Index Part 1 Business Operations Page 1. Corporate Group Structure and Business Operations 2 2. Risk management 28 3. Sustainability Development 37 4. Management Discussion and Analysis 99 5. General Information and Other Important Information 113 Part 2 Corporate Governance 6. Corporate Governance Policy 121 7. Corporate Governance Structure and Significant Information 133 regarding to the Board of Directors, Sub-Committees, Executives, Employee and others 8. Report of Corporate Governance 162 9. Internal Control and Related Parties Transactions 183 Part 3 Financial Statement 190 Part 4 Confirmation of Information Accuracy 269 Attachment Attachment 1 Detail of Directors, Management, Authorized Persons, Company Secretary and Supervising Accountant Attachment 2 Detail of Directors of subsidiaries Attachment 3 Details of heads of internal audit and compliance units Attachment 4 Details of asset appraisal Attachment 5 Corporate Governance Policy and Code of Conduct Attachment 6 Audit Committee Report Attachment 7 Board of Directors Report RS Public Company Limited 1) Corporate Group Structure and Business Operations 1.1) Policy and Overall Business Operations RS Public Company Limited (“RS” or “Company”) was established in 1976, starting from a comprehensive music business. Later, it was converted into a public company, listed on the Stock Exchange of Thailand in 2003 with a registered capital of 560 million baht. The Company subsequently changed its name to “RS Public Company Limited”. As of December 31, 2020, the Company’s issued and paid-up capital was 972,496,946 shares, with a par value of one baht. The Company has expanded continuously since its music business days, going into radio and television media and event business. Since April 2014, the Company has adapted its existing “Channel 8”, which originally aired on the satellite TV system, to a standard-definition digital TV instead. In the same year, the Company has started to sell health and beauty products, advertising them through the Company's television and radio media platforms, including product launches online and via modern retail stores. Also, the Company has developed a telemarketing system that analyzes customer data to recommend products and close sales, as well as a more effective after-sales support system. From 2018 to 2019, the Company continued to develop and expand its distribution channels through the Company's commerce business. Also, it collaborated with various digital TV channel partners to offer a wide variety of products for both health and beauty, as well as personal appliances and household products, including various high-tech products or gadgets. The Company also developed and increased its telemarketing teams to be able to analyze customer data accurately and support the increase of over 1.6 million customers. In 2020, The Company represented one of the companies that rapidly adapted in response to the Covid- 19 situation, developing health- related products to meet changing customer behavior and transforming the “RS Mall” brand into a platform that offers products and services that promote good health and longevity with quality living in accordance with the slogan “Adding Happiness to Every Life”. The Company also aimed to develop online sales through the “COOLanything” platform. In addition, RS introduced information technology systems throughout the organization, which included developing comprehensive customer data analysis and call center systems. 1.1.1) Core Purpose “Inspire and fulfill people with valuable entertainment and solutions” Annual Registration Statement (Form 56-1 One Report) for the year ended December 31, 2020 3 RS Public Company Limited Motto “Passion to Win” 5-Year Business Direction “RS is an organization that conducts business with ‘opportunities’ and is always receptive to change and use it to create business opportunities by focusing on market leadership, continual investment in the business to sustain the commerce business with Entertainmerce Model and expansion to related businesses. The contribution from new businesses is to increase significantly, strengthening the Company’s total revenue.” 1.1.2) Significant Changes and Developments in the Past 3 Years The Company has evolved from being a leader in the media business to becoming a commerce business that provides content and powerful entertainment as well as sells both its own products and that of its partners. This includes establishing a system to analyze customer data and a telemarketing system through “RS Mall” and “COOLanything” brands. The Company also continuously expands its distribution channels to be more diverse for both itself and its partners. Overview of the Business Operations of the Company and its Subsidiaries At present, the Company’s main business operations are divided into 3 groups, which are the commerce business, media business and music and other businesses. The commerce business commands the highest proportion of income, conducting its activities under RS Mall Company Limited and Lifestar Company Limited to sell health and beauty products, personal appliances and