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NOBLE_2005 NOBLE DEVELOPMENT PCL Annual Report 2005
Citation preview
Message from the Chairman
01 Financial Highlights
02 Company Structure
03 Company Overview
05 Noble Development Projects
08 Revenues Structure
09 Industrial Situation and Trend
12 Risk Factors
15 Shareholders
16 Organization Chart
17 The Board of Directors
19 The Audit Committee
20 The Executives
21 Election of the Board of Directors and Remuneration
22 Board of Directors, Audit Committee
and Executive officers
28 Corporate Governance
32 The Audit Committee's Report
33 Charts of Operating Performance
and Revenue Structure
35 Analysis of Financial Status and Operating Results
36 Remunerations for External Auditor
37 Company Factsheet
Auditor's Report 39
Consolidated and Company Balance Sheets 40
Consolidated and Company Statements of Income 42
Consolidated and Company Statements of Changes in 43
Shareholders' Equity
Consolidated and Company Statements of Cash Flows 45
Notes to the Consolidated and Company Financial 46
Statements
CONTENT
Annual Report 2005 Noble Development Public Company Limited
In 2005, despite of negative factors, such as
fuel prices and increasing interest rates, the
performance of Noble Development Public
Company Limited still grew prominently both
in term of income and profit. The company
had total sales of THB 2,506 million and net
profit of THB 456 million, a 36% increase
from 2004.
The increase in revenue and profit was a
result of the success in projects selling,
effective management and efficient expense
control. Apart from the revenue and profit
that reflected the successful business
administration, the company has prepared
itself for future project development by
investing more in assets on the potential
locations. The investment is planned to be in
line with the projection of the profit which is
expected to expand at 15-20% per year.
In 2006, we are confident that the real estate
market will continue its stable and long-term
expansion according to the real demand and
the investment in infrastructure development
in order to promote Thailand as the
investment center of the region. In 2006, we
plan to launch at least 4 projects, both in
single detached houses and condominiums,
which value over THB 3,600 million.
Finally, Noble Development Public Company
Limited would like to thank our shareholders
for their support, which has been vital to our
strength and capacity for constant growth.
We, at Noble Development, will strictly,
carefully, efficiently and transparently hold
on to our policies in business administration
and capital on according to our corporate
governance value. At the same time, we will
continually create more innovation for a
different lifestyle as we are bound to our
philosophy and commitment.
Mr. Kitti Thanakitamnuay
Chairman and Managing Director
Message from the chairman
Annual Report 2005 Noble Development Public Company Limited
Unit : Million Baht
2005 2004 2003
Operating Performance
Revenue from Property Development Business 2,458 1,770 3,087
Revenue from Department Store Business 48 - -
Total Revenues 2,528 1,817 3,168
Gross Profit from Property Development Business 972 705 991
Gross Profit from Department Store Business 22 - -
Net Profit‘ 456 335 747
Financial Status
Total Assets 5,363 5,287 4,584
Total Liabilities 2,474 2,761 2,201
Issued and Paid-up Share Capital 2,282 2,282 2,282
Shareholders' Equity 2,889 2,526 2,383
Financial Ratios
Gross Profit Margin from Property Development
Business 39.53 39.82 32.09
Gross Profit Margin from Department
Business 46.44 - -
Net Profit Margin 18.05 18.41 23.58
Return on Assets 8.57 6.78 20.32
Return on Equity 15.80 13.25 31.36
Debt to Equity Ratio 0.86 1.09 0.92
Net Debt to Equity Ratio 0.69 0.86 0.44
Book Value per Share (Baht) 6.33 5.53 5.22
Earning per Share (Baht) 1.00 0.73 1.64
Financial Highlights
Annual Report 2005 Noble Development Public Company Limited
01
Company Structure
Noble Development Public Co., Ltd.
Paid-up Capital THB 2,282.36 Million
Type of Business : Property Development
and Housing Construction
ë Ban Suk Sabai Co., Ltd.
Paid-up Capital THB 2 Million
Type of Business : Property Development and Housing
Construction
ë S&P Property Management Co., Ltd.
Paid-up Capital THB 2 Million
Type of Business : Housing Construction and Property
Management
ë Continental City Co., Ltd.
Paid-up Capital THB 440 Million
Type of Business : Property Development
ë Playground Store Co.,Ltd
Paid-up Capital THB 25 Million
Type of Business : Department Store
ë Research & Consultant Co., Ltd.
Paid-up Capital THB 10 Million
Type of Business : Housing Construction
ë N.K. Energy Conservation Co.,Ltd.
Paid-up Capital THB 6.5 Million
Type of Business : Light Weight Wall Panel
100%
100%
85%
65%
50%
100%
Annual Report 2005 Noble Development Public Company Limited
02
Type of Business
The core business of Noble Development
Public company Limited and its subsidiaries
is property development, being composed
of various types of residential projects such
as single detached houses, low rise and
high rise condominiums. In addition, the
company creates and offers the residential
innovation to satisfy the customers' desire
for the uniqueness and distinctive living.
Up till now, the company has launched 22
projects, where 8 of those projects with the
total value of THB 4,877 million were
developed and launched before year 2002.
The rest of them were launched during year
2002 and 2004 with the total value of THB
11,111 million, consisting of single detached
house, condominium, townhouse, and
landplot. The single detached house
projects were Noble Tara Ekamai - Rama 9,
Noble Tara Ngamwongwan, Noble Tara
Pattanakarn, Noble Wana Pinklao, Noble
Wana Watcharapol, Noble Anawana Pinklao,
Noble Geo Watcharapol, and Noble Geo
Rama 5. The condominium projects were
Noble Ora Thonglor, Noble Lite, and Noble
09. Finally, the townhouse and landplot were
First Home and Noble Sathorn Thapra.
In the year 2005, the company launched
Noble Tara Ngamwongwan 2, single
detached house project, with the total value
of 903 million baht. Besides the residential
project the company proudly presented
"Playground" under the concept of
inspiration store. "Playground" is not just a
shopping center; it inspires new modern
lifestyle through fashions, designs, home
decorations, music, books and arts.
"Playground" is located in the middle of Soi
Thonglor, one of the best locations in
Bangkok. Thus, it is the pilot project
developed to be the source of recurring
income for the company in the long run. In
the year 2006, the company plans to launch
another 4 new projects, 3 projects of
downtown condominiums and 1 project of
single detached house, with the total value
of more than THB 3,600 million.
Housing construction is another core
business of the Company. The Company
also expanded into the related business
such as turnkey property management
services, property services after transfer of
ownership, asset or debt management service
offer to investors, financial institutions or
asset management companies.
Company Overview
Annual Report 2005 Noble Development Public Company Limited
03
Numbers of issued
and paid up
Company/Address Type of Business Project shares
1. Ban Suk Sabai Company Limited
19th Fl., Tonson Tower, 900 Ploenchit Rd., Property Development Noble Park
Lumpini, Pathumwan, Bangkok and Housing Construction Noble Tara Ngamwongwan 2 20,000
2. S&P Property Management Company Limited
19th Fl., Tonson Tower, 900 Ploenchit Rd., Housing Construction
Lumpini, Pathumwan, Bangkok and Property Management Noble Neo City 20,000
3. Continental City Company Limited
19th Fl., Tonson Tower, 900 Ploenchit Rd., The Noble
Lumpini, Pathumwan, Bangkok Property Development Noble Sukhumvit 36 4,400,000
4. Playground Store Company Limited
946/4 Soi Sukhumvit 55, Sukhumvit Rd.,
Klongton Nue, Wattana, Bangkok Department Store Playground Store 250,000
5. Research and Consultant Company Limited
19th Fl., Tonson Tower, 900 Ploenchit Rd., Noble Choice Pinklao
Lumpini, Pathumwan, Bangkok Housing Construction Noble Choice Vibhavadee 100,000
6. N.K.Energy Conservation Company Limited
54/4 Moo 7, Bang Saothong, Light Weight Noble Choice Pinklao
Samutprakarn Wall Panel Noble Choice Vibhavadee 6,500
The subsidiary companies are set to develop, operate or manage the projects as follows.
Company Overview (Continued)
Annual Report 2005 Noble Development Public Company Limited
04
Every Noble Development project is a
reflection of the creativity and the conviction
of Noble. The mind-set to create innovation
to satisfy needs and enhance quality of life
which bring happiness to homeowners
beyond their expectations are all the
Noble's mission.
Besides the residential projects, Noble also
offers distinctive living with design by
launching 'Playground', the inspiration store
where the modern happiness can be
inspired. The following are part of the
Company's pride and success
Projects developed and launched before 2002
Noble Park Project
Noble Park was unveiled in December 1991
as the first horizontal condominium in
Thailand. The concept of a "Condo house"
combines the benefits of living as part of a
community and the precepts of condominium
residence to the familiar features of Thai
ways of living within the development.
Noble Home Project
Noble Home comprises single dwelling
houses with architectural designs aimed to
give a different perspective and individuality
including the curved roof, all of which
enhanced quality and offered more useable
floor space than the average home. The
project launched in August 1992.
Noble Neo City Project
Noble Neo City is the visual proof of the
innovation development that is taking place
within Noble. Here, the concept of a life of
freedom is catered to. Owners can expand
living space within their detached homes in
four different steps. They can start with 2
floors 2 bedrooms and, if so wish, they can
later add to that and end up with 3 floors 5
bedrooms.
The Noble Project
Prestigious detached residences comparable
to a contemporary art form. Built right in the
art of Bangkok, The Noble has been
designed to offer maximum floor space,
resulting in practicality and privacy. The
design concept also brings the green-ness
of the garden right into the home.
Noble House Phayathai Project
Noble's high-rise residential development
with 30 storey tower located in central
business district, special design offer
convenience in terms of commuting and
amenities for today's lifestyle. The project
consists of 300 residential units and
commercial area.
Noble Choice Project
Noble Choice is the innovation from Noble
Development, one spawned from the
marriage of state-of-the-art technology and
an old-fashioned commitment to service.
The success of Noble Choice is evident
from all of our satisfied customers who have
exercised their freedom of choice to
express a wide variety of contemporary
lifestyles, all of whom were delighted
beyond their expectations. Durable yet
flexible, Noble Steel Tech has a proven
track record of success overseas where it
has been utilized for more than a decade.
Noble Choice projects are located in two
different areas -- Noble Choice Pinklao and
Noble Choice Vibhavadee.
Noble Development Projects
Annual Report 2005 Noble Development Public Company Limited
05
Noble House Ruamrudee Project
Possibly occupying the best location in
Bangkok, the key concepts behind this
development are privacy and peace. Hence,
there is a total of only 23 units designed to
give maximum space for the families of
those executives who are looking for
minimum in convenience what traveling.
Projects launched since 2002
Noble Tara Ekamai - Rama 9 / Noble Tara Ngamwongwan / Noble Tara Pattanakarn / Noble Tara Ngamwongwan 2 Project
"Tara" means "stream" which implies the
concept of the project to bring peace of
recreation with tall fences covered by floras
surrounding the project to maximize the
enjoyment from nature together with the
private swimming pool. The Noble's
differentiated concept of C-shape housing
keeps every corner of the house close to
nature surrounding. The projects are in the
best location according to the concept of
"Special privacy in the city center", which
located on Rama 9, Ngamwongwan and
Pattanakarn.
Noble Wana Pinklao / Noble Wana Watcharapol Project
The concept of this project is to bring resort
feeling to the home, which can be presented
in its name: "Wana" means "Forest". This is
a place to take a rest with nature everyday.
Every living space links with nature, both
view and sensibility by balancing oriental
and western philosophy. The project is
unique from others in the market with the
clubhouse and swimming pool decorated to
maximize the privacy. Two Wana projects
are Noble Wana Pinklao and Noble Wana
Watcharapol.
Noble Ana Wana Pinklao Project
Noble Ana Wana Pinklao builds on the
success of the previous Noble Wana Pinklao
project. Utilizing the popular Wana design on
the same Pinklao site, this new development
offers a resort-style living experience 365
days a year. Each house has a plot of 100
square wah or more to give each resident
that much more exposure to the area's
natural charms.
Noble Satorn Thapra Project
Noble Satorn Thapra is a project with a very
different approach to modern housing. Plots
varying in size from 78 to 168 square wah
offer havens of security and serenity in small
communities served by common facilities.
Customers who wish to design their own
homes are given every help and
encouragement in selecting the concepts
and details that they and their families
prefer.
Noble Ora Thonglor Project
Noble Ora Condominium comprises two 21-
storey condominium towers of 223 units
altogether at one of Bangkok's prime
locations, the center of Soi Thonglor. The
project has 60's design that provides
Condominium facilities but feeling of
spacious single house from the large floor-
to-ceiling and a tropical style swimming
pool.
Noble Geo Watcharapol / Noble Geo Rama 5 Project
Noble Geo is designed under the Planning &
Function concept to enable free-style
arrangement of furniture. The box-shape
houses maximize useable area, larger living
room and bedroom. The beautiful natural
landscape lawns and gardens can be
accessible from every angle of the houses,
located in Watcharapol and Rama 5.
First Home Project
First Home is a townhouse project under the
strategies to expand the market base to
cover all tiers of customers, located near the
city but economical pricing. The project
consists of 2-storey townhouses and 3-
storey commercial units, located in Soi
Watcharapol.
Annual Report 2005 Noble Development Public Company Limited
06
Noble Development Projects (Continued)
Noble 09 Project
Noble 09 is a luxurious condominium
located in Soi Ruamrudee, only 100 meters
away from the Ploenchit BTS station, gives
a cozy feeling in modern style. Designed to
have serene beige color elegantly combined
with naturally formed stone, it goes up to 8
floors and provides more open area with its
two towers. Enjoy total privacy with only
three units per floor, and spacious interior
benefited from airy floor-to-ceiling glass
windows.
Noble Lite Project
Near Aree BTS Station, Noble Lite is located
only 150 meters from business center on
Phaholyothin Road. With Crash-Pads
concept - living near BTS route with no red
lights traffic to spare up hours for pleasure
and relaxation. The project offers 24 storeys
with one to three bedrooms. Each unit is
designed for multi purpose activities. The
project also provides facilities area, fitness
and a swimming pool.
Playground Store
Playground is not just a department store,
but an "inspiration store", the place for
unlimited happiness in the heart of Soi
Thonglor, stylish location. With over 3,000
square metres, Playground is a new lifestyle
that is not only a shopping place, but also a
huge living room where the customers can
fulfill their lives with new experiences.
Inspiration and creativity have been brought
through design and lifestyle products;
fashion, clothing and accessories, home
decorations, music, Thailand's most provided
magazines and books featuring design and
lifestyles. The space also consists of
restaurants, and Play Gallery to differentiate
the new frontier with art.
Projects launched in 2006
Noble Ambiance Ruamrudee
It is the condominium for the perfect urban
relaxation in Soi Ruamrudee. Noble
Ambiance Ruamrudee offers the peaceful
privacy surrounded by various moods. The
project composes of 2 eight-storey building
with Perfect Contrast architecture. The
exterior is designed to be simple but exciting
and amusing with color of the buildings,
whereas the interior is designed for
spaciousness and airiness with tall glasses
from the ceiling to the floor, allowing the
natural touches in.
