Annual Report 2014 by Surachet Fungwatthananon

RS PUBLIC COMPANY LIMITED ANNUAL REPORT 2014

CONTENT 1. Message from the Chairman and Chief Executive Officer

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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]

1 Message from the Chairman and Chief Executive Officer

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.

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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Management Team

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06 05

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1. Mr.Surachai Chetchotisak

6. Mr. Sorat Vanichvarakij

2. Mrs. Pornpan Techarungchaikul

7. Mr. Phisit Dachanabhirom

3. Mr. Darm Nana

8. General Pairoj Panichsamai

4. Mr. Danaisidh Peslapunt

9. Associate Professor Witaya Danthamrongkul

5. Mr. Sutthisak Prasatkarukarn

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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 • 2003 – present • 1992 - present

Chairman RS Public Company Limited Chairman of the Executive Committee RS Public Company Limited Chief Executive Officer RS Public Company Limited

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

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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2007 Director Accreditation Program (DAP) Year 2004

Experience :

• 2008 – present • 2007 – present • 2004 – present • 2003 – 2007 • 2001 – March 2003 • 1999 – July 2001

Secretary to the Board of Directors and Company Secretary RS Public Company Limited Chief Operating Officer RS Public Company Limited Director RS Public Company Limited Executive Vice President RS Public Company Limited Assistant Managing Director Golden Land Property Development Public Company Limited Assistant Vice President SG Securities Co., Ltd.

Directorships in other companies that are not owned by the RS Public Company Limited: None

Shareholding at the beginning of the year 2014 (Shares) Bought Shares during the year 2014 (Shares) Sold Shares during the year 2014 (Shares) Shareholding at the end of the year 2014 (Shares) Shareholding (%) -

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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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2008 Director Accreditation Program (DAP) Year 2008

Experience :

• 2007 – Present • 2007 – Present • 2002 – 2007

Director RS Public Company Limited Chief Financial Officer RS Public Company Limited Senior Vice President Corporate Banking, HSBC Thailand

Directorships in other companies that are not owned by the RS Public Company Limited: None

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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2008 Director Accreditation Program (DAP) Year 2008 Financial Statements for Directors (FSD) Year 2008

Experience :

• 2007 – present • 2007 – present • 1997 – 2007

Director RS Public Company Limited Executive Vice President – Central Legal Office RS Public Company Limited Law Consultant RS Public Company Limited

Directorships in other companies that are not owned by the RS Public Company Limited: None

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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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2013

Experience :

2012 â&#x20AC;&#x201C; present 2003 â&#x20AC;&#x201C; present

Director RS Public Company Limited Managing Director Thai Copyright Collection Company Limited

Directorships in other companies that are not owned by the RS Public Company Limited: None

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)

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2013

Experience :

• 2012 – present • 2003 – present • 2003 – present • 2003 – present

Director RS Public Company Limited Chief Executive Officer YT Group Company Limited Chief Executive Officer VRK Engineering Company Limited Chief Executive Officer Pan Asia Industrial Company Limited

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

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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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2007 Audit Committee Program (ACP) Year 2005 Director Accreditation Program (DAP) Year 2004

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

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

Don Muang Tollway Public Company Limited Jaymart Public Company Limited Phuket International Hospital Company Limited Professional Alliance Group Limited Polipharm Company Limited

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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2007 Audit Committee Program (ACP) Year 2007 Director Accreditation Program (DAP) Year 2007 Finance for Non-Finance Director (FN) Year 2007

Experience :

• 2007 – present • 2014 – present • 2006 • 2005 • 2000

Independent Director and Audit Committee RS Public Company Limited Member of the National Legislative Assembly of Thailand 2014 Deputy Supreme Commander Supreme Command Headquarters (Army) Chairman of the RTA Advisory Board Commanding General Army Weapons Production Control Center

Directorships in other companies that are not owned by the RS Public Company Limited: None

14 15 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

Thai Institute of Directors Training :

Director Certification Program (DCP) Year 2007 Director Accreditation Program (DAP) Year 2007

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)

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

Independent Director and Audit Committee Chairman, Prinsiri Public Company Limited Shareholding at the beginning of the year 2014 (Shares) Bought Shares during the year 2014 (Shares) Sold Shares during the year 2014 (Shares) Shareholding at the end of the year 2014 (Shares) Shareholding (%) -

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Policy and Business Overview

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.

Vision The revolutionist that creates entertainment products with social responsibility

Mission To 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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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

RS Public Company Limited

Media

Television

Radio

Music Distribution

Coolism Co.,Ltd.

RS PCL.

Starz (Thailand) Co.,Ltd.

RS PCL.

Starz (Thailand) Co.,Ltd.

* 83.33% Shareholder by RS Public Company Limited As at December 31, 2014

RS PCL.

The Copyright Collection Co.,Ltd.

Starz (Thailand) Co.,Ltd.

Sport Management

RS PCL.

RS Television Co.,Ltd.

Event Management

RS International Broadcasting and Sportt Management Co.,Ltd.*

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.

Poema Co.,Ltd. Blu Fairy Co.,Ltd. Nagasia Co.,Ltd. Aladdin House Co.,Ltd.

Yaak Co.,Ltd. Dee Media & Production Co.,Ltd.

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Business Descriptions

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

Revenue Structure 2012 Amount (Million Baht)

share in total revenue (%)

2013 Amount (Million Baht)

share in total revenue (%)

2014 Amount (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

5.5

33.3

2,812.4

100%

3,461.5

100%

4306.5

100%

Type of Business

Total Revenues

Media Business RS 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”.

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

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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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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.

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

On Air Date and Time

24 hours

Signal Coverage

Bangkok and vicinity

Program Concept

50 Minutes Music Freeze Your Mind Various Thai music For the family

Target Audience

Students and working people aged Students and working people aged 20 - 34 years old 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.

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).

Marketing and Competition 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.

026 027

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.

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.

028 029

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.

Marketing and Competition At present, consumersâ&#x20AC;&#x2122; 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 consumersâ&#x20AC;&#x2122; 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.

Marketing and Competition 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 RSâ&#x20AC;&#x2122;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.

Marketing and Competition 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

Risk Factors

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.

032 033

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 business In 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

Property used in the business

Property used in the business 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. Address

Renter

Contract term

Rental fee/month (Million Baht)

431/2-5

RS Public Company Limited

3 years

0.41

Soi Ladphrao 15

(Aug 2014 â&#x20AC;&#x201C; July 2017)

Jatujak, Bangkok

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

Ownership

Book Value Year 2013 (million Baht)

1. RS Public Company Limited

Studio recording and Broadcast equipment

Owner

77.14

Nil

2. COOLISM Co.,Ltd.

Studio recording

Owner

4.20

Nil

3. Yaak Co.,Ltd.

Studio recording

Owner

1.92

Nil

Company

Obligation

Warehouse Warehouse of the Company and its subsidiaries are as follows. Renter

Contract term

Rental fee/month (Million Baht)

1. 9/102 Phaholyothin Road, Klongluang, Pathumthani

RS Public Company Limited

1 Year

0.20

2. 9/26, Building phaholyothin klongluang pathumthani

Starz Co.,Ltd. (Thailand)

Address

(agreement expire on Jan 2015) 1 Year (agreement expire on Dec 2014)

0.10

036 037

Concession and Radio leases

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

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

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

Legal disputes

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

General information and other important information

General information and other important information General information Name Type of business

: RS Public Company Limited : 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 10900 Registration No. : 0107546000016 Website : www.rs.co.th Tel. : 02-511-0555 Fax : 02-511-2324

Registared Capital

Baht 1,026,000,280 including 1,026,000,280 ordinary shares at one Baht par value Baht 1,022,346,046 including 1,022,346,046 ordinary shares at one Baht par value

Paid-up Capital : Share register : Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110 Tel : 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 : Legal Office, RS Public Company Limited 419/1 Soi Ladphrao 15, Ladphrao Road, Chomphon, Jatujak, Bangkok 10900 Tel : 02-511-0555 Fax : 02-938-5622

042 043

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

Location

Type of Business

Type of Share

Registered Capital (Baht)

Paid-up Capital (Baht)

5,000,000

Hold (%)

1. Thai Copyright Collection Co.,Ltd

203/34-36 Soi Copyright Ladphrao 15, Collection Ladphrao Road, Chomphon, Jatujak, Bangkok Tel. 02-9388000 Fax. 02-9385583

Ordinary shares

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 Event Ladphrao 15, Management Ladphrao Road, Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

80,000,000 80,000,000

99.99

4. Blu Fairy Co.,Ltd

419/3 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

5,000,000

99.99

5,000,000

99.99

Company Name

Location

Type of Business

Type of Share

Registered Capital (Baht)

Paid-up Capital (Baht)

Hold (%)

5. Nagasia Co.,Ltd.

431/3 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-511-2324

Ordinary shares

4,000,000

99.99

6. Aladdin House Co.,Ltd

431/2 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

5,000,000

99.99

7. R Siam Co.,Ltd

419/2 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

1,000,000

99.99

8. Dee Media & Production Co.,Ltd

419/1 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 025110555 Fax. 02-5112324

Ordinary shares

37,000,000 37,000,000

99.99

044 045

Type of Share

Registered Capital (Baht)

Paid-up Capital (Baht)

Ordinary shares

2,500,000

99.98

10. Coolism Co.,Ltd 419/2 Soi Ladphrao Radio Business 15, Ladphrao Road, Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-9385694

Ordinary shares

25,000,000 25,000,000

99.99

11. RS Television Co.,Ltd

431/4 Soi Ladphrao Television 15, Ladphrao Road, Business Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

200,000,000 200,000,000

99.99

12. RS In-store Media Co.,Ltd

419/2 Soi Ladphrao Modern Trade 15, Ladphrao Road, Media Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

30,000,000 30,000,000

65.00

Company Name 9. Yaak Co.,Ltd

Location

Type of Business

431/3 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-9385630-2 Fax. 02-5112324

Hold (%)

Company Name

Location

Type of Business Sport ŕ¸şBusiness

Type of Share

Registered Capital (Baht)

Paid-up Capital (Baht)

Ordinary shares

15,000,000 15,000,000

99.99

150,000,000 150,000,000

83.33

Hold (%)

13. S-One Sports Co.,Ltd

1706 Bangna - trad road, Bangna Bangkok Tel. 02-5110555

14. RS International Broadcasting and Sports Management Co.,Ltd

419/3 Soi Ladphrao Sport 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

15. RS Film & Distribution Co.,Ltd

203/34-36 Soi Event Ladphrao 15, Management Ladphrao Road, Chomphon, Jatujak, Bangkok Tel. 02-5110555

Ordinary shares

5,000,000

99.99

16. Avant Co.,Ltd

431/1 Soi Ladphrao Event 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

4,000,000

99.98

046 047

Type of Share

Registered Capital (Baht)

Paid-up Capital (Baht)

17. R.S. Sportmaster 419/2 Soi Ladphrao Event Co.,Ltd 15, Ladphrao Road, Management Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

4,500,000

75.98

419/2 Chetchotisak Event Buiding Management Soi Ladphrao 15, Ladphrao Road, Chomphon, Jatujak, Bangkok Tel. 02-5110555 Fax. 02-5112324

Ordinary shares

3,000,000

99.98

Company Name

18. Bangkok Organizer Co.,Ltd

Others Information -Nil

Location

Type of Business

Hold (%)

049

Securities and Shareholder Information

Securities and Shareholder Information 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:No. 1 2 3 4 5 6 7 8 9 10

List 0f Shareholders Chetchotisak Group * Vanichvarakij Group ** Thai NVDR Company Limited Mr. Santi Kovitchindachai Mr. Chanyuth Laoraddecha SIX SIS LTD RS Public Company Limited Mr. Chairat Kovitchindachai Mr. Wirot Tossiraporn Mr. Kasem Ngamekaur

Shares 389,465,000 130,846,500 81,090,937 24,650,000 19,100,000 18,468,240 17,700,000 13,000,000 7,100,000 6,560,000

Percentage 38.09 12.79 7.93 2.41 1.86 1.80 1.73 1.27 0.69 0.64

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 companyâ&#x20AC;&#x2122;s director or sending representative as the companyâ&#x20AC;&#x2122;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)

050 051 Secondary Market Number of Warrants Underlying Shares Issuer

Rights of Warrants

Type of Warrants Term of Warrants Offering Price Exercise of Warrants:

Main Market 140,000,269 units 140,000,269 shares 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. 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. Transferable named certificate 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.) Baht 0 (Baht Zero) 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.

