.94 448,207,218.62

Finance costs 5 (26,685,649.25) (17,293,523.69) (7,175,311.91) (3,147,180.67)

Profit before income tax 515,641,306.27 475,818,152.05 296,872,109.03 445,060,037.95

Income tax 16 (118,015,992.84) (83,561,310.90) 41,437,804.00 (31,406,734.33)

Profit for the year 397,625,313.43 392,256,841.15 338,309,913.03 413,653,303.62

Other comprehensive income

Defined benefit plan actuatal gain 1,567,124.20 - 2,044,733.00 -

Other comprehensive income for the year 1,567,124.20 - 2,044,733.00 -

Other comprehensive income for the year 399,192,437.63 392,256,841.15 340,354,646.03 413,653,303.62

Attributable profit for the year to

Owner of the Company 370,956,749.69 394,491,532.39 338,309,913.03 413,653,303.62

Non - controlling interests 26,668,563.74 (2,234,691.24) - -

Net profit (Loss) 397,625,313.43 392,256,841.15 338,309,913.03 413,653,303.62

Attributable Other comprehensive income to

Owner of the Company 1,157,442.40 - 2,044,733.00 -

Non - controlling interests 409,681.80 - - -

Net profit (Loss) 1,567,124.20 - 2,044,733.00 -

Earnings per share 26

Owner of the Company (Baht) 0.377 0.436 0.344 0.458

Number of ordinary shares (Shares) 983,957,561 903,953,050 983,957,561 903,953,050

Diluted earnings per share 26

Owner of the Company (Baht) 0.377 0.412 0.344 0.432

Weighted average number of diluted ordinary shares

(Shares) 983,957,561 958,410,122 983,957,561 958,410,122

01190118

RS

PU

BLI

C C

OM

PAN

Y LI

MIT

ED A

ND

SU

BS

IDIA

RIE

S

STA

TEM

ENTS

OF

CH

AN

GES

IN

EQ

UIT

Y

FOR

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0120

Baht


2014 2013 2014 2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net profit 397,625,313.43 392,256,841.15 338,309,913.03 413,653,303.62

Adjustments to reconcile net profit to net cash provided by (used in)

operating activities:

Depreciation and amortization 880,392,135.53 278,241,584.44 122,130,281.93 72,398,539.15

Allowance for doubtful accounts (reversal) and written off withholding tax 4,496,200.21 (13,719,557.85) 969,873.33 23,390,963.66

Reversal allowance for decline in value of inventory (7,434,689.20) (12,401,873.31) (5,984,266.37) (12,392,664.25)

Reversal allowance for sales return - net (37,732,515.83) (10,972,821.07) (37,559,288.83) (8,991,868.07)

Allowance for impairment of assets 19,719,003.57 28,295,932.11 15,647,438.69 14,004,948.30

Share of loss from investments in associated company accounted

for under the equity method 89,723.37 109,693.75 - -

Reversal allowance for impairment - investment in subsidiaries - - (57,461,210.83) (103,520,224.85)

Allowance for doubtful accounts - loan to subsidiaries - - 1,275,008.42 (13,046,005.48)

Provision for loss on investment in subsidiaries (reversal) - (2,252,756.11) 1,527,119.99 (3,610,163.21)

Gian on sales investment in subsidiary - - - 126,375.45

Provision for damage from litigation case 1,755,860.90 - - -

Loss (gain) on sales and written off equipment 312,985.20 514,948.69 412,045.26 -

Provision for employee benefits 17,151,390.03 17,230,318.96 15,521,824.43 15,052,406.04

Dividend income - - (407,907,925.25) (176,961,762.40)

Unrealized gain on exchange rates (2,054.86) (67,220.87) - (85,345.39)

Interest income (2,957,029.53) (4,760,639.17) (16,324,064.05) (15,746,838.42)

Interest expenses 26,685,649.25 17,293,523.69 7,175,311.91 3,147,180.67

Income tax 118,015,992.84 83,561,310.90 (41,437,804.00) 31,406,734.33

Profit from operating activities before changes in operating assets and liabilities 1,418,117,964.91 773,329,285.31 (63,705,742.34) 238,825,579.15

(INCREASE) DECREASE IN OPERATING ASSETS:

Trade accounts receivable (86,613,861.14) (94,808,004.79) (19,062,292.05) 62,761,643.09

Inventories (88,999,043.12) 89,721,037.85 34,284,172.44 1,811,324.66

Other current assets (936,436.94) 62,001,610.97 5,807,855.58 27,424,666.06

Other non - current assets 10,577,831.94 (9,162,724.04) 8,277,052.96 (13,885,128.26)

INCREASE (DECREASE) IN OPERATING LIABILITIES:

Accounts payable and others payable (51,990,670.32) (6,046,574.47) 8,531,158.77 (66,506,524.15)

Other current liabilities 70,519,546.48 300,942,894.53 (8,021,652.80) 1000,320,070.20

Other non - current liabilities (3,455,679.40) 3,020,419.17 (8,414,679.40) 3,285,459.17

Proceed from refunding witholding tax 882,995.54 11,774,533.31 - -

Payment of income tax (155,762,635.34) (146,491,625.44) (36,994,717.13) (80,692,925.22)

Net Cash Provided by (used in) Operating Activities 1,112,340,012.61 984,280,852.40 (79,298,843.97) 273,344,164.70


STATEMENTS OF CASH FLOWS


)


01210120


STATEMENTS OF CASH FLOWS (Cont.)


)

Baht


2014 2013 2014 2013

CASH FLOWS FROM INVESTING ACTIVITIES:

Interest income 3,139,316.62 4,570,363.25 14,668,194.67 15,653,879.79

Increase in short-term loans to related parties and related persons (91,000,000.00) - (833,120,000.00) (397,050,000.00)

Receipts from short-term loans to related parties and related persons 91,000,000.00 - 670,000,000.00 574,775,000.00

Decrease in short-term loans to others 100,071.00 1,308,739.00 77,364.00 1,049,684.00

Cash received from decreasing in registered share capital - - - 40,000,000.00

Payment of investments in subsidiaries - - (196,000,000.00) -

Temporary investments - fixed deposit with maturity of twelve months (73,899.54) (85,252.62) - -

Cash received for dividend income - - 365,409,115.25 82,964,394.40

Increase (decrease) in payable for purchase on assets 17,887,359.28 (2,148,615.07) 17,887,359.28 (2,148,615.07)

Purchase of fixed assets (85,721,413.81) (121,262,499.54) (74,408,790.60) (114,682,874.96)

Proceeds from disposal of fixed assets 465,203.60 1,267,431.34 112,130.37 117,009.37

Advance payment of license for operation right in spectrum of digital

television - (38,000,000.00) - -

Deposit for broadcasting system eauipment (74,995,500.00) - (74,995,500.00) -

Increase in intangible assets (298,758,992.24) (313,589,855.37) (41,726,648.83) (50,123,561.04)

Net Cash Used in Investing Activities (437,957,855.09) (467,939,689.01) (152,096,775.86) 150,554,916.49

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of interest expenses (13,523,322.94) (17,452,200.86) (6,630,070.84) (3,448,289.73)

Receipt of short-term loans from financial institutions 755,000,000.00 25,000,000.00 755,000,000.00 25,000,000.00

Repayment of short-term loans from financial institutions (755,000,000.00) (111,000,000.00) (755,000,000.00) (75,000,000.00)

Receipts of long-term loans from financial institutions 65,000,000.00 205,915,000.00 - -

Repayment of long-term loans from financial institutions (351,915,000.00) (240,000,000.00) - -

Repayment of liability under financial lease (5,139,979.02) (4,786,804.05) (5,139,979.02) (4,786,804.05)

Increase in short-term loans from related parties - 8,000,000.00 719,000,000.00 50,500,000.00

Decrease in short-term loans from related parties (8,000,000.00) - (518,000,000.00) (89,550,000.00)

Repayment to payable for cost of license for operation right in spectrum (340,500,000.00) - - -

Dividend paid (310,964,854.80) (271,535,169.19) (310,954,755.50) (271,526,931.60)

Increase in share capital 100,049,474.20 118,006,507.20 100,049,474.20 118,006,507.20

Advance receipts for share subscription - 30,061,062.80 - 30,061,062.80

Net Cash Used in Financing Activities (864,993,682.56) (257,791,604.10) (21,675,331.16) (220,744,455.38)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (190,611,525.04) 258,549,559.29 (253,070,950.99) 203,154,625.81

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEARS 572,146,840.32 313,597,281.03 405,983,565.40 202,828,939.59

CASH AND CASH EQUIVALENTS AT THE ENDING OF THE YEARS 381,535,315.28 572,146,840.32 152,912,614.41 405,983,565.40

ADDITION INFORMATION

1. Purchases of vehicle for under lease agreement. - 1,414,659.26 - 1,414,659.26

2. Cost of license for peration right in spectrum payable 2,227,000,000.00 - - -


0122


NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2014

1. GENERAL INFORMATION

RS Public Company Limited, the “Company” is a company registered in Thailand and listed on the Stock Exchange of

Thailand on May 22, 2003. The registered office of the Company is at 419/1 Soi Ladphao 15, Ladphao Road, Jompon,

Jatujak, and Bangkok, Thailand.

