BEC World Plc.
Consolidated Financial Statements for the year 2007
Management Discussion and Analysis :

Business Environment :

Following the tragic incident at the New Year Eve, advertising expenditure through television during the first quarter of 2007 had dropped around 5% when compares with the previous quarter, and when major changes incurred at the other channels at the beginning of the second quarter the industry's data as reported by Nielsen Media Research (NMR) seems even more strange as the report does not show any improvement despite the fact that the 2nd quarter normally is the better quarter, but the 2nd quarter ad-spending was 9% worsen year-on-year. However, the industry had recovered during the 2nd half of the year as ad-spending increased every month since the beginning of the 3rd quarter showing growth quarter-on-quarter. Even NMR reported that "Uniliver" the largest advertiser in the industry had substantially cut its ad-spending through out the last quarter of the year but the industry still shows 5% year-on-year growth pushed the TV ad-spending in 2007 up slightly higher than that of the prior year at 53.5 billions, but still lower than the whole ad-spending growth which is reported at 2.5%. TV still has 58% share of the total ad-spending. On the brighter side, the industry is recovering and is more diversified which should be a strong base for future growth.

Structure Changes :

In 2007, the BEC World group was almost unchanged except that now we have "Major Group" as our minority partner in "Thai Ticket" and we had disposed of all our shares in "SMBT Publishing" to the major shareholders, and we also had brought the shares of "BEC-Tero Exhibitions" from our partners increasing our stake in that company to 99.9%, and we also set up a joint venture with "Senario" to stage "Cats" here in Bangkok.

Operating Results :

Due to the change in accounting for investments, from the equity method to cost method in separate (the company only) financial statements of the company, the reported profit as shown in the separate statements is difference from that shown in the consolidated statement. This MD&A will discuss those numbers shown in the consolidated statement in order to avoid confusion.

BEC World group was able to made Baht 2,252 millions as its net profit for the year 2007, higher than that of the last year by Baht 609 millions, up 37 percent, as the advertising income increased continuously since the last quarter of 2005, from the higher utilization rate of our commercial air-time, from expansion of our super-prime slot and from air-time rate increases on certain day parts, while our costs of services were lower down as we had reduced the number of local dramas whereas the concerts and shows businesses are profitable and the selling expenses were slightly increased. Therefore, our operating margin and growth rate of our profit had improved substantially.

Revenues :

Our advertising income in the last quarter of 2007 was in line with the industry, it increased higher than the previous quarter and also higher year on year. BEC World's performance was better than the industry as its year on year growth in the fourth quarter is 26.9% and 14.9% higher for the whole year; the increase came from higher utilization rate of our commercial air-time, from expansion of our super-prime slot and from air-time rate increases on certain day parts. The revenue from concerts and shows in 2007 are also higher than the prior year.

Costs and Operating Expenses :

Costs of services were lower down as we had reduced the number of local dramas. Costs of concerts and shows increased in line with the revenue but at a lower rate. The selling and administration expenses were slightly increased, only at 2.6%.

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 as corporate income tax is higher. Our shareholders' equity increased because of higher profit. BEC World's financial positions are strong as usual.