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 donâ&#x20AC;&#x2122;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.

053

Management Structure

Management Structure Board of Directors Nomination and Remuneration Committee

Risk Management Committee

Audit Committee Executive Board

Corporate Governance Committee CEO

Internal Audit

Human Development Committee

ประธานเจ้าหน้าที่ฝ่ายปฏิบัติการ (Chief Operating Officer)

ประธานเจ้าหน้าที่ฝ่ายการเงิน (Chief Financial Officer)

Human Resource and Administration

Finance & Accounting

Legal Office

Corporate Communication

Information Technology

Corporate Client Management

Corporate Branding

Broadcast Business

Event Management ส�ำนักกฎหมาย (Legal Office) Television Radio Music Distribution

054 055 RS Public Company Limited

Media

Television

Radio

Music Distribution RS PCL.

RS PCL.

Thai Copyright Collection Co.,LtdCollection Co.,Ltd

Starz (Thailand) Co.,Ltd

Sport Management

RS PCL.

Coolism Co.,Ltd

RS PCL.

Starz (Thailand) Co.,Ltd

RS PCL.

Starz (Thailand) Co.,Ltd

RS Television Co.,Ltd

Event Management

RS International Broadcasting and Sports Management Co.,Ltd

Poema Co.,Ltd Blu Fairy Co.,Ltd Nagasia Co.,Ltd

*83.33 % Shareheld by RS Public Company Limited As at December 31, 2014

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.

Aladdin House Co.,Ltd Yaak Co.,Ltd. Dee Media & Production Co.,Ltd.

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 Directors As at December 31, 2014. The Board of Directors consists of the following qualified persons: 1. Mr.Surachai Chetchotisak 2. Mrs. Pornpan Techarungchaikul 3. Mr. Darm Nana 4. Mr. Danaisidh Peslapunt 5. Mr. Sutthisak Prasatkarukarn 6. Mr. Sorat Wanichwarakij 7. Mr. Phisit Dachanabhirom 8. General Pairoj Panichsamai 9. Associate Professor Witaya Danthamrongkul

Chairman Director, Executive Committee, Risk Management Committee Chairman, Good Corporate Governance Committee Chairman, Human Development Committee Chairman and Company Secretary Director, Executive Committee Risk Management Committee Good Corporate Governance Committee Director Director Director Independent Director Audit Committee Chairman Nomination and Remuneration Committee Chairman Independent Director and Audit Committee Nomination and Remuneration Committee Independent Director and Audit Committee Nomination and Remuneration Committee

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.

056 057 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 Company

Directors 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.

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 Chairman

Served 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 1. Mr. Surachai Chetchotisak 2. Mrs. Pornpan Techarungchaikul 3. Mr. Darm Nana 4. Mr. Danaisidh Peslapunt 5. Mr. Sutthisak Prasatkarukarn 6. Mr. Sorat Wanichwarakij 7. Mr. Phisit Dachanabhirom 8. General Pairoj Panichsamai 9. Associate Professor Witaya Danthamrongkul

Title Chairman Director Director Director Director Director Independent Director Independent Director Independent Director

No. of Attendance 5/5 5/5 5/5 5/5 5/5 5/5 5/5 4/5 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.

058 059 • 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.

Nomination and Remuneration Committee

As 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.

060 061

Executive Committee

As 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 Committee

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 Executive Committeeâ&#x20AC;&#x2122;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 companyâ&#x20AC;&#x2122;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

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 Committee

As 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.

062 063 Responsibilities of Human Development Committee

Human 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 Team

As 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.

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 Secretary Age 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 Association Relationship 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 Remuneration Cash Remuneration (A) D irectors List

Year 2014 Amount of money (Baht)

Detail of Remuneration

Directors

905,000

Fixed remuneration and Meeting allowance

Audit Committee

1,788,250

Fixed remuneration and Meeting allowance

064 065 Detail of Remuneration and Meeting allowance are as follows: No.

Year 2014 Fixed remuneration (Baht) Meeting allowance (Baht)

Board of Director

Mr. Surachai Chetchotisak

125,000

Mrs. Pornpan Techarungchaikul

100,000

Mr. Darm Nana

100,000

Mr. Danaisidh Peslapunt

100,000

Mr. Sutthisak Prasatkarukarn Director 1/1

100,000

Mr. Sorat Vanichwarakij

100,000

Mr. Phisit Dachanabhirom

100,000

General Pairoj Panichsamai

80,000

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 No.

Year 2014 Amount of money (million baht)

Detail of remuneration

Executive Directors

Management team

87.54

List

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.

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 Employeesâ&#x20AC;&#x2122; 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 â&#x20AC;&#x2DC;Mega Go Glow Run 2014â&#x20AC;&#x2122; 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.

067

Corporate Governance

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.

068 069 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

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.

070 071 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.

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 Transparency

The 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.

072 073 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 Committee The 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 Committee The 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.

§ 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

074 075 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 the qualified Directors and be in accordance with the Company’s operating results. The Executives remuneration would be in accordance with the Company’s operating results, and individual Executives performance. For Chief Executive Officer’s performance evaluation, the Nomination and Remuneration Committee supplied inputs on regulations for the evaluation on performance of Chief Executive Officer and propose for the approval of the Board of Directors. Results on 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 Thai Institute of Directors, and other related organizations in order to support efficient operations, with all costs to be financially supported by the Company (details were shown in “Description of Management Team and other persons overseeing the Company”).

Succession plan for the Chief Executive Officer and high level Executives

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. : Website : Facebook : Twitter : E-mail :

0-2511-0911 and 0-2511-0555 ext 1503, 1505 http://www.rs.co.th/investor.html http://www.facebook.com/pages/Rs-ir/256459961140733 https://twitter.com/RS_IR Address: kitsada@rs.co.th

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.

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. 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.

Board of Directors Structure Policy The Board of Directors has defined the required qualifications of Directors to be in line with company strategy. 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. The Company’s Board of Directors acknowledges that the 3 Independent Directors have qualified as per regulations 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 and experiences in financial and accounting field, to become Chairman of the Audit Committee.

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.

076 077

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.

078 079 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-

081

12 Responsibilities toward society, environment, and related persons

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:

082 083 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.

Kamikaze Give & Share 2015 Happy New Year Season 2 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.

Channel 8 Share to Child 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).

Others Activity in Year 2014 Baitoey and Kung, Singers of R-Siam, a subsidiary of RS Public Company Limited attached the Red Ribbon â&#x20AC;&#x153;World AIDS Dayâ&#x20AC;? to General Prayuth Chan-ocha, Prime Minister of Thailand.

084 085

Activity “1 to 3blood This pain for you” 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.

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

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.

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.

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.

087

Internal Control and Risk Management

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

Related Party Transactions

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:

090 091 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

1. Chetchotisak Building 1 419/1 Soi Ladphrao 15, Chetchotisak Jatujak, Bangkok Co.,Ltd. 2. Chetchotisak Building 2 419/2 Soi Ladphrao 15, Jatujak, Bangkok Chetchotisak Co.,Ltd. 3 3. Chetchotisak Building 419/3 Soi Ladphrao 15, Chetchotisak Jatujak, Bangkok Co.,Ltd. 4. 419/4 Soi Ladphrao 15, Jatujak, Bangkok Jatujak, Bangkok SS2C Co.,Ltd. 5. 203/18-20 Mr.Kriengkai Soi Ladphrao 15, Chetchotisak / Jatujak, Bangkok Chetchotisak Co.,Ltd. 6. 203/34-36 Mr.Kriengkai Soi Ladphrao 15, Chetchotisak / Jatujak, Bangkok Chetchotisak Co.,Ltd.

Rent by

RS Public Company Limited RS Public Company Limited COOLISM Co.,Ltd. Starz (Thailand) Co.,Ltd. RS Public Company Limited

Rented space (square metre)

Rental fee, Central Service fee / month (million Baht)

Contract period Start

End ( * )

Approved by (**)

3,766

1,102.48 June 2012 May 2015 Board of Directors

4,645 1,200 200

132,754.00 June 2012 May 2015 Board of Directors 35,640.00 June 2012 May 2015 Board of Directors 5,940.00 Jan 2013 May 2015 Board of Directors

2,242

65,299.00 July 2013 July 2015 Board of Directors

RS Public Company Limited (Lump sum price) Thai Copyright Collection Co.,Ltd. RS Public Company (Lump sum price) Limited (Lump sum price)

4,820.00 June 2012 May 2015 Board of Directors 12,460.00 June 2012 May 2015 Board of Directors

Thai Copyright Collection Co.,Ltd.

14,060.00 June 2012 May 2015 Board of Directors

(Lump sum price)

68,825.00

August 2012

Dec 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.

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 Type

Renter

Rent by

1. Land Soi Ladphrao 15 Jatujak, Bangkok

Chetchotisak Commitee /

RS Public Company Limited

2. Land Soi Ladphrao 15 Jatujak, Bangkok

Chetchotisak Co.,Ltd.

Starz (Thailand) Co.,Ltd.

Rented space 152 square wah 52 square metre

Rental fee/ month (Baht)

Contract term เริ่ม สิ้นสุด ( * )

20,000 Feb 2013 May 2015

5,000

Jan-56

May-58

Approved by (**) Management (**) Management (**)

-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

092 093 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 Companyâ&#x20AC;&#x2122;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 Shareholdersâ&#x20AC;&#x2122; meeting.

095

Financial Highlight

Financial Highlight 15.1 Statement of Financial Position For the Year Ended December 31, 2012 - 2014 (Thousand baht) 2012 Detail ASSETS CURRENT ASSETS : Cash and cash equivalents Temporary investment - fixed deposit with maturity of twelve months Trade accounts receivable-Others-net Trade accounts receivable-Related parties-net Inventories - net Accrued income Other current assets Total Current Assets NON-CURRENT ASSETS : Investments in subsidiaries - net Property plant and equipment - net Deposit for broadcasting system eauipment License for operation right in spectrum of digital television Advance payment of license for operation right in spectrum of digital television Intangible assets - net Deferred tax assets Other non-current assets Total Non-Current Assets TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES : Short-term loans from financial institutions Trade accounts payable and others payable Trade accounts payable and others - related Current portion of liability under financial lease agreements Current portion of payable for cost of license for operation right in spectrum Current portion of employee benefit obligations

(Audited)

2013 %

(Audited)

2014 %

(Audited)

313,597

12.3%

572,147

19.2%

381,535

7.9%

4,306 652,953 11,155 140,564 244,965 152,697 1,520,237

0.2% 25.6% 0.4% 5.5% 9.6% 6.0% 59.5%

4,391 756,169 19,730 63,312 233,716 98,823 1,748,288

0.1% 25.3% 0.7% 2.1% 7.8% 3.3% 58.5%

4,465 863,143 159,856 147,699 169,515 1,726,213

0.1% 17.9% 3.3% 3.1% 3.5% 35.9%

5,606 259,520 -

0.2% 10.2% -

5,496 310,016 -

0.2% 10.4% -

5,406 313,235 74,996

0.1% 6.5% 1.6%

2,161,817

44.9%

643,320 64,554 61,830 1,034,830 2,555,067

25.2% 2.5% 2.4% 40.5% 100.0%

38,000 720,771 73,119 90,520 1,237,922 2,986,210

1.3% 24.1% 2.4% 3.0% 41.5% 100.0%

304,327 97,723 129,812 3,087,316 4,813,529

6.3% 2.0% 2.7% 64.1% 100.0%

86,000 195,324 1,697 4,587

3.4% 7.6% 0.1% 0.2%

185,015 1,659 5,140

6.2% 0.1% 0.2%

152,569 7,655

3.2% 0.2%

11,011

0.4%

302,500 4,407

6.3% 0.1%

096 097 (Thousand baht) 2012 Detail Current portion of long-term loan Short-term loans from related parties Unearned revenues - others Accrued expenses Other current liabilities Total Current Liabilities NON-CURRENT LIABILITIES : Liabilities under financial lease agreements Payable for cost of license for operation right in spectrum - net Long-term loans Employee benefit obligations Deferred tax liabilities Other non-current liabilities Total Non-Current Liabilities Total Liabilities EQUITY Share capital : Authorized share capital 1,026,000,280 ordinary shares : Baht 1 per share Issued and paid - up share capital Treasury shares Premium on share capital Advance receipts for share subscription Difference between the purchase price of investment in subsidiaries under common control and their net book value Retained earnings (Deficits) : Appropriated - Legal reserve Appropriated - Treasury share reserve Unappropriated Equity attributable to owners of the Company Non - controlling interests Total equity TOTAL LIABILITIES AND EQUITY