The principal activities of the Company and subsidiaries (together referred to as the “Group”) are entertainment businesses

including media, music distribution, event business and other businesses supporting the Group’s core business.

2. BASIS OF CONSOLIDATION

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries, in which

the Company has authority to control or holds more than 50% of the subsidiaries shares.

Subsidiaries

Subsidiaries are those entities controlled by the Company. Control exists when the Company has the power, directly

and indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The

financial statements of subsidiaries are included in the consolidated financial statements from the date that control

commences until the date that control ceases.

The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted

by the Group. Losses applicable to non-controlling interests in a subsidiary are allocated to non- controlling interests

even if doing so causes the non-controlling interests to have a deficit balance.

Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating

policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power

of another entity.

Investments in associates are accounted for in the consolidated financial statements using the equity method

(equity-accounted investees) and are recognised initially at cost. The cost of the investment includes transaction costs.

The consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of

equity accounted investees from the date that significant influence commences until the date that significant influence

ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s carrying

amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the

Group has an obligation or has made payments on behalf of the investee.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions,

are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with

associates and jointly-controlled entities are eliminated against the investment to the extent of the Group’s interest in

the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is

no evidence of impairment.

01230122

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as follows:

Company Name Nature of Business

Rate of Shareholding

2014

(%)

2013

(%)

Operating subsidiaries

1 Starz (Thailand) Co., Ltd.

(Formerly: K.master Co., Ltd.)

Service provider and organizer 100 100

2 Yaak Co., Ltd. Television production 100 100

3 Thai Copyright Collection Co., Ltd. Copyright collection 100 100

4 Coolism Co., Ltd. Radio production and organizer 100 100

5 Poema Co., Ltd. Organizer 100 100

6 RS International Broadcasting and Sport

Management Co., Ltd.

Service provider and organizer for

sport activities

83 83

7 Aladdin House Co., Ltd. Organizer 100 100

8 Blu Fairy Co., Ltd. Organizer 100 100

9 Magique (Thailand) Co., Ltd.

(Formerly: Nagasia Co., Ltd.)

Organizer 100 100

10 D-Media and Production Co., Ltd. Organizer 100 100

11 R.S. Television Co., Ltd. Television production 100 100

Non-operating subsidiaries

12 RS In-Store Media Co., Ltd. 65 65

13 S-One Sport Co., Ltd. 100 100

14 Avant Co., Ltd. 100 100

15 R Siam Co., Ltd. 100 100

16 R.S. Sportmaster Co., Ltd 76 76

17 RS Film and Distribution Co., Ltd. 100 100

18 Bangkok Organizer Co., Ltd. 100 100

Liquidated

19 Lazerface Records Co., Ltd. - -

Associated company

20 Idea Power Co., Ltd. Organizer 25 25

The significant accounting transaction between the Company and the subsidiaries were eliminated from the consolidated

financial statements.

0124

The Company changed in the composition of the subsidiary companies as follows:

1. The Extraordinary Shareholders’ Meeting No. 1/2014 of R.S. Television Co., Ltd. held on January 29, 2014 passed

the resolution to increase the share capital from Baht 4 million to Baht 200 million by issuing 1.96 million new shares

capital at the par value of Baht 100 per share in amount of Baht 196 million. Therefore the Company invested in whole

amount of share capital of this subsidiary company. The increase of share capital was registered with the Ministry

of Commerce on January 30, 2014.

2. The Extraordinary Shareholders’ Meeting No.1/2013 of Lazerface Records Co., Ltd. held on November 14, 2013

passed the resolution to liquidate this subsidiary company.

3. The Extraordinary Shareholder’s Meeting No.1/2014 of Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.)

held on October 10, 2014 passed the resolution to change of its name to Magique (Thailand) Co., Ltd. As registered

with the Ministry of Commerce on October 10, 2014.

4. The Extraordinary Shareholders’ Meeting No 1/2014 of Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) held

on October 21, 2014 passed the resolution to change of its name to Starz (Thailand) Co., Ltd. As registered with the

Ministry of Commerce, on November 3, 2014.

3. BASIS OF FINANACIAL STATEMENT PREPARATION

3.1 Basis of financial statements preparation

The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including

related interpretations and guidelines promulgated by the Federation of Accounting Professions (FAP); applicable

rules and regulations of the Thai Securities and Exchange Commission.

The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language.

These English language financial statements have been prepared from the Thai language statutory financial statements.

Thai Financial Reporting Standards (TFRS) new effective

Effective from January 1, 2014 the interim financial statements are prepared on new and revised TFRS issued by

FAP in year 2013 as follows :

TFRS Topic

Year

effective

TAS 1 (revised 2012) Presentation of financial statements 2014

TAS 7 (revised 2012) Statement of Cash Flows 2014

TAS 12 (revised 2012) Income Taxes 2014

TAS 17 (revised 2012) Leases 2014

TAS 18 (revised 2012) Revenue Recognition 2014

TAS 19 (revised 2012) Employee Benefits 2014

TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rates 2014

TAS 24 (revised 2012) Related Party Disclosures 2014

TAS 28 (revised 2012) Investments in Associates 2014

TAS 31 (revised 2012) Interests in Joint Ventures 2014

TAS 34 (revised 2012) Interim Financial Reports 2014

01250124

TFRS Topic

Year

effective

TAS 36 (revised 2012) Impairment of Assets 2014

TAS 38 (revised 2012) Intangible Assets 2014

TAS 2 (revised 2012) Share-based Payment 2014

TAS 3 (revised 2012) Business Combinations 2014

TAS 5 (revised 2012) Non-current Assets held for Sale and Discontinued

Operations

2014

TAS 8 (revised 2012) Operating Segments 2014

TFRIC 1 Changes in Existing Decommissioning, Restoration and

Similar Liabilities

2014

TFRIC 4 Determining whether an Arrangement contains a Lease 2014

TFRIC 5 Rights to Interests arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds

2014

TFRIC 7 Applying the Restatement Approach under TAS 29

Financial Reporting in Hyperinflationary Economies

2014

TFRIC 10 Interim Financial Reporting and Impairment 2014

TFRIC 12 Service Concession Arrangements 2014

TFRIC 13 Customer Loyalty Programmes 2014

TFRIC 17 Distributions of Non-cash Assets to Owners 2014

TFRIC 18 Transfers of Assets from Customers 2014

TIC15 Operating Leases-Incentives 2014

TIC27 Evaluating the Substance of Transactions Involving the

Legal Form of a Lease

2014

TIC29 Service Concession Arrangements – Disclosure 2014

TIC32 Intangible Assets-Web Site Costs 2014

The adoption of these new and revised TFRS has result no material effect on the financial statements.

Thai Financial Reporting Standards (TFRS) not yet adopted

In addition to the above new and revised TFRS, the FAP has issued a number of other new and revised TFRS which

are effective for annual financial periods beginning on or after January 1, 2015 and have not been adopted in the

preparation of these financial statements. Those new and revised TFRS that may be relevant to the Company’s

operations, which become effective for annual financial periods beginning on or after January 1 in the year indicated,

are set out below. The Company does not plan to adopt these TFRS early.

0126

TAS Topic

Year

effective

TFRS 3 (revised 2014) Business Combinations 2015

TFRS 4 Insurance Contracts 2016

TFRS 8 (revised 2014) Operating Segments 2015

TFRS 10 Consolidated Financial Statements 2015

TFRS 11 Joint Arrangements 2015

TFRS 12 Disclosure of Interests in Other Entities 2015

TFRS 13 Fair Value Measurement 2015

TAS 1 (revised 2014) Presentation of Financial Statements 2015

TAS 16 (revised 2014) Property, Plant and Equipment 2015

TAS 18 (revised 2014) Revenue 2015

TAS 19 (revised 2014) Employee Benefits 2015

TAS 20 (revised 2014) Accounting for Government Grants and Disclosure of

Government Assistance

2015

TAS 21 (revised 2014) The Effects of Changes in Foreign Exchange Rates 2015

TAS 27 (revised 2014) Separate Financial Statements 2015

TAS 28 (revised 2014) Investments in Associates and Joint Ventures 2015

TAS 29 (revised 2014) Financial Reporting in Hyperinflationary Economies 2015

TFRIC 5(revised 2014) Rights to Interests arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds

2015

The Group company has made a preliminary assessment of the potential initial impact on the consolidated and separate

financial statements of these new and revised TFRS and expects that there will be no material impact on the financial

statements in the period of initial application.

3.2 Basis of measurement

The financial statements have been prepared on the historical cost.

3.3 Presentation currency

The financial statements are prepared and presented in Thai Baht. All financial information presented in Thai Baht

has been rounded to the nearest thousand or million unless otherwise stated.

3.4 Use of estimates and judgements

The preparation of financial statements in conformity with TFRS requires management to make judgments, estimates

and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and

expenses. Actual results may differ from estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which estimates are revised and in any future periods affected.

01270126

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that

have the most significant effect on the amount recognized in the financial statements is included in the following note:

Note 16 Current and deferred taxation

Note 20 Measurement of defined benefit obligations

4. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial

statements except in Note 3.

4.1 Foreign currencies

Transactions in foreign currencies are converted at the foreign exchange rates ruling at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the Statement of financial position date are

converted to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising upon

conversion are recognised in the Statement of comprehensive income.

