SET Announcements

February 20, 2007 To: President, Stock Exchange of Thailand. Re: Submission of Financial Statements for the Year 2006. Enclosures: Financial Statements for the Year 2006 and the relevant management discussion and analysis. We are sending you herewith the enclosed financial statements of the company and the consolidated statement of the group for the year 2006 ended December 31, 2006, which were audited by the Auditor and our Audit Committee has already reviewed them. BEC World group was able to made Baht 1,643 millions as its net profit for the year 2006, higher than that of the last year by 86 percent or Baht 762 millions, as the advertising income increased continuously since the last quarter of previous year, from the higher utilization rate of our commercial air-time and from air-time rate increases on certain day parts, which is Baht 1,151 millions higher than last year, while our costs were quite stable and even the selling expenses were increased but at a much lower rate than the increase of revenue. Therefore, our operating margin had improved substantially, as discussed further in the attached management discussion and analysis. Please be informed accordingly. Sincerely Yours, (Chatchai Thiamtong) Vice President - Finance BEC World Plc. Consolidated Financial Statements for the year 2006 Management Discussion and Analysis: Business Environment: Advertising expenditure through television during the last quarter of 2006 had dropped slightly around 2% when compares with the previous quarter, as there are more restrictions on beverages advertisements as well as the prohibition of advertisement of alcoholic beverage imposed during the later part of the year and the substantial reduction of Unilever's spending in November. However, it is still 4% higher than that of the same quarter of last year. For the whole year of 2006, advertising expenditure through television is amounting to Baht 53,475 millions, 7% higher than previous year which is a higher growth rate than the industry's one which is only at 5%, thus push the share of television in the total advertising expenditure to 59%. Unfortunately, beverage advertisements were substantially reduced during the second half of the year caused a big drop when compare 2006 spending with prior year level and pulling the industry growth rate down. However, on the brighter side, it is obvious that the industry is now much more diversified as many small advertisers increased their spending a lot especially during the second half of the year which is a good thing for future growth opportunity. The major advertisers on television are still pretty much similar to those of prior years and still grew at high growth rate. Automotive industry is now included among the major categories. Certain big advertisers have a very high growth rate in 2006, much higher than the average. Even growth rate which channel 3 had from certain advertisers are very high but it is reasonable when looked at it on market share basis. When compare those market share data with targeted audience and share of audience of each channel, it is obvious that even it gain an additional 3% in ad-spending share but channel 3's growth rate and market share can be improved further. Structure Changes: In 2006, the BEC World group was almost unchanged except the exchange of an investment in Sony Music BEC Tero entertainment, an associated company, to be a minor stake in Sony BMG Music Entertainment which later on disposed in the 4th quarter. However, because of the change of the status of ThemeStar Ltd. from a subsidiary to be just an associated company in December 2005, there are big differences in comparing the income statement between 2006 and 2005 especially revenue and costs of concerts and shows. Even ThemeStar's selling and administrative expenses are also included in 2005 income statement, but they are not at substantial amount. Operating Results: BEC World group was able to made Baht 1,643 millions as its net profit for the year 2006, higher than that of the last year by 86 percent or Baht 762 millions, as the advertising income increased continuously since the last quarter of previous year, from the higher utilization rate of our commercial air-time and from air-time rate increases on certain day parts, which is Baht 1,151 millions higher than last year, while our costs were quite stable and even the selling expenses were increased but at a much lower rate than the increase of revenue. Therefore, our operating margin had improved substantially. Revenues: For the Year Year on Year (Bht:Million) 2006 2005 B:m % Advertising Income 6,114 4,963 1,151 23.2% Copyrights and Other Services 295 296 -1 -0.2% Concerts and Shows 366 1,033 -667 -64.6% Total Sales Revenues 6,775 6,292 483 7.7% Our advertising income in the last quarter of the year was in line with the industry, it dropped below the previous quarter but still higher year on year. BEC World was better than the industry as its year on year growth in the fourth quarter is 6% and 23% for the whole year; the increase came from higher utilization rate of our commercial air-time and from air-time rate increases on certain day parts. The drop of concerts and shows revenue is due to the exclusion of ThemeStar's revenue in 2006 because of the structural change as explained above. Costs and Operating Expenses: For the Year Year on Year (Bht:Million) 2006 2005 B:m % Costs of Services 2,911 2,925 -14 -0.5% Costs of Concerts and Shows 374 979 -605 -61.8% Selling and Administrative Expenses 1,332 1,162 170 14.7% Total Costs and Operating Expenses 4,617 5,066 -449 -8.9% Costs of services were quite stable during the two years 2005-6 as the expansion programmes finished in the later part of 2005. The big drop of Costs of concerts and shows is due to the exclusion of ThemeStar's costs in 2006 because of the structural change as explained above. The increase in expenses is mainly the selling expenses which increased in line with the revenue but at a lower rate. Financial positions: Our total assets increased when compared with balances at the end of the previous year as cash and short term investment of our cash increased in line with the improved profit. Our liabilities increased slightly from the level at the end the prior year as corporate income tax is higher. Our shareholders' equity increased because of higher profit. BEC World's financial positions are strong as usual.