2013

2014

(Audited) 240,000 74,880 324,454 164,678 1,091,619

% 9.4% 2.9% 12.7% 6.4% 42.7% -

(Audited) 286,915 8,000 196,725 463,323 164,382 1,322,170

% 9.6% 0.3% 6.6% 15.5% 5.5% 44.3% -

(Audited)

206,545 563,155 152,319 1,389,151

4.3% 11.7% 3.2% 28.9% -

16,684

0.7%

12,759

0.4%

5,103

0.1%

81,000 32,537 21,134 10,626 161,981 1,253,600

3.2% 1.3% 0.8% 0.4% 6.3% 49.1%

38,756 30,874 11,394 93,783 1,415,953

1.3% 1.0% 0.4% 3.1% 47.4%

1,584,000 60,945 6,102 9,694 1,665,844 3,054,995

32.9% 1.3% 0.1% 0.2% 34.6% 63.5%

1,026,000 882,692 (74,672) 129,536 17,225

40.2% 34.5% (2.9%) 5.1% 0.7%

1,026,000 953,867 (74,672) 193,593 30,061

34.4% 31.9% (2.5%) 6.5% 1.0%

1,026,000 1,022,346 (74,672) 255,225 -

21.3% 21.2% (1.6%) 5.3% -

(16,594)

(0.6%)

(16,594)

(0.6%)

(16,594)

(0.3%)

32,312 74,672 251,060 1,296,232 5,235 1,301,467 2,555,067

1.3% 2.9% 9.8% 50.7% 0.2% 50.9% 100.0%

52,995 74,672 353,342 1,567,264 2,993 1,570,257 2,986,210

1.8% 2.5% 11.8% 52.5% 0.1% 52.6% 100.0%

69,910 74,672 397,586 1,728,473 30,061 1,758,534 4,813,529

1.5% 1.6% 8.3% 35.9% 0.6% 36.5% 100.0%

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

(Audited)

(Thousand baht) 2014 (Audited) %

1,192,979 883,216 718,826 17,370 2,812,391 1,751,614 1,060,778 60,201 1,120,978 151,472 556,744 8,598 716,813 404,165 7,509 396,656 122,824 273,832

42.4% 31.4% 25.6% 0.6% 100.0% 62.3% 37.7% 2.1% 39.9% 5.4% 19.8% 0.3% 25.5% 14.4% 0.3% 14.1% 4.4% 9.7%

1,986,275 777,175 692,561 5,452 3,461,463 2,109,271 1,352,192 22,354 1,374,547 213,511 659,219 8,705 881,435 493,112 17,294 475,818 83,561 392,257

57.4% 22.5% 20.0% 0.1% 100.0% 60.9% 39.1% 0.6% 39.7% 6.2% 19.0% 0.3% 25.5% 14.2% 0.5% 13.7% 2.4% 11.3%

3,356,835 457,817 458,514 33,285 4,306,451 2,924,664 1,381,787 26,620 1,408,407 207,554 649,935 8,591 866,080 542,327 26,686 515,641 118,016 397,625

77.9% 10.6% 10.7% 0.8% 100.0% 67.9% 32.1% 0.6% 32.7% 4.8% 15.1% 0.2% 20.1% 12.6% 0.6% 12.0% 2.7% 9.2%

273,832

9.7%

392,257

11.3%

1,567 1,567 399,192

0.0% 0.0% 9.3%

284,273 10,442 273,832

10.1% 0.4% 9.7%

394,492 (2,235) 392,257

11.4% (0.1%) 11.3%

370,957 26,669 397,625

8.6% 0.6% 9.2%

1,157 410 1,567

0.0% 0.0% 0.0%

2012 Detail Revenues Revenue from media Revenue from music distribution Revenue from event management Revenue from other services Total sales and services income Cost of sales and services Gross profit Other income Gross profit before expenses Selling expenses Administrative expenses Amortization of employee benefit expenses Total expenses Profit before finance costs and income tax Finance costs Profit before income tax Income tax Profit for the year Other comprehensive income Defined benefit plan actuatal gain Other comprehensive income for the year Profit and comprehensive income for the year Attributable profit for the year to Owner of the Company Non - controlling interests Attributable Other comprehensive income to Owner of the Company Non - controlling interests Earnings per share Owner of the Company (Baht) Number of ordinary shares (Shares) Diluted earnings per share Owner of the Company (Baht) Weighted average number of diluted ordinary shares (Shares)

2013

0.326 873,049

0.436 903,953

0.377 983,958

0.299

0.412

0.377

950,440

958,410

983,958

098 099

15.3 Statement of Cash Flows For the Year Ended December 31, 2012 - 2014 Detail CASH FLOWS FROM OPERATING ACTIVITIES Net profit Adjustments to reconcile net profit to net cash provided by (used in) operating activities: Depreciation and amortization Allowance for doubtful accounts (reversal) and written off withholding tax Reversal allowance for decline in value of inventory Reversal allowance for sales return - net Allowance for impairment of assets Reversal allowance for impairment - investment in associate Share of loss from investments in associated company accounted for under the equity method Provision for loss on investment in subsidiaries (reversal) Provision for damage from litigation case Loss (gain) on sales and written off equipment Loss on sales of intangible assets Provision for employee benefits Unrealized gain on exchange rates Interest income Interest expenses Income tax Profit from operating activities before changes in operating assets and liabillities (INCREASE) DECREASE IN OPERATING ASSETS: Trade accounts receivable Inventories Other current assets Other non - current assets INCREASE (DECREASE) IN OPERATING LIABILITIES: Accounts payable and others payable Other current liabilities Decrese in employee benefit obligations Other non - current liabilities Proceed from refunding witholding tax Payment of income tax

2012 (Audited) %

2013 (Audited) %

(Thousand baht) 2014 (Audited) %

273,832

87.3%

392,257

68.6%

397,625

104.2%

92,930

29.6%

278,242

48.6%

880,392

230.7%

(2,913) 2,425 38,701 (18,694) (4,148)

(0.9%) 0.8% 12.3% (6.0%) (1.3%)

(13,720) (12,402) (10,973) 28,296 -

(2.4%) (2.2%) (1.9%) 4.9% -

4,496 (7,435) (37,733) 19,719 -

1.2% (1.9%) (9.9%) 5.2% -

110

0.0%

2,001 20,538 167 16,566 (507) (2,395) 7,509 122,824

0.6% 6.5% 0.1% 5.3% (0.2%) (0.8%) 2.4% 39.2%

(2,253) 515 17,230 (67) (4,761) 17,294 83,561

(0.4%) 0.1% 3.0% (0.0%) (0.8%) 3.0% 14.6%

1,756 313 17,151 (2) (2,957) 26,686 118,016

0.5% 0.1% 4.5% (0.0%) (0.8%) 7.0% 30.9%

548,837

175.0%

773,329

135.2% 1,418,118

371.7%

(36,670) (105,597) (141,397) (23,442)

(11.7%) (33.7%) (45.1%) (7.5%)

(94,808) 89,721 62,002 (9,163)

(16.6%) 15.7% 10.8% (1.6%)

(86,614) (88,999) (936) 10,578

(22.7%) (23.3%) (0.2%) 2.8%

(37,222) 80,368 4,030 42,516 (119,527)

(11.9%) (6,047) 25.6% 300,943 1.3% 3,020 13.6% 11,775 (38.1%) (146,492)

(1.1%) (51,991) 52.6% 70,520 0.5% (3,456) 2.1% 883 (25.6%) (155,763)

(13.6%) 18.5% (0.9%) 0.2% (40.8%)

Detail Net Cash Provided by (used in) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES: Interest income Increase in short-term loans to related parties and related persons Receipts from short-term loans to related parties and related persons Decrease in short-term loans to others Cash received from decreasing in registered share capital Payment of investments in subsidiaries Temporary investments - fixed deposit with maturity of twelve months Increase (decrease) in payable for purchase on assets Purchase of fixed assets Proceeds from disposal of fixed assets Advance payment of license for operation right in spectrum of digital Television Deposit for broadcasting system eauipment Increase in intangible assets Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES: Payment of interest expenses Receipt of short-term loans from financial institutions Repayment of short-term loans from financial institutions Receipts of long-term loans from financial institutions Repayment of long-term loans from financial institutions Repayment of liability under financial lease Increase in subsidiary's share capital Increase in short-term loans from related parties Decrease in short-term loans from related parties Repayment to payable for cost of license for operation right in spectrum Dividend paid Increase in share capital Advance receipts for share subscription Increase in share capital Net Cash Used in Financing Activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS SUBSIDIARY'S CASH AT INVESTMENT SALES SUBSIDIARY'S CASH AT INVESTMENT PURCHASE CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEARS CASH AND CASH EQUIVALENTS AT THE ENDING OF THE YEARS

2012 (Audited) % 211,895 67.6%

(Thousand baht) 2013 2014 (Audited) % (Audited) % 984,281 172.0% 1,112,340 291.5%

2,685

0.9%

4,570

0.8%

3,139

0.8%

(8,040)

(2.6%)

(91,000)

(23.9%)

18,040 1,531

5.8% 0.5%

1,309

0.2%

91,000 100

23.9% 0.0%

2,610 (2,610)

0.8% (0.8%)

(98) 2,149 (191,636) 8,996

(0.0%) (85) 0.7% (2,149) (61.1%) (121,262) 2.9% 1,267

(0.0%) (0.4%) (21.2%) 0.2%

(74) 17,887 (85,721) 465

(0.0%) 4.7% (22.5%) 0.1%

(221,589) (387,963)

- (38,000) (70.7%) (313,590) (123.7%) (467,940)

(6.6%) - (74,996) (54.8%) (298,759) (81.8%) (437,958)

(19.7%) (78.3%) (114.8%)

(6,860) 166,000 (80,000) 321,000

(2.2%) (17,452) 52.9% 25,000 (25.5%) (111,000) 102.4% 205,915

(3.1%) (13,523) 4.4% 755,000 (19.4%) (755,000) 36.0% 65,000

(3.5%) 197.9% (197.9%) 17.0%

(4,364) 800 -

- (240,000) (1.4%) (4,787) 0.3% 8,000 -

(41.9%) (351,915) (0.8%) (5,140) 1.4% (8,000)

(92.2%) (1.3%) (2.1%)

(131,430) (74,672) 17,225 72 207,772

(41.9%) (271,535) (23.8%) 5.5% 30,061 0.0% 118,007 66.3% (257,792)

- (340,500) (47.5%) (310,965) 5.3% 20.6% 100,049 (45.1%) (864,994)

(89.2%) (81.5%) 26.2% (226.7%)

10.1%

258,550 -

45.2% -

(190,612) -

(50.0%) -

313,597

54.8%

572,147

150.0%

572,147

100.0%

381,535

100.0%

31,704

0100 0101 Detail ADDITION INFORMATION 1. Purchases of vehicle for under lease agreement. 2. Cost of license for peration right in spectrum payable 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. (less) Cash and deposits with financial institutions net (less) Other assets less other liabilities Reclassification to investment in associates as sales of investments at book value. 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 (plus) Cash and deposits with financial institutions net (plus) Other assets less other liabilities The book value of investments in subsidiaries at the date of acquisition.