Non-monetary assets and liabilities measured at cost in foreign currencies are converted to Thai Baht using the

foreign exchange rates ruling at the dates of the transactions.

4.2 Cash and cash equivalents

Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid

short-term investment. Bank overdrafts that are repayable on demand are a component of financing activities for the

purpose of the statement of cash flows.

4.3 Trade and other accounts receivable

Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts.

The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations

of customer payments. Bad debts are written off when incurred.

4.4 Inventories and work in process

Inventories are stated at the lower of cost or net realisable value.

The finished goods including cassette tapes, CDs, VCDs, DVDs. raw materials and others are stated at first-in, first-

out method.

The finished goods and work in process of films, drama series, tele-movies and others are stated at cost which

consists of direct production cost and other production expenses.

Other inventories are valued at first-in, first-out method.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to

complete and to make the sale.

The Company set up allowance for damaged goods and obsolete stock.

0128

4.5 Investments

Investments in associates and subsidiaries

Investments in subsidiaries in the separate financial statements of the Company are accounted for using the cost

method less allowance for impairment (if any). Investments in associates in the consolidated financial statements

are accounted for using the equity method.

Other long-term investment

Investments in non-marketable equity securities, which the Company classifies as other long –term investments, are

stated at cost method less allowance for impairment (if any).

4.6 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and losses on decline in value.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed

assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets

to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site

on which they are located and capitalised borrowing costs. Purchased software that is integral to the functionality

of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate

items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds

from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income

in profit or loss.

Leased assets

Leases in terms of which the Company substantially assumes all the risk and rewards of ownership are classified

as finance leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of

its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated

depreciation and losses on decline in value. Lease payments are apportioned between the finance charges and

reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are charged directly to the statement of income.

Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the

item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost

can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day

servicing of property, plant and equipment are recognised in profit or loss as incurred.

Depreciation

Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted

for cost, less its residual value.

Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each component

of an item of property, plant and equipment as follows:

01290128

YearsLand improvement 8 years 7 months as land lease agreement termBuilding and construction 20 as land lease agreement termMachines and equipment 5 – 10Furniture and office equipment 5 – 10Vehicles 5

4.7 Intangible assets

Intangible assets with finite lives are amortised on a systematic basis over the useful economic useful life and tested

for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and

the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation

expense is charged to the Statement of comprehensive income.

A summary of the intangible assets with finite useful lives is as follows:

License for operation right in spectrum of digital television has recognized assets and liabilities at an amount equal

to payment of license as specified in the agreement and amortized expenses by the straight-line method.

Copyrights of certain show are amortized by proportionate of revenue generated within granted period.

Software are amortized on the basis of estimated useful lives of 10 years.

Others copyrights are amortised on a straight-line basis over the term of the agreement.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually either individually

or at the cash generating unit level. The assessment of indefinite life is reviewed annually.

Intangible asset with indefinite useful lives is the Copyright of musical master tape, Copyright of drama, Copyright

of films.

4.8 Impairment

The carrying amounts of the Company’s assets are reviewed at each reporting date to determine whether there

is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For

intangible assets that have indefinite useful lives or are not yet available for use, the recoverable amount is estimated

each year at the same times.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable

amount. The impairment loss is recognised in profit or loss unless it reverses a previous revaluation credited to equity,

in which case it is charged to equity.

Calculation of recoverable amount

The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less costs to

sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable

amount is determined for the cash-generating unit to which the asset belongs.

Reversals of impairment

Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting

date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has

0130

been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to

the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,

net of depreciation or amortisation, if no impairment loss had been recognised.

4.9 Trade and other accounts payable

Trade and other accounts payable are stated at cost.

4.10 Employee benefits

Post-employment benefit plan other than a defined contribution plan. The Company’s obligation in respect of post

employment benefits under defined benefit plans recognized in the financial statements based on calculations by the

independent actuary using the projected unit credit method estimating the amount of future benefit that employees

have earned in return for their service in the current and prior periods; that benefit is discounted to determine its

present value.

The Company recognises all actuarial gains and losses arising from defined benefit plans in other comprehensive

income and all expenses related to defined benefit plans in profit or loss.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related

service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus if the Company has a

present legal or constructive obligation to pay this amount as a result of past service provided by the employee,

and the obligation can be estimated reliably.

4.11 Provisions

A provision is recognised if, as a result of a past event, the Group/Company has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to

settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that

reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding

of the discount is recognised as finance cost.

Provision for goods returns

Provision for goods returns is estimated with reference to past experience of actual goods returned and calculated

based on the proportion of sales.

4.12 Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and

share options are recognised as a deduction from equity, net of any tax effects.

Treasury share

Treasury shares are recognised initially at cost and presented as a deduction from equity. An equal amount is

appropriated from retained earnings and taken to a reserve for treasury shares within equity. When treasury shares

are sold, the amount received is recognised as an increase in equity by crediting the cost of the treasury shares

sold, calculated using the weighted average method, to the treasury shares account and transferring the equivalent

01310130

amount to the cost of shares sold back from reserve for treasury shares to retained earnings. Surpluses on the sale

of treasury shares are taken directly to a separate category within equity (“Surplus on treasury shares”). Net deficits

on sale or cancellation of treasury shares are debited to retained earnings after setting off against any remaining

balance of surplus on treasury shares and the reserve for treasury shares are credited at the equivalent amount to

the cost of shared sold back to retained earnings.

4.13 Revenue Recognition

Revenue exclude value added taxes or other sales taxes and is arrived at after deduction of trade discounts.

Revenue from sales is recognised in the Statement of comprehensive income when the significant risks and rewards of

ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement

with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs

or the probable return of goods. Revenue from service is recognised when service has been provided.

1. Revenue from media

Revenue from sales of advertising, being the revenue from the sales of advertising media, i.e., the media of

TV, radio, modern trade, publishing and others, is recognized at invoice value less discounts when service

has been provided.

Revenue from publishing distribution is recognized at invoice value once delivered, after deduction of goods

returned and discounts.

Revenue from production of drama, TV programme, advertising film and other productions is recognized upon

delivery of completed work or recognized based on the proportion of completed service, whichever is the case.

Revenue from production of market activities is recognized upon delivery of completed work or recognized

based on the proportion of completed service, whichever is the case.

Television station sublease income is recognised over the period of the sublease.

2. Revenue from music distribution

Revenue from music distribution sales represents the revenue from sales and services, revenue from copyright,

revenue from commercial use or other benefit of music copyright and revenue from digital downloads.

Revenue from copyright is recognized once the copyright has been delivered.

Revenue from commercial use or other benefit of music copyright is recognized on a straight-line basis over

the agreement period.

Revenue from digital downloads are recognized once it has been delivered or the download service has

been provided.

3. Revenue from event business

Revenue from event business represents the revenue from ticket distribution, revenue from sales of advertising

and sponsorship, revenue from production and revenue from artist.

Revenue from ticket distribution is recognized when the concert has been provided.

Revenue from sales of advertising and sponsorship is recognized at invoice value less discounts when the

service has been provided.

0132

Revenue from production is recognized upon delivery of completed work or recognized based on the proportion

of completed service, whichever is the case.

Revenue from artist is recognized when the service has been provided.

4. Revenue from films

Revenue from films represents the revenue from box-office sharing between cinema’s owner, copyright and

sales of sponsorship.

Revenue from box-office sharing between cinema’s owner and Group of Companies is recognized when the

film has been exhibited.

Revenue from film copyright is recognized when the film have been exhibited.

Revenue from sales of other film copyright is recognized based on the agreement and/or the rights attaching

to the said film.

Revenue from sales of sponsorship is recognized at invoice value less discounts when service has been

provided.

5. Interest and dividend income

Interest income is recognized in the Statement of comprehensive income as it accrues. Dividend income is

recognized in the Statement of comprehensive income on the date the Group’s right to receive payments is

established.

4.14 Expenses

Expenses are recognized on an accrual basis.

4.15 Finance costs

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, dividends on preference shares classified as liabilities, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

4.16 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group/Company determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Company the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group/Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of

01330132

their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s/Company’s incremental borrowing rate.

4.17 Income tax

Income tax expense for the year comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and differences relating to investments in subsidiaries and jointly-controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

In determining the amount of current and deferred tax, the Group/Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group/Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group/Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.

4.18 Earnings per Share

The Group/Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

0134

5. TRANSACTIONS WITH RELATED PARTIES

Related parties are those parties linked to the Group and the Company as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price

exists, at contractually agreed prices.

Significant related parties transactions can be summarized as follows:

Related parties Type of business Type of relation

Chetchotsak Co., Ltd Rental service Common shareholder and directors

Idea Power Co., Ltd. Organizer Indirect shareholding and common directors of

subsidiaries

SS2C Co., Ltd. Rental service Common shareholder and directors

Key management personnel - Persons having authority and responsibility for planning,

directing and controlling the activities of the entity, directly

or indirectly, including any director (whether executive

or otherwise) of the Group company

Basis of pricing for intercompany revenues and expenses

1. Revenue from sales is determined per unit on a cost basis.

2. Revenue from copyright is determined either by per unit on historical cost or by a proportion of copyright usage to

revenue collection.