Noble Ambiance Sarasin
This project is a dream-comes-true for
Bangkokians. Relax with the natural touch
from Lumpini Park which is just across the
street while enjoying the HIP life of the Lang
Suan area. The eight-storey building is the
combination between functions and design.
Spaciousness and airiness from single-load
corridors in every storey allows private
views in harmonious with the inner-court
ambiance surrounded by beautiful gardens,
pools and gyms.
Noble Ambiance Ruamrudee and Noble
Ambiance Sarasin will be officially launched
together in March 2006.
Noble Sukhumwit 36
The project is the answer for a different kind
of lifestyle. This 35-storey building
composes of a 29-storey condominium, a
modern shopping mall, and an office space.
It is the condominium for people who love
the freedom and the excitement of the
urban beat. The 1st to the 4th floors and the
"Inspiration store" will be another Bangkok's
modern shopping center with many leading
shops and offices. Its offers conveniences
from the transportation via BTS sky train
and the facilities along Sukhumwit 36 road.
Noble Geo Watcharapol 2
The project is developed as a result of the
immense success of Noble Geo Watcharapol,
the project under the concept of Planning &
Function. Noble Geo Watcharapol allows its
residents freedom of choices with the
freestyle furniture layout. In addition, every
house is equally comfortable regardless of
sizes because the Box-shape design has cut
off unnecessary components such as walls
between common rooms. Thus, the result is
a spacious house with more space for living
rooms and bedrooms. The project is expected
to be launched in the second quarter of
2006.
Annual Report 2005 Noble Development Public Company Limited
07
Noble Development Projects (Continued)
Revenues Structure Operated by(1) % Shares 2005 2004 2003
holding Value % Value % Value %
Revenue from Real Estate
Development
Single Detached House and Land NOBLE - 1,142.14 45.18 1,297.66 71.40 2,150.53 67.88
WPV(3) - - - - - 169.00 5.33
BSS 100% 144.25 5.71 - - 36.16 1.14
Condominium NOBLE - 1,171.39 46.33 380.11 20.92 - -
WPV(3) - - - - - 1.45 0.05
WT(3) - - - - - - -
Condo House NOBLE - - - - - 1.94 0.06
Townhouse and Shop house NOBLE - - - 41.60 2.29 383.09 12.09
Total Revenue from Real
Estate Development 2,457.78 97.22 1,719.37 94.61 2,742.17 86.55
Revenue from Construction
Services
Detached House NOBLE - 0.04 0.00 47.84 2.63 345.05 10.89
S&P 100% 0.06 0.00 3.01 0.16 - -
Total Revenue from
Construction Services 0.10 0.00 50.85 2.79 345.05 10.89
Revenue from Department Store
Sales PG 85% 35.85 1.42 - - - -
Rental and Services PG 85% 12.17 0.48 - - - -
Total Revenue from Department Store 48.02 1.90 - - - -
Total Revenue from Core Businesses 2,505.90 99.12 1,770.22 97.40 3,087.22 97.44
Other Revenues
Gain on Sales of Investments in
Subsidiaries and Associate, net NOBLE - - - - - 22.61 0.71
Gain on Foreign Currency Exchange NOBLE - - - 26.99 1.49 18.12 0.57
Interest Income (2) - 15.94 0.63 12.76 0.70 16.37 0.52
Others Income (2) - 6.20 0.25 7.43 0.41 24.03 0.76
Total Other Revenues 22.14 0.88 47.18 2.60 81.13 2.56
Total Revenues 2,528.04 100.00 1,817.40 100.00 3,168.35 100.00
Increase (Decrease) in Revenue
from Core Businesses 735.68 41.56 (1,317.00) (42.66) 2,037.78 194.18
Remark
(1) NOBLE = Noble Development Public Company
Limited
WPV = Wipa View Company Limited
WT = World Time Holding Company Limited
BSS = Ban Suk Sabai Company Limited
S&P = S&P Property Management Company
Limited
PG = Playground Store Company Limited
(2) Revenues of the Company and its subsidiaries.
(3) The Company disposed the investment in
subsidiaries, Wipa View Company Limited and
World Time Holding Company Limited on
September 1, 2003.
Revenues Structure
Annual Report 2005 Noble Development Public Company Limited
(Unit : Million Baht)
08
The Industrial Situation and Trend
In 2005, the survey on registered residential
units in Bangkok and vicinity (please see
table 1) indicated that the overall real estate
business had expanded from 2004 for 3.3%.
In 2005, the numbers of residential units
increased to 71,301 units, from 69,050 units
in 2004. The numbers of self-built units
increased for 22.5% whereas the numbers
of the developer-built decreased for 9.7%.
At the same time, the numbers of condominium
projects increased for 20.5%. These were
the result of continually-increasing interest
rates and fuel price which affected the operation
costs and drove the overall dwelling prices
up. The prices per unit became a key factor
and strategy in project development for the
developers. Moreover, customers' behavior
in choosing residential places tended to be
more focused on transportation expense
and convenience. Additionally, though the
purchasing power of the customers remained
the same, the house prices increased. Thus,
customers had switched to condominiums in
the inner city which offered the lower price
per unit than houses.
Furthermore, the numbers of registered
residential units built by developers that
decreased in 2005 had reflected to less
competition between them. As we had
mentioned, the impact from fuel prices and
increasing interest rates drove the cost up.
At the same time, financial institutes had
restricted their financing loan for project
development. In addition, at present,
confidence in qualities and developers
became a key decision factor in buying
house for customers. Thus, this drove some
small developers who were not competitive
both in term of marketing and financial
status out of the market.
2000 2001 2002 2003 2004 2005 2005(2)
(Jan-Sep)
Developer-Built
Single House, Twin House,
Townhouse, Shop House 6,331 9,691 14,371 30,088 40,752 27,600 36,800
Condominium 6,679 4,650 5,118 7,399 8,439 7,629 10,172
Total Developer-Built 13,010 14,341 19,489 37,487 49,191 35,229 46,972
Self-Built 18,064 19,639 17,693 18,598 19,859 18,247 24,329
Total Residential Units
Registered 31,074 33,980 37,182 56,085 69,050 53,476 71,301
Change from Last Year (%) 7.1% 9.4% 9.4% 50.8% 23.1% 13.8%(1) 3.3%
Table 1 : Residential units registered in Bangkok Metropolis and Vicinity.
Source : Real Estate Information Center
Remark : (1) Compared to the data from Jan-Sep 2004
(2) Pro-rata based on Jan-Sep 2005
Annual Report 2005 Noble Development Public Company Limited
09
The Industrial Situation and Trend (Continued)
In 2005, despite of several negative factors
such as the slow down of the world's
economy, interest rate situation, inflation,
and political uncertainty, many organizations
and institutions have forecasted that in
2006, the overall Thailand's economy (marked
by the GDP) is likely to expand at a similar
rate to 2005 which is between 4.0-4.5%. The
real estate sector is expected to expand in
the same direction with the national economic
growth with the following supporting factors:
The government's investment in infrastructure development
The government had announced their plan
for Mega Projects investment, worth around
THB 1.8 trillion. The investment plan aims to
distribute income to business sectors and
citizens, and that positively affects
consumers' demand and purchasing power.
This investment also increases land's value
and potential which are the key success
factors for real estate developers. The
government's investment thus substantially
promotes the real estate development
business in both short and long terms.
Interest rates
As a result of the rising US Fed Fund
interest rate, the pressure from fuel price
and domestic inflation, Bank of Thailand has
raised its Policy Interest rate by 2% in 2005.
For 2006, it is expected that the situation
will be relieved, since The US Fed Fund
restricted interest rate policy is expected to
increase only by 0.5 - 0.75%, in comparison
with 3% increase in 2005. The fuel prices
seem to maintain itself at the same level or
to increase gently, unlike the situation in the
past 2 years. Thus, the domestic interest
rates are expected to grow in the
decreasing rate. Nevertheless, the rates are
still considered relatively low compared to
the past (please see Chart 1) and the
concern over the rise of interest rates also
helps accelerate customers with real
demand for houses to make their decision
faster.
Chart 1: Minimum Lending Rate (MLR) of Commercial banks during the year 1996-2005
Source : Bank of Thailand
Remark : Average MLR of 5 commercial banks BBL, KBANK, BAY, KTB and SCB
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
96
MLR (At the end of the Year)
MLR
MLR (Average during the Year)
97 98 99 00 01 02 03 04 05
13.55 14.65
9.26
13.72
8.077.44
7.056.14
5.69 5.9113.20
15.25
11.75
8.40 7.85 7.20 6.755.70 5.70
6.55
Annual Report 2005 Noble Development Public Company Limited
10
Measure to promote second-handed houses
The government's measure to promote
second-handed houses by reducing the
transfer fee and the mortgage fee to 0.01%
each, which is effective from the year-end of
2005 to end of 2007. This not only
encourages the purchasing power in the
second-handed house market, but also
helps to boost the liquidity in real estate
sector, because the easier customers can
sell their current residential places, the
faster they can make decision for their new
ones.
Foreign Investment
Foreign investors have become more
interested in investing in Thai real estate
business, as a result of the government's
infrastructure and transportation network
development plans. These plans enhanced
the potential and the land prices which were
not attractive to foreign investors before.
Additionally, the measures to promote free
trade and investment allow them to see the
opportunities for investment and profit from
rising in land prices. The foreign investment,
in forms of joint venture with Thai companies,
direct investment, the investment via the
stock market, or any kind of financial
support, not only encourages the liquidity in
the market, but also promotes the long-term
development for real estate sector.
In conclusion, regardless the political
uncertainty, the real estate business in 2006
tends to expand and grow with stability.
Only the developers who sustain their
quality and potential can compete in this
business. For Noble, with our distinctive and
strong competitive and marketing strategies,
readiness and potential in terms of capital,
properties for project development, as well
as disciplined and efficient administration
and capital management, we are stable and
strong in both financial and marketing position
and ready to expand with sustainability to
create and develop quality of residential
projects, as well as to return profits to
shareholders and investors as aimed.
Annual Report 2005 Noble Development Public Company Limited
The Industrial Situation and Trend (Continued)
11
Risk Factors
Chart 1 : index of construction material prices and the change of the index of construction material
Source : Bureau of Trade and Economic Indices, Office of the Permanent Secretary Ministry of Commerce ,
Ministry of Commerce
Remark : Base on 2000 A.D = 100
In 2006, another factor that might affect the
price of construction material is government
Mega Projects. The government planned to
invest THB 290 billion in 2006, from the total
investment budget of THB 1.8 trillion. That
would cause the rising demand of construction
materials and a temporary shortage of the
materials, and eventually result in the increase
of construction material prices. However, the
Mega Projects are a long-term investment
plan, so the government announced the plan
in advance in 2004 to ensure that all related
parties in both government and private sectors
have preparation and management planning
in order to achieve highest efficiency.
Consequently, the effect of construction
shortage is well relieved.
The risk factors that may affect the Company's
operation are :
The Risk in terms of Construction Material
Prices
According to Chart 1 that shows index of
construction material prices and the change
of the index, we can see that the construction
prices in 2005 have been increased to 20 %
higher than in 2002. Construction material
prices had begun to rise since 2003 by 8 %
because developers accelerated the
construction to obtain the benefit of the
government's tax measure ending in the
year. The prices had continued to increase
until 2004 because of the sharp rise of
petrol price. However, in 2005, construction
material prices did not increase but began
to stabilize at the same level as 2004 prices.
130.0
110.0
90.0
70.0
50.0
16
12
8
4
0 2000 2001 2002 2003 2004 2005
Index Change (%)
100.0
0.0
103.9
3.9
104.8
0.9
112.8
124.3 124.3
0.0
11.5
8.0
Annual Report 2005 Noble Development Public Company Limited
Index of construction
material prices
Change of the index of
construction material (%)
12
Risk Factors (Continued)
If political uncertainty continues, Mega
Project investment might be postponed.
That will affect Thai economy in a long term
because the government's investment in the
Mega Project inject the capital into the
economy, increase employment rate, also
cause the income distribution to the
business sector and to individuals. The said
project has been clearly defined to invest
more than 50% in public infrastructure,
enhancing land value and high potential
locations. This would positively affect the
economy and society, particularly in real
estate sector.
For the Company, its policy not to hold land
banks but rather to develop the land
immediately after the acquisition, and the
pre-build policy enable it to undertake
effective planning for construction. This reduces
the risks posed by construction material
shortage and the rise in construction material
prices. At the end of 2005, the Company
had pre-build houses, built at the previous
construction costs, amounted to THB 3.4
billion which are ready to immediately
transfer after customers make decisions.
The Risk in Terms of Interest Rates
Due to the raised interest rate by US Fed
Fund and inflation in 2005, Monetary Policy
Committee of the Bank of Thailand raised
the policy interest rate by 2% for the whole
year of 2005. That caused the rate of
Minimum Lending Rate (MLR) of commercial
banks to rise from 5.60 to 6.55 % (average
of five commercial banks), effected to the
developers' financing costs and customer's
burdens of loan installment.
In 2006, the Fiscal Policy Office expects that
the inflation rate should decrease from 4.5
% to 3.0 %, and petrol price is likely to
increase but in a slower rate. Kasikorn
Research Center also expects that the
interest policy of US Fed Fund should be
less strict in 2006, the interest rate would be
increased by 0.5 to 0.75%, to the height of
4.75 to 5.00%. The interest rate is likely to
be risen but in a slower rate than 2005.
Regarding its financial structure, the
Company plans to arrange project finance
only for the condominium projects in
accordance with the construction period. All
of the single detached house projects are
completely free debt. The Company's cost
structure for financing consists of 65 % of
fixed interest (at the average rate of 4.07 %)
and 35 % of floating interest. Although, the
Company has floating interest as a
component of financing cost, with the
corporate potential, those floating interest
rates offered by the financial institutions
compared to the industry are considered
low. Consequently, increasing interest rates
would not materially affect the company.
For the customer, installment burden
increases only THB 900 per month in every
0.25 % increased in an interest rate.
Annual Report 2005 Noble Development Public Company Limited
13
The Risk in Terms of Inventory Management
(Pre-build Houses)
Customer behavior has changed after the
financial crisis. According to research,
customers prefer buying pre-build houses
built by reliable developers rather than
buying build-to-order houses. Also, to
mange cost and time, the Company has
implemented a Pre-Build Policy for all single
detached house projects since 2002.
Currently, the Company has 350 units of
pre-build house, worth more than THB 3.4
billion, that are ready to transfer.
Although the Company has this number of
pre-build houses, the inventory cost is very
low, when compared to other developers in
the industry. The Company's gross profit
margin is 39.5 % while ratios of other
competitors in the industry are in the range
of 24.5 to 44.2 %. Moreover, the Company
does not have high risk in construction
material prices and all pre-build houses are
located in prime areas. If the Company has
to buy land in the areas to develop at
current prices, our cost would be at least 10
% higher.
Regarding the liquidity risk, the Company
has pre-build houses and ready-to-transfer
inventory that is better than having
undeveloped land banks, low liquidity and
cannot be sold and transferred to customers
immediately.