2012 (Audited) % 12,165 2,610

(4,634) (2,024) 284 (1,740) (2,610)

4,353 1,743 (3) 1,740

2013 (Audited) % 1,415 -

(Thousand baht) 2014 (Audited) % 2,227,000

15.4 Key Financial Ratios As at 31 December Financial Ratio Liquidity Ratios Liquidity Ratios (time) Quick Ratio (time) Cash Flows Ratio (time) Account Receivable Turnover (time) Average Debt Collection Period (day) Inventory Turnover (time) Average Number of Days Sales (day) Account Payable Turnover (time) Credit Period (day) Cash Cycle (day) Profitability Ratio Gross Profit Margin (%) Operating Profit Margin (%) Operating Cash Flows to Operating Profit Ratio (%) Net Profit Margin (%) Return on Equity (%) Efficiency Ratios Return on Asset (%) Return on Fixed Asset (%) Assets Turnover (เท่า) Leverage Ratios Debt/Equity Ratio (time) Interest Coverage (time) Debt Service Coverage (Cash basis)(time) Dividend Payment Rate (%) Per Share Book Value per Share (baht) Earning per Share (baht)

2012

2013

2014

1.39 0.90 0.24 4.35 84 14.49 26 9.28 40 70

1.32 1.02 0.82 4.81 76 16.37 23 12.71 29 70

1.24 0.90 0.82 5.25 70 22.76 17 19.53 19 68

37.72% 12.23% 61.60% 9.90% 22.77%

39.06% 13.60% 209.08% 11.32% 27.55%

32.09% 11.98% 215.69% 8.56% 22.51%

18.09% 178.44% 1.29

17.80% 162.63% 1.10

13.91% 153.96% 1.11

0.97 53.82 0.53 76.83%

0.90 28.51 1.32 83.86%

1.77 20.32 0.74 86.62%

1.485 0.326

1.734 0.436

1.757 0.377

0103

Management Discussion and Analysis

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

0104 0105

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 companyâ&#x20AC;&#x2122;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 companyâ&#x20AC;&#x2122;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 Shareholdersâ&#x20AC;&#x2122; Meeting.

(Phisit Dachanabhirom) Chairman of the Audit Committee

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:

0106 0107 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

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

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%

Gross Profit Margin

0108 0109 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) Account receivables – other - net Not Due

2012

2013

2014

387.7

487.7

408.0

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

4.35

4.81

5.25

7.5%

4.5%

4.1%

Over Due : Less than 3 months

Account receivable turnover (time) Average debt collection period (day) Allowance for doubtful accounts / Account receivables – other - net

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.

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

19.1%

24.6%

7.6%

Average Number of Days Sales (day) Allowance for decline in value of inventory / Inventories

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) Intangible assets

2012

2013

2014

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

0110 0111 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) Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the end of the year

2012 211.9 (388.0) 207.8 31.7 313.6

2013 984.3 (467.9) (257.8) 258.5 572.1

2014 1,112.3 (437.9) (865.0) (190.6) 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) Liquidity Ratio (time) Quick Ratio (time) Average Debt Collection Period (day) Average Number of Day Sales (day) Credit Period (day) Cash Cycle (day)

2012 1.39 0.90 84 26 40 70

2013 1.32 1.02 76 23 29 70

2014 1.24 0.90 70 17 19 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.

16.5 Sources of Funds 16.5.1 Liabilities, Shareholders’ Equity and Debt to Equity Ratio (million) Short-term loan from financial institutions

2012

2013

2014

86.0

240.0

286.9

81.0

765.6

1,035.3

1,389.2

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

0.97

0.90

1.77

Current portion of long-term loan Long-term loans Other current liabilities Other non-current liabilities

Debt to Equity Ratio (time)

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-

0113

Financial Statement

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

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

ASSETS CURRENT ASSETS Cash and cash equivalents Temporary investment - fixed deposit with maturity of twelve months - Others-net - Related parties-net Short-term loans to related parties - net Short-term loans to others - net Inventories - net Accrued income Declared dividend Revenue department receivable Other current assets Total Current Assets NON-CURRENT ASSETS Investments in subsidiaries - net Investments in associated company for under the equity method Property plant and equipment - net Deposit for broadcasting system eauipment License for operation right in spectrum of digital television Advance payment of license for operation right in spectrum of digital television Intangible assets - net Withholding tax deducted at source Deferred tax assets Other non-current assets Total Non-Current Assets TOTAL ASSETS

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2014 AND 2013 Consolidated

304,326,651.67 92,453,879.60 97,723,291.59 37,358,405.41 3,087,315,542.34 4,813,528,748.01

14 15 16

5,406,090.08 313,235,057.30 74,995,500.00 2,161,816,666.69

381,535,315.28 4,464,839.90 863,142,805.10 159,855,842.36 147,699,485.69 30,592,899.02 138,922,018.32 1,726,213,205.67

2014

10 11 12 13 14

5, 9

8 5 5

7 5, 7 5

Notes

38,000,000.00 720,770,805.24 42,583,803.25 73,118,568.85 47,936,237.33 1,237,921,719.82 2,986,209,846.39

5,495,813.48 310,016,491.67 -

572,146,840.32 4,390,940.36 756,169,082.23 19,729,730.00 100,071.00 63,312,140.45 233,716,271.28 11,140,103.31 87,582,947.62 1,748,288,126.57

2013

Baht Separated

125,944,152.49 49,902,283.71 74,278,730.59 32,436,857.50 1,277,588,063.72 2,575,949,909.20

624,853,389.59 295,177,149.84 74,995,500.00 -

152,912,614.41 260,647,747.20 256,499,115.03 329,699,999.99 7,678,274.17 104,456,562.46 136,496,178.00 2,431,043.85 47,540,310.37 1,298,361,845.48

2014

149,503,102.25 12,907,566.58 32,840,926.59 40,713,910.46 901,142,341.54 2,262,668,173.98

371,392,178.76 293,784,656.90 -

405,983,565.40 387,798,381.89 112,100,443.16 165,988,658.58 77,364.00 35,901,210.65 114,211,237.94 93,997,368.00 45,467,602.82 1,361,525,832.44

2013

0114 0115

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

LIABILITIES AND EQUITY CURRENT LIABILITIES Trade accounts payable and others payable Trade accounts payable and others - related Current portion of liability under financial lease agreements Current portion of payable for cost of license for operation right in spectrum Current portion of employee benefit obligations Current portion of long-term loan Short-term loans from related parties Unearned revenues - related parties Unearned revenues - others Accrued expenses Other current liabilities Total Current Liabilities NON-CURRENT LIABILITIES Liabilities under financial lease agreements Payable for cost of license for operation right in spectrum - net Provision liabilities on investment in subsidiaries Employee benefit obligations Deferred tax liabilities Other non-current liabilities Total Non-Current Liabilities Total Liabilities

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (Cont.) AS AT DECEMBER 31, 2014 AND 2013

5,103,488.90 1,584,000,000.00 60,944,814.91 6,102,159.69 9,693,925.12 1,665,844,388.62 3,054,995,110.27

18 14 10 20 16

5 17

302,500,000.00 4,406,669.00 206,545,244.51 563,155,440.72 152,319,470.74 1,389,150,721.65

152,568,581.95 7,655,314.73

2014

14 20 19 5 5

5 18

Notes

Consolidated

38,756,284.08 30,874,254.44 11,393,744.07 93,783,087.20 1,415,953,265.68

12,758,804.61

11,010,934.00 286,915,000.00 8,000,000.00 196,724,885.77 463,323,470.06 164,381,962.76 1,322,170,178.48

185,014,991.00 1,658,956.85 5,139,978.04

2013

Baht

2,949,108.90 52,300,564.79 916,093.51 61,269,256.10 881,562,668.00

5,103,488.90

4,406,669.00 246,045,000.00 35,403,079.94 31,586,607.21 261,766,322.68 77,295,901.85 820,293,411.90

99,463,875.48 56,670,641.01 7,655,314.73

2014

Separated

1,421,988.91 32,499,061.36 9,330,772.91 56,010,627.79 697,730,297.89

12,758,804.61

11,010,934.00 45,045,000.00 26,591,759.00 23,605,780.49 282,739,010.55 118,151,062.58 641,719,670.10

119,104,178.19 10,331,967.25 5,139,978.04

2013

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

Issued and paid - up share capital Treasury shares Premium on share capital Advance receipts for share subscription Difference between the purchase price of investment in subsidiaries under common control and their net book value Retained earnings (Deficits) Appropriated - Legal reserve Appropriated - Treasury share reserve Unappropriated Equity attributable to owners of the Company Non - controlling interests Total equity TOTAL LIABILITIES AND EQUITY

LIABILITIES AND EQUITY EQUITY Share capital Authorized share capital 1,026,000,280 ordinary shares : Baht 1 per share

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (Cont.) AS AT DECEMBER 31, 2014 AND 2013

22 23

Notes

953,866,816.00 (74,671,816.00) 193,593,324.68 30,061,062.80 (16,593,839.52) 52,994,862.01 74,671,816.00 353,341,831.97 1,567,264,057.94 2,992,522.77 1,570,256,580.71 2,986,209,846.39

(16,593,839.52) 69,910,357.66 74,671,816.00 397,585,773.29 1,728,472,969.11 30,060,668.63 1,758,533,637.74 4,813,528,748.01

1,026,000,280.00)

2013

1,022,346,046.00 (74,671,816.00) 255,224,631.68 -

1,026,000,280.00

2014

Consolidated

Baht

69,910,357.66 74,671,816.00 346,906,205.86 1,694,387,241.20 1,694,387,241.20 2,575,949,909.20

1,022,346,046.00 (74,671,816.00) 255,224,631.68 -

1,026,000,280.00)

2014

Separated

52,994,862.01 74,671,816.00 334,421,810.60 1,564,937,876.09 1,564,937,876.09 2,262,668,173.98

953,866,816.00 (74,671,816.00) 193,593,324.68 30,061,062.80

1,026,000,280.00

2013

0116 0117

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

Notes 5, 28

Revenues Revenue from media Revenue from music distribution Revenue from event business Revenue from other services Total sales and services income 5, 28 Cost of sales and services Gross profit 5 Other income Gross profit before expenses Other expenses Selling expenses 5 5 Administrative expenses Reversal of provision for (loss) on investment in subsidiaries - net Amortization of employee benefit expenses Total expenses Profit before finance costs and income tax 5 Finance costs Profit before income tax 16 Income tax Profit for the year Other comprehensive income Defined benefit plan actuatal gain Other comprehensive income for the year Other comprehensive income for the year Attributable profit for the year to Owner of the Company Non - controlling interests Net profit (Loss) Attributable Other comprehensive income to Owner of the Company Non - controlling interests Net profit (Loss) 26 Earnings per share Owner of the Company (Baht) Number of ordinary shares (Shares) 26 Diluted earnings per share Owner of the Company (Baht) Weighted average number of diluted ordinary shares (Shares)

2014

Consolidated

Baht

Separated

2013

2014

3,356,834,828.71 457,816,855.99 458,514,472.14 33,285,277.26 4,306,451,434.10 (2,924,664,109.26) 1,381,787,324.84 26,619,606.55 1,408,406,931.39

1,986,274,871.39 777,175,118.49 692,561,390.30 5,451,570.64 3,461,462,950.82 (2,109,270,664.75) 1,352,192,286.07 22,354,459.07 1,374,546,745.14

883,264,568.72 405,395,848.35 321,838,996.38 105,535,214.67 1,716,034,628.12 (1,419,941,766.28) 296,092,861.84 534,624,870.70 830,717,732.54

877,926,179.65 718,297,721.50 388,666,279.14 5,451,570.64 1,990,341,750.93 (1,271,369,794.66) 718,971,956.27 258,044,444.07 977,016,400.34