3. Revenue from production is determined from original cost plus operating margin based on normal business operations.

4. Revenue from concert and marketing activities is calculated from cost plus operating margin based on normal

business operations.

5. Revenue from advertising is determined per unit by referring to the market price.

6. Radio and television stations lease income is determined on a cost basis and determined from original cost plus

operating margin based on normal business operations.

7. Services income is determined on a cost of service basis by referring to the market price.

8. Revenue from management services is charged on the basis of agreed contracts which based on cost of service.

9. Interest income derived from related parties is based on the borrowing cost or at market rate of approximately 4.00

per annum.

10. Rental and common service fee’s unit price are comparable to the market price survey of rental and common service

fee.

Significant balances at each Statement of financial position date and transactions for years ended December 31, 2014

and 2013, with related parties were as follows:

01350134

Million Baht

Consolidated Separate

December

31, 2014

December

31, 2013

December

31, 2014

December

31, 2013

Trade accounts receivable

Subsidiaries company

Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) - - 80.17 81.95

Thai Copyright Collection Co., Ltd. - - 0.01 2.55

Yaak Co., Ltd. - - 5.78 24.26

Coolism Co., Ltd. - - 1.56 2.63

RS In-Store Media Co., Ltd. - - - 0.63

RS International Broadcasting and Sport Management Co., Ltd. - - 0.12 -

Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) - -

0.38 -

D-Media and Production Co., Ltd. - - - 0.08

R.S. Television Co., Ltd. - - 168.47 -

Associated company

Idea Power Co., Ltd. - 19.73 - -

Total - trade accounts receivable - 19.73 256.49 112.10

Loans to


Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) - - - 99.00

Yaak Co., Ltd. - - 20.00 45.00

S-One Sport Co., Ltd. - - 20.36 19.94

Poema Co., Ltd. - - - 5.00

Blu Fairy Co., Ltd. - - 1.00 -

R.S. Sportmaster Co., Ltd. - - 2.34 2.34

R.S. Television Co., Ltd. - - 328.70 38.00

Total - - 372.40 209.28

Less Allowance for doubtful account - - (42.70) (43.29)

Loans to related parties - net - - 329.70 165.99

0136

Million Baht


December

31, 2014

December

31, 2013

December

31, 2014

December

31, 2013

Movement of loans to related companies

Beginning balance - - 209.28 387.00

Increase during for the years 91.00 - 833.12 397.06

Paid during for the years (91.00) - (670.00) (574.78)

Ending balance - - 372.40 209.28

Accrued interest receivable


Starz (Thailand) Co., Ltd.

(Formerly: K.master Co., Ltd.) - - - 0.36

Yaak Co., Ltd. - - 1.24 1.76

S-One Sport Co., Ltd. - - 1.68 0.87

Poema Co., Ltd. - - - 0.02

Blu Fairy Co., Ltd. - - 0.01 -


R.S. Television Co., Ltd. - - 2.11 0.29

Total - accrued interest receivable - - 6.47 4.63

Less Allowance for doubtful debt - - (3.56) -

Accrued interest receivable - Net - - 2.91 4.63

Advance


Magique (Thailand) Co., Ltd.

(Formerly: Nagasia Co., Ltd.) - - - 0.01

Avant Co., Ltd. - - - 0.01

R Siam Co., Ltd. - - - 0.01


RS Film and Distribution Co., Ltd. - - 0.24 0.22

R.S. Television Co., Ltd. - - - 0.01

Total - - 0.37 0.38

01370136

Million Baht


December

31, 2014

December

31, 2013

December

31, 2014

December

31, 2013

Accrued income



(Formerly: K.master Co., Ltd.) - - 2.29 3.73

Coolism Co., Ltd. - - 1.10 0.88


Total - accrued income - - 18.77 4.61

Declared dividend

Coolism Co., Ltd. - - 136.50 94.00

Trade accounts payable and other accounts

payable




Thai Copyright Collection Co., Ltd. - - 0.07 -

Yaak Co., Ltd. - - 0.80 0.70

Coolism Co., Ltd. - - 1.93 2.21


Avant Co., Ltd. - - 0.01 -


Associated company


Related parties

Chetchotsak Co., Ltd. 2.01 1.64 1.61 1.34

Total 2.01 1.66 56.64 10.33

0138

Million Baht


December

31, 2014

December

31, 2013

December

31, 2014

December

31, 2013

Short - term loans from


Thai Copyright Collection Co., Ltd. - - - 12.00

Coolism Co., Ltd. - - 90.00 5.00

RS In-Store Media Co., Ltd. - - 7.00 7.00

RS International Broadcasting and Sport

Management Co., Ltd. - - 139.00 -

Aladdin House Co., Ltd. - - 6.00 7.00


(Formerly: Nagasia Co., Ltd.) - - - 3.00

Blu Fairy Co., Ltd. - - - 4.00

Avant Co., Ltd. - - 0.75 0.75

R Siam Co., Ltd. - - 1.00 1.00

R.S.Television Co., Ltd. - - - 3.00

Bangkok Organizer Co., Ltd. - - 2.30 2.30

Associated company


Total - 8.00 246.05 45.05

Movement of loans from

Beginning balance 8.00 - 45.05 84.10

Increase during for the years - 8.00 719.00 50.50

Paid during for the years (8.00) - (518.00) (89.55)

Ending balance - 8.00 246.05 45.05

Unearned revenues





Coolism Co., Ltd. - - 0.02 -



Total - - 35.40 26.59

01390138

Million Baht


December

31, 2014

December

31, 2013

December

31, 2014

December

31, 2013

Accrued interest expense

Associated company


Total - 0.11 - -

Accrued expenses



(Formerly: K.master Co., Ltd.) - - 1.94 -

Thai Copyright Collection Co., Ltd. - - - 0.08


Related parties

Chetchotsak Co., Ltd. 0.09 - - -

SS2C Co., Ltd. 0.05 - 0.05 -

Total 0.14 - 9.16 0.08

The Company’s financial statements include significant transactions between the Company and subsidiaries for each

of the years ended December 31, 2014 and 2013 as follows:

Million Baht


2014 2013 2014 2013

Revenue from media




Yaak Co., Ltd. - - - 3.16

Coolism Co., Ltd. - - 0.07 -




(Formerly: Nagasia Co., Ltd.) - - 16.97 -

D-Media and Production Co.,Ltd. - - - 0.07

R.S.Television Co., Ltd. - - 111.99 -

Total revenue from media - - 259.71 79.25

0140

Million Baht


2014 2013 2014 2013

Revenue from music distribution





Lazerface Records Co., Ltd. - - - 0.05

Aladdin House Co., Ltd. - - - 0.03

Total revenue form music distribution - - 56.44 64.76

Revenue from event business




Coolism Co., Ltd. - - - 0.88

Yaak Co., Ltd. - - - 0.48



(Formerly: Nagasia Co., Ltd.) - - 0.35 0.07

Blu Fairy Co., Ltd. - - 0.03 0.02

R.S.Television Co., Ltd. - - 2.57 -

Associated company

Idea Power Co., Ltd. - 32.44 - 14.00

Total revenue from event business - 32.44 26.94 30.48

Other income

Revenue from management service





Coolism Co., Ltd. - - 17.34 14.65




Total - - 73.16 52.72

01410140

Million Baht


2014 2013 2014 2013

ดอกเบี้ยรับ

บริษัทย่อย



Yaak Co., Ltd. - - 1.10 0.97

S-One Sport Co., Ltd. - - 0.81 0.80

Coolism Co., Ltd. - - - 0.24

Lazerface Records Co., Ltd. - - - 0.08

Poema Co., Ltd. - - 0.72 0.02



Aladdin House Co., Ltd. - - - 0.89

Blu Fairy Co., Ltd - - 0.01 1.30


D-Media and Production Co., Ltd. - - 0.05

R.S.Television Co., Ltd. - - 9.81 0.29

Associated company

Idea Power Co., Ltd. 0.03 - - -

Total 0.03 - 15.23 11.75

Other income





Coolism Co., Ltd. - - 0.15 0.21


RS In ternational Broadcasting and Sport


Blu Fairy Co., Ltd - - 0.01 -


(Formerly: Nagasia Co., Ltd.) - - 0.22 -

R.S.Television Co., Ltd. - - 3.18

Total - - 23.26 2.01

Total other income - - 111.65 66.48

0142

Million Baht


2014 2013 2014 2013

Cost of sales and service




Yaak Co., Ltd. - - 4.50 33.38

Coolism Co., Ltd. - - 7.36 6.57


Bangkok Organizer Co., Ltd. - - 32.34 -

Related parties


Total cost of sales and service 26.38 30.42 161.17 113.38

Selling and administration expenses




Related parties


SS2C Co., Ltd. 8.76 8.51 8.76 8.51

Group of Person - Chetchotsak 0.24 0.22 0.24 0.22

Total 50.28 44.70 41.73 35.91

Finance costs - interest payable



(Formerly: K.master Co., Ltd.) - - 0.25 -


Coolism Co., Ltd. - - 0.33 0.14




Poema Co., Ltd. - - - 0.65



(Formerly: Nagasia Co., Ltd.) - - 0.09 0.11

Blu Fairy Co., Ltd - - 0.04 0.01

Avant Co., Ltd. - - 0.01 0.02

D-Media and Production Co.,Ltd. - - - 0.03

R Siam Co., Ltd. - - 0.01 0.03

Bangkok Organizer Co., Ltd. - - 0.03 0.05

R.S. Television Co., Ltd. - - - 0.07

01430142

Million Baht


2014 2013 2014 2013

Associated company

Idea Power Co., Ltd. 0.57 0.12 - -

Total finance costs - interest payable 0.57 0.12 1.94 1.58

Key management personnel compensation

Short-term employee benefit 172.47 118.93 161.94 107.77

Long-term employee benefit 3.66 3.39 3.49 3.21

Total key management personnel compensation 176.13 122.32 165.43 110.98

6. CASH AND CASH EQUIVALENTS

Baht


2014 2013 2014 2013

Cash on hand 6,215,577.35 6,414,432.38 4,818,403.50 5,267,752.00

Deposit in bank 375,319,737.93 315,732,407.94 148,094,210.91 150,715,813.40

Highly liquid shot-term in vestments - 250,000,000.00 - 250,000,000.00

Total 381,535,315.28 572,146,840.32 152,912,614.41 405,983,565.40

7. ลูกหนี้การค้า – สุทธิ

As at December 31, 2014, and 2013, accounts receivable was classified by aging as follows:

