BEC WORLD PUBLIC COMPANY LIMITED FORGING AHEAD ANNUAL REPORT 2020 Contents 01 16 63 Important Financial Data Awards in Year 2020 Financial Statements 04 22 123 Board of Directors’ Report The BEC World Group Revenue Structure 06 23 125 Audit & Risk Committee Report Business Operation List of Top Ten Largest of BEC World Group Shareholders 08 Report of The Nomination 30 128 and Remuneration Committee Business Operation Management Structure Policy and Overview and Corporate Governance 09 Corporate Governance 43 189 Committee Report Risk Factors Internal Control and Risk Management 10 48 Board of Directors Management Discussion 192 and Analysis: MD&A Connected Transactions 12 Management Team 59 195 Report of The Board Subsidiaries and Associates of Directors’ Responsibilities Information 14 for The Financial Statements 51 Years BEC World Group’s Milestone 198 60 CV of Directors, Executive Auditor’s Report Officers, Chief Compliance Officer and Company Secretary 215 Reference Persons Investors can and more information regarding the Company from the Company’s Disclosure Report (Form 56-1) which has been displayed at www.sec.or.th or www.becworld.com Annual Report 2020 BEC World Public Company Limited Important Financial Data Unit : Million Baht 2020** 2019 2018 Total Asset 9,518 11,354 14,320 Total liabilities 4,109 5,636 8,084 Total Shareholders’ equity 5,409 5,718 6,236 Revenue from sale 5,860 8,310 10,125 Total revenues 5,945 8,751 10,236 Gross Margin 1,278 774 1,339 Net Profit (Loss) (214) (397) (330) Financial Ratio Nat Profit to Total Revenues -3.66% -4.78% -3.26% Return on Total Shareholders’ Equity -7.20% -6.78% -5.29% Return on Total Assets -2.05% -3.98% -2.68% Net Profit (loss) Per Shares (Baht) (0.11) (0.20) (0.17) Dividend Per Share (Baht) -* - - Book Value Per Share (Baht) 2.70 2.86 3.12 Note : * On March 19, 2020, the Board of Directors’ Meeting No. 4/2021 resolution to propose to the Annual General Meeting of Shareholders 2021 to refrain from paying the dividend for the operating result in 2020, since the company suffered loss in 2020. ** From December 8, 2020, the Company has removed BEC-Tero Entertainment Public Company limited financials from the Company’s consolidated financial statement. Dividend payment policy The Compant has a customary payment policy to pay dividend at least 90% of net profit to the shareholders as shown in consolidate financial statement, except in the case which it is required to invest in the sighificant projects. As for the subsidiaries, which 99.99% of shares are held by the company, the dividends will be paid to the company by mainly considering the cash flow of the Company and that subsidiary. Unit : Million Baht 14,320 11,354 10,236 9,518 8,751 2018 2019 2020 5,945 -330 -214 -397 2018 2019 2020 2018 2019 2020 Total Asset Total Revenues Net Profit (Loss) 1 Vision Mission 2 Annual Report 2020 BEC World Public Company Limited Mission Vision Rebuild BEC World to become a forward-thinking and lean organization, Thailand’s leading content leveraging CH3 creative DNA to deliver fresh and entertainment platform. and engaging content for today’s users, and technology to deliver innovative and effective media, across all screens, throughout Thailand and overseas countries. 3 Board of Directors’ Report management, with versatility and flexibility to adjust operating plan, to create maximum benefit and efficiency. In addition, they have conducted proactive measures to prevent the spread of Covid-19 among the personnel, as well as preparing the business continuity plan, whereby the strict compliance to the provided policies resulted in satisfying outcome. In this regard, while the Company suffered loss in the 1Q to 2Q/2020, it had better operating result in the 3Q to 4Q/2020, profiting from increased revenue from sale of advertisement, global licensing and digital platform, as well as reducing operation cost and selling and administrative expenses. Advertising revenue of BEC World in 2020 were Baht 4,758 million, decreased by 29% comparing to 2019, with revenue in the amount of Baht 6,743 million. Non-advertising decreased by 30% to Baht 1,103 million due to the lack of revenue from organizing concerts Mr. Somchai Boonnamsiri and shows in 2020. The decreased in revenue were resulted (The Chairman of the Board of Directors) directly from the Covid-19 lock-down since all concerts and shows needed to be postponed or cancelled. In December 2020, BEC World Public Company (“BEC World group”, “the Company”) sold its investment in BEC-Tero Entertainment Public Company Dear Shareholders of BEC World Public Limited, which was the sale of investment in subsidiary companies Company Limited according to investment management plan of the Company. Therefore, BEC World removed the financial statement of the Tero The year of 2020 was another year that BEC group from preparing the consolidated financial statement from 8 World faced with challenging factors in the December 2020 onwards. However, licensing and other services total television industry, both internal