(207,553,837.62) (649,935,128.48) -

(213,511,313.84) (659,218,688.96) -

(69,752,854.25) (503,645,674.55) 54,659,082.41

(119,485,795.16) (521,634,781.55) 120,176,393.95

(8,591,009.77) (866,079,975.87) 542,326,955.52 (26,685,649.25) 515,641,306.27 (118,015,992.84) 397,625,313.43

(8,705,066.60) (881,435,069.40) 493,111,675.74 (17,293,523.69) 475,818,152.05 (83,561,310.90) 392,256,841.15

(7,930,865.21) (526,670,311.60) 304,047,420.94 (7,175,311.91) 296,872,109.03 41,437,804.00 338,309,913.03

(7,864,998.96) (528,809,181.72) 448,207,218.62 (3,147,180.67) 445,060,037.95 (31,406,734.33) 413,653,303.62

1,567,124.20 1,567,124.20 399,192,437.63

392,256,841.15

2,044,733.00 2,044,733.00 340,354,646.03

413,653,303.62

370,956,749.69 26,668,563.74 397,625,313.43

394,491,532.39 (2,234,691.24) 392,256,841.15

338,309,913.03 338,309,913.03

413,653,303.62 413,653,303.62

1,157,442.40 409,681.80 1,567,124.20

2,044,733.00 2,044,733.00

0.377 983,957,561

0.436 903,953,050

0.344 983,957,561

0.458 903,953,050

0.377

0.412

0.344

0.432

983,957,561

958,410,122

983,957,561

958,410,122

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

2013

255,224,631.68

1,022,346,046.00

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

Ending balance as at December 31, 2014

Comprehensive income for the year

Profit for the year

Legal reserve

Dividend

Advance receipts for share subscription

61,631,307.00

68,479,230.00

Increase in share capital

193,593,324.68

953,866,816.00

64,056,949.20

Ending balance as at December 31, 2013

Profit and comprehensive income for the year

Legal reserve

Dividend

22 -

71,174,388.00

Increase in share capital

Advance receipts for share subscription

129,536,375.48

Share Capital

882,692,428.00

Ending balance as at December 31, 2012

Notes

Premium on Share Capital

Issued and Paid-up

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY

(74,671,816.00)

Treasury shares

(16,593,839.52)

Difference between the purchase price of investment in subsidiaries under common control and their net book value

(30,061,062.80)

30,061,062.80

(17,224,830.00)

17,224,830.00

Advance receipts for share subscription

69,910,357.66

16,915,495.65

52,994,862.01

20,682,665.18

32,312,196.83

Legal reserve

74,671,816.00

Treasury share reserve

397,585,773.29

1,157,442.40

370,956,749.69

(16,915,495.65)

(310,954,755.12)

353,341,831.97

394,491,532.39

(20,682,665.18)

(271,526,931.60)

251,059,896.36

Unappropriated

Retained earnings (deficits) Appropriated

Consolidated

Baht

1,728,472,969.11

1,157,442.40

370,956,749.69

(310,954,755.12)

(30,061,062.80)

130,110,537.00

1,567,264,057.94

394,491,532.39

(271,526,931.60)

30,061,062.80

118,006,507.20

1,296,231,887.15

Equity attributable to owners of the Company

Total

392,256,841.15

30,060,668.63

409,681.80

26,668,563.74

(10,099.68)

1,758,533,637.74

1,567,124.20

397,625,313.43

(310,964,854.80)

(30,061,062.80)

130,110,537.00

(271,535,169.19)

30,061,062.80

118,006,507.20

1,301,467,338.75

2,992,522.77 1,570,256,580.71

(2,234,691.24)

(8,237.59)

5,235,451.60

Non Controlling interests

0118 0119

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

Baht Consolidated 2014

Separated 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: 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

89,723.37

109,693.75

Depreciation and amortization

Share of loss from investments in associated company accounted for under the equity method Reversal allowance for impairment - investment in subsidiaries

Allowance for doubtful accounts - loan to subsidiaries Provision for loss on investment in subsidiaries (reversal) Gian on sales investment in subsidiary

Provision for damage from litigation case Loss (gain) on sales and written off equipment Provision for employee benefits

(57,461,210.83)

(103,520,224.85)

1,275,008.42

(13,046,005.48)

(2,252,756.11)

1,527,119.99

(3,610,163.21)

1,755,860.90

312,985.20

514,948.69

17,151,390.03

Dividend income Unrealized gain on exchange rates

17,230,318.96 -

126,375.45

412,045.26

15,521,824.43

15,052,406.04

(407,907,925.25)

(176,961,762.40)

(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

83,561,310.90

(41,437,804.00)

Income tax Profit from operating activities before changes in operating assets and liabilities

118,015,992.84 1,418,117,964.91

773,329,285.31

(63,705,742.34)

31,406,734.33 238,825,579.15

(INCREASE) DECREASE IN OPERATING ASSETS: Trade accounts receivable

(86,613,861.14)

(94,808,004.79)

(19,062,292.05)

Inventories

(88,999,043.12)

89,721,037.85

62,761,643.09

34,284,172.44

1,811,324.66

62,001,610.97

5,807,855.58

27,424,666.06

10,577,831.94

(9,162,724.04)

8,277,052.96

(13,885,128.26)

Accounts payable and others payable

(51,990,670.32)

(6,046,574.47)

Other current liabilities

70,519,546.48

Other non - current liabilities

Other current assets Other non - current assets

(936,436.94)

INCREASE (DECREASE) IN OPERATING LIABILITIES:

Proceed from refunding witholding tax Payment of income tax Net Cash Provided by (used in) Operating Activities

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

8,531,158.77

(66,506,524.15)

300,942,894.53

(8,021,652.80)

1000,320,070.20

(3,455,679.40)

3,020,419.17

(8,414,679.40)

3,285,459.17

882,995.54

11,774,533.31

(155,762,635.34) 1,112,340,012.61

(146,491,625.44)

(36,994,717.13)

(80,692,925.22)

984,280,852.40

(79,298,843.97)

273,344,164.70

0120 0121 RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Cont.) FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

Baht Consolidated

Separated

2014

2013

2014

3,139,316.62

4,570,363.25

2013

CASH FLOWS FROM INVESTING ACTIVITIES: 14,668,194.67

15,653,879.79

Increase in short-term loans to related parties and related persons

Interest income

(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

Temporary investments - fixed deposit with maturity of twelve months Cash received for dividend income Increase (decrease) in payable for purchase on assets Purchase of fixed assets Proceeds from disposal of fixed assets

(73,899.54) -

(85,252.62) -

(196,000,000.00)

365,409,115.25

82,964,394.40

17,887,359.28

(2,148,615.07)

17,887,359.28

(2,148,615.07)

(85,721,413.81)

(121,262,499.54)

(74,408,790.60)

(114,682,874.96)

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 Deposit for broadcasting system eauipment Increase in intangible assets

(74,995,500.00)

(38,000,000.00) -

(74,995,500.00)

(298,758,992.24)

(313,589,855.37)

(41,726,648.83)

(50,123,561.04)

(437,957,855.09)

(467,939,689.01)

(152,096,775.86)

150,554,916.49

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)

65,000,000.00

205,915,000.00

(351,915,000.00)

(240,000,000.00)

(5,139,979.02)

(4,786,804.05)

Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES:

Receipts of long-term loans from financial institutions Repayment of long-term loans from financial institutions Repayment of liability under financial lease Increase in short-term loans from related parties

(4,786,804.05)

8,000,000.00

719,000,000.00

50,500,000.00

(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 ) Advance receipts for share subscription

100,049,474.20

118,006,507.20

100,049,474.20

118,006,507.20

30,061,062.80

Decrease in short-term loans from related parties

(5,139,979.02)

(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

1,414,659.26

2,227,000,000.00

Net Cash Used in Financing Activities

ADDITION INFORMATION 1. Purchases of vehicle for under lease agreement. 2. Cost of license for peration right in spectrum payable

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

RS PUBLIC COMPANY LIMITED AND SUBSIDIARIES 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.

0122 0123 The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as follows:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Company Name Operating subsidiaries Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Yaak Co., Ltd. Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. Poema Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Aladdin House Co., Ltd. Blu Fairy Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) D-Media and Production Co., Ltd. R.S. Television Co., Ltd. Non-operating subsidiaries RS In-Store Media Co., Ltd. S-One Sport Co., Ltd. Avant Co., Ltd. R Siam Co., Ltd. R.S. Sportmaster Co., Ltd RS Film and Distribution Co., Ltd. Bangkok Organizer Co., Ltd. Liquidated Lazerface Records Co., Ltd. Associated company Idea Power Co., Ltd.

Nature of Business

Rate of Shareholding 2014 2013 (%) (%)

Service provider and organizer

100

Television production Copyright collection Radio production and organizer Organizer Service provider and organizer for sport activities Organizer Organizer Organizer

100 100 100 100 83

100 100 100

Organizer Television production

100 100

65 100 100 100 76 100 100

Organizer

The significant accounting transaction between the Company and the subsidiaries were eliminated from the consolidated financial statements.

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

0124 0125 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 â&#x20AC;&#x201C; 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 Companyâ&#x20AC;&#x2122;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.

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.

0126 0127 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, firstout 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.

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 â&#x20AC;&#x201C;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:

0128 0129 Land improvement Building and construction Machines and equipment Furniture and office equipment Vehicles

Years 8 years 7 months 20 5 – 10 5 – 10 5

as land lease agreement term as land lease agreement term

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

been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâ&#x20AC;&#x2122;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 Companyâ&#x20AC;&#x2122;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

0130 0131 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 (â&#x20AC;&#x153;Surplus on treasury sharesâ&#x20AC;?). 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.

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 cinemaâ&#x20AC;&#x2122;s owner, copyright and sales of sponsorship. Revenue from box-office sharing between cinemaâ&#x20AC;&#x2122;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 Groupâ&#x20AC;&#x2122;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

0132 0133 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 Groupâ&#x20AC;&#x2122;s/Companyâ&#x20AC;&#x2122;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.

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 Chetchotsak Co., Ltd Idea Power Co., Ltd.

Type of business Rental service Organizer

SS2C Co., Ltd. Key management personnel

Rental service -

Type of relation Common shareholder and directors Indirect shareholding and common directors of subsidiaries Common shareholder and directors 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 feeâ&#x20AC;&#x2122;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:

0134 0135 Million Baht Consolidated December December 31, 2014 31, 2013 Trade accounts receivable Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Yaak Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) D-Media and Production Co., Ltd. R.S. Television Co., Ltd. Associated company Idea Power Co., Ltd. Total - trade accounts receivable Loans to Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Yaak Co., Ltd. S-One Sport Co., Ltd. Poema Co., Ltd. Blu Fairy Co., Ltd. R.S. Sportmaster Co., Ltd. R.S. Television Co., Ltd. Total Less Allowance for doubtful account Loans to related parties - net

Separate December December 31, 2014 31, 2013

80.17 0.01 5.78 1.56 -

81.95 2.55 24.26 2.63 0.63

0.12

0.38 168.47

0.08 -

19.73 19.73

256.49

112.10

99.00 20.00 45.00 20.36 19.94 5.00 1.00 2.34 2.34 328.70 38.00 372.40 209.28 (42.70) (43.29) 329.70 165.99

Million Baht Consolidated December December 31, 2014 31, 2013 Movement of loans to related companies Beginning balance Increase during for the years Paid during for the years Ending balance Accrued interest receivable Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Yaak Co., Ltd. S-One Sport Co., Ltd. Poema Co., Ltd. Blu Fairy Co., Ltd. R.S. Sportmaster Co., Ltd. R.S. Television Co., Ltd. Total - accrued interest receivable Less Allowance for doubtful debt Accrued interest receivable - Net Advance Subsidiaries company Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) Avant Co., Ltd. R Siam Co., Ltd. R.S. Sportmaster Co., Ltd. RS Film and Distribution Co., Ltd. R.S. Television Co., Ltd. Total