Baht


2557 2013 2014 2013

Accounts receivable - related parties

Current - 19,729,730.00 108,630,637.89 38,406,892.23

Overdue :

Less than 3 months - - 60,914,525.99 45,581,611.32

3 - 6 months - - 79,136,932.50 13,809,280.33

6 - 12 months - - 3,247,838.65 5,270,094.42

Over 12 months - - 4,569,180.00 9,032,564.86

Total - 19,729,730.00 256,499,115.03 112,100,443.16

Less Allowance for doubtful accounts - - - -

Total accounts receivable - related

parties - net - 19,729,730.00 256,499,115.03 112,100,443.16

0144

Baht


2557 2013 2014 2013

Accounts receivable - others – net

Current 407,971,310.24 487,715,994.53 131,725,538.36 207,582,929.10

Overdue :

Less than 3 months 401,877,831.03 240,906,394.90 97,239,969.09 156,625,652.87

3 - 6 months 49,164,628.03 8,838,206.40 27,701,798.28 5,049,290.56

6 - 12 months 6,238,951.03 18,456,482.85 5,564,851.03 18,120,759.65

มากกว่า 12 เดือนขึ้นไป 34,632,635.15 36,223,612.60 31,919,129.39 33,028,973.85

Total 899,885,355.48 792,140,691.28 294,151,286.15 420,407,606.03

Less Allowance for doubtful accounts (36,742,550.38) (35,971,609.05) (33,503,538.95) (32,609,224.14)

Total accounts receivable - others – net 863,142,805.10 756,169,082.23 260,647,747.20 387,798,381.89

8. INVENTORIES – NET

As at December 31, 2014 and 2013, inventories were as follows:-

Baht


2557 2013 2014 2013

Finished goods: Films and Music ,

Tapes, CDs,VCDs,DVDs 10,436,364.07 21,445,922.31 10,425,501.85 20,228,272.14

Work in process: movie, drama and others

Music 4,326,311.25 5,338,299.09 1,429,282.55 2,747,381.00

TV Program 898,484.04 513,540.38 538,650.00 513,540.38

Concert and marketing activities 127,754.75 13,490,295.52 47,000.00 1,416,794.49

Drama series 51,614,439.94 21,654,007.87 665,263.15 21,654,007.87

Telemovie 1,944,710.23 1,944,710.23 - -

Film 24,330.00 22,000.00 2,330.00 -

Production house 2,941,730.16 3,484,791.73 1,474,240.18 1,433,081.88

Total work in process 61,877,760.37 46,447,644.82 4,156,765.88 27,764,805.62

Raw material 1,062,660.76 1,993,017.56 1,062,660.76 1,936,023.17

Satellite television receivers 96,370,960.80 12,592,693.72 - -

Other 3,272,575.60 1,487,897.25 - -

รวม สินค้าคงเหลือ 173,020,321.60 83,967,175.66 15,644,928.49 49,929,100.93

Less Allowance for devaluation of

inventories (13,164,479.24) (20,655,035.21) (7,966,654.32) (14,027,890.28)

Inventories - net 159,855,842.36 63,312,140.45 7,678,274.17 35,901,210.65

01450144

9. OTHER CURRENT ASSETS

As at December 31, 2014 and 2013, other current assets were as follows:-

Baht


2014 2013 2014 2013

Undue input Value Added Tax 29,858,152.43 13,939,207.24 5,377,582.11 2,747,571.53

Prepaid expense 98,015,669.13 53,366,341.22 36,941,683.95 34,672,242.42

Advance receivable 3,303,229.89 4,667,293.17 2,421,159.00 1,579,094.71

Other Account receivable 385,419.44 683,777.17 250,430.30 678,730.46

Other 7,359,547.43 14,926,328.82 2,549,455.01 5,789,963.70

Total 138,922,018.32 87,582,947.62 47,540,310.37 45,467,602.82

0146

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01470146

11. INVESTMENT IN ASSOCIATED COMPANIES

Baht PercentPaid - up capital Percentage of holding

Name Nature of business 2014 2013 2014 2013Idea Power Co., Ltd. Organizer 20,000,000.00 20,000,000.00 25.00 25.00

บาท

งบการเงินรวม

เงินลงทุนตามวิธีส่วนได้เสีย เงินลงทุนตามวิธีราคาทุน

2557 2556 2557 2556

Idea Power Co., Ltd. 5,406,090.08 5,495,813.48 6,303,621.00 6,303,621.00

Less Impairment of investment - - (897,530.92) (807,807.52)

Total investments in associated

companies 5,406,090.08 5,495,813.48 5,406,090.08 5,495,813.48

12. PROPERTY, PLANT AND EQUIPMENT - NET

Movements of property, plant and equipment during year ended December 31, 2014 and 2013, are summarized below:

(Unit : Baht)

Consolidated

Building

and building

improvements

Machines

and operating

equipment

Furniture and

office equipment vehicles

Equipment under

installation Total

At Cost

Balance as at January 1,2013 42,170,428.48 265,583,446.00 297,210,207.86 37,274,383.76 16,788,457.89 659,026,923.99

Acquisitions 148,960.00 41,368,642.46 54,395,527.70 1,414,659.26 25,349,369.38 122,677,158.80

Transfers in (out) 63,840.00 11,111,150.00 29,989,912.52 - (41,164,902.52) -

Disposal (5,774,901.50) (24,913,500.80) (17,934,063.64) (242,872.92) - (48,865,338.86

Balance as at December

31, 2013 36,608,326.98 293,149,737.66 363,661,584.44 38,446,170.10 972,924.75 732,838,743.93

Acquisitions 3,754,139.72 16,498,917.92

42,632,967.15

5,041,261.02 17,867,828.00 85,795,113.81

Transfers in (out) 686,925.00 5,141,800.00 6,880,000.00 - (12,782,425.00) (73,700.00)

Disposal - (4,802,508.02) (8,866,573.80) - - (13,669,081.82


31, 2014 41,049,391.70 309,987,947.56 404,307,977.79 43,487,431.12 6,058,327.75 804,891,075.92

Accumulated depreciation

As at January 1, 2013 32,370,747.89 174,901,264.94 178,875,161.22 12,475,656.03 - 398,622,830.08

Depreciation for the year 6,203,400.95 24,492,705.21 35,900,850.16 4,263,503.16 - 4,263,503.16

Transfers in (out) - - - - - -

Disposal (5,774,700.50) (23,984,585.40) (17,080,804.02) (242,868.92) - (47,082,958.84

As at December 31, 2013 32,799,448.34 175,409,384.75 197,695,207.36 16,496,290.27 - 422,400,330.72


Transfers in (out) (1,091.73) - - - (1,091.73)

Disposal (4,749,311.52) (8,141,588.50) - - (12,890,900.02

As at December 31, 2014 37,538,011.80 200,395,443.72 232,656,094.79 21,066,468.31 - 491,656,018.62

Provision for impairment

of asset

As at January 1, 2013 - 884,243.35 - - - 884,243.35

Increase (Decrease) - (462,321.81) - - - (462,321.81

0148

(Unit : Baht)

Consolidated

Building

and building

improvements

Machines

and operating

equipment

Furniture and

office equipment vehicles

Equipment under

installation Total

As at December 31, 2013 - 421,921.54 - - - 421,921.54

Increase (Decrease) - (421,921.54) - - - (421,921.54

As at December 31, 2014 - - - - - -

Net book value

As at December 31, 2013 3,808,878.64 117,318,431.37 165,966,377.08 21,949,879.83 972,924.75 310,016,491.67

As at December 31, 2014 3,511,379.90 109,592,503.84 171,651,883.00 22,420,962.81 6,058,327.75 313,235,057.30

(Unit : Baht)

Separate

อาคารและส่วน

ปรับปรุงอาคาร

เครื่องจักรและ

อุปกรณ์

ในการด�าเนินการ

เครื่องตกแต่งและ

อุปกรณ์ส�านักงาน ยานพาหนะ

งานระหว่างก่อสร้าง

และอุปกรณ์ระหว่าง

ติดตั้ง รวม

At Cost

Balance as at January

1, 2013 20,238,824.56 72,033,473.36 276,770,836.43 34,017,594.99 16,788,457.89 419,849,187.23