and business under non-advertising revenue increased by 11%, most of external of organization, which are change which was from global licensing business and digital platform, resulting from the spread of Covid-19 generating more than Baht 400 million in each business. situation. The Covid-19 situation caused worldwide economic recession, including Despite the decrease in overall revenue, the business continuity Thailand’s economy and affected consumer’s plan made the Company to be able to make profits. In this regard, behaviour as well as the organization’s the Company has gradually reduced cost, as well as made a business operation, in which the Company difficult decision to downsize the organization due to analog needed to adapt itself to accommodate the television switch-off after the expiration of concession agreement. situation that was not propitious for business The reduced cost, in addition, resulted from the downsizing of operation. The Board of Directors, executives other organisation, which operated constantly, reduction in and all employees of BEC World group were production cost and instead broadcasted more of re-run drama united to use their knowledge, skills, expertise series, and reduction of cost from the deferred digital television and experiences in proactive business license fee according to Section 44 in the past year. 4 Annual Report 2020 BEC World Public Company Limited As a result, the Company’s net loss was decreased from 2019, with Baht 397 million net loss, to Baht 214 million in 2020, equal to 46% lower. Despite a loss in profit, BEC World’s financial position remains stable, generating cashflow from operations was 2,295 million Baht in 2020. Cash and cash equivalents as of December 31, 2020 was at 2,565 million Baht. The business situation was not very smooth in the beginning of 2021 due to the new wave of Covid-19, which put pressure on the overall economic expansion, as well as risks from political situation. Tourism that generates main income for Thailand was still affected widely from the Covid-19 situation and may result in limitation of advertising spending in media industry during the beginning of the year 2021. However, in 2021, the Company’s operation is still in line with the new strategy of BEC World which targets mainly to the customers and movement to new revenue and profit resources, with the Mr. Surin Krittayaphongphun Company’s vision “to be a content and entertainment business (President of TV Business) leader of Thailand”. The awareness of the Company that it is not only television operator in Thailand, the Board of Directors, executives, and employees aim to make BEC World to be the “lean organization” and make use of Ch3 creativity to deliver fresh On behalf of the Board of Directors, we would contents to current users, and make use of technology to deliver like to express our sincere appreciation to our effective innovations and media, outside Thailand’s territory, with shareholders, customers, agencies, partners, strategic goals as follows: artists, directors, and employees for the ongoing support. We are committed to 1. Maintaining the market share and expanding new perform our duties to create maximum audiences; benefit to all group of shareholders and 2. Generating and distributing of new revenues (Single Content, stakeholders with fairness, as well as take care Multiple Platform); and of environment, society and community to 3. Building financial stability sustainably grow together with the Company and make BEC World to become “Thailand’s Moreover, in 2021, the Company aims to increase advertising leading content & entertainment platform” revenue of BEC World, revenue from global licensing and revenue to building a solid foundation for the company from digital platform, by 20% from 2020. It also aims to reduced to find new sources of revenue and profitability. cost gradually in accordance with operation plan, in order for the company to be able to make profit, and to ensure that BEC World will be able to achieve business goals sustainably with balance. The Board of Directors has then, determined the vision regarding sustainability, covering environmental, social and governance aspects, and driving operation in various aspects. 5 Audit & Risk Committee Report Dear Shareholder determining the structure, roles, obligations and BEC World Public Company Limited responsibilities or any person relating to internal Audit & Risk, to ensure the establishment of the risk To promote the Company to have a good internal management Committee - management level to control system and a risk management and business support the determination of risk management policy management system that is efficient, transparent, and to proceed according to risk management reliable, and verifiable; to ensure that the Company’s procedures, to enable the Company group to achieve financial report is prepared in line with a trustworthy its goal, in line with the goal, mission and vision of the standard and the Company’s information disclosure is Company.