household goods, high-tech products or gadgets. Distribution is conducted through the media channels of the Company, including television media, with Channel 8 being a leader in the digital TV group under R.S. Television Company Limited, radio media through the station COOLfahrenheit; online channels; and modern retail stores. In addition, the Company has invested through various subsidiaries (The details are shown in the Shareholding structure part) 1.2) Business Description At present, the Company has 3 main core businesses which consist of Commerce, Media, and Music & Other businesses. Annual Registration Statement (Form 56-1 One Report) for the year ended December 31, 2020 4 RS Public Company Limited 1.2.1) Revenue Structure 2018 2019 2020 Amount Share in Amount Share in Amount Share in Type of Revenue (million Total (million Total (million Total baht) Revenue baht) Revenue baht) Revenue (%) (%) (%) Commerce business 2,126.8 56 2,012.4 56 2,381.8 63 Media business 1,344.7 35 1,069.2 30 1,148.7 30 Music & Other business 355.2 9 529.5 14 244.2 7 Total Revenue 3,826.7 100 3,611.1 100 3,774.7 100 1.2.2) Products Information Commerce Business 1) Types of Products The commerce business operates under Lifestar Company Limited (“Lifestar”) and RS Mall Company Limited (“RS Mall”), both subsidiaries of RS. The operating model includes “Lifestar” which is a product designer and developer, hiring Original Equipment Manufacturers (OEMs) to produce both health and beauty products. Such products are grouped into categories, with skin care products under “Magique” brand, hair care under “Revive” brand, food supplement products under “S.O.M.” brand and bird's nest products under "Reju" brand. Lifestar focuses on producing innovative products based on the “Science of Body & Mind” concept that uses science as the basis for researching products to meet the healthcare needs of consumers; the emphasis is on addressing and solving issues with one solution, to create dietary supplements of international standards. Moreover, at the end of 2020, Lifestar launched a dietary supplement brand called “Vitanature+”, featuring 5 types of products that focus on herbal extracts that are beneficial to the body, with easy-to-understand properties, to reach more consumers. Also, the market positioning and prices are cheaper than the S.O.M. brand, making the products suitable for the Covid-19 situation in the past year, where consumers have turned to taking better care of their health while also being more conscious of their spending. For the production of each type of product, Lifestar Annual Registration Statement (Form 56-1 One Report) for the year ended December 31, 2020 5 RS Public Company Limited has collaborated with domestic and international research institutes and manufacturers to create quality products that meet the needs of customers. Product manufacturing begins with analyzing market data in conjunction with research by leading laboratories and testing facilities by working together with Lifestar. Also, it includes collecting data from customers directly through the Company's telesales system. This provides an understanding of the trends and needs of the overall market as well as the needs of consumers before the development of each type of product. Before and during the distribution of products through the Company’s sales channels, including the “RS Mall” and “COOLanything” platforms, online marketplace and the modern trade retail stores, there will be regular random checks of product quality by delivering components for inspection to the laboratory. The main sales channels of the commerce business are operating under RS Mall through both offline and online platforms. This is a platform that sells products and services to enhance health and promote good health and wellbeing. Product quality and standards are backed by certification from the Food and Drug Administration, enabling consumers to live a comfortable, happy and healthy life. Products include those for health, beauty and fashion; electrical appliances; home goods; and animal food - from Lifestar as well as partners who own the products directly, with a total of more than 200 items. There will be random inspections of the products before they are delivered to the warehouse and when they leave the warehouse to be sent to the consumer. Over the past year, RS Mall has broadened the variety of its advertising, offering different products for each type of content and time frame. The expansion in both offline and online channels include: 1) the Company's own offline media, namely, Channel 8, as well as digital TV channels that are partners of the Company, like Workpoint TV, Amarin TV and the RS Mall channel via satellite television, that can reach over 5 million viewers per day; 2) the Company's online media platforms, including www. rsmall. co. th and LINE SHOP through @RS Mall which has followers with over 650,000 accounts, as well as other leading online platforms such as Shopee and Lazada; and 3) should customers wish to order products and services, they can utilize the telesales and/ or digital marketing channels.