Acquisitions 148,960.00 38,951,992.00 50,232,553.58 1,414,659.23 25,349,369.38 116,097,534.19

Transfers in (out) 63,840.00 11,111,150.00 29,989,912.52 - (41,164,902.52) -

Disposal - (46,300.00) (10,851,531.65) (2,959.81) - (10,900,791.46)


31, 2013 20,451,624.56 122,050,315.36 346,141,770.88 35,429,294.41 972,924.75 525,045,929.96

Acquisitions 3,154,139.72 12,492,367.80 40,890,464.92 3,990.00 17,867,828.16 74,408,790.60

Transfers in (out) 686,925.00 5,215,500.00 6,880,000.00 - (12,782,425.00) -

Disposal - (20,000.00) (3,875,309.54) - - (3,895,309.54)


31, 2014 24,292,689.28 139,738,183.16 390,036,926.26 35,433,284.41 6,058,327.91 595,559,411.02

Accumulated depreciation

As at January 1, 2013 11,647,770.27 22,734,322.56 140,273,598.20 9,218,869.26 - 183,874,560.29


Disposal - (42,002.17) (10,612,446.69) (2,957.81) - (10,657,406.67)

As at December 31, 2013 16,915,191.18 38,776,644.73 162,090,022.54 13,479,414.61 - 231,261,273.06


Disposal - (19,999.00) (3,351,134.91) - - (3,371,133.91)

As at December 31, 2014 21,295,184.71 62,598,272.49 198,745,126.44 17,743,677.54 - 300,382,261.18

Net book value

As at December 31, 2013 3,536,433.38 83,273,670.63 184,051,748.34 21,949,879.80 972,924.75 293,784,656.90

As at December 31, 2014 2,997,504.57 77,139,910.67 191,291,799.82 17,689,606.87 6,058,327.91 295,177,149.84

01490148

Depreciation for the year 2014 of the Group of companies are totaling Baht 82.15 million (in 2013: Baht 70.86 million).

The amount of Baht 49.07 million (in 2013: Baht 41.55 million) was included in cost of sales and service and the amount

of Baht 33.08 million (in 2013: Baht 29.31 million) was included in administrative expenses, in the consolidated financial

statements.

Depreciation for the year 2014 of the Company are totalling Baht 72.49 million (in 2012: Baht 58.04 million). The amount

of Baht 42.30 million (in 2013: Baht 31.98 million) was included in cost of sales and service and the amount of Baht

30.19 million (in 2013: Baht 26.06 million) was included in administrative expenses, in the Separate financial statements.

As at December 31, 2014 Group of companies’ property plant and equipment at cost of Baht 184.93 million, respectively,

have been fully depreciated but still in use (in 2013: Baht 217.17 million).

As at December 31, 2014, the Company’s property plant and equipment at cost of Baht 146.79 million, respectively,

have been fully depreciated but still in use (in 2013: Baht 174.04 million).

As at December 31, 2014, the book value of vehicles and equipment under financial lease agreements of the Group of

companies is Baht 17.68 million (in 2013: Baht 21.93 million), respectively, in the consolidated financial statements and

the Separate financial statements were assets under financial leases agreements.

13. DEPOSIT FOR BROADCASTING SYSTEM EQUIPMENT

On December 3, 2014, the Company entered into an agreement to purchase for broadcasting system equipments with

other local company in amount of Baht 250 million. The Company has paid to deposit 30% of agreement.

On February 18, 2015, such company has entered into the transfer of rights and obligations of the broadcasting system

equipments agreement with another local company under the same conditions and obligations. The Company also

obtained cashier cash guarantee on that date amount of Baht 10 million.

As at December 31, 2014, the Company has commitment for broadcasting system equipments amount of Baht 175 million.

14. LICENSE FOR OPERATION RIGHT IN SPECTRUM OF DIGITAL TELEVISION

Movement of license for operation right in spectrum of digital television during the years ended December 31, 2014

and 2013 are summarized below.

Thousand Baht

Consolidated

2557 2556

Cost 2,265,000,000.00 -

Accumulated amortization (103,183,333.31) -

Balance 2,161,816,666.69 -

On April 25, 2014, the subsidiary received license for operation right in spectrum of digital television of total bid amount

of Baht 2,265 million for 15 years obliged to payment in 5 years ending in 2019, the subsidiary recognized cost of license

on present value at date of received license.

0150

As at December 31, 2014, the outstanding payable for cost of license for operation right in spectrum were Baht 1,886.50

million the current portion amount of Baht 302.50 million was presented under current liabilities.

As at December 31, 2014, the subsidiary has committed to pay the payable for cost of license for operation right in

spectrum as follows:

Baht

Year Consolidated

1 302,500,000.00

2-5 1,584,000,000.00

1,886,500,000.00

15. INTANGIBLE ASSETS - NET

As at December 31, 2014 and 2013, intangible assets are as follow:

Baht


2014 2013 2014 2013

Cost

Beginning balance 1,527,839,878.39 1,214,250,023.02 638,304,115.78 588,180,554.74

Addition 298,758,992.24 313,589,855.37 41,726,648.83 50,123,561.04

Disposal / Transfer (1,213,055.17) - - -

Carry forward balance 1,825,385,815.46 1,527,839,878.39 680,030,764.61 638,304,115.78

Accumulated amortization

Beginning balance 496,730,305.85 289,349,180.89 201,215,551.76 186,861,132.05

Amortization for the periods 695,062,214.30 207,381,124.96 49,638,159.90 14,354,419.71

Disposal / Transfer (1,213,049.16) - - -

Carry forward balance 1,190,579,470.99 496,730,305.85 250,853,711.66 201,215,551.76

ยอดคงเหลอื 634,806,344.47 1,031,109,572.54 429,177,052.95 437,088,564.02

Less Allowance for impairment (330,479,692.80) (310,338,767.30) (303,232,900.46) (287,585,461.77)

Net book value 304,326,651.67 720,770,805.24 125,944,152.49 149,503,102.25

Baht


2014 2013 2014 2013

Copyright of music 70,480,267.75 78,794,093.75 70,480,307.75 78,830,106.99

Copyright of drama 51,376,972.54 37,855,711.93 9,849,116.82 37,855,704.89

Copyright of film 1,443,499.60 3,914,221.21 1,443,494.60 3,914,216.21

Other copyright 181,025,911.78 600,206,778.35 44,171,233.32 28,903,074.16

Total 304,326,651.67 720,770,805.24 125,944,152.49 149,503,102.25

01510150

16. DEFERRED TAX

Deferred income taxes are calculated in full on temporary differences under the liability method using a principal tax

rate of 20%.

As at December 31, 2014 and 2013, deferred tax consisted of:

Thousand Baht


2014 2013 2014 2013

Deferred tax assets

Account receivable 6,371,824.59 6,371,824.59 6,371,824.59 6,371,824.59

Intangible assets 34,584,086.76 26,469,102.00 25,831,526.23 26,469,102.00

Allowance for sale return 7,346,986.59 - 7,346,986.59 -

Loss carry forward 49,420,393.65 40,277,642.26 34,728,393.18 -

Total 97,723,291.59 73,118,568.85 74,278,730.59 32,840,926.59

Deferred tax liabilities

Intangible assets 6,102,159.69 30,874,254.44 - -

Net 91,621,131.90 42,244,314.41 74,278,730.59 32,840,926.59

The movement on the deferred income tax is as follows:

Thousand Baht


2014 2013 2014 2013

Deferred tax assets

Beginning 73,118,568.85 64,554,191.44 32,840,926.59 25,802,478.00

Income tax recognized in

statement of income 24,604,722.74 8,564,377.41 41,437,804.00 7,038,448.59

Ending 97,723,291.59 73,118,568.85 74,278,730.59 32,840,926.59

Deferred tax liabilities

Beginning (30,874,254.44) (21,133,763.81) - -

Income tax recognized in

statement of income 24,772,094.75 (9,740,490.63) - -

Ending (6,102,159.69) (30,874,254.44) - -

Revenue (expense) Income tax

recognized in statement of income

net 49,376,817.49 (1,176,113.22) 41,437,804.00 7,038,448.59

Deferred income tax assets and liabilities are offset when there is a legally enforceable right and the income taxes relate

to the same fiscal authority.