Separate December December 31, 2014 31, 2013

91.00 (91.00) -

209.28 833.12 (670.00) 372.40

387.00 397.06 (574.78) 209.28

1.24 1.68 0.01 1.43 2.11 6.47 (3.56) 2.91

0.36 1.76 0.87 0.02 1.33 0.29 4.63 4.63

0.13 0.24 0.37

0.01 0.01 0.01 0.12 0.22 0.01 0.38

0136 0137 Million Baht Consolidated December December 31, 2014 31, 2013 Accrued income Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Coolism Co., Ltd. R.S. Television Co., Ltd. Total - accrued income Declared dividend Coolism Co., Ltd. Trade accounts payable and other accounts payable Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Yaak Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. Avant Co., Ltd. R.S. Television Co., Ltd. Associated company Idea Power Co., Ltd. Related parties Chetchotsak Co., Ltd. Total

Separate December December 31, 2014 31, 2013

2.29 1.10 15.38 18.77

3.73 0.88 4.61

136.50

94.00

49.51 0.07 0.80 1.93 0.01 2.71

4.87 0.70 2.21 1.21 -

0.02

2.01 2.01

1.64 1.66

1.61 56.64

1.34 10.33

Million Baht

Short - term loans from Subsidiaries company Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Aladdin House Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) Blu Fairy Co., Ltd. Avant Co., Ltd. R Siam Co., Ltd. R.S.Television Co., Ltd. Bangkok Organizer Co., Ltd. Associated company Idea Power Co., Ltd. Total Movement of loans from Beginning balance Increase during for the years Paid during for the years Ending balance Unearned revenues Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Total

Consolidated December December 31, 2014 31, 2013

Separate December December 31, 2014 31, 2013

90.00 7.00

12.00 5.00 7.00

139.00 6.00

7.00

0.75 1.00 2.30

3.00 4.00 0.75 1.00 3.00 2.30 45.05

8.00 8.00 246.05

8.00 - 45.05 84.10 - 8.00 719.00 50.50 (8.00) - (518.00) (89.55) 8.00 246.05 45.05

0.46 34.72 0.02

1.00 25.59 -

0.20 35.40

26.59

0138 0139 Million Baht Consolidated December December 31, 2014 31, 2013 Accrued interest expense Associated company Idea Power Co., Ltd. Total Accrued expenses Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. R.S. Television Co., Ltd. Related parties Chetchotsak Co., Ltd. SS2C Co., Ltd. Total

Separate December December 31, 2014 31, 2013

0.11 0.11

1.94 7.17

0.08 -

0.09 0.05 0.14

0.05 9.16

0.08

The Companyâ&#x20AC;&#x2122;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

Consolidated 2014 2013 Revenue from media Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Yaak Co., Ltd. Coolism Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) D-Media and Production Co.,Ltd. R.S.Television Co., Ltd. Total revenue from media

2014

Separate

2013

98.58 0.07

76.02 3.16 -

32.10

16.97 111.99 259.71

0.07 79.25

Million Baht

Consolidated 2014 2013 Revenue from music distribution Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Lazerface Records Co., Ltd. Aladdin House Co., Ltd. Total revenue form music distribution Revenue from event business Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Coolism Co., Ltd. Yaak Co., Ltd. Aladdin House Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) Blu Fairy Co., Ltd. R.S.Television Co., Ltd. Associated company Idea Power Co., Ltd. Total revenue from event business Other income Revenue from management service Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Total

2014

Separate

2013

1.13 55.31 56.44

4.00 60.68 0.05 0.03 64.76

10.39 13.60

15.01 0.88 0.48 0.02

0.35 0.03 2.57

0.07 0.02 -

32.44 32.44

26.94

14.00 30.48

45.30 9.52 17.34 -

26.63 9.52 14.65 1.92

1.00 73.16

52.72

0140 0141 Million Baht

Consolidated 2014 2013 ดอกเบี้ยรับ บริษัทย่อย Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Yaak Co., Ltd. S-One Sport Co., Ltd. Coolism Co., Ltd. Lazerface Records Co., Ltd. Poema Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Aladdin House Co., Ltd. Blu Fairy Co., Ltd R.S. Sportmaster Co., Ltd. D-Media and Production Co., Ltd. R.S.Television Co., Ltd. Associated company Idea Power Co., Ltd. Total Other income Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. RS In ternational Broadcasting and Sport Management Co., Ltd. Blu Fairy Co., Ltd Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) R.S.Television Co., Ltd. Total Total other income

2014

Separate

2013

2.62 1.10 0.81 0.72

7.07 0.97 0.80 0.24 0.08 0.02

0.02 0.01 0.09 0.05 9.81

0.89 1.30 0.09 0.29

0.03 0.03

15.23

11.75

0.35 0.02 0.15 -

1.70 0.04 0.21 0.06

19.33 0.01

0.22 3.18 23.26 111.65

2.01 66.48

Million Baht

Cost of sales and service Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Yaak Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. Bangkok Organizer Co., Ltd. Related parties Chetchotsak Co., Ltd. Total cost of sales and service Selling and administration expenses Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Related parties Chetchotsak Co., Ltd. SS2C Co., Ltd. Group of Person - Chetchotsak Total Finance costs - interest payable Subsidiaries company Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. RS In-Store Media Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Poema Co., Ltd. Aladdin House Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) Blu Fairy Co., Ltd Avant Co., Ltd. D-Media and Production Co.,Ltd. R Siam Co., Ltd. Bangkok Organizer Co., Ltd. R.S. Television Co., Ltd.

Consolidated 2014 2013

2014

Separate

2013

89.12 4.50 7.36 2.34 32.34

41.45 33.38 6.57 3.54 -

26.38 26.38

30.42 30.42

25.51 161.17

28.44 113.38

0.95

0.40

41.28 8.76 0.24 50.28

35.97 8.51 0.22 44.70

31.78 8.76 0.24 41.73

26.78 8.51 0.22 35.91

0.25 0.13 0.33 0.09

0.25 0.14 0.20

0.87 0.09

0.65 0.02

0.09 0.04 0.01 0.01 0.03 -

0.11 0.01 0.02 0.03 0.03 0.05 0.07

0142 0143 Million Baht

Consolidated 2014 2013 Associated company Idea Power Co., Ltd. Total finance costs - interest payable Key management personnel compensation Short-term employee benefit Long-term employee benefit Total key management personnel compensation

Separate

2014

2013

0.57 0.57

0.12 0.12

1.94

1.58

172.47 3.66 176.13

118.93 3.39 122.32

161.94 3.49 165.43

107.77 3.21 110.98

6. CASH AND CASH EQUIVALENTS Baht Consolidated 2014 Cash on hand Deposit in bank

2013

2014

2013

6,215,577.35

6,414,432.38

4,818,403.50

5,267,752.00

375,319,737.93

315,732,407.94

148,094,210.91

150,715,813.40

250,000,000.00

381,535,315.28

572,146,840.32

152,912,614.41

405,983,565.40

Highly liquid shot-term in vestments Total

Separate

7. ลูกหนี้การค้า – สุทธิ As at December 31, 2014, and 2013, accounts receivable was classified by aging as follows: Baht Consolidated 2557 Accounts receivable - related parties Current Overdue : Less than 3 months 3 - 6 months 6 - 12 months Over 12 months Total Less Allowance for doubtful accounts Total accounts receivable - related parties - net

Separate 2013

2014

2013

- 19,729,730.00

108,630,637.89

38,406,892.23

- 19,729,730.00 -

60,914,525.99 79,136,932.50 3,247,838.65 4,569,180.00 256,499,115.03 -

45,581,611.32 13,809,280.33 5,270,094.42 9,032,564.86 112,100,443.16 -

256,499,115.03

112,100,443.16

19,729,730.00

Baht Consolidated Accounts receivable - others – net Current Overdue : Less than 3 months 3 - 6 months 6 - 12 months มากกว่า 12 เดือนขึ้นไป Total Less Allowance for doubtful accounts Total accounts receivable - others – net

Separate

2557

2013

2014

2013

407,971,310.24

487,715,994.53

131,725,538.36

207,582,929.10

401,877,831.03 49,164,628.03 6,238,951.03 34,632,635.15 899,885,355.48 (36,742,550.38) 863,142,805.10

240,906,394.90 8,838,206.40 18,456,482.85 36,223,612.60 792,140,691.28 (35,971,609.05) 756,169,082.23

97,239,969.09 27,701,798.28 5,564,851.03 31,919,129.39 294,151,286.15 (33,503,538.95) 260,647,747.20

156,625,652.87 5,049,290.56 18,120,759.65 33,028,973.85 420,407,606.03 (32,609,224.14) 387,798,381.89

8. INVENTORIES – NET As at December 31, 2014 and 2013, inventories were as follows:Baht

Consolidated 2557 Finished goods: Films and Music , Tapes, CDs,VCDs,DVDs 10,436,364.07 Work in process: movie, drama and others Music 4,326,311.25 TV Program 898,484.04 Concert and marketing activities 127,754.75 Drama series 51,614,439.94 Telemovie 1,944,710.23 Film 24,330.00 Production house 2,941,730.16 Total work in process 61,877,760.37 Raw material 1,062,660.76 Satellite television receivers 96,370,960.80 Other 3,272,575.60 รวม สินค้าคงเหลือ 173,020,321.60 Less Allowance for devaluation of inventories (13,164,479.24) Inventories - net 159,855,842.36

Separate

2013

2014

2013

21,445,922.31

10,425,501.85

20,228,272.14

5,338,299.09 513,540.38 13,490,295.52 21,654,007.87 1,944,710.23 22,000.00 3,484,791.73 46,447,644.82 1,993,017.56 12,592,693.72 1,487,897.25 83,967,175.66

1,429,282.55 538,650.00 47,000.00 665,263.15 2,330.00 1,474,240.18 4,156,765.88 1,062,660.76 15,644,928.49

2,747,381.00 513,540.38 1,416,794.49 21,654,007.87 1,433,081.88 27,764,805.62 1,936,023.17 49,929,100.93

(20,655,035.21) 63,312,140.45

(7,966,654.32) 7,678,274.17

(14,027,890.28) 35,901,210.65

0144 0145 9. OTHER CURRENT ASSETS As at December 31, 2014 and 2013, other current assets were as follows:Baht Consolidated Undue input Value Added Tax Prepaid expense Advance receivable Other Account receivable Other Total

2014 29,858,152.43 98,015,669.13 3,303,229.89 385,419.44 7,359,547.43 138,922,018.32

2013 13,939,207.24 53,366,341.22 4,667,293.17 683,777.17 14,926,328.82 87,582,947.62

Separate 2014 5,377,582.11 36,941,683.95 2,421,159.00 250,430.30 2,549,455.01 47,540,310.37

2013 2,747,571.53 34,672,242.42 1,579,094.71 678,730.46 5,789,963.70 45,467,602.82

776,000,000.00 582,000,000.00

Grand Total

(326,463,231.96)

(12,654,207.58) (33,800,530.00) (1,854,161.59) (5,852.00) (2,667,594.68) (4,999,300.00) (490,871.31) (1,199,900.00) (57,672,417.16)

(28,594,357.46) (1,159,258.11) (268,790,814.80)

(105,770,418.05) -

(54,559,344.29) (76,208,136.89) (2,499,300.00)

6,845,092.42 2,145,138.41 993,448.00 2,508,428.69 12,492,107.52 624,853,389.59 371,392,178.76

6,420,990.86 2,137,149.85 999,300.00 2,520,277.88 12,077,718.59

3,999,300.00 3,999,300.00 6,431,518.71 4,180,642.54 200,209,300.00 3,050,041.89 612,775,671.00 358,900,071.24

179,229,581.99 179,229,581.99 4,999,300.00 4,999,300.00 4,009,993.00 4,009,993.00

199,999,300.00 145,439,955.71 4,999,400.00 4,999,400.00 5,199,993.00 5,199,993.00 3,697,984.30 3,791,863.11 -

Carrying value 2014 2013

2,949,108.90

2013

1,421,988.91

82,658.41 1,339,330.50 1,421,988.91

Provision

1,519,328.93 73,297.62 1,356,482.35 2,949,108.90

2014

9,648,649.00 -

1,918,656.00 1,918,65ๅ6.00 407,907,925.25 176,961,762.40

17,176,993.50 6,198,915.00 407,907,925.25 175,043,106.40

1,524,786.50 -

231,999,188.00 12,398,512.00 144,808,445.25 159,195,542.40 -

Dividend Received 2014 2013

* 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.

