Supply Chain Management

Supply Chain Management

S Hotels & Resorts Public Company Limited (the "Company") places significant importance on supply chain management, emphasizing transparent and fair procurement, data security, and environmental friendliness. The Company also promotes green procurement by supporting local employment and purchasing environmentally friendly products and services.

Challenges, Risks, and Impacts that May Arise

Currently, the Company conducts procurement transactions with numerous business partners both domestically and internationally. This necessitates managing suppliers according to company policies and procurement processes and managing supplier risks to avoid impacts on business operations. The Company considers opportunities and impacts on three main factors: environmental (E), social (S), and governance (G) or ESG, which influence business operations and stakeholders. Therefore, a dedicated procurement department is established at the headquarters and hotels to ensure flexible and efficient procurement management.

The procurement department collaborates with the risk management department to categorize suppliers, analyze data, and assess risks including supply risks and sustainability risks. The Company regularly evaluates the capabilities of suppliers to enhance risk management, ensuring continuous business operations. Additionally, the Company monitors potential impacts on its supply chain, such as natural disasters that could affect product quantities and prices in the area that the Company operates. Therefore, contingency plans for essential goods and services are put in place for the Company’s business domestically and internationally.

Supply Chain Management Strategies

The Company has formulated the following supply chain management strategies:

• Manage the supply chain with transparency, fairness, and consideration for social and environmental aspects.
• Implement contracts and procurement processes that do not exploit suppliers.
• Emphasize human rights throughout the supply chain.
• Encourage suppliers to develop products, innovations, and services with efficiency, standards, reasonable costs, and environmental friendliness.
• Conduct procurement strictly in accordance with the Company's anti-corruption policy.
• Adhere to principles of conflict-free transactions.
• Do not support transactions with suppliers that engaged in illegal activities, intellectual property violations, human rights abuses, or businesses that exhibit corruption, exploitation, and disrespect for the privacy of the Company or its customers.
• Manage risks to ensure continuous business operations, such as having contingency plans in case suppliers face problems in delivering goods within the specified time.

Commitments and Goals

The Company is committed to establishing a transparent and fair supply chain management framework that considers the best interests of the Company and stakeholders, including the society and the environment. The Company promotes a circular economy and uplifts local economies through employment and local purchases.

Supply Chain Management Goals
Indicators		Targets	Achieved
1.	Communication of Supplier Code of Conduct	100%	100%
2.	Holding S and SHR Supplier Day events to meet up and communicate with suppliers	At least 1 time/year	1 time/year
3.	Suppliers On-site ESG audit	At least 1 company/year	1 company
4.	Zero complaints of Supplier Code violations	0 Case	0 Case
5.	Value of community purchases (products and services)	Not less than THB 5 million	THB 109 million

Policy Framework, Supplier Management, and High-Risk Sustainable Suppliers

Procurement Policy

The Company has established procurement guidelines to ensure transparency, fairness, and alignment with Singha Estate Group’s procurement practices. These guidelines define roles, duties, and responsibilities consistent with the procurement tasks and processes.

Green Procurement Policy

The Company emphasizes and promotes environmental protection and the enhancement of local economies through local employment and procurement of locally produced goods. Green procurement must be fair and ethical, prioritizing the purchase of clean and hygienic food products and raw materials to create farm-to-table menus.

In this regard, the Green Procurement Policy encourages all types of suppliers to avoid using substances that are harmful to health and the environment. Additionally, products and goods must not directly or indirectly impact biodiversity and must be naturally biodegradable or recyclable.

Therefore, the procurement department and relevant parties are required to carefully consider purchases, avoiding conflicts of interest of both parties.

Supplier Code of Conduct

The Company requires all suppliers to study and strictly adhere to the Supplier Code of Conduct and other company policies, emphasizing responsible, transparent, and fair business practices. This approach aims to balance economic, social, and environmental factors for sustainable development in the future.

The Company manages supplier risks by analyzing compliance with the Supplier Code of Conduct and other relevant policies. Additionally, the Company conducts supplier evaluations (ESG due diligence) before transactions, covering issues or impacts related to sustainable development, community and environmental balance management, safety, occupational health and working environment management, fair labor practices, respect for human rights, conflict of interest prevention, and more.

Supplier Credit Management Policy

The Company emphasizes transparent and fair business practices with suppliers, ensuring business growth together. The Company typically manages liquidity within a 30-day credit period, with exceptions for special cases requiring extended periods.

Credit Term	Average Credit Term
	2022	2023
30-60 Days	35 Days	35 Days

Definitions of Critical Suppliers and Non-critical Suppliers

A Critical Supplier is a supplier of goods or services, including product manufacturers, who directly do business with the Company and are crucial to its operations. These suppliers are difficult to replace or are few in number. The Company classifies these suppliers as Tier 1 in its list of critical suppliers based on the following criteria:

1. The supplier cannot be replaced, or a new supplier cannot be found due to scarce resources, limited products, or the inability to negotiate at that time.
2. The supplier's products or services are among the most important for the Company's operations.
3. The supplier has a high volume of trade with the Company, ranking among the top in terms of trade volume.

 A Non-Critical Supplier is a general supplier of goods or services, including but not limited to product manufacturers, whose operations do not significantly impact the Company. They may have a minor impact, but  the Company can manage by finding other market suppliers, and they pose low social and environmental risks.

Criteria for evaluating trading partners of the company

1. Trading partners with the highest trading volume.
2. Trading partners that supply goods or provide services crucial to operations, and
3. Trading partners that cannot be easily replaced.

The company will evaluate trading partners (Non-tier 1) using the same criteria and consider factors significant to operations, including potential continuous business impact, to select trading partners of importance (Critical Non-tier 1).

SHR’s Supplier
Supplier Types	No. of Supplier	% of Total Supplier
1. Total Supplier	1,738	100.00%
2. Critical Tier-1 (i.e. diesel suppliers)	16	0.92%
3. Critical non-tier 1	0	0
Data as of April 2024

Supplier Sustainability Risk Assessment

Our company conducts an annual assessment of our suppliers' sustainability risks to ensure that our business partners have the capability to deliver goods and services to us as per the signed agreements. We gather information through news sources, ethical assessments of supplier practices, as well as in-depth interviews and discussions before entering any transactions. Based on the results of these assessments, we categorize suppliers into high sustainability risk groups.

High-Risk Supplier Types	No. of Supplier
High-Risk Tier 1 Suppliers	0
High-Risk Critical non-tier 1 Suppliers	0
Data as of April 2024