0152

Effective tax rate in respect of continuing operations for the year ended December 31, 2014 of the Group of companies

was 23 % (2013 : 18%) and of the Company was 14 % (2013 : 7%)

Baht


2014 2013 2014 2013

Income tax :

Income tax for the period 167,392,810.33 82,385,197.68 - 38,445,182.92

Deferred tax :

Relating to origination

and reversal of temporary

differences (49,376,817.49) 1,176,113.22 (41,437,804.00) (7,038,448.59)

Income tax in statements of

comprehensive income 118,015,992.84 83,561,310.90 (41,437,804.00) 31,406,734.33

Income tax recognized directly in equity

(Unit : Thousand Baht)

Consolidated

Rate

(%) 2557

Rate

(%) 2556

Profit before income tax expense 515,641 475,818

Income tax using the Thai corporation tax rate 20 103,128 20 95,164

Expenses not deductible for tax purposes net benefit of

tax losses recognised 14,939 2,786

Expenses deductible increases for tax purpose (296) (2,556)

Tax losses for which no deferred income tax asset was

recognised 685 2,736

Utilisation of previously unrecognised tax losses (440) (14,569)

Total 23 118,016 18 83,561

(Unit : Thousand Baht)

Separate

Rate

(%) 2014

Rate

(%) 2013

Profit before income tax expense 296,872 445,060

Income tax using the Thai corporation tax rate 20 59,374 20 89,012

Effect of income tax from reversal of provision for (loss) on

investment in subsidiaries - net (11,172) (24,035)

Income not subject to tax (81,582) (35,392)

Expenses not deductible for tax purposes (7,165) 1,352

Expenses (Income) deductible increases for tax purpose (893) 470

Total 14 (41,438) 7 31,407

01530152

Income tax reduction

Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the

three accounting periods 2012, 2013 and 2014; from 30% to 23% for the accounting period 2012 which begins on or

after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1

January 2013 and 2014, respectively.

It is understood that the Government will proceed to amend the law in order to maintain the corporate income tax rate

at not higher than 20% for the accounting period 2015 which begins on or after 1 January 2015 and onwards in order

to give full effect to the Cabinet resolution dated 11 October 2011 to increase Thailand’s tax competitiveness.

17. OTHER CURRENT LIABILITIES

As at December 31, 2014 and 2013, other current liabilities was as follows:

Baht


2014 2013 2014 2013

Allowance for sale return 36,734,932.94 74,467,448.77 36,734,932.94 74,294,221.77

Undue output Value Added Tax 82,914,182.55 47,143,754.80 34,880,479.03 26,591,290.37

Others 32,670,355.25 42,770,759.19 5,680,489.88 17,265,550.44

Total 152,319,470.74 164,381,962.76 77,295,901.85 118,151,062.58

18. LIABILITY UNDER FINANCIAL LEASE

As at December 31, 2014 and 2013, the Group had liability under financial lease as follows:

Baht


2014 2013 2014 2013

Liability under financial lease 12,758,803.63 17,898,782.65 12,758,803.63 17,898,782.65

Less Current portion of liability under

financial lease (7,655,314.73) (5,139,978.04) (7,655,314.73) (5,139,978.04)

Liability under financial lease - net 5,103,488.90 12,758,804.61 5,103,488.90 12,758,804.61

As at December 31, 2014, the Group has financial lease agreements for vehicles. These are payable monthly in the

amount of Baht 0.51 million in the consolidated financial statements and the Separate financial statements, (2013: Baht

0.51 million). The current portion of Baht 7.66 million (2013: Baht 5.14 million) were presented under current liabilities.

As at December 31, 2014, the group Company have committed to pay the lease under the financial lease agreements

as follows:

Baht

Year Consolidated/ Separate

1 8,261,731.36

2-5 5,340,540.24

13,602,271.60

0154

19. LOANS-LOAN FROM FINANCIAL INSTITUTIONS

As at December 31, 2014 and 2013, the Group had loans from financial institutions as follows:

Baht


2013 2013 2014 2013

Current portion of long-term loans - 286,915,000.00 - -

Long-term loans - - - -

Total long-term loans - 286,915,000.00 - -

As at December 31, 2014, the Group of companies have credit lines of loan facility from local bank amount of Baht 420

million. The Group of companies had repayment in full bearing the market interest rate. The load was guaranteed by

the Company.

20. EMPLOYEE BENEFIT OBLIGATIONS

An independent actuary carried out an evaluation of the Company’s obligations for employees’ long-term benefits using

the projected unit credit method. The Company has provided the provision for employees’ long-term benefits as at

December 31, 2014 and 2013 as follows:

Baht


2014 2013 2014 2013

Current portion of employee benefit obligations 4,406,669.00 11,010,934.00 4,406,669.00 11,010,934.00

Employee benefit obligations - net 60,944,814.91 38,756,284.08 52,300,564.79 32,499,061.36

Total 65,351,483.91 49,767,218.08 56,707,233.79 43,509,995.36

Movement in the present value of the defined benefit obligations :

Baht

Consolidated งบการเงินเฉพาะกิจการ

2014 2013 2014 2013

For the year ended December 31

Defined benefit obligations at January 1 49,767,218.08 32,536,899.12 43,509,995.36 28,457,589.32

Provision for employee

benefits-beginning 17,151,390.03 17,230,318.96 15,521,824.43 15,052,406.04

Benefits paid by the plan - - - -

Actuarial gains in other comprehensive

income (1,567,124.20) - (2,044,733.00) -

Decrease benefits from transfer

employee to subsidiary - - (279,853.00) -

Provision for employee benefits - ending 65,351,483.91 49,767,218.08 56,707,233.79 43,509,995.36

Present value of unfunded obligation as

at December 31, 65,351,483.91 49,767,218.08 56,707,233.79 43,509,995.36

01550154

Post-employee benefit expenses included in the statements of comprehensive income for the years ended December

31,2014 and 2013 were as follows:

Baht


2014 2013 2014 2013

Recognised in profit or loss :

- Current service cost 6,411,248.60 6,415,787.36 5,662,665.22 5,321,346.08

- Past service cost 8,591,009.77 8,705,066.60 7,930,865.21 7,864,998.96

- Interest cost 2,149,131.66 2,109,465.00 1,928,294.00 1,866,061.00

Total – recognized in profit or loss 17,151,390.03 17,230,318.96 15,521,824.43 15,052,406.04

Recongnised in other comprehensive income:

Actuarial gain in the year 1,567,124.20 - 2,044,733.00 -

Principal actuarial assumptions

Consolidated / Separate

2014 2013

For the year ended December 31, 2014 and 2013

Discount rate (%) 3.5 3.7

Estimation of future salary increase (%) 7.0 - 7.5 5 - 7

Retirement age (year old) 60 60

21. DIVIDEND RECEIVED FROM SUBSIDIARIES

Dividend

Per share

(Baht)

Total amount

(Millions Baht)

2014 2013 2014 2013

Coolism Co., Ltd.

First 33.25 20.80 8.31 5.20

Second 546.00 240.00 136.50 60.00

Third - 376.00 - 94.00


(Formerly: K.master Co., Ltd.) 116.00 - 232.00 -


(Formerly: Nagasia Co., Ltd.)

First 9.50 155.00 0.38 6.20

Second 420.00 - 16.80 -

R Siam Co., Ltd. - 192.00 - 1.92

Aladdin House Co., Ltd. 30.50 193.00 1.52 9.64

Thai Copyright Collection Co., Ltd.

First 93.00 - 4.65 -

Second 155.00 - 7.75 -

Total 407.91 176.96

0156

22. SHARE CAPITAL

The Company issued and offered warrants as follows:

Name of warrants

Date of issue and

offer of warrants

Exercise price

(Baht per

Share)

Exercise right

(warrant per

ordinary share)

Number of

allotted shares

(million units)

Last exercise date

of warrants

RS-W2 June 14, 2010 1.900 1:1 71.21 May 19, 2014

As at December 31, 2014, the Company has registered the increase in share capital with the Ministry of Commerce

amount of 68,479,230 units. As a result, the share capital has increased in amount of Baht 68,479,230 and premium on

share capital has increased in amount of Baht 61,631,307.

On May 19, 2014, which is the last exercise date, the warrants have been exercised 52,657,618 units convert to common

share of 52,657,618 shares. The remaining unexercised of warrants is 308,651 units which is no longer being registered

security in the stock Exchange of Thailand.

23. TREASURY SHARES/TREASURY SHARE RESERVE

Treasury shares

On February 22, 2012, the Company’s Board of Director No. 1/2012 passed a resolution to repurchase not more than

million 26 shares or not more than 2.9% of the Company’s paid-up capital (As at December 31, 2011 the Company

has share capital issued 882,654,428shares.), the maximum of repurchase amount is not over than Baht 75 million.

The repurchase is being made for financial management purposes, since the Company has excess liquidity, and it is

to be made through the Stock Exchange of Thailand. The repurchase beginning 6 months start from March 8, 2012 to

September 7, 2012 and the resale period for the repurchased shares runs for 3 years, beginning 6 months after the

completion date of the share repurchase.

As at December 31, 2014, the Company has treasury shares million 17.70 shares, repurchase totaling Baht 74.67 million

and the market price of treasury shares totalling Baht 297.36 million

On February 5, 2015, the Company has sold treasury shares 441,600 shares at 21 Baht per share totaling Baht 9.27 million.

24. DIVIDEND

At the Board of Directors Meeting No. 4/2014 held on August 14, 2014, the Board of Directors resolved to appropriate

retained earnings of separate for the accounting period ending June 30, 2014 for shareholder as dividend in amount

of Baht 120.56 million (Common shares 1,004,646,046 shares, at value Baht 0.12 per share). Whereby presently the

dividend has already been paid to shareholders on September 12, 2014.

At the 2014 Ordinary shareholders meeting held on April 24, 2014, the shareholders resolved to appropriate legal

reserve in amount of Baht 20,682,665.18 and appropriate the net profit for the year 2013, for shareholder as dividend in

amount of Baht 0.20 per share. Whereby presently the dividend has already been paid to shareholders on May 8, 2014.