892,655,510.72 697,855,410.72 (267,802,121.13)

(13,078,309.14) (33,800,530.00) (1,862,150.15) (2,667,594.68) (4,999,300.00) (479,022.12) (56,886,906.09)

19,499,300.00 33,800,530.00 3,999,300.00 999,300.00 2,667,594.68 4,999,300.00 2,999,300.00 68,964,624.68

30,000,000.00 15,000,000.00 4,000,000.00 1,000,000.00 4,500,000.00 5,000,000.00 3,000,000.00 62,500,000.00

19,499,300.00 33,800,530.00 3,999,300.00 999,300.00 2,667,594.68 4,999,300.00 2,999,300.00 1,199,900.00 70,164,524.68

3,999,300.00 3,999,300.00 32,775,000.00 32,775,000.00 (26,343,481.29) 200,209,300.00 4,209,300.00 823,690,886.04 627,690,886.04 (210,915,215.04)

4,000,000.00 4,000,000.00 37,000,000.00 37,000,000.00 200,000,000.00 4,000,000.00 713,500,000.00 517,500,000.00

30,000,000.00 15,000,000.00 4,000,000.00 1,000,000.00 4,500,000.00 5,000,000.00 3,000,000.00 2,000,000.00 64,500,000.00

285,000,000.04 285,000,000.04 (105,770,418.05) 4,999,300.00 4,999,300.00 4,009,993.00 4,009,993.00 -

(76,302,015.70) (2,499,300.00)

Allowance for impairment 2014 2013

150,000,000.00 150,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00

2013

199,999,300.00 199,999,300.00 4,999,400.00 4,999,400.00 5,199,993.00 5,199,993.00 80,000,000.00 80,000,000.00 2,499,300.00 2,499,300.00

Cost Method

200,000,000.00 200,000,000.00 5,000,000.00 5,000,000.00 25,000,000.00 25,000,000.00 80,000,000.00 80,000,000.00 2,500,000.00 2,500,000.00

2014

Operating subsidiaries Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Thai Copyright Collection Co., Ltd. Coolism Co., Ltd. Poema Co., Ltd. Yaak Co., Ltd. RS International Broadcasting and Sport Management Co., Ltd. Aladdin House Co., Ltd. Blu Fairy Co., Ltd. Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) D-Media and Production Co., Ltd. R.S. Television Co., Ltd. Total Non-operating subsidiaries RS In-Store Media Co., Ltd. S-One Sport Co., Ltd. Avant Co., Ltd. R Siam Co., Ltd. R.S. Sportmaster Co., Ltd. RS Film and Distribution Co., Ltd. Bangkok Organizer Co., Ltd. Lazerface Records Co., Ltd.* Total

Paid up capital 2014 2013

Thousand Baht

Investments in subsidiaries which recorded by the cost method as at December 31, 2014 and 2013, consisted of:

10. INVESTMENTS IN SUBSIDIARIES – NET

0146 0147 11. INVESTMENT IN ASSOCIATED COMPANIES

Name Idea Power Co., Ltd.

Nature of business Organizer

Baht Paid - up capital 2014 2013 20,000,000.00 20,000,000.00

Percent Percentage of holding 2014 2013 25.00 25.00

บาท งบการเงินรวม

Idea Power Co., Ltd. Less Impairment of investment Total investments in associated companies

เงินลงทุนตามวิธีส่วนได้เสีย 2557 2556 5,406,090.08 5,495,813.48 -

เงินลงทุนตามวิธีราคาทุน 2557 2556 6,303,621.00 6,303,621.00 (897,530.92) (807,807.52)

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 At Cost Balance as at January 1,2013 42,170,428.48 Acquisitions 148,960.00 Transfers in (out) 63,840.00 Disposal (5,774,901.50) Balance as at December 31, 2013 36,608,326.98 Acquisitions 3,754,139.72 Transfers in (out) Disposal Balance as at December 31, 2014 Accumulated depreciation As at January 1, 2013 Depreciation for the year Transfers in (out) Disposal As at December 31, 2013 Depreciation for the year Transfers in (out) Disposal As at December 31, 2014 Provision for impairment of asset As at January 1, 2013 Increase (Decrease)

Machines and operating equipment

Furniture and office equipment

vehicles

Equipment under installation

Total

265,583,446.00 41,368,642.46 11,111,150.00 (24,913,500.80)

297,210,207.86 54,395,527.70 29,989,912.52 (17,934,063.64)

37,274,383.76 1,414,659.26 (242,872.92)

16,788,457.89 25,349,369.38 (41,164,902.52) -

659,026,923.99 122,677,158.80 (48,865,338.86

293,149,737.66 363,661,584.44 38,446,170.10 16,498,917.92 5,041,261.02 42,632,967.15 686,925.00 5,141,800.00 6,880,000.00 (4,802,508.02) (8,866,573.80) -

972,924.75 732,838,743.93 17,867,828.00 85,795,113.81 (12,782,425.00) (73,700.00) (13,669,081.82

41,049,391.70 309,987,947.56 404,307,977.79

43,487,431.12 6,058,327.75 804,891,075.92

32,370,747.89 6,203,400.95 (5,774,700.50) 32,799,448.34 4,738,563.46

12,475,656.03 4,263,503.16 (242,868.92) 16,496,290.27 4,570,178.04 21,066,468.31

174,901,264.94 24,492,705.21 (23,984,585.40) 175,409,384.75 29,736,462.22 (1,091.73) (4,749,311.52) 37,538,011.80 200,395,443.72 -

178,875,161.22 35,900,850.16 (17,080,804.02) 197,695,207.36 43,102,475.93 (8,141,588.50) 232,656,094.79

884,243.35 (462,321.81) -

398,622,830.08 4,263,503.16 (47,082,958.84 422,400,330.72 82,147,679.65 (1,091.73) (12,890,900.02 491,656,018.62 -

884,243.35 (462,321.81

(Unit : Baht) Consolidated

As at December 31, 2013 Increase (Decrease) As at December 31, 2014 Net book value As at December 31, 2013 As at December 31, 2014

Building and building improvements -

Machines and operating Furniture and equipment office equipment 421,921.54 (421,921.54) -

vehicles -

Equipment under installation Total - 421,921.54 - (421,921.54 -

3,808,878.64 117,318,431.37 165,966,377.08 21,949,879.83 972,924.75 310,016,491.67 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�ำเนินการ

เครื่องตกแต่งและ อุปกรณ์ส�ำนักงาน

ยานพาหนะ

งานระหว่างก่อสร้าง และอุปกรณ์ระหว่าง ติดตั้ง

รวม

At Cost Balance as at January 1, 2013 Acquisitions Transfers in (out) Disposal Balance as at December

20,238,824.56 148,960.00 63,840.00 -

72,033,473.36 38,951,992.00 11,111,150.00 (46,300.00)

276,770,836.43 50,232,553.58 29,989,912.52 (10,851,531.65)

34,017,594.99 1,414,659.23 (2,959.81)

16,788,457.89 25,349,369.38 (41,164,902.52) -

419,849,187.23 116,097,534.19 (10,900,791.46)

31, 2013 Acquisitions Transfers in (out) Disposal Balance as at December

20,451,624.56 3,154,139.72 686,925.00 -

122,050,315.36 12,492,367.80 5,215,500.00 (20,000.00)

346,141,770.88 40,890,464.92 6,880,000.00 (3,875,309.54)

35,429,294.41 3,990.00 -

972,924.75 17,867,828.16 (12,782,425.00) -

525,045,929.96 74,408,790.60 (3,895,309.54)

31, 2014 Accumulated depreciation As at January 1, 2013 Depreciation for the year Disposal As at December 31, 2013 Depreciation for the year Disposal As at December 31, 2014 Net book value As at December 31, 2013 As at December 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

11,647,770.27 5,267,420.91 16,915,191.18 4,379,993.53 21,295,184.71

22,734,322.56 16,084,324.34 (42,002.17) 38,776,644.73 23,841,626.76 (19,999.00) 62,598,272.49

140,273,598.20 32,428,871.03 (10,612,446.69) 162,090,022.54 40,006,238.81 (3,351,134.91) 198,745,126.44

9,218,869.26 4,263,503.16 (2,957.81) 13,479,414.61 4,264,262.93 17,743,677.54

183,874,560.29 58,044,119.44 (10,657,406.67) 231,261,273.06 72,492,122.03 (3,371,133.91) 300,382,261.18

3,536,433.38 2,997,504.57

83,273,670.63 77,139,910.67

184,051,748.34 191,291,799.82

21,949,879.80 17,689,606.87

972,924.75 6,058,327.91

293,784,656.90 295,177,149.84

0148 0149 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 companiesâ&#x20AC;&#x2122; 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 Companyâ&#x20AC;&#x2122;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

Cost Accumulated amortization Balance

2557 2,265,000,000.00 (103,183,333.31) 2,161,816,666.69

2556

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.

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 Consolidated 302,500,000.00 1,584,000,000.00 1,886,500,000.00

Year 1 2-5

15. INTANGIBLE ASSETS - NET As at December 31, 2014 and 2013, intangible assets are as follow:

2014

Consolidated

Cost Beginning balance 1,527,839,878.39 Addition 298,758,992.24 Disposal / Transfer (1,213,055.17) Carry forward balance 1,825,385,815.46 Accumulated amortization Beginning balance 496,730,305.85 Amortization for the periods 695,062,214.30 Disposal / Transfer (1,213,049.16) Carry forward balance 1,190,579,470.99 ยอดคงเหลือ 634,806,344.47 Less Allowance for impairment (330,479,692.80) Net book value 304,326,651.67

2013

2014

Separate

2013

1,214,250,023.02 313,589,855.37 1,527,839,878.39

638,304,115.78 41,726,648.83 680,030,764.61

588,180,554.74 50,123,561.04 638,304,115.78

289,349,180.89 207,381,124.96 496,730,305.85 1,031,109,572.54 (310,338,767.30) 720,770,805.24

201,215,551.76 49,638,159.90 250,853,711.66 429,177,052.95 (303,232,900.46) 125,944,152.49

186,861,132.05 14,354,419.71 201,215,551.76 437,088,564.02 (287,585,461.77) 149,503,102.25

Consolidated

2014 70,480,267.75 51,376,972.54 1,443,499.60 181,025,911.78 304,326,651.67

Baht

2013 78,794,093.75 37,855,711.93 3,914,221.21 600,206,778.35 720,770,805.24

Separate

2014 70,480,307.75 9,849,116.82 1,443,494.60 44,171,233.32 125,944,152.49

2013 78,830,106.99 37,855,704.89 3,914,216.21 28,903,074.16 149,503,102.25

0150 0151 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 Consolidated 2014 Deferred tax assets Account receivable Intangible assets Allowance for sale return Loss carry forward Total Deferred tax liabilities Intangible assets Net

Separate 2013

2014

2013

6,371,824.59 34,584,086.76 7,346,986.59 49,420,393.65 97,723,291.59

6,371,824.59 26,469,102.00 40,277,642.26 73,118,568.85

6,371,824.59 25,831,526.23 7,346,986.59 34,728,393.18 74,278,730.59

6,371,824.59 26,469,102.00 32,840,926.59

6,102,159.69 91,621,131.90

30,874,254.44 42,244,314.41

74,278,730.59

32,840,926.59

The movement on the deferred income tax is as follows: Thousand Baht Consolidated 2014 Deferred tax assets Beginning 73,118,568.85 Income tax recognized in statement of income 24,604,722.74 Ending 97,723,291.59 Deferred tax liabilities Beginning (30,874,254.44) Income tax recognized in statement of income 24,772,094.75 Ending (6,102,159.69) Revenue (expense) Income tax recognized in statement of income net 49,376,817.49

Separate 2013

2014

2013

64,554,191.44

32,840,926.59

25,802,478.00

8,564,377.41 73,118,568.85

41,437,804.00 74,278,730.59

7,038,448.59 32,840,926.59

(21,133,763.81)

(9,740,490.63) (30,874,254.44)

(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.