The Risk in Terms of the Political Uncertainties
The political situation has been occurred
since the end of 2005 and continued to
spread widely. If the situation does not stop
soon, it might result in violence and affect
the investment from both domestic and foreign
investors. That could impact the overall
economy of Thailand. Due to the uncertainty
and unstable political situation, investments
in all businesses are unavoidably postponed.
The Company closely monitors this situation,
as well as implements a cautious investment
policy with disciplines in business and
financial management. We only invest in
assets located in potential areas after
prudent studies on its feasibility in terms of
marketing and finance.
Risk Factors (Continued)
Annual Report 2005 Noble Development Public Company Limited
14
Shareholders' Name Number of Shares % of Paid up Capital
1 Thai NVDR Company Limited 72,674,300 15.92
2 Thanakitamnuay Group 36,662,296 8.03
Mr. Kitti Thanakitamnuay 36,330,919 7.96
Ban Siam Holdings Company Limited 331,377 0.07
3 CHASE C.S.CENTRAL NOMINEES LIMITED 20,425,400 4.47
4 Mr. Taveechat Jurankul 20,200,000 4.43
5 Viravan Group
Dr. Amnuay Viravan 3,664,853 0.80
Khun Ying Samornsri Viravan 8,471,850 1.86
Samvest Company Limited 4,778,265 1.05
Amvest Company Limited 2,389,131 0.52
6 Thai Strategic Asset Fund 18,750,000 4.11
7 Mr. Piya Thanakitamnuay 16,353,060 3.58
8 SOMERS (U.K.) LIMITED 12,997,700 2.85
9 Ms. Chansri Umpornsuwan 10,758,661 2.36
10 THE BANK OF NEW YORK (NOMINEES) LIMITED 10,521,400 2.30
Total 238,646,916 52.28
Shareholders
The First Ten Major Shareholders as of May 9, 2005
Dividend Policy
The company has a policy to pay dividend to shareholders by considering its' operating results
and concerned factors. The Company's dividend payout ratio is not less than 25% of the net
profit. However the said policy must be in accordance with the resolutions of shareholders'
meeting.
The Board of directors resolves to propose to the annual general shareholders' meeting held on
April 27, 2006 to approve the 2005 annual dividend payment of THB 0.27 per share or 27% of
the net profit.
Dividend policy of its subsidiaries
- None -
Investors can acquire update information of the major shareholders before the shareholders' meeting from the
website www.noblehome.com
Annual Report 2005 Noble Development Public Company Limited
15
Organization Chart
Board of Directors
Chairman and Managing Director
Audit Committee
ë Corporate Finance Department
ë Accounting Department
ë Finance Department
ë Legal Service Department
ë Legal Department
ë Human Resources Development Department
ë Project Operation Department 1-4
ë Investment Analyst Department
ë Marketing and PR Department
ë Information Technology Department
ë After Sales Service Department
ë Project Legal Department
Support Line CEO Office Project Operation
and Information
Technology Line
Internal Audit Line
ë Playground Store Department
Annual Report 2005 Noble Development Public Company Limited
16
The Board of Directors
The structure of the Company's directors consists of the followings:
ë The Board of Directors 9 persons
ë The Audit Committee 3 persons
The Board of Directors
As of December 31, 2005 the Company has 9 directors as follows.
ë Executive Directors 4 persons
ë Independent Directors 5 persons
55% of the members of the Board are Independent Director
1. Mr. Kitti Thanakitamnuay Chairman and Managing Director
2. Mr. Sitti Leelakasamelerk Director
3. Mr. Thongchai Busrapan Director
4. Miss Vasana Thieansirisak Director
5. Mr. Vicharn Busrawong Independent Director
6. Mr. Thakonkiat Viravan Independent Director
7. Mrs. Boonperm Jiamtiranat Independent Director and
Chairman of the Audit Committee
8. Mr. Narong Taychachaiwong Independent Director and
Member of the Audit Committee
9. Mr. Surachet Suboonson Independent Director and
Member of the Audit Committee
The Board of Directors' scope of duties
and responsibilities:
(1) To perform their duties cautiously and
faithfully in compliance with laws, under the
scope of the Company's objective and Articles
of Associations, together with the shareholders'
resolutions for the maximum benefits of the
shareholders.
(2) To set the Company's business plan,
strategies, goals, policies and budget together
with the Management.
(3) To supervise, monitor and assess the
Management to effectively and transparently
perform their duties in accordance with the
Company's policy and business plan.
(4) To review and ensure the efficiency of
the internal control system to ensure that
the Company's Financial Statements is
reliable, accurate and correct, and to prevent
the fraudulence in using the Company's
properties and improper transaction between
the related parties.
(5) To establish the appropriate structure of
the Board of Directors in order to create the
balance of power, adequate and appropriate
management monitoring.
17
Annual Report 2005 Noble Development Public Company Limited
The Board of Directors (Continued)
In 2005, the Board of Directors held 37 meetings; 10 regular meetings and 27 sub-meetings,
details of attendance is as follows:
No. of meeting attended (Times)
Regular meeting Sub-meeting*
1. Mr. Kitti Thanakitamnuay 10 27
2. Mr. Sitti Leelakasamelerk 10 27
3. Mr. Thongchai Busrapan 10 27
4. Miss Vasana Thieansirisak 10 25
5. Mr. Vicharn Busrawong 7 4
6. Mr. Thakonkiat Viravan 6 -
7. Mrs. Boonperm Jiamtiranat 8 -
8. Mr.Narong Taychachaiwong 7 -
9. Mr. Surachet Suboonson 10 25
* Sub-meetings are arranged to consider the operation issues that do not affect the Company's management
policy, e.g. the request of projects' utilities, house registration numbers, bank accounts opening etc. Thus, the
Board of Directors has assigned 5 directors composing Mr. Kitti Thanakitamnuay, Mr. Sitti Leelakasamelerk, Mr.
Thongchai Busrapan, Miss Vasana Thieansirisak, and Mr. Surachet Suboonson to attend the meetings. If any of
the 5 directors is unavailable for any meeting, the Company will invite other directors to constitute the meeting.
18
Annual Report 2005 Noble Development Public Company Limited
The Audit Committee
As of December 31, 2005 the Company has 3 Audit Committee as follows
1. Mrs. Boonperm Jiamtiranat Chairman of the Audit Committee
2. Mr. Narong Taychachaiwong Member of the Audit Committee
3. Mr. Surachet Suboonson Member of the Audit Committee
The Audit Committee's Secretary : Mrs. Angkana Intravichien
The Audit Committee's scope of
duties and responsibilities:
(1) To ensure the Company's financial report
is correct and reliable.
(2) To ensure the Company have adequate
and effective internal controls system, and
prepare the Audit Committees' report for
disclosure in the Company's Annual Report
and Annual Information.
(3) To consider, elect, propose the Company's
external auditor and also its fee.
(4) To review the Company's activities in
comply with the Security and Stock Exchange
regulations or the Law regarding to the
Company's business.
(5) To review and consider the Company's
information disclosure in case of the related
transaction or conflict of interest in order to
ensure the completeness and fidelity of
disclosure.
(6) To file the Audit Committee's Report on
Corporate Governance and disclose in the
Company's Annual Report and Annual
Information, the report must be signed by
the Chairman of Audit Committee.
(7) To perform other matters as assigned by
the Board of Directors under the audit
committee's considerations.
19
Annual Report 2005 Noble Development Public Company Limited
The Executives
As of December 31, 2005 the Company's Executives are as follows:
1. Mr. Kitti Thanakitamnuay Chairman and Managing Director
2. Mr. Sitti Leelakasamelerk Executive Vice President : Support Line
3. Mr. Thongchai Busrapan Executive Vice President : Project Operation
and Information Technology Line
4. Miss Vasana Thieansirisak Senior Vice President : Corporate Finance
Department
5. Mr. Arat Sawatatat Vice President : Project Operation Department
6. Miss Songsri Panich Vice President : Project Operation Department
7. Mr. Sira Udol Vice President : Project Operation Department
8. Mr. Manit Ngamsantiwongsa Vice President : After Sales Service Department
9. Mrs. Angkana Intravichien Vice President : Accounting and Finance
Department
Annual Report 2005 Noble Development Public Company Limited
20
The Company did not nominate the
committee to search for the Board of
Directors' candidates. According to the
Company's articles of association, the
Company's existing directors will propose
the candidates to the shareholders' meeting
by considering education, experience,
capability and readiness to completely
perform their duties. The shareholders'
meeting will elect the Board of Directors via
the following manners:
1. Each shareholder shall have a number of
votes equal to the number of shares held.
2. Each shareholder may exercise all the
votes he or she has (under 1) to elect one
or several persons as director or directors.
The shareholder cannot allot his or her
votes to any person in any number.
3. After the vote, the candidates shall be
ranked in order descending from the highest
number of votes received to the lowest, and
shall be appointed as directors in that order
until all of the director positions are filled.
Where the votes cast for candidates in
descending order are ties, which would
otherwise cause the number of directors to
be exceeded, the remaining appointments
shall be made by one extra vote from the
chairman of the meeting.
Regard to the Company's articles of
association, the shareholders' meeting may
pass a resolution removing any director
from office prior to retirement as a result of
the expiration of the director's term office,
by a vote of not less than three quarters of
the number of shareholders attending the
meeting who have the right to vote and who
have shares totaling not less than half of the
number of shares held by the shareholders
attending the meeting and having the right
to vote.
Remuneration for the year 2005
Remuneration in terms of money
ë Board of Directors
Remuneration for 9 directors totaled of THB
455,000 THB 55,000 for Chairman of the
Board of directors and THB 50,000 for each
director.
ë The Audit Committee
Remuneration for 3 members of the Audit
Committee totaled THB 400,000. Chairman
of the Audit Committee totaled THB 150,000
and THB 125,000 for each member.
ë Executive Officers
Remuneration for 9 executive officers, from
vice president level and upward, totaled
THB 16,666,510.
Remuneration policy for Directors and the
Management is transparently and fairly
determined on the identical and comparable
to the general practice in the industry.
Remuneration for the directors is
determined and approved by the
shareholders' meeting. To motivate as well
as to maximize interests of the Company,
the executive officers' remuneration is set to
correspond with the performance of the
Company and that of each performance's.
Other Remuneration
-None-
Election of the Board of
Directors and Remuneration
Annual Report 2005 Noble Development Public Company Limited
21
Board of Directors, Audit Committee
and Executive Officers
Mr.Kitti ThanakitamnuayPosition Chairman and Managing Director
Education B.A., Political Science, Chulalongkorn University
Training from Thai Institute of
Directors Association
Number of Shares 36,330,919 shares
Number of Shares Changed in 2005 No
Experience Present ë Chairman and Managing Director
Noble Development Public Company Limited
ë Managing Director
Continental City Company Limited
Research and Consultant Company Limited
Playground Store Company Limited
Ban Suk Sabai Company Limited
ë Director
Ban Siam Holdings Company Limited.
Mr. Sitti LeelakasamelerkPosition Director and Executive Vice President: Support
Education B.A., Accounting, Chulalongkorn University
Training from Thai Institute of
Directors Association Director Accreditation Program (DAP) Class 11/2004
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Director
Noble Development Public Company Limited
Continental City Company Limited
Research and Consultant Company Limited
Playground Store Company Limited
Ban Suk Sabai Company Limited
ë Executive Vice President: Support
Noble Development Public Company Limited
ë Independent Director and Member of the Audit Committee
Khon Kaen Sugar Industry Public Company Limited
Annual Report 2005 Noble Development Public Company Limited
22
Board of Directors, Audit Committee and Executive Officers (Continued)
Mr. Thongchai BusrapanPosition Director and Executive Vice President: Project Operation
and Information Technology Line
Education Master of Science in Management SASIN Graduate
Institute of Business Administration of Chulalongkorn University
Training from Thai Institute of
Directors Association Director Accreditation Program (DAP) Class 52/2006
Number of Shares 20,000 Shares
Number of Shares Changed in 2005 No
Experience Present ë Director
Noble Development Public Company Limited
Continental City Company Limited
Research and Consultant Company Limited
N.K.Energy Conservation Company Limited
Playground Store Company Limited
Ban Suk Sabai Company Limited
ë Executive Vice President
Project Operation Development And
Information Technology Line
Noble Development Public Company Limited
Miss Vasana ThieansirisakPosition Director and Senior Vice President: Corporate Finance Department
Education Master of Science, Managerial Accounting and
Master of Science, Economic Law
Chulalongkorn University
Training from Thai Institute of
Directors Association Director Accreditation Program (DAP) Class 45/2005
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Director
Noble Development Public Company Limited
ë Managing Director
S&P Property Management Company Limited
ë Senior Vice President: Corporate Finance Department
Noble Development Public Company Limited
Annual Report 2005 Noble Development Public Company Limited
23
Mr. Vicharn BusrawongPosition Independent Director
Education Secondary School
Training from Thai Institute of
Directors Association
Number of Shares 3,735,000 Shares
Number of Shares Changed in 2005 No
Experience Present ë Independent Director
Noble Development Public Company Limited
ë Director
Continental City Company Limited
Playground Store Company Limited
Ban Suk Sabai Company Limited
ë Chairman and Managing Director
Kit Porn Company Limited
World Grain Company Limited
ë Chairman
World Grain Marketing Company Limited
World People Foodstuffs Company Limited
P.T.T.N. Tharua Company Limited
World Time Company Limited
R.K.Nichigo Company Limited
W.Y. Company Limited
ë Honorary Chairman
The Rice Exporters Association
The Thai Maize and Produce Trades Association
Mr. Thakonkiat ViravanPosition Independent Director
Education Master of Science, Boston University, USA
Training from Thai Institute of
Directors Association
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Independent Director
Noble Development Public Company Limited
ë Director
Continental City Company Limited
Ban Siam Holdings Company Limited
Playground Store Company Limited
Ban Suk Sabai Company Limited
ë Managing Director
Exact Company Limited
Scenario Company Limited
Annual Report 2005 Noble Development Public Company Limited
Board of Directors, Audit Committee and Executive Officers (Continued)
24
Mr. Narong TaychachaiwongPosition Independent Director and Member of the Audit Committee
Education B.FA., Fine Art, University of Central Florida, USA.
Training from Thai Institute of
Directors Association Director Accreditation Program (DAP) Class 2/2003
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Independent Director and Member
of the Audit Committee
Noble Development Public Company Limited
ë Chairman
Inter-Far East Engineering Public Company Limited
Mr. Surachet SuboonsonPosition Independent Director and Member of the Audit Committee
Education B.A., Accounting, Thammasat University
Training from Thai Institute of
Directors Association
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Independent Director and Member
of the Audit Committee
Noble Development Public Company Limited
Mrs. Boonperm JiamtiranatPosition Independent Director and Chairman of the Audit Committee
Education B.A., Accounting, Chulalongkorn University
Training from Thai Institute of
Directors Association Director Accreditation Program (DAP) Class 13/2004
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Independent Director and Chairman
of the Audit Committee
Noble Development Public Company Limited
ë Member of Audit Committee
Surapon Foods Public Company Limited
ë Director
Noble Estate Company Limited
Annual Report 2005 Noble Development Public Company Limited
Board of Directors, Audit Committee and Executive Officers (Continued)
25
Miss Songsri PanichPosition Vice President: Project Operation Department
Education Master of Business Administration (Marketing),
Dominican University, USA
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Vice President: Project Operation Department
Noble Development Public Company Limited
Mr. Sira UdolPosition Vice President: Project Operation Department
Education Master of Management SASIN Graduate Institute of
Business Administration of Chulalongkorn University
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Director
Research and Consultant Company Limited
Idirexdotcom Company Limited
ë Vice President: Project Operation Department
Noble Development Public Company Limited
Mr. Arat SawatatatPosition Vice President: Project Operation Department
Education Master of Science (Land Development),
Texas (A&M) University, USA
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Director
S&P Property Management Company Limited
ë Vice President: Project Operation Department
Noble Development Public Company Limited
Annual Report 2005 Noble Development Public Company Limited
Board of Directors, Audit Committee and Executive Officers (Continued)
26
Mrs. Angkana IntravichienPosition Vice President: Accounting and Finance Department
Education Master of Business Administration, NIDA
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Vice President: Accounting and Finance Department
Noble Development Public Company Limited
Mr. Manit NgamsantiwongsaPosition Vice President : After Sales Service Department
Education B.ENG., Sanitary Engineering and Civil Engineering,
Chulalongkorn University
Number of Shares -
Number of Shares Changed in 2005 No
Experience Present ë Director
Research and Consultant Company Limited
ë Vice President: After Sales Service Department
Noble Development Public Company Limited
* Remark All of the company's directors and executive officers do not hold the Company and its subsidiaries' debentures
Annual Report 2005 Noble Development Public Company Limited
Board of Directors, Audit Committee and Executive Officers (Continued)
27
Corporate Governance
We realize that good corporate governance
is the important factor in strengthening our
effective management system. It can be
taken as a reflection of our high standard
and transparency, which will lead to our
Company's sustainable growth. Therefore,
we decide to implement 15 principles of
good corporate governance regulated by the
Stock Exchange of Thailand as our business
guideline and core policy. They can be
summarized as follows:
1. The Corporate Governance Policy
Our corporate governance policy is settled
to cover our important value, which is the
fair treatment to both our shareholders and
stakeholders. Our board of directors and
management team are committed to their
duties according to the Company's
Objectives and Article of Association with
honesty, ethic, and the obedience to the
law. Our policy must be strictly followed to
prevent the abuse of the Company's internal
information for personal benefits. We
implement the appropriate internal
monitoring system. Our information system
is prepared to publicize the transparent,
complete and ready-to-be-checked
information.
2. The Right and Equality of the Shareholders
We realize the importance of the right and
equality of every shareholder. Our
shareholders have the right to receive
information, attend the meetings, vote,
appoint and discharge directors, express
their opinion, and raise any questions at the
meetings. At least 7 days prior to every
meeting, the shareholders will receive a
notice consisted of the meeting's agenda
and the board of directors' opinion on the
issue. We accommodate the meeting place
to fit most of our shareholder's convenience.
The Chairman of the Board attends every
shareholder's meeting. In the former
meeting, the Company assigned the
Chairman of the Audit Committee and the
Audit Committee to represent the
shareholders who cannot attend the
meeting.
3. The Right of the Stakeholders
We perceive the shared value between the
stakeholders and the Company. Therefore,
we promote the coherence and trust among
every party in order to sustain our
competitiveness and growth.
ë Customer : As our most important
supporters and stakeholders, we value our
customers and do our best to protect their
benefit. We develops not only the design,
the quality and the standard of our houses,
but also the after-sale project management
division to maintain a pleasant environment
and offer maintenance service to the
customer even after the ownership is
transferred. Moreover, we offer the
information about our house's designs and
materials, so that the customer can compare
our quality and standard with others.
Corporate Governance
Annual Report 2005 Noble Development Public Company Limited
28
ë Employees and Executives : As the most
important drives for the Company's success,
our employees and executives are offered
the appropriate and fair remunerations. The
Company also encourages training and
development to enhance competency for
present responsibility and line of works.
Moreover, the employees are able to
participate with the executive officers to
establish goals of the Company.
ë Competitors : We promote the free-trade
policy and fair competition under the legal
regulation and business ethic.
ë Partners : We transparently and fairly
select our contractors (partners), and follow
every contract strictly. Generally, the
contract already includes the labor and the
material cost. However, in case of material
shortage, we offer our hand in negotiating
for a better solution in order to support our
contractors on material cost.
ë Debtors : Although we have a strong
financial status and liquidity, we never forget
the importance of the financial support from
our investors and financial institutions.
Therefore, we promise to maintain our
creditability as best as we have done so far.
ë Government and Relevant Sectors : The
Company respects and follows the relevant
laws and regulations strictly in order to
advantage our customer, environment,
community and society.
ë Community and Society : As a Thai Company,
we realize that our business will never be
conducted successfully if it distresses our
community and society. Therefore, we
develop our after-sale project management
division to maintain a pleasant environment
and offer maintenance service to the customer
even after the proprietorship is transferred.
4. The Shareholders' meeting
A quorum will be constituted if at least 6
directors, who two of them are independent
directors, attend the meeting. The Chairman
attends every meeting to answer the
shareholders' inquiries. The agendas and
issues in every meeting are recorded in
detail and can be inspected.
5. Leadership and Vision
All of the Company's directors are well
aware of their duties and responsibilities
driven by the expectation and trust of the
shareholders. Therefore, every director
performs his duties cautiously, faithfully and
ethically to pursue the shareholders' best
benefit the Company
6. The Conflict of Interests
To prevent and avoid the conflict of
interests, the Company prohibits the
directors and executives, including their
spouses and dependents, from abusing the
unpublicized internal information for their
personal benefits. Moreover, the directors
and executives have duty to submit the
report regarding any change on their
security holding. In addition, the Company
sets the very strict policy regarding the
approval of transactions between the related
parties.
7. The Business Ethic
The Company conducts its business
ethically. We clearly determine a "Code of
Conduct" in written document, including the
right of the stakeholders, the duties to the
stakeholders, the monitoring of the
Company's assets and the utilization of the
Company's information, to be a guideline
and direction for the board of directors,
executives, and employees. The Company
will set up a training course on the issue
and monitor the result of the code
continuously.
8. The Check-and-balance Power among Non-Executive Directors
The structure of the board of directors,
which 55% comprises of independent
directors, who have reputation, high
business expertise and not been controlled
by the Management, creates a sufficient
monitoring and a balance of power in the
board. It can be ensured the independent
and transparent management under the
board.
Annual Report 2005 Noble Development Public Company Limited
29
Corporate Governance (Continued)
9. The Acquisition and Separation of Position
At present, though the Chairman and
Managing Director are the same person, the
structure of the Board of directors, which
55% comprises of independent directors,
still balances the management for
monitoring and auditing.
10. The Remunerations for the Board and Executives
The remunerations for the board are clearly
and transparently set and approved by the
shareholders' meeting. For the executives,
their remunerations depend on the
Company's operating results and their
individual performances in comparing to the
equivalent industry. The objective is to
motivate and create a competitive strength.
11. The Board of Directors' Meeting
At least 7 days prior to every meeting, the
directors will receive a notice consisted of
the meeting's agenda and relevant
information. The minutes are well recorded
in detail and retained for the Board of
directors and related person to be later
inspected.
12. The Subcommittee
The Board of directors set up the Audit
Committee to support in corporate governance
for the accuracy and transparency in the
Company's financial statements and the
sufficiency of information disclosure. Their
duties, responsibilities and authorities are
set according to the SET's rules and
regulations. The Chairman of the Audit
Committee discloses their corporate
governance report in the Company's annual
report and annual information.
13. The Internal Control and Audit
The Company has set up an internal audit
line to monitor and assess the internal
control system in operation and financial
transaction. The internal audit line reports
directly to managing director and the Audit
Committee.
14. The Directors' Report
The Board of directors are responsible for
the accuracy, the completeness and the
sufficiency of the information disclosure in
the financial statements and annual
information according to the general-accepted
standard and the related regulations.
Moreover, they have the duties to implement
and enforce an efficient internal control
system and monitor all functions to follow
the said system.
15. The Investor Relation
The Company considers the importance of
the correct, transparent, up-to-date and
accessible information disclosure. We
publicize our essential information through
every SET's channel and through our own
web site at www.noblehome.com. Moreover,
the Company set up the analyst meeting
regularly to open a forum where our
management attend to answer the inquiries
from the investors, analysts, and interested
parties. In addition, the Company has a
roadshow program in order to update the
Company's information and progress to the
foreign investors. Any further information,
please contact Ms.Vasana Thieansirisak at
02-251-9955 #1400-1401 and the e-mail
address [email protected], or visit us
at www.noblehome.com.
Annual Report 2005 Noble Development Public Company Limited
30
Corporate Governance (Continued)
Monitoring the Utilization of Internal Information
The Company strictly set the policy to avoid
the abuse of the Company's internal
information. The Company also prohibits
directors and executives including their
spouses and dependents from abusing the
unpublicized internal information for their
personal benefits, particularly during the
period of one month prior to publicizing the
Company's financial statement, lest it may
affect the securities' trading prices. The
board and executives have the duty to
submit the report on any changed regarding
their securities holding to the Company, SET
and SEC. The Company also informed its
executives of their duties and obligations in
preparing such report and disclosure of
securities holding, including the stipulations
on penalties in Article 275 of the Securities
and Exchange Act B.E.2535 (A.D.1992).
Moreover, the executives will be punished if
they use the internal information for their
personal benefits.
Internal Control
The Board of Directors assigned the Audit
Committee to take care, monitor and review
the properness and effectiveness of internal
control system to ensure that the Company's
internal control is appropriate and adequate
to protect the Company and its subsidiaries'
properties for the benefit of the shareholders.
The Company has internal audit team to
monitor and assess the internal control
adequacy for every operating unit. In
addition, the Company also regularly has the
internal and external risk assessment, which
might impact on its operation.
To evaluate the Company's internal control
system, the scope included 3 main areas
which were construction, sale, and transfer
of ownership. The assessment was to
evaluate the properness, adequacy and
effectiveness. Moreover, the assessment also
covered the adequacy and appropriateness
of policies, rules and regulations, work
processes, job allocation, empowerment and
approval authority, and the punctuality and
accuracy in reports preparation for
management.
The Board of Directors Meeting No. 2/2006
on February 28, 2006, which consisted of
the Board of directors and all member of the
Audit Committee reviewed and evaluated
the sufficiency of the internal control system
for the year 2005 including organization and
environment, risk management, controlling
the executives' performance, information and
communication and monitoring system From
the reviews, the Audit Committee and the
Board did not find any material items that
may potentially have adverse effects or
insufficiency of the Company's internal
control.
Annual Report 2005 Noble Development Public Company Limited
31
Corporate Governance (Continued)
The audit committee of Noble Development
Public Company comprises of 3 independent
directors. The chairman of the audit committee
is Mrs. Boonperm Jiamtiranat and two
members of the committee are Mr. Narong
Taychachaiwong and Mr. Surachet Suboonson.
In 2005, the Audit Committee held 5 meetings
to review and regulate the operations in
accordance with assigned scope of duties
and responsibilities and report to the Board of
Directors. The Committee also had the
meetings with the internal audit team and the
Company's external auditor.
The Committee discussed with the external
auditor, PricewaterhouseCoopers ABAS Ltd.,
in order to acknowledge the matters and
exchange opinions to evaluate the quality
and accuracy of the quarterly and annual
Financial Statements prepared by the
Management. In addition, the meetings
assessed the adequacy of the information
disclosure, particularly in related and
connected transactions, and evaluated the
efficiency and appropriateness of the
Company's internal control system. The
Committee also had the meetings with the
internal audit team to acknowledge the result
of the company's internal control audit and
evaluation, as well as the suggestion to
improve the efficiency, adequacy and
appropriateness of the company's internal
control system.
By complying with the scope of duties and
responsibilities and discussing with the
auditor and the Management, the Audit
Committee did not find any material items
that were not recorded or disclosed in the
Company's Financial Statements that may
potentially have adverse effects on the
Company's financial status and performance.
In addition, the Committee did not find any
situation regarding the internal control
system that showed material weak points
that may potentially affect the accuracy and
reliability of the Company's Financial
Statements.
(Mrs. Boonperm Jiamtiranat)
Chairman of the Audit Committee
February 28, 2006
The Audit Committee's Report
Annual Report 2005 Noble Development Public Company Limited
32
Charts of Operating Performance and Revenue Structure
Total Assets and Shareholders' Equity
0
1,000
2,000
3,000
4,000
5,000
6,000
Total Assets
Shareholders' Equity
Net D/E Ratio
D/E Ratio
2005 2004
Debt and Net Debt to Equity Ratio
Total Revenues and Net Profit
2005 2004
2005 20040.0
0.2
0.4
0.6
0.8
1.0
1.2
0
500
1,000
1,500
2,000
2,500
3,000
Net Profit
Total Revenues
2,889
5,363
2,526
5,287
0.86
0.69
1.09
0.86
2,528
456
1,817
335
Charts of Operating Performance
Annual Report 2005 Noble Development Public Company Limited
33
Unit : Million Baht
2005 2004
Revenue from Property Development Business 2,458 1,770
Revenue from Department Store Business 48 -
Others Income 22 47
Total 2,528 1,817
Charts of Revenue Structure
Annual Report 2005 Noble Development Public Company Limited
2005 Revenues Structure 2004 Revenues Structure
1.9% Revenue from Department Store Business
0.9% Others Income
97.2% Revenue from Property Development Businesså
2.6% Others Income
97.4% Revenue from Property Development Business
34
Operating Results
In 2005, the Company recorded the net
profit of THB 456.43 million, an increase of
36.4 % from THB 334.61 million recorded in
2004. Total revenue in 2005 was THB
2,528.04 million, increased from THB 710.65
million in 2004 due to the following reasons.
ë The success from sales of the Company's
projects, especially condominium projects. In
2005, the revenue from property development
business was 38.9 % higher than 2004, with
a gross profit margin of 39.5 %.
ë In April 2005, "Playground", the first
shopping centre project of the Company
located in the prime area of Thonglor, was
launched. Revenue from retail business, rental
and services were THB 48.02 million, with the
gross profit margin of 46.4 %.
ë The selling and administrative expenses in
2005 was THB 418.09 million, 16.7 % of
sales. It decreased from 24.0 % of sales in
2004 because of decreasing in marketing
expenses from 7.9 % in 2004 to 2.0 % in
2005.
ë In 2005, the Company has net profit
margin before tax of 22.7 %, higher than
18.2 % in 2004.
Financial Status
ë Total assets of the Company and its
subsidiaries as at December 31, 2005 were
recorded at THB 5,363.29 million, a 1.44 %
increase from THB 5,287.02 million in 2004.
Unbilled completed works increased by THB
469 million because the Company
accelerated condominium construction to
make them ready for sale and transfer in
2005. At the end of 2005, two of the
condominium projects were completed,
Noble Ora Condominium and Noble 09
Project. The construction of Noble Lite
project is expected to be completed and be
ready to transfer to customers in the second
quarter of 2006.
ë Total liabilities of the Company and its
subsidiaries were recorded at THB 2,474.42
million, decreasing by THB 287.03 million
from THB 2,761.45 million in 2004. At the
end of 2005, the Company's net debt to
equity ratio was 0.69, while its debt to
equity ratio was 0.86, a decrease from 0.86
and 1.09 time in 2004 respectively.
ë The Company and its subsidiaries'
shareholder's equity in 2005 was recorded
at THB 2,888.87 million, a 14.4% increase
from THB 2,525.57 million recorded in 2004.
The return on equity was 15.80%. The book
value per share increased from THB 5.53 in
2004 to THB 6.33.
In 2005, the Company's operating results
was excellent because of revenue from
property development business that
increased by 39%. With the Company's
financial strength and success of projects, in
2006 we plan to launch at least new projects
of single detached house and condominium,
totaling of more than THB 3.6 Billion. In
order to continue a long-term expansion, the
Company also planned to acquire THB 1,000
billion of assets in 2006. The Company will
build quality projects for unique lifestyles
under the prudent and efficient policy to
manage project and capital.
Analysis of Financial Status and
Operating Results
Annual Report 2005 Noble Development Public Company Limited
35
Audit Fee
In 2005, the Company and its subsidiaries paid the audit fee totaling THB 1,995,000 and out of
pocket expenses totaling THB 38,366 to the Company's external auditor, PricewaterhouseCoopers ABAS
Ltd.
Non-Audit Fee
In 2005, the Company and its subsidiaries have a commitment to pay for the uncompleted
services, which are legal and tax matters service fee, to PricewaterhouseCoopers ABAS Ltd.,
totaling THB 30,000
Annual Report 2005 Noble Development Public Company Limited
Remunerations for External Auditor
36
Company Factsheet
Annual Report 2005 Noble Development Public Company Limited
Noble Development Public Company Limited
Head Office 19th Fl., Tonson Tower, 900 Ploenchit Road, Lumpini, Pathumwan,
Bangkok 10330
Home Page www.noblehome.com
Main Business Property Development
Registered Number 0107538000312
Registered Capital 474,782,565 Shares at Baht 5 par value totaling Baht 2,373,912,825
Paid Up Capital THB 2,282,355,875
Ordinary share Registrar Thailand Securities Depository Company Limited
4th, 6
th- 7
th Fl., The Stock Exchange of Thailand Building
62 Rachadapisek Road, Klongteoy, Bangkok 10110
Tel. 0-2229-2800
Debenture Registrar The Debentures of Noble Development Public Company Limited
No.1/2546 DUE B.E. 2549
TMB BANK PUBLIC COMPANY LIMITED
393 Silom Road, Bangrak, Bangkok 10500
Tel. 0-2230-6295
Auditor Mr. Boonmee Ngotngamwong
Certified Public Accountant Registration No. 3673
Mr. Kajornkiet Aroonpirodkul
Certified Public Accountant Registration No. 3445
Mr. Prasit Yuengsrikul
Certified Public Accountant Registration No. 4174
PricewaterhouseCoopers ABAS Limited.
15th Fl., Bangkok City Tower
179/74 - 80 South Sathorn Road, Bangkok 10120
Tel. 0-2286-9999, 0-2344-1000
Legal Advisor Mr. Pathiparn Tatikhun LL.B.
Lawyer's License No. 266/2540
95/174 Panason Garden Home Moo2, Minburi, Bangkok 10510
Tel. 0-2543-6870
External Legal Advisor White & Case (Thailand) Limited.
22nd
Fl., Mercury Tower, 540 Ploenchit Road, Lumpini, Pathumwan,
Bangkok 10330
Tel. 0-2264-8000
37
Address and Telephone Number of Head Office and Projects
ë Head Office: Noble Development Public Company Limited
19th Fl., Tonson Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok
Tel. 0-2251-9955
ë Noble Wana Pinklao
9/121 Moo 5, Pinklao-Nakornchaisi Road km. 15, Salathammasop, Thaveewattana, Bangkok
Tel. 0-2888-6611, 0-2251-9955
ë Noble Anawana Pinklao
28 Moo 8, Pinklao-Nakornchaisi Road km. 15, Salathammasop, Thaveewattana, Bangkok
Tel. 0-2888-6611, 0-2251-9955
ë Noble Wana Watcharapol
179 Moo 3, Soi Ruammitrpattana, Watcharapol Road, Tarang, Bangkhen, Bangkok
Tel. 0-2949-8530-1, 0-2251-9955
ë Noble Geo Watcharapol
222 Soi Watcharapol (Ruammitrpattana), Ramindra Road, Tarang, Bangkhen, Bangkok
Tel. 0-2998-4255, 0-2251-9955
ë Noble Geo Rama 5
58 Moo 6, Nakorn-in-Karnjanapisek Road, Bangkoonkong, Bangkruai, Nontaburi
Tel. 0-2985-0683, 0-2985-0686-8, 0-2251-9955
ë Noble Tara Ngamwongwan and Noble Tara Ngamwongwan
66/1 Moo 8,Rattanatibeth Road, Bangkrasor, Muang, Nontaburi
Tel. 0-2965-5800, 0-2251-9955
ë Noble Tara Pattanakarn
2046 Pattanakarn Road, Suanluang, Suanluang, Bangkok
Tel. 0-2720-4000, 0-2251-9955
ë Noble Ora Thonglor
822 Soi Sukhumvit 55 (Thonglor), Sukhumvit Road, Klongton Nue, Wattana, Bangkok
Tel. 0-2714-7844, 0-2251-9955
ë Noble Zero Nine
9 Soi Ruamrudee, Wireless Road, Lumpini, Pathumwan, Bangkok
Tel. 0-2251-9955
ë Noble Lite
46 Soi Aree 1, Paholyothin Road, Samsen-nai, Phayathai, Bangkok
Tel. 0-2278-0011, 0-2251-9955
ë Noble Ambience Ruamrudee
81 Soi Ruamrudee, Wireless Road, Lumpini, Pathumwan, Bangkok
Tel. 0-2255-7999
ë Noble Ambience Sarasin
237 Rajdumri Road, Lumpini, Pathumwan, Bangkok
Tel. 0-2255-7999
ë Noble Sukhumvit 36
19th Fl., Tonson Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok
Tel. 0-2251-9955
ë Playground Store
818 Soi Sukhumvit 55 (Thonglor), Sukhumvit Road, Klongton Nue, Wattana, Bangkok
Tel. 0-2714-7888, 0-2714-9616-9, 0-2251-9955
Annual Report 2005 Noble Development Public Company Limited
38
Annual Report 2005 Noble Development Public Company Limited
To the Shareholders of Noble Development Public Company Limited
I have audited the accompanying consolidated
and company balance sheets as at 31
December 2005 and 2004, and the related
consolidated and company statements of
income, changes in shareholders' equity and
cash flows for the years then ended of Noble
Development Public Company Limited and its
subsidiaries, and of Noble Development Public
Company Limited, respectively. The Company's
management is responsible for the correctness
and completeness of information in these
financial statements. My responsibility is to
express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with
generally accepted auditing standards. Those
standards require that I plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. An audit also includes assessing
the accounting principles used and significant
estimates made by management, as well as
evaluating the overall financial statement
presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the consolidated and company
financial statements referred to above present
fairly, in all material respects, the consolidated
and company financial position as at 31
December 2005 and 2004, and the
consolidated and company results of
operations and cash flows for the years then
ended of Noble Development Public Company
Limited and its subsidiaries, and of Noble
Development Public Company Limited,
respectively, in accordance with generally
accepted accounting principles.
Without qualifying my opinion, I draw your
attention to Note 18 to the consolidated and
company financial statements which explains
the Company's plan to remove the balance of
share discount outstanding as at 31 December
2005 amounting to Baht 844 million in full to
comply with the Circular Letter of the Office of
the Securities and Exchange Commission
relating to the removal of share discount.
BOONMEE NGOTNGAMWONG
Certified Public Accountant
(Thailand) No. 3673
PricewaterhouseCoopers ABAS Limited
Bangkok
28 February 2006
AUDITOR'S REPORT
39
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Notes Baht Baht Baht Baht
Assets
Current Assets
Cash and cash equivalents 3 470,859,539 578,220,428 436,366,352 560,023,999
Short-term investments 4 23,836,603 53,153,634 12,836,916 53,153,634
Trade accounts receivable - retail business 1,140,296 - - -
Trade accounts receivable - real estate
development business 5 808,503 1,642,763 808,503 1,642,763
Unbilled completed work 5 622,299,151 153,075,741 622,299,151 153,075,741
Short-term loans to and amounts due from
subsidiaries, net 10 - - 568,017,308 420,651,719
Inventories, net 7 195,899,620 56,491,917 173,209,685 56,491,917
Real estate development cost 8 3,425,488,295 3,843,630,351 2,276,832,218 2,767,275,658
Other current assets 9 213,932,044 293,586,398 226,193,553 298,513,582
Total Current Assets 4,954,264,051 4,979,801,232 4,316,563,686 4,310,829,013
Non-Current Assets
Long-term trade accounts receivable, net
5 680,000 680,000 680,000 680,000
Long-term loans to and amounts due from
other company 6 93,374,203 86,055,029 93,374,203 86,055,029
Investments - equity method 10 - - 392,066,811 394,002,134
Land held for future development, net 11 - 57,195,808 - 57,195,808
Property and equipment, net 12 276,320,943 46,333,088 228,613,623 39,299,895
Deferred tax assets, net 17 19,346,233 73,197,033 19,346,233 73,197,033
Other assets 13 19,304,070 43,754,684 16,385,470 43,061,663
Total Non-Current Assets 409,025,449 307,215,642 750,466,340 693,491,562
Total Assets 5,363,289,500 5,287,016,874 5,067,030,026 5,004,320,575
Noble Development Public Company Limited
Balance Sheets
As at 31 December 2005 and 2004
The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial
statements.
40
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Notes Baht Baht Baht Baht
Liabilities and
Shareholder's Equity
Current Liabilities
Short-term loans from financial institutions 15 367,498,381 633,701,452 367,498,381 633,701,452
Accounts payable - construction
ë related company 25 - - 185,991 185,991
ë others 88,729,889 245,454,761 76,998,486 226,804,598
Trade accounts payable
ë related company 25 - - 422,559
ë others 14,543,142 - -
Billing in excess of work in progress - 1,668,493 - 1,668,493
Amount due to and loans
from subsidiary 25 - - 109,219,052 121,325,511
Current portion of long-term borrowings 15 1,000,000,000 - 1,000,000,000
Deposits and advances received
from customers 69,013,150 70,275,029 68,813,150 70,143,799
Retention payable 80,463,404 96,633,127 75,405,814 92,657,163
Other current liabilities 14 130,519,329 117,800,164 106,851,028 92,600,287
Total Current Liabilities 1,750,767,295 1,165,533,026 1,805,394,461 1,239,087,294
Non-Current Liabilities
Long-term borrowings 15 653,149,000 1,557,600,000 283,149,000 1,187,600,000
Liabilities arisen from
investments in subsidiaries 10 - - 15,350,546 13,928,098
Deferred tax liability 17 68,041,369 38,268,935 68,041,369 38,268,935
Other liabilities 2,464,800 46,550 - 46,550
Total Non-Current Liabilities 723,655,169 1,595,915,485 366,540,915 1,239,843,583
Total Liabilities 2,474,422,464 2,761,448,511 2,171,935,376 2,478,930,877
Shareholder's Equity
Share capital
Registered share capital 18 2,373,912,825 2,373,912,825 2,373,912,825 2,373,912,825
Issued and paid-up share capital 18 2,282,355,875 2,282,355,875 2,282,355,875 2,282,355,875
Share premium 18 - 781,292,711 - 781,292,711
Share discount 18 (843,768,010) (1,625,060,721) (843,768,010) (1,625,060,721)
Retained earnings
Appropriated
Legal reserve 19 90,170,667 67,348,943 90,170,667 67,348,943
Unappropriated 1,366,336,118 1,019,452,890 1,366,336,118 1,019,452,890
Total Parent's Shareholder's Equity 2,895,094,650 2,525,389,698 2,895,094,650 2,525,389,698
Minority interest 16 (6,227,614) 178,665 - -
Total Shareholder's Equity 2,888,867,036 2,525,568,363 2,895,094,650 2,525,389,698
Total Liabilities and Shareholders' Equity 5,363,289,500 5,287,016,874 5,067,030,026 5,004,320,575
-
-
-
The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial
statements.
Noble Development Public Company Limited
Balance sheets (Continued)
As at 31 December 2005 and 2004
41
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Notes Baht Baht Baht Baht
Revenues
Revenues from sales - real estate
development business 2,457,774,836 1,719,367,202 2,313,526,836 1,719,367,202
Revenues from construction services 105,897 50,854,637 44,028 47,845,173
Revenues from sales - retail business 35,848,370 - - -
Revenues from rental and services 12,168,130 - 22,606,533 -
Gain on foreign currency exchange 20, 22 - 26,989,664 - 26,989,664
Interest income 15,945,172 12,757,055 49,771,187 45,390,916
Share of profits in investments
ë equity method 10 - - 14,913,310 -
Other income 6,199,975 7,426,782 4,977,056 7,359,280
Total Revenues 2,528,042,380 1,817,395,340 2,405,838,950 1,846,952,235
Expenses
Cost of sales - real estate development
business 1,486,159,629 1,026,460,330 1,388,343,996 1,026,460,330
Cost of construction services - 38,809,173 - 36,772,165
Cost of sales - retail business 17,857,755 - - -
Cost of rental and services 7,860,549 - 8,084,368 -
Selling and administrative expenses 417,185,100 423,747,276 330,749,722 412,842,435
Director's remuneration 905,000 825,000 905,000 825,000
Share of losses of investments
ë equity method 10 - - 55,941,675 13,249,269
Total Expenses 1,929,968,033 1,489,841,779 1,784,024,761 1,490,149,199
Profit before interest expenses and
income tax 22 598,074,347 327,553,561 621,814,189 356,803,036
Interest expenses (38,491,963) (5,158,558) (52,825,526) (33,836,698)
Profit before income tax 559,582,384 322,395,003 568,988,663 322,966,338
Income tax 21 (112,554,188) 11,641,721 (112,554,188) 11,641,721
Profit before minority interest 447,028,196 334,036,724 456,434,475 334,608,059
Net loss of subsidiary attributable to minority
interest 16 9,406,279 571,335 - -
Net profit for the year 456,434,475 334,608,059 456,434,475 334,608,059
Basic earnings per share 23
Net profit for the year 1.00 0.73 1.00 0.73
The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial
statements.
Noble Development Public Company Limited
Statements of Income
For the year ended 31 December 2005 and 2004
42
Consolidated (Baht)
Issued and Retained earnings
paid-up Share Share Appropriated- Minority
share capital premium discount legal reserve interest
(Note 18) (Note 18) (Note 18) (Note 19) Unappropriated (Note 16) Total
Opening balance 2005 2,282,355,875 781,292,711 (1,625,060,721) 67,348,943 1,019,452,890 178,665 2,525,568,363
Transfer of share premium to offset
against share discount (Note 18) - (781,292,711) 781,292,711 - - - -
Net profit for the year - - - - 456,434,475 - 456,434,475
Dividend paid (Note 18) - - - - (86,729,523) - (86,729,523)
Legal reserve - - - 22,821,724 (22,821,724) - -
Increase during the year - - - - - (6,406,279) (6,406,279)
Closing balance - 31 December 2005 2,282,355,875 - (843,768,010) 90,170,667 1,366,336,118 (6,227,614) 2,888,867,036
Opening balance 2004 2,282,355,875 781,292,711 (1,625,060,721) 50,618,540 893,293,128 - 2,382,499,533
Net profit for the year - - - - 334,608,059 - 334,608,059
Dividend paid (Note 18) - - - - (191,717,894) - (191,717,894)
Legal reserve - - - 16,730,403 (16,730,403) - -
Increase during the year - - - - - 178,665 178,665
Closing balance - 31 December 2004 2,282,355,875 781,292,711 (1,625,060,721) 67,348,943 1,019,452,890 178,665 2,525,568,363
Annual Report 2005 Noble Development Public Company Limited
The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements.
Noble Development Public Company Limited
Statements of changes in shareholders' equity
For the year ended 31 December 2005 and 2004
43
Company (Baht)
Issued and Retained earnings
paid-up Share Share Appropriated-
share capital premium discount legal reserve
(Note 18) (Note 18) (Note 18) (Note 19) Unappropriated Total
Opening balance 2005 2,282,355,875 781,292,711 (1,625,060,721) 67,348,943 1,019,452,890 2,525,389,698
Transfer of share premium to offset
against share discount (Note 18) - (781,292,711) 781,292,711 - - -
Net profit for the year - - - - 456,434,475 456,434,475
Dividend paid (Note 18) - - - - (86,729,523) (86,729,523)
Legal reserve - - - 22,821,724 (22,821,724) -
Closing balance - 31 December 2005 2,282,355,875 - (843,768,010) 90,170,667 1,366,336,118 2,895,094,650
Opening balance 2004 2,282,355,875 781,292,711 (1,625,060,721) 50,618,540 893,293,128 2,382,499,533
Net profit for the year - - - - 334,608,059 334,608,059
Dividend paid (Note 18) - - - - (191,717,894) (191,717,894)
Legal reserve - - - 16,730,403 (16,730,403) -
Closing balance - 31 December 2004 2,282,355,875 781,292,711 (1,625,060,721) 67,348,943 1,019,452,890 2,525,389,698
Annual Report 2005 Noble Development Public Company Limited
The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements.
Noble Development Public Company Limited
Statements of changes in shareholders' equity (Continued)
For the year ended 31 December 2005 and 2004
44
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Notes Baht Baht Baht Baht
Cash flows receipts from (used in)
operating activities 20 408,813,658 (812,468,077) 489,006,806 (579,596,713)
Cash flows from investing activities
Decrease in guaranteed deposits
at banks 29,317,031 24,246,548 40,316,718 24,246,548
Short-term loans to subsidiaries - - (218,651,687) (202,906,000)
Long-term loans to other company 6 (1,500,000) (8,300,000) (1,500,000) (8,300,000)
Purchases of property and equipment 12 (53,457,984) (14,099,333) (3,965,577) (6,955,062)
Payment for land deposit 9 - (140,000,000) - (140,000,000)
Payment for land (236,150,000) - (236,150,000) -
Proceeds from repayments of
short-term loans to subsidiaries - - 80,419,687 621,200,000
Proceeds from repayments
of loans to other company 6 - 9,500,000 - 9,500,000
Cash invested in investments
in subsidiaries 10 - - - (404,250,000)
Increase in share subscription
receivable 9 - - - (17,000,000)
Proceed from minority interest for capital 16 3,000,000 750,000 - -
increase
Proceeds from disposals of property and
equipment - 3,800 - 3,800
Net cash used in investing activities (258,790,953) (127,898,985) (339,530,859) (124,460,714)
Cash flows from financing activities
(Repayments) proceeds from short-term
loans from financial institutions, net (266,203,071) 11,286,445 (266,203,071) 11,286,445
Proceeds from long-term borrowings 15 470,400,000 557,600,000 470,400,000 187,600,000
Proceeds from short-term loans from
subsidiary - - - 117,720,000
Repayments of long-term borrowings 15 (374,851,000) - (374,851,000) -
Repayments of short-term loans from
subsidiary - - (15,750,000) -
Dividend payment 18 (86,729,523) (191,717,894) (86,729,523) (191,717,894)
Net cash (used in) receipts from financing
activities (257,383,594) 377,168,551 (273,133,594) 124,888,551
Net decrease in cash and cash equivalents (107,360,889) (563,198,511) (123,657,647) (579,168,876)
Cash and cash equivalents - beginning
balance 578,220,428 1,141,418,939 560,023,999 1,139,192,875
Cash and cash equivalents - ending
balance 470,859,539 578,220,428 436,366,352 560,023,999
Non-cash transactions
Operating activities
Transferred projects which 90% of projects
have been sold from real estate
development cost to inventories 56,952,342 23,112,817 56,952,342 23,112,817
Transfer from real estate development
cost to property and equipment (Note 12) 200,243,408 - 200,243,408 -
Transfer from land held for future
development to inventories (Note 11) 57,195,808 - 57,195,808 -
The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial
statements.
Noble Development Public Company Limited
Statements of Cash Flows
For the year ended 31 December 2005 and 2004
45
Annual Report 2005 Noble Development Public Company Limited
1 General information
Noble Development Public Company Limited
("the Company") is a public limited company
incorporated and resident in Thailand. The
address of its registered office is as follows:
900 Tonson Tower, 19th floor, Ploenchit Road,
Lumpini, Pathumwan, Bangkok.
The Company is listed on the Stock Exchange
of Thailand. For reporting purposes, the
Company and its subsidiaries are referred to
as the "Group".
The principal business operations of the
Company and its subsidiaries ("the Group") are
development of real estate for sale, providing
construction services, retail business, rental
and services and construction consulting in
Thailand.
The Group employed 291 employees as at 31
December 2005 (2004 : 228 employees).
These consolidated and company financial
statements have been approved by the
Company's Board of Directors on 28 February
2006.
2 Accounting policies
The principal accounting policies adopted in
the preparation of these consolidated and
company financial statements are set out
below:
2.1 Basis of preparation
The consolidated and company financial
statements have been prepared in accordance
with Thai generally accepted accounting
principles under the Accounting Act B.E. 2543,
being those Thai Accounting Standards issued
under the Accounting Profession Act B.E.
2547, and the financial reporting requirements
of the Securities and Exchange Commission
under the Securities and Exchange Act B.E.
2535.
As a result of the Federation of Accounting
Profession approval of three new accounting
standards on 12 May 2005, the Company has
adopted TAS 52, "Events After Balance Sheet
Date", TAS 53, "Provisions, Contingent
Liabilities, and Contingent Assets", and TAS
54, "Discontinuing Operations", since the
second quarter of 2005.
The consolidated and company financial
statements have been prepared under the
historical cost convention except for impairment
as disclosed in the accounting policies below.
An English version of the consolidated and
company financial statements have been
prepared from the statutory financial statements
that are in the Thai language. In the event of a
conflict or a difference in interpretation between
the two languages, the Thai language statutory
financial statements shall prevail.
2.2 Use of estimates
The preparation of consolidated and company
financial statements in conformity with Thai
generally accepted accounting principles
requires management to make estimates and
assumptions that affect the reported amounts
of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of
the financial statements and the amounts of
revenues and expenses in the reported period.
Although these estimates are based on
management's best knowledge of current
events and actions, actual results may differ
from those estimates.
Noble Development Public
Company Limited
Notes to the consolidated and
company financial statements
For the years ended 31 December 2005 and 2004
46
Annual Report 2005 Noble Development Public Company Limited
2.3 Consolidation
a) Subsidiaries
Subsidiary undertakings, which are those
companies in which the Group has power to
exercise control over the financial and
operating policies generally accompanying a
shareholding of more than one half of the
voting rights, have been consolidated.
Subsidiaries are consolidated from the date
in which effective control is transferred to
the Group and are no longer consolidated
from the date that control ceases.
All intercompany transactions, balances and
unrealised surpluses and deficits on
transactions between group companies have
been eliminated. Where necessary,
accounting policies for subsidiaries have
been changed to ensure consistency with
the policies adopted by the Group. Separate
disclosure is made for minority interests in
the consolidated balance sheet and
consolidated statement of income, except
where the minority interests reach zero.
Investments in subsidiary undertakings are
accounted for in the company financial
statements by using the equity method of
accounting.
A list of the Group's principal subsidiaries is
set out in Note 10.
b) Associates
Investments in associated undertakings are
accounted for by the equity method of
accounting. These are undertakings over
which the Group has significant influence,
but which it does not control, generally
accompanying a shareholding of between
20% and 50% of the voting rights.
Unrealised gains and losses on transactions
between the Group and its associated
undertakings are eliminated to the extent of
the Group's interests in the associated
undertakings. Equity accounting is
discontinued when the carrying amount of
the investment in an associated undertaking
reaches zero, unless the Group has incurred
obligations or guaranteed obligations in
respect of the associated undertaking.
A list of the Group's associates is set out in
Note 10.
2.4 Cash and cash equivalents
Cash and cash equivalents are carried in the
balance sheets at cost. For the purpose of
the statements of cash flows, cash and cash
equivalents comprise cash on hand, deposits
held at call at banks and fixed deposits and
deposits at financial institutions with original
maturity of three months or less and without
restriction.
2.5 Short-term investments
Short-term investments include fixed deposits
at banks which are pledged with the banks as
guarantees.
2.6 Trade accounts receivable
Trade accounts receivable are carried at
original invoice amount less an estimate made
for doubtful receivables. An estimate is made
for doubtful receivables based on a review of
all outstanding amounts at the year end. Bad
debts are written off during the year in which
they are identified.
Concentrations of credit risk with respect to
trade accounts receivable are limited due to
the Group's large number of customers in a
variety of businesses. Due to these factors,
management believes that no additional credit
risk beyond the amounts provided for collection
losses is inherent in the Group's trade accounts
receivable.
2.7 Inventories
The Group's inventories comprise condominium
units, land and single detached houses for
sale, construction supplies for sale including
retail products. Inventories are stated at the
lower of cost or net realisable value. Costs of
construction supplies are determined by the
first-in, first-out method. Costs of land,
condominium units for sales, single detached
houses for sale are determined by the specific
method. Retail products are determined by
the weighted average method. The cost of
inventory comprises purchase and construction
costs and other direct costs. Net realisable
value is the estimate of the selling price in the
ordinary course of business less selling
expenses. Allowance is made, where necessary,
for obsolete inventories.
47
2 Accounting policies (Continued)
Annual Report 2005 Noble Development Public Company Limited
2.8 Real estate development cost
Real estate development cost is stated at cost
less provision for loss on projects. Costs
include cost of land, cost of land development,
costs of constructions of real estate projects
and infrastructure and related borrowing costs.
The Company recognises real estate
development cost as cost of sale on the
percentage of completion method.
2.9 Construction contracts
The profit on a construction contract is
recognised as soon as it can be estimated
reliably. The Group uses the percentage of
completion method to determine the
appropriate amount to recognise in a given
period; the stage of completion is measured
by reference to work progress reported by
external construction managements. Losses
are recognised as soon as the losses are
foreseen. The full amount of the anticipated
loss, including any loss related to future
work on the contract, is recognised in the
period in which the loss is identified.
2.10 Investments
Investments in non-marketable equity securities
which are classified as general investments
are carried at cost. A test for impairment is
carried out when there is a factor indicating
that such investment might be impaired. If
the carrying value of the investment is higher
than its recoverable amount, an impairment
loss is charged to the statement of income.
On disposal of an investment, the difference
between the net disposal proceed and the
carrying amount is charged or credited to
the statement of income.
2.11 Land held for future development
Land held for future development comprises
land, which is held by the Company for
generating future benefits, and is treated as
a non-current asset. The land is stated at
cost less an allowance for impairment in
value. Cost includes cost of land and other
related interest incurred during the period of
development. Capitalisation of interests will
be suspended during extended periods in
which active development is interrupted or
when the development is completed.
2.12 Property and equipment
Property and equipment comprise of land of
clubhouses, clubhouses, building, building
improvements and office equipment.
Clubhouses comprise clubhouse buildings,
swimming pools and sports clubs. Land is
stated at cost less an allowance for
impairment. Other property and equipment
are initially recorded at cost less an allowance
for impairment and accumulated depreciation.
Depreciation is calculated on the straight
line method to write off the cost of each
asset, except for land as it is deemed to
have an indefinite life, to their residual
values over their estimated useful lives as
follows:
Clubhouses 5 - 20 years
Building 20 years
Building improvements 10 years
Furniture and fixtures,
and office equipment 5 years
Vehicles 5 years
Where the carrying amount of an asset is
greater than its estimated recoverable
amount, it is written down immediately to its
recoverable amount.
Gains and losses on disposals of property
and equipment are determined by reference
to their carrying amounts and are taken into
account in determining operating profit.
Expenditure incurred for addition, renewal and
betterment, which results in a substantial
increase in an asset's current replacement
value, is capitalised. Repair and maintenance
costs are recognised as an expense when
incurred.
48
2 Accounting policies (Continued)
Annual Report 2005 Noble Development Public Company Limited
2.13 Capitalisation of borrowing costs
Borrowing costs to finance the construction
of property and equipment are capitalised
during the period of time that is required to
complete and prepare the property for its
intended use as part of cost of the asset.
The borrowing costs include interest on
short-term and long-term borrowings.
The capitalisation rate used to determine the
amount of borrowing costs to be capitalised
is a weighted average interest rate applicable
to the Group's outstanding borrowings during
the year. Where funds are borrowed
specifically for the acquisition, construction
or production of property and equipment, the
amount of borrowing costs eligible for
capitalisation on that asset is determined at
the actual borrowing costs incurred on that
borrowing during the period less any
investment income on the temporary
investments of those borrowings.
2.14 Deferred income taxes
Deferred income tax is provided, using the
liability method, for all temporary differences
arising between the tax base of assets and
liabilities and their carrying amounts in the
financial statements. Tax rates at the balance
sheet date are used in the determination of
deferred income tax.
Deferred tax assets are recognised to the
extent that it is probable that future taxable
profit will be available against which the
temporary differences can be utilised. Valuation
allowance is made, where necessary, to write
down the carrying amounts of the deferred tax
assets to their recoverable amounts.
2.15 Financial instruments
Financial assets carried on the balance sheets
include cash on hand and at financial
institutions, investments, loans, trade
accounts receivable and deferred tax assets.
Financial liabilities carried on the balance
sheets include trade accounts payable,
accrued expenses, borrowings and deferred
tax liability. The particular recognition methods
adopted are disclosed in the individual
accounting policy statements associated with
each item.
Cross currency and interest rate swap option
contracts protect the Company from
movements in foreign currency exchange and
interest rates. The option contracts are not
recognised in the financial statements.
2.16 Accounting for long-term leases
Where the Group is the lessee
Leases not transferring a significant portion of
the risks and rewards of ownership to the
lessee are classified as operating leases.
Payments made under operating leases are
charged to the statement of income on a
straight-line basis over the period of the
lease.
When an operating lease is terminated before
the lease period has expired, any payment
required to be made to the lessor by way of
penalty is recognised as an expense in the
period in which termination takes place.
Where the Group is the lessor
Assets leased out under operating leases are
included in property and equipment in the
balance sheet. They are depreciated over
their expected useful lives on a basis
consistent with other similar property and
equipment owned by the Group. Rental
income (net of any incentives given to
lessees) is recognised on a straight-line basis
over the lease term.
2.17 Related parties
Enterprises and individuals that directly, or
indirectly through one or more intermediaries,
control, or are controlled by, or are under
common control with the Company, including
holding companies and subsidiaries are
related parties of the Company. Associates
and individuals owning, directly or indirectly,
an interest in the voting power of the
Company that gives them significant influence
over the enterprise, key management
personnel, including directors and officers of
the Company and close members of the
family of these individuals and companies
associated with these individuals also
constitute related parties.
In considering each possible related party
relationship, attention is directed to the
substance of the relationship, and not merely
the legal form.
49
2 Accounting policies (Continued)
Annual Report 2005 Noble Development Public Company Limited
2.18 Revenue recognition
Real estate development business
Revenues from sales of real estate under
development are recognised upon signed
legally binding contracts of sale, using the
percentage of completion method. The
percentage of completion is calculated based
on actual costs incurred to total estimated
construction costs, excluding cost of land,
and results of assessment performed by
external construction managements.
The Group recognises income only when the
deposits and installments received are at
least twenty percent of the total sale contract
price and when the construction work is at
least ten percent complete. Revenue
recognition will be discontinued when more
than three consecutive installments are
overdue for payment.
Installment due under contract but not yet
received is shown as "Account receivable".
The excess of revenue recognised under the
percentage of completion method over the
amount of installment payment due under
contract is shown as "Unbilled completed
work" under current assets. The excess of
installment due under the contract over the
revenue recognised under the percentage of
completion method is shown as "Billing in
excess of work in progress" under current
liabilities.
Other revenues
Other revenues comprise the invoiced value
for the sale of goods and services net of
output tax, rebates and discounts. Revenue
from sales of goods is recognised when
significant risks and rewards of ownership of
the goods are transferred to the buyer.
Revenue from services is recognised as
revenue in the year/period in which the service
is rendered.
Interest income is recognised on an accrual
basis unless collectibility is in doubt.
2.19 Foreign currency translation
Foreign currency transactions of the Group
are accounted for at the exchange rates
prevailing at the date of the transactions
and monetary assets and liabilities
denominated in foreign currencies at the
balance sheet date are translated into Thai
Baht at the exchange rates ruling at the
balance sheet date, except where they are
covered by financial instruments. The
Company translates foreign currency loans
and interest payable into Thai Baht
according to the exchange rate, as specified
in the cross currency interest rate swap
option contract. Any differences to be paid
or received on the cross currency swap
option contract, and gains and losses
resulting from the settlement of such
transactions and from the translation of
monetary assets and liabilities denominated
in foreign currencies are recongnised in the
statement of income.
2.20 Borrowings
Borrowings are recognised initially at the
proceeds received, net of transaction costs
incurred. In subsequent periods, borrowings
are stated at amortised cost using the
effective yield method. Any difference
between proceeds (net transaction costs)
and the redemption value is recognised in
the statement of income over the period of
the borrowings.
2.21 Provisions
Provisions, which exclude the provisions
relating to employee benefits, are recognised
when the Group has a present legal or
constructive obligation as a result of past
events, it is probable that an outflow of
resources embodying economic benefits will
be required to settle the obligation, and a
reliable estimate of the amount of the
obligation can be made.
2.22 Provident fund
The Company operates a provident fund, the
assets of which are held in a separate trust
fund. The provident fund is funded by
payments from employees and by the
Company. Contributions to the provident
fund are charged to the statement of income
in the year to which they relate.
50
2 Accounting policies (Continued)
Annual Report 2005 Noble Development Public Company Limited
3 Cash and cash equivalents
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Cash on hand 40,714,366 1,536,417 33,517,839 1,536,417
Deposits on call, fixed deposits and
promissory notes with maturity periods
within 3 months 430,145,173 576,684,011 402,848,513 558,487,582
Total cash and cash equivalents 470,859,539 578,220,428 436,366,352 560,023,999
5 Unbilled completed work and trade accounts receivable
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Total value of contracts signed 4,903,448,124 4,697,096,080 4,756,442,996 4,693,899,699
Percentage of total projects 57.22 50.46 62.06 50.44
Unbilled completed work
Revenues recognised to date 4,253,160,624 3,538,959,334 4,106,155,496 3,535,762,954
Less: Installments due (3,630,861,473) (3,387,552,086) (3,483,856,345) (3,384,355,706)
Add: Billing in excess of work in progress - 1,668,493 - 1,668,493
Unbilled completed work 622,299,151 153,075,741 622,299,151 153,075,741
Fixed deposits at banks and promissory notes with maturity periods within 3 months of local
financial institutions carry interest at the rates of 1.50% - 3.75% per annum (2004 : 0.25% -
1.875% per annum).
As at 31 December 2005, unbilled completed work, which are presented in the company financial
statements amounting to Baht 622 million (2004 : Baht 142 million), are being used as collateral of
long-term borrowings of the Company from local banks amounting to Baht 283 million (2004 : Baht
188 million) (Note 15).
As at 31 December 2005, short-term investments, which are presented in the consolidated and
company financial statements with a net book value of Baht 23.84 million (2004 : Baht 53.15 million)
and Baht 12.84 million (2004 : Baht 53.15 million), respectively, are fixed deposits at banks,
which are pledged with the banks for letters of guarantee issued by the banks to the Land
Allotment Supervision Board and for letter of credit issued by the bank to the suppliers for
imported purchasings (2004 : pledged to the Land Allotment Supervision Board) (Note 26).
4 Short-term investments
51
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Trade accounts receivable
Installments due 3,630,861,473 3,387,552,086 3,483,856,345 3,384,355,706
Less: Collections (3,629,125,250) (3,384,981,603) (3,482,120,122) (3,381,785,223)
Trade accounts receivable
- installments due 1,736,223 2,570,483 1,736,223 2,570,483
Less: Short-term trade accounts
receivable (808,503) (1,642,763) (808,503) (1,642,763)
Long-term trade accounts
receivable 927,720 927,720 927,720 927,720
Less: Allowance for doubtful
accounts (247,720) (247,720) (247,720) (247,720)
Long-term trade accounts
receivable, net 680,000 680,000 680,000 680,000
Consolidated and Company
2005 2004
Baht Baht
Within 3 months 405,022 613,844
3 - 6 months 141,200 411,902
6 - 12 months - 617,017
Over 12 months 262,281 -
Total short-term trade accounts receivable 808,503 1,642,763
Long-term trade accounts receivable as at 31 December 2005 included 10 troubled debtors
(2004 : 10 debtors), which the Company partly provides an allowance for doubtful debts. All
long-term accounts receivable have been outstanding for more than 12 months.
The figures disclosed in this note do not include projects where 90% of the respective project
has been sold and ownership transferred to customers.
Outstanding short-term trade accounts receivable as at 31 December can be aged as follows:
52
5 Unbilled completed work and trade accounts receivable (Continued)
Annual Report 2005 Noble Development Public Company Limited
Consolidated and Company
2005 2004
Baht Baht
Beginning balance 86,055,029 82,499,020
Additional loans 1,500,000 8,300,000
Increase in interest receivable (Note 20) 5,819,174 4,756,009
Loan repayments received - (9,500,000)
Ending balance 93,374,203 86,055,029
7 Inventories, net
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Condominium units for sale 27,331,000 27,331,000 27,331,000 27,331,000
Condominium units bought for sale 6,048,100 6,048,100 6,048,100 6,048,100
Houses for sale 68,729,540 11,756,655 68,729,540 11,756,655
Land for sale 125,551,970 11,356,162 125,551,970 11,356,162
Supplies for construction 3,969,939 1,420,864 2,549,075 -
Retail products 22,689,935 - - -
254,320,484 57,912,781 230,209,685 56,491,917
Less: Allowance for obsolescence (1,420,864) (1,420,864) - -
Allowance for impairment (57,000,000) - (57,000,000) -
Inventories, net 195,899,620 56,491,917 173,209,685 56,491,917
6 Long-term loans to and amounts due from other company
As at 31 December 2005 and 2004, long-term loans to and amounts due from other company
represent unsecured loans in form of promissory notes at call to Bang Plee View Company
Limited, which used to be an associate, and interest receivable for the loans. However, the
Company will not call the loans and interest receivable outstanding as at 31 December 2005 for
settlement within 2006. Therefore, the Company presents the loans and interest receivable as
long-term loans to and amounts due from other company.
The movements of the loans to and amounts due from other company during the years are as
follows:
As at 31 December 2005, land of the Company with a net book value of Baht 12.56 million is
used to secure against short-term borrowings from a financial institution, is in the process of
being released from the mortgage. In addition, land of the Company with a net book value of
Baht 8.82 million is secured as a collateral with the court (2004 : all inventories were free-hold).
53
Annual Report 2005 Noble Development Public Company Limited
8 Real estate development cost
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Land development 2,381,121,835 2,472,536,222 1,566,064,187 1,656,652,575
Construction in progress 3,491,761,129 3,281,965,776 3,139,565,397 3,066,593,443
Capitalised interest 151,659,313 111,759,577 91,975,894 76,945,405
Mocks up and project offices 131,094,399 208,988,567 116,855,021 202,421,315
Other related costs 20,524,944 18,116,559 15,229,411 14,399,271
Total 6,176,161,620 6,093,366,701 4,929,689,910 5,017,012,009
Less: Transfer to cost of sales (2,550,429,917) (2,249,736,350) (2,452,614,284) (2,249,736,351)
Transfer to property and
equipment (Note 12) (200,243,408) - (200,243,408) -
Real estate development cost 3,425,488,295 3,843,630,351 2,276,832,218 2,767,275,658
Capitalised interest during the year 57,463,052 65,252,668 32,593,805 30,438,496
9 Other current assets
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Advances to contractors 35,537,233 129,226,450 34,121,346 125,104,965
Land deposit 140,000,000 140,000,000 140,000,000 140,000,000
Accrued management fees
ë related companies (Note 25) - - 4,585,076 4,585,076
ë other companies 6,697,128 6,697,128 6,697,128 6,697,128
Accrued rental and service income
ë related companies (Note 25) - - 23,630,000 124,000
Share subscription receivable (Note 10) - - - 17,000,000
Others 31,697,683 17,662,820 17,160,003 5,002,413
Total other current assets 213,932,044 293,586,398 226,193,553 298,513,582
As at 31 December 2005, real estate development costs, which are presented in the
consolidated and company financial statements with a net book value of Baht 879 million (2004
: Baht 818 million) and Baht 228 million (2004 : Baht 177 million), respectively, are being used
as collaterals of long-term borrowings of the Company and its subsidiary from local banks
amounting to Baht 653 million (2004 : Baht 558 million) and Baht 283 million (2004 : Baht 188
million), respectively, (Note 15).
The real estate development costs as at 31 December 2005 and 2004 do not include projects
where 90% of the respective project has been sold and ownership transferred to customers.
54
Annual Report 2005 Noble Development Public Company Limited
Investments in subsidiaries - equity method
2005 2004
Baht Baht
Beginning balance 305,186,157 (85,814,574)
Share of losses in subsidiaries, net (Note 20) (41,028,365) (13,249,269)
Additional investments 17,000,000 404,250,000
Ending balance 281,157,792 305,186,157
Company
10 Investments in and short-term loans to and amounts due from
subsidiaries, associate and other investment
Company
Paid-up
share capital Percentage of holding
Principal 2005 2004 2005 2004
activities Million Baht Million Baht Percent Percent
Investments in subsidiaries
Continental City Company Limited Real estate 440.0 440.0 100.0 100.0
Ban Suk Sabai Company Limited Real estate 2.0 2.0 100.0 100.0
S&P Property Management Management
Company Limited service 2.0 2.0 100.0 100.0
Research & Consultant Company Construction
Limited service 10.0 10.0 65.0 65.0
Playground Store Company Limited Retail
business, 25.0 5.0 85.0 85.0
Rental and
services
Consolidated and Company
Paid-up
share capital Percentage of holding
Principal 2005 2004 2005 2004
activities Million Baht Million Baht Percent Percent
Investment in associate
N.K. Energy Conservation Light weight
Company Limited wall panel 6.5 6.5 50.0 50.0
Other investment
Khonkaenland Development
Group Company Limited Real estate 265.0 265.0 1.9 1.9
On 18 May 2004, the Company increased an investment in common shares of Continental City
Company Limited totalling Baht 400 million, consisting of 4 million shares with a par value of Baht
100 per share.
On 18 August 2004, the Company acquired ordinary shares of Playground Store Company Limited at
85% of its registered capital or 42,500 shares at the par value of Baht 100, totalling Baht 4.25
million.
On 16 December 2004, the Board of Directors approved the Company to increase the investment in
ordinary shares of Playground Store Company Limited at 85% of the increase in its registered
capital or 170,000 shares at the par value of Baht 100, totalling Baht 17 million. The Company
recorded the cash payment as a share subscription receivable (Note 9) as at 31 December 2004
since Playground Store Company Limited registered the increase of share capital with the Ministry of
Commerce on 19 January 2005.
55
Annual Report 2005 Noble Development Public Company Limited
Company - 2005 (Baht)
Short-term Short-term
loans to and loans to and
Average amounts Less: Investment amounts Liabilities arisen
Investments Interest due from value using due from Investments in from investments
at cost Rates (%) subsidiaries equity method subsidiaries, net subsidiaries, net in subsidiaries, net
Ban Suk Sabai Company Limited 1,360,000 5.12 565,712,252 (55,370,620) 510,341,632 - -
Continental City Company Limited 442,783,506 - - 392,066,811 - 392,066,811 -
Research & Consultant Company
Limited 6,500,000 7.05 4,898,038 (5,909,426) - - (1,011,388)
S&P Property Management
Company Limited 5,000 - - (14,339,158) - - (14,339,158)
Playground Store Company Limited 21,250,000 6.00 92,965,491 (35,289,815) 57,675,676 - -
471,898,506 663,575,781 281,157,792 568,017,308 392,066,811 (15,350,546)
Company - 2004 (Baht)
Short-term Short-term
loans to and loans to and
Average amounts Less: Investment amounts Liabilities arisen
Investments Interest due from value using due from Investments in from investments
at cost Rates (%) subsidiaries equity method subsidiaries, net subsidiaries, net in subsidiaries, net
Ban Suk Sabai Company Limited 1,360,000 4.85 490,935,649 (70,283,930) 420,651,719 - -
Continental City Company Limited 442,783,506 - - 392,989,696 - 392,989,696 -
Research & Consultant Company
Limited 6,500,000 5.34 4,603,949 (4,964,496) - - (360,547)
S&P Property Management
Company Limited 5,000 - - (13,567,551) - - (13,567,551)
Playground Store Company Limited 4,250,000 - - 1,012,438 - 1,012,438 -
454,898,506 495,539,598 305,186,157 420,651,719 394,002,134 (13,928,098)
Short-term loans to subsidiaries are unsecured loans denominated in Thai Baht and repayable on demand.
Amounts due from subsidiaries represent interest receivables for the loans to subsidiaries.
Since the investments in subsidiaries under equity method are below zero, the Company presents the negative investment balance against the short-
term loans to and amounts due from subsidiaries.
10 Investments in and short-term loans to and amounts due from subsidiaries, associate and other investment (Continued)
Investments in and short-term loans to and amounts due from subsidiaries
56
Annual Report 2005 Noble Development Public Company Limited
Consolidated and Company
2005 2004
Baht Baht
Investment in associate
N.K. Energy Conservation Company Limited 3,247,400 3,247,400
Less: Allowance for impairment (3,247,400) (3,247,400)
Investment, net - -
Other investment
Khonkaenland Development Group Company Limited 5,000,000 5,000,000
Less: Allowance for impairment (5,000,000) (5,000,000)
Investment, net - -
Consolidated and Company
2005 2004
Baht Baht
Land cost - 113,032,026
Capitalised interest - 590,459
Other expenses - 573,323
Total - 114,195,808
Less: Allowance for impairment - (57,000,000)
Land held for future development, net - 57,195,808
Consolidated and Company
2005 2004
Baht Baht
Opening net book value 57,195,808 57,195,808
Less: Transfer to inventories (Note 7) (57,195,808) -
Ending net book value - 57,195,808
11 Land held for future development, net
10 Investments in and short-term loans to and amounts due from
subsidiaries, associate and other investment (Continued)
As at 31 December 2004, land held for future development of the Company with a net book value
of Baht 12.56 million, which was secured against short-term borrowings from a financial
institution, is in the process of being released from the mortgage.
Movements in land held for future development, net, for the year ended 31 December are analysed as
follows:
As at 31 December 2005, land held for future development was transferred to inventories, as the Company no longer has the intention to hold the land for future development.
57
Annual Report 2005 Noble Development Public Company Limited
Consolidated (Baht)
Furniture
and fixtures,
office Building Furniture
Building equipment Building improvements and fixtures
Land Clubhouses improvements and vehicles for lease for lease for lease Total
Year ended
31 December 2004
Opening net book value 12,792,000 10,553,775 - 14,388,173 - - - 37,733,948
Additions - 489,302 - 13,610,031 - - - 14,099,333
Disposals - - - (18,370) - - - (18,370)
Depreciation charge
(Note 22) - (777,788) - (4,704,035) - - - (5,481,823)
Closing net book value 12,792,000 10,265,289 - 23,275,799 - - - 46,333,088
At 31 December 2004
Cost 26,532,000 106,519,095 3,087,016 79,133,145 - - - 215,271,256
Less: Allowance
for impairment
of assets (13,740,000) (53,258,447) - - - - - (66,998,447)
Accumulated
depreciation - (42,995,359) (3,087,016) (55,857,346) - - - (101,939,721)
Net book value 12,792,000 10,265,289 - 23,275,799 - - - 46,333,088
Year ended
31 December 2005
Opening net book value 12,792,000 10,265,289 - 23,275,799 - - - 46,333,088
Additions - 85,880 - 53,372,104 - - - 53,457,984
Disposals - - - (32,168) - - - (32,168)
Transfer from real estate
development cost
(Note 8) 83,022,979 - - - 81,384,375 31,520,619 4,315,435 200,243,408
Depreciation charge
(Note 22) - (1,057,331) - (14,539,670) (4,069,219) (3,152,062) (863,087) (23,681,369)
Closing net book value 95,814,979 9,293,838 - 62,076,065 77,315,156 28,368,557 3,452,348 276,320,943
At 31 December 2005
Cost 109,554,979 106,604,975 3,087,016 132,463,309 81,384,375 31,520,619 4,315,435 468,930,708
Less: Allowance
for impairment
of assets (13,740,000) (53,258,447) - - - - - (66,998,447)
Accumulated
depreciation - (44,052,690) (3,087,016) (70,387,244) (4,069,219) (3,152,062) (863,087) (125,611,318)
Net book value 95,814,979 9,293,838 - 62,076,065 77,315,156 28,368,557 3,452,348 276,320,943
12 Property and equipment, net
As at 31 December 2005 and 2004, all property and equipment of the Group are free-hold.
58
Annual Report 2005 Noble Development Public Company Limited
Company (Baht)
Furniture
and fixtures,
office Building Furniture
Year ended equipment Building improvements and fixtures
31 December 2004 Land Clubhouses and vehicles for lease for lease for lease Total
Opening net book value 12,792,000 10,553,776 14,368,003 - - - 37,713,779
Additions - 489,302 6,465,760 - - - 6,955,062
Disposals - - (18,370) - - - (18,370)
Depreciation charge
(Note 22) - (777,788) (4,572,788) - - - (5,350,576)
Closing net book value 12,792,000 10,265,290 16,242,605 - - - 39,299,895
At 31 December 2004
Cost 26,532,000 101,194,231 67,746,197 - - - 195,472,428
Less: Allowance
for impairment
of assets (13,740,000) (49,531,042) - - - - (63,271,042)
Accumulated
depreciation - (41,397,899) (51,503,592) - - - (92,901,491)
Net book value 12,792,000 10,265,290 16,242,605 - - - 39,299,895
Year ended
31 December 2005
Opening net book value 12,792,000 10,265,290 16,242,605 - - - 39,299,895
Additions - 85,880 3,879,697 - - - 3,965,577
Disposals - - (1,361) - - - (1,361)
Transfer from real estate
development cost
(Note 8) 83,022,979 - - 81,384,375 31,520,619 4,315,435 200,243,408
Depreciation charge
(Note 22) - (1,057,331) (5,752,197) (4,069,219) (3,152,062) (863,087) (14,893,896)
Closing net book value 95,814,979 9,293,839 14,368,744 77,315,156 28,368,557 3,452,348 228,613,623
At 31 December 2005
Cost 109,554,979 101,280,111 71,621,663 81,384,375 31,520,619 4,315,435 399,677,182
Less: Allowance
for impairment
of assets (13,740,000) (49,531,042) - - - - (63,271,042)
Accumulated
depreciation - (42,455,230) (57,252,919) (4,069,219) (3,152,062) (863,087) (107,792,517)
Net book value 95,814,979 9,293,839 14,368,744 77,315,156 28,368,557 3,452,348 228,613,623
As at 31 December 2005 and 2004, all property and equipment of the Company are free-hold.
Building, building improvements and furniture and fixtures of the Company with net book values
as at 31 December 2005 amounting to approximately Baht 109 million are under a three-year
operating lease agreement with a subsidiary, commencing 15 March 2005. The subsidiary has an
option to renew this operating lease agreement for another three-year period.
59
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Withholding tax receivable 1,733,895 28,285,575 253 28,159,353
Deposit for investment 4,000,000 4,000,000 4,000,000 4,000,000
Others 13,570,175 11,469,109 12,385,217 10,902,310
Total other assets 19,304,070 43,754,684 16,385,470 43,061,663
13 Other assets
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Accrued interest expenses 7,793,873 7,489,210 7,702,640 7,451,196
Accrued expenses 55,268,231 38,550,906 51,405,148 32,075,888
Account payable for land 15,500,000 15,500,000 15,500,000 15,500,000
Loans from other company 13,085,701 12,628,655 - -
Accrued corporate income tax 11,901,088 9,609,332 11,901,088 9,609,332
Others 26,970,436 34,022,061 20,342,152 27,963,871
Total other current liabilities 130,519,329 117,800,164 106,851,028 92,600,287
14 Other current Liabilities
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Current borrowings
Promissory notes issued to financial
institutions 367,498,381 633,701,452 367,498,381 633,701,452
Debentures - current portion of
long-term borrowings 1,000,000,000 - 1,000,000,000 -
Total current borrowings 1,367,498,381 633,701,452 1,367,498,381 633,701,452
Non-current borrowings
Debentures - 1,000,000,000 - 1,000,000,000
Borrowings from financial institutions 653,149,000 557,600,000 283,149,000 187,600,000
Total non-current borrowings 653,149,000 1,557,600,000 283,149,000 1,187,600,000
Total borrowings 2,020,647,381 2,191,301,452 1,650,647,381 1,821,301,452
15 Borrowings
Deposit for investment of Baht 4 million (2004 : Baht 4 million) is a deposit in a fund to jointly bid in loan portfolios from the Financial Restructuring Authority Sector. The Company has a right to invest at 10% of the bid price or the minimum amount of Baht 37.5 million. At present, the restructuring process has not yet been completed.
60
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Beginning balance 1,557,600,000 1,000,000,000 1,187,600,000 1,000,000,000
Additional borrowings 470,400,000 557,600,000 470,400,000 187,600,000
Loan repayments paid (374,851,000) - (374,851,000) -
Transfer to current borrowings (1,000,000,000) - (1,000,000,000) -
Closing net book value 653,149,000 1,557,600,000 283,149,000 1,187,600,000
The movements in the long-term borrowings for the year ended 31 December can be analysed
as follows:
The current borrowings of the Company consist as follow:
a) As at 31 December 2005 and 2004, the Company's current borrowings representing bills of
exchange due within one year were issued to institutional investors with interest rate at 4.25%
per annum (2004 : 4.00% - 4.25% per annum).
b) As at 31 December 2005 and 2004, unsubordinated and unsecured debentures, without a
debenture holder's representative in the name-registered certificate, amount to one million units
at the face value of Baht 1,000 per unit, totalling Baht 1,000 million. The debentures have
maturity period of 3 years and carry interest rate at 4% per annum, and the interest is payable
semi-annually. The debentures will be due for redemption on 3 November 2006.
The non-current borrowings of the Group and the Company consist as follows:
a) As at 31 December 2005 and 2004, long-term borrowing from a financial institution of the
Company represents a loan from a local bank amounting to Baht 158.1 million (2004 : Baht
187.6 million), and carries interest at MLR minus 2.75% per annum, but not lower than an
interest rate for personal fixed deposit of a 12-month period plus 2.25% per annum and will be
due for repayment on 26 February 2007. The Company has pledged the ownership certificate of
the condominium units of the related project, including respective unbilled completed work and
real estate development cost, as collaterals for the loan (Notes 5 and 8).
b) As at 31 December 2005, long-term borrowing from a financial institution of the Company
represents a loan from a local bank amounting to Baht 125 million (2004 : nil), which carries
interest at an interest rate for personal fixed deposit of a 12-month period plus 3.25% per annum
and will be due for repayment on 14 February 2008. The Company has pledged its land of the
related project, including relevant unbilled completed work and real estate development cost, as
collaterals for the loan (Notes 5 and 8).
c) As at 31 December 2005 and 2004, long-term borrowing from a financial institution of a
subsidiary represents a loan from a local bank amounting to Baht 370 million (2004 : Baht 370
million), which carries interest at MLR minus 2% per annum and will be due for repayment on
20 May 2008. The subsidiary has pledged land of the related project, including related real
estate development cost, as collaterals for the loan (Note 8).
61
15 Borrowings (Continued)
Annual Report 2005 Noble Development Public Company Limited
Consolidated Company
2005 2004 2005 2004
Million Baht Million Baht Million Baht Million Baht
Unused credit lines
Floating interest rate 1,012 1,202 212 402
As at 31 December, the followings are undrawn borrowing facilities:
16 Minority interest
17 Deferred income taxes
Consolidated
2005 2004
Baht Baht
Beginning balance 178,665 -
Acquisition of investment in subsidiary (Note 10) 3,000,000 750,000
Share of net loss of subsidiary (Notes 20 and 28) (9,406,279) (571,335)
Ending balance (6,227,614) 178,665
Consolidated and Company
2005 2004
Baht Baht
Statements of income (Note 21) 65,700,934 143,624,399
Less: Valuation allowance (46,354,701) (70,427,366)
Deferred income tax assets, net 19,346,233 73,197,033
Deferred income tax liability 68,041,369 38,268,935
Deferred income taxes are calculated on all temporary differences under the liability method
using a principal tax rate of 25%.
15 Borrowings (Continued)
62
Annual Report 2005 Noble Development Public Company Limited
The movements in the deferred income tax account for the year ended 31 December are as
follows:
Consolidated and Company
2005 2004
Baht Baht
Deferred income tax assets, net
Beginning balance 73,197,033 -
Statements of income (Note 21) (77,923,465) 143,624,399
Less: Valuation allowance 24,072,665 (70,427,366)
Ending balance 19,346,233 73,197,033
Deferred income tax liability
Beginning balance 38,268,935 -
Statements of income (Note 21) 29,772,434 38,268,935
Ending balance 68,041,369 38,268,935
Consolidated and Company
2005 2004
Baht Baht
Deferred income tax assets, net
Allowances for doubtful loans and long-term
accounts receivable 23,578,034 102,505,405
Allowance for impairment in value of land 28,043,129 28,043,129
Deposits and advances received from
customers 7,400,767 7,839,273
Allowance for impairment in value
of investment 2,061,850 2,061,850
Others 4,617,154 3,174,742
Total deferred income tax assets 65,700,934 143,624,399
Less: Valuation allowance (46,354,701) (70,427,366)
Deferred income tax assets, net 19,346,233 73,197,033
Deferred income tax liability
Unbilled completed work 68,041,369 38,268,935
17 Deferred income taxes (Continued)
Deferred income tax assets and liability as at 31 December are derived from the following
temporary differences:
Deferred income taxes are calculated on all temporary differences arising from differences
between tax base of assets and liabilities and their carrying amounts by using a principal tax rate
of 25%. However, deferred tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary differences can be utilised.
63
Annual Report 2005 Noble Development Public Company Limited
Consolidated and Company (Baht)
Number of Ordinary Share Shares
shares share premium discount Total
For the year ended
31 December 2005
Registered share capital
At 31 December 2005
(par value of Baht 5 per share) 474,782,565 2,373,912,825 - - 2,373,912,825
Issued and paid-up
At 31 December 2003 456,471,175 2,282,355,875 781,292,711 (1,625,060,721) 1,438,587,865
Decrease during the year - - - - -
Issue of shares during the year - - - - -
At 31 December 2004 456,471,175 2,282,355,875 781,292,711 (1,625,060,721) 1,438,587,865
At 31 December 2004 456,471,175 2,282,355,875 781,292,711 (1,625,060,721) 1,438,587,865
Transfer of share premium to
offset against share discount - - (781,292,711) 781,292,711 -
Decrease during the year - - - - -
Issue of shares during the year - - - - -
At 31 December 2005 456,471,175 2,282,355,875 - (843,768,010) 1,438,587,865
18 Share capital, premium and discount on share capital, and dividend
At the annual general meeting of the Company's shareholders held on 28 April 2005, the
shareholders approved to pay dividend in respect of the year 2004 of Baht 0.19 per share
amounting to a total of Baht 87 million.
At the annual general meeting of the Company's shareholders held on 29 April 2004, the
shareholders approved to pay dividend in respect of the year 2003 of Baht 0.42 per share
amounting to a total of Baht 191.7 million.
According to the Circular Letter No. SEC.Chor.