At the Board of Directors Meeting No. 3/2013 held on August 8, 2013, the Board of Directors resolved to appropriate

legal reserve in amount of Baht 8,662,637 and appropriate the net profit for the six-month period ended June 30, 2013,

for shareholder as dividend in amount of Baht 140.43 million (Common shares 936,166,816 shares, at value Baht 0.15

per share). Whereby presently the dividend has already been paid to shareholders on September 6, 2013.

01570156

At the 2013 Ordinary shareholders meeting held on April 19, 2013, the shareholders resolved to appropriate legal reserve

in amount of Baht 14,353,170 and appropriate the net profit for the year 2012, for shareholder as dividend at value Baht

0.15 per share. Whereby presently the dividend has already been paid to shareholders on May 8, 2013.

25. SHARE PREMIUM AND LEGAL RESERVE

Share premium

Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription received in

excess of the par value to a reserve account (“share premium”). Share premium is not available for dividend distribution.

Legal reserve

Section 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5% of its annual net

profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an

amount not less than 10% of the registered authorized capital. The legal reserve is not available for dividend distribution.

26. EARNINGS PER SHARE

Basic earnings per share

The calculations of basic earnings per share for the year ended December 31, 2014 and 2013 were based on the profit

for the year attributable to ordinary shareholders of the Company and the number of ordinary shares outstanding during

the periods as follows:


2014 2013 2014 2013

Profit for the period attributable to

shareholders of the Company basic

(Baht) 370,956,749.69 394,491,532.39 338,309,913.03 413,653,303.62

Ordinary shares outstanding as at

January 1, (shares) 983,957,561 864,992,428 983,957,561 864,992,428

Effect of shares issued in periods

(shares) -

38,960,622

- 38,960,622

Weighted average ordinary shares

outstanding basic (shares) 983,957,561 903,953,050 983,957,561 903,953,050

Earnings per share basic (Baht) 0.3770 0.4364 0.3438 0.4576

0158

Diluted earnings per share

The calculations of diluted earnings per share for the year ended December 31, 2014 and 2013 were based on the

profit for the year were based on the profit for the year attributable to ordinary shareholders of the Company and the

number of ordinary shares outstanding during the periods after adjusting for the effects of all dilutive potential ordinary

shares as follows


2014 2013 2014 2013

Profit for the period attributable to

shareholders of the Company basic

(Baht) 370,956,749.69 394,491,532.39 338,309,913.03 413,653,303.62

Weighted average number of ordinary

shares outstanding basic (shares) 983,957,561 903,953,050 983,957,561 903,953,050

Effect of exercise of shares options - 54,457,072 - 54,457,072

Weighted average number of ordinary

shares outstanding diluted (shares) 983,957,561 958,410,122 983,957,561 958,410,122

Earnings per share diluted (Baht) 0.3770 0.4116 0.3438 0.4316

27. EXPENSES BY NATURE

Significant expenses for the year 2014 and 2013 were as follows:

Thousands Baht


2014 2013 2014 2013

Changes in finished goods and work in

process balance (120,702) (140,132) 3,791 (35,395)

Cost of service and raw consumable and

material used 3,109, 001 1,766,264 948,596 925,861

Employee expenses 731,522 695,210 617,860 554,364

Depreciation 82,147 70,860 72,492 58,044

Amortization 798,245 207,382 49,638 14,355

Rental and utility expense 112,982 114,266 89,767 89,848

Sales promotion and public relations

expense 19,584 30,063 8,809 7,880

Allowance for impairment asset 19,719 28,296 15,647 14,005

Loss for damage of inventory and provision

for decline in value of inventory 24,159 30,931 24,432 30,941

01590158

28. S

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01610160

29. FINANCIAL INSTRUMENTS

The Company and its subsidiaries do not have the policy to enter the derivative financial instruments for trading or

speculative purposes.

Credit risk

The Company and subsidiaries have credit risk on trade accounts receivable. However, the Company and subsidiaries

have a policy of doing business with good financial status clients to reduce the risk of financial loss. The Company

and subsidiaries make allowance for doubtful accounts to cover the residual risk of financial loss when receivables are

expected to be uncollectible.

Credit risk

Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s operations

and its cash flows. Management believes that the interest rate risk is minimal because the interest rates on overdrafts

and loans are at market rates and substantial portions of loans are short-term maturity. Accordingly, the Group does

not hedge such risk

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management

to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

Fair values

The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing

parties in an arm’s length transaction.

Because the financial instruments have short-term maturity, the Group used the following methods and assumptions in

estimating the fair values of financial instruments:

Cash and cash equivalents, trade accounts receivable; the carrying values approximate their fair values.

Trade accounts payable; the fair value is based on the carrying value in the statement of financial position.

Bank overdrafts and short-term loans and long-term loan from financial institutions; the carrying values approximate

their fair values since they bear interest rates varied according to market interest rate.

Risk from exchange rate

The Company has certain foreign currency transactions that give rise to significant exposure to market risk from change

in foreign exchange rates. However, the Company has committed purchase-sell forward contract for foreign exchange

rated as a hedge against such risk.

As at December 31, 2014 there were no any sales and purchase forward contracts.

30. CAPITAL MANAGEMENT

The primary objectives of the Company’s capital management are to maintain their abilities to continue as a going

concern and to maintain an appropriate capital structure.

As at December 31, 2014, debt to equity ratio in the consolidated financial statements is 1.77 : 1 (Separate 0.52 : 1)

0162

31. COMMITMENT AND CONTINGENT LIABILITIES

31.1 Commitments

Million Baht


2014 2013 2014 2013

Capital Commitments

Plant Property and Equipment 175.00 - 175.00 -

Operating lease Commitments

Within one year 34.55 60.38 31.82 53.66

Two – Three years 7.78 26.15 7.78 23.35

Total 42.33 86.53 39.60 77.01

Total all 217.33 86.53 214.60 77.01

- The Company and subsidiaries Company have entered into 12 agreements with three companies whereby those

companies are to provide satellite transmission services during year 2012-2023. The Company is obliged to pay

transmission service fees and ot her expenses in relation to such services, as stipulated in the agreements. The

Company is required to comply with conditions stipulated in the agreements.

- The Company and subsidiary is committed to pay for licensing to broadcast to the public with the government agency

for 1 agreement and other company for 1 agreement during the period of 2 years starting from January 1, 2014 to

December 31, 2015 as stipulated in the agreements.

- The National Broadcasting and Telecommunications Commission (NBTC) granted licenses to the Company and four

subsidiaries are obliged to comply with certain conditions as stated in the licenses, and to pay annual license fees,

together in accordance with conditions and requirements stipulated by the NBTC.

- The subsidiary has entered into the Standard Definition Terrestrial Digital Television Network Services agreement with

Organization of Thailand Public Broadcasting Service (TPBS) for operation digital television for 15 years and had

obliged to pay service fees as stipulated in the agreements. The subsidiary has submitted bank guarantee at 5% of

total contract amount to the TPBS .

01630162

31.2 Contingent liabilities

As at December 31, 2014 and 2013, the Company had contingent liabilities with the local bank as follows:


2014 2013 2014 2013

Various credit facilities

- Unused (Baht Million) 870 1,113 820 920

- Unused (US Dollar Million) - 4 - -

Forward contract (Sold) facility credit

- Unused (US Dollar Million) - 5 - -

- Unused (EURO) 3.5 3.5 - -

Guarantee to subsidiary

(Unit: US Dollar Million) - 1.25 - -

Guarantee to the Company, its subsidiary and

other company (Unit: Baht Million) 18.35 27.23 - -

- As at December 31, 2014 and 2013, the Company and the subsidiaries were being sued, with the plaintiff demanding

the Company to pay for the damage caused by the Company’s alleged copyright violation in the amount of Baht

82.82 million and Baht 69.55 million, respectively. However, provision was made in the amount of Baht 3.70 million

and Baht 1.95 million, respectively. This issue is still being adjudicated.

32. SPONSOR FEE FOR BROACASTING FIFA WORLD CUP 2014

In June 2014 the subsidiary company and National Broadcasting and Telecommunications Commission (NBTC) have

agreed to whereby the subsidiary company shall boardcast all matchs of FIFA World Cup 2014 to Free TV and NBTC

shall sponsor to the subsidiary company at amount not exceeding to Baht 427 million.

The subsidiary company received certain amount of Baht 369.86 million and recorded as revenue from media. Presently

the subsidiary company is in process appeal to receive sponsor fee for the remaining amount of Baht 57.14 million

from the NBTC.

33. SUBSEQUENT EVENT

At the Board of Directors Meeting No.1/2015 held on February 24, 2015 the Board of Director resolved to appropriate

the net profit for the 2014, for shareholder as dividend at value Baht 0.30 per share for the 2014 operating result. The

dividend of Baht 0.12 per share, was paid to shareholders as the interim dividend during the year 2014, and the additional

dividend of Baht 0.18 per share, will be approved at the annual general meeting of shareholders.

34. APPRROVAL FOR THE INTERIM FINANCIAL STATEMENTS

These financial statements have been approved for issue by the Company’s authorized directors on February 24, 2015.

Chetchotisak Building, 419/1 Ladphrao 15, Ladphrao Road,Chomphon, Chatuchak, Bangkok, 10900Tel : 02-511-0555 , Fax: 02-511-2324

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