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 Consolidated 2014 Income tax : Income tax for the period 167,392,810.33 Deferred tax : Relating to origination and reversal of temporary differences (49,376,817.49) Income tax in statements of comprehensive income 118,015,992.84

Separate 2013

2014

2013

82,385,197.68

38,445,182.92

1,176,113.22

(41,437,804.00)

(7,038,448.59)

83,561,310.90

(41,437,804.00)

31,406,734.33

Income tax recognized directly in equity (Unit : Thousand Baht)

Profit before income tax expense Income tax using the Thai corporation tax rate Expenses not deductible for tax purposes net benefit of tax losses recognised Expenses deductible increases for tax purpose Tax losses for which no deferred income tax asset was recognised Utilisation of previously unrecognised tax losses Total

Profit before income tax expense Income tax using the Thai corporation tax rate Effect of income tax from reversal of provision for (loss) on investment in subsidiaries - net Income not subject to tax Expenses not deductible for tax purposes Expenses (Income) deductible increases for tax purpose Total

Rate (%) 20

Rate (%)

Consolidated Rate 2557 (%) 515,641 103,128 20

2556 475,818 95,164

14,939 (296)

2,786 (2,556)

685 (440) 118,016

2,736 (14,569) 83,561

Separate

2014 296,872 59,374

(11,172) (81,582) (7,165) (893) (41,438)

(Unit : Thousand Baht) Rate (%) 20

2013 445,060 89,012

(24,035) (35,392) 1,352 470 31,407

0152 0153 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 Thailandâ&#x20AC;&#x2122;s tax competitiveness. 17. OTHER CURRENT LIABILITIES As at December 31, 2014 and 2013, other current liabilities was as follows: Baht Consolidated

Separate

2014 2013 36,734,932.94 74,467,448.77 82,914,182.55 47,143,754.80 32,670,355.25 42,770,759.19 152,319,470.74 164,381,962.76

Allowance for sale return Undue output Value Added Tax Others Total

2014 2013 36,734,932.94 74,294,221.77 34,880,479.03 26,591,290.37 5,680,489.88 17,265,550.44 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 Consolidated Liability under financial lease Less Current portion of liability under financial lease Liability under financial lease - net

Separate

2014 12,758,803.63

2013 17,898,782.65

2014 12,758,803.63

2013 17,898,782.65

(7,655,314.73) 5,103,488.90

(5,139,978.04) 12,758,804.61

(7,655,314.73) 5,103,488.90

(5,139,978.04) 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: Year 1 2-5

Baht Consolidated/ Separate 8,261,731.36 5,340,540.24 13,602,271.60

19. LOANS-LOAN FROM FINANCIAL INSTITUTIONS As at December 31, 2014 and 2013, the Group had loans from financial institutions as follows: Baht

Current portion of long-term loans Long-term loans Total long-term loans

Consolidated 2013 2013 - 286,915,000.00 - 286,915,000.00

Separate 2014

2013 -

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 Consolidated 2014 2013 Current portion of employee benefit obligations 4,406,669.00 11,010,934.00 Employee benefit obligations - net 60,944,814.91 38,756,284.08 Total 65,351,483.91 49,767,218.08

Separate 2014 2013 4,406,669.00 11,010,934.00 52,300,564.79 32,499,061.36 56,707,233.79 43,509,995.36

Movement in the present value of the defined benefit obligations : Baht Consolidated For the year ended December 31 Defined benefit obligations at January 1 Provision for employee benefits-beginning Benefits paid by the plan Actuarial gains in other comprehensive income Decrease benefits from transfer employee to subsidiary Provision for employee benefits - ending Present value of unfunded obligation as at December 31,

งบการเงินเฉพาะกิจการ 2014 2013

2014

2013

49,767,218.08

32,536,899.12

43,509,995.36

28,457,589.32

17,151,390.03 -

17,230,318.96 -

15,521,824.43 -

15,052,406.04 -

(1,567,124.20)

(2,044,733.00)

65,351,483.91

49,767,218.08

(279,853.00) 56,707,233.79

43,509,995.36

65,351,483.91

49,767,218.08

56,707,233.79

43,509,995.36

0154 0155 Post-employee benefit expenses included in the statements of comprehensive income for the years ended December 31,2014 and 2013 were as follows: Baht

Consolidated 2014 2013 Recognised in profit or loss : - Current service cost - Past service cost - Interest cost Total â&#x20AC;&#x201C; recognized in profit or loss Recongnised in other comprehensive income: Actuarial gain in the year

2014

Separate

2013

6,411,248.60 8,591,009.77 2,149,131.66 17,151,390.03

6,415,787.36 8,705,066.60 2,109,465.00 17,230,318.96

5,662,665.22 7,930,865.21 1,928,294.00 15,521,824.43

5,321,346.08 7,864,998.96 1,866,061.00 15,052,406.04

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 (%) Estimation of future salary increase (%) Retirement age (year old)

3.5 7.0 - 7.5 60

3.7 5-7 60

21. DIVIDEND RECEIVED FROM SUBSIDIARIES

Coolism Co., Ltd. First Second Third Starz (Thailand) Co., Ltd. (Formerly: K.master Co., Ltd.) Magique (Thailand) Co., Ltd. (Formerly: Nagasia Co., Ltd.) First Second R Siam Co., Ltd. Aladdin House Co., Ltd. Thai Copyright Collection Co., Ltd. First Second Total

2014

Per share (Baht)

Dividend 2013

Total amount (Millions Baht) 2014 2013

33.25 546.00 -

20.80 240.00 376.00

8.31 136.50 -

5.20 60.00 94.00

116.00

232.00

9.50 420.00 30.50

155.00 192.00 193.00

0.38 16.80 1.52

6.20 1.92 9.64

93.00 155.00

4.65 7.75 407.91

176.96

22. SHARE CAPITAL The Company issued and offered warrants as follows: Exercise price Date of issue and (Baht per Share) Name of warrants offer of warrants RS-W2 June 14, 2010 1.900

Exercise right (warrant per ordinary share) 1:1

Number of allotted shares (million units) 71.21

Last exercise date of warrants 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 Companyâ&#x20AC;&#x2122;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 Companyâ&#x20AC;&#x2122;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.

0156 0157 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: Consolidated Profit for the period attributable to shareholders of the Company basic (Baht) Ordinary shares outstanding as at January 1, (shares) Effect of shares issued in periods (shares) Weighted average ordinary shares outstanding basic (shares) Earnings per share basic (Baht)

Separate

2014

2013

2014

2013

370,956,749.69

394,491,532.39

338,309,913.03

413,653,303.62

983,957,561

864,992,428 38,960,622

983,957,561

864,992,428

38,960,622

983,957,561 0.3438

903,953,050 0.4576

983,957,561 0.3770

903,953,050 0.4364

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 Consolidated Profit for the period attributable to shareholders of the Company basic (Baht) Weighted average number of ordinary shares outstanding basic (shares) Effect of exercise of shares options Weighted average number of ordinary shares outstanding diluted (shares) Earnings per share diluted (Baht)

Separate

2014

2013

2014

2013

370,956,749.69

394,491,532.39

338,309,913.03

413,653,303.62

983,957,561 -

903,953,050 54,457,072

983,957,561 -

903,953,050 54,457,072

983,957,561 0.3770

958,410,122 0.4116

983,957,561 0.3438

958,410,122 0.4316

27. EXPENSES BY NATURE Significant expenses for the year 2014 and 2013 were as follows: Thousands Baht

Changes in finished goods and work in process balance Cost of service and raw consumable and material used Employee expenses Depreciation Amortization Rental and utility expense Sales promotion and public relations expense Allowance for impairment asset Loss for damage of inventory and provision for decline in value of inventory

Consolidated 2014 2013

2014

Separate

2013

(120,702)

(140,132)

3,791

(35,395)

3,109, 001 731,522 82,147 798,245 112,982

1,766,264 695,210 70,860 207,382 114,266

948,596 617,860 72,492 49,638 89,767

925,861 554,364 58,044 14,355 89,848

19,584 19,719

30,063 28,296

8,809 15,647

7,880 14,005

24,159

30,931

24,432

30,941

159,248,874.74

Fixed assets

2,349,958,942.97

202,156,533.56

1,093,558,308.36

Gross profit

Intangible assets

316,689,144.70

Cost of sales and services 3,167,979,462.27

70,569,673.44

15,623,557.17

61,028,822.27

904,702,941.92

457,816,855.99

Revenues from external 3,356,834,828.71

Revenues from internal

518,845,678.26

Music distribution

4,261,537,770.63

Revenues

Media

365,759.84

86,480,238.64

414,696,492.93

42,662,259.43

458,514,472.14

501,176,731.57

Event business

45,614,729.92

137,996,865.55

(3,253,130.81)

110,137,195.01

73,598,786.94

33,285,277.26

106,884,064.20

Baht Other services

For the year ended December 31, 2014, the operated information with business segment is as follows:

Business segments

2,466,143,346.33

313,235,057.30

1,378,941,949.75

4,009,502,294.91

1,081,992,810.56

4,306,451,434.10

5,388,444,244.66

Total

(27.97)

2,845,375.09

(1,084,838,185.65)

(1,081,992,810.56)

Eliminated

Management considers that the Group operates in a single geographic area, namely in Thailand, and has, therefore, only one major geographic segment.

Geographic segments

2,466,143,318.36

313,235,057.30

1,381,787,324.84

2,924,664,109.26

4,306,451,434.10

Total

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest or dividend-earning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses.

Segment information is presented in respect of the Groupâ&#x20AC;&#x2122;s business. The primary format / business segments is based on the Groupâ&#x20AC;&#x2122;s management and internal reporting structure.

28. SEGMENT INFORMATION

0158 0159

777,175,118.49 70,358,922.78 280,740,526.22 566,793,515.05

Revenues from external 1,986,274,871.39

152,869,664.38

Cost of sales and services 1,250,463,401.23

888,681,134.54

143,308,538.45

534,318,557.99

Revenues from internal

Gross profit

Fixed assets

Intangible assets

78,866,123.23

18,661,112.06

847,534,041.27

Music distribution

2,139,144,535.77

Revenues

Media

1,410,478.47

142,835,478.03

577,542,651.24

27,816,738.97

692,561,390.30

720,378,129.27

Event business

26,480,379.88

146,636,362.69

4,927,484.58

524,086.06

5,451,570.64

Baht Other services

For the year ended December 31, 2013, the operated information with business segment is as follows:

639,665,061.10

310,016,491.67

1,603,237,612.20

2,109,270,664.75

251,045,326.13

3,461,462,950.82

3,712,508,276.95

Total

81,105,744.14

(251,045,326.13)

Eliminated

720,770,805.24

310,016,491.67

1,352,192,286.07

2,109,270,664.75

3,461,462,950.82

Total

0160 0161 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)

31. COMMITMENT AND CONTINGENT LIABILITIES 31.1 Commitments Consolidated 2014 2013 Capital Commitments Plant Property and Equipment Operating lease Commitments Within one year Two â&#x20AC;&#x201C; Three years Total Total all

Million Baht 2014

Separate

2013

175.00

34.55 7.78 42.33 217.33

60.38 26.15 86.53 86.53

31.82 7.78 39.60 214.60

53.66 23.35 77.01 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 .

0162 0163 31.2 Contingent liabilities As at December 31, 2014 and 2013, the Company had contingent liabilities with the local bank as follows: Consolidated 2014 2013 Various credit facilities - Unused (Baht Million) - Unused (US Dollar Million) Forward contract (Sold) facility credit - Unused (US Dollar Million) - Unused (EURO) Guarantee to subsidiary (Unit: US Dollar Million) Guarantee to the Company, its subsidiary and other company (Unit: Baht Million)

Separate 2014

2013

870 -

1,113 4

820 -

920 -

3.5

5 3.5

1.25

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 Companyâ&#x20AC;&#x2122;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 Companyâ&#x20AC;&#x2122;s authorized directors on February 24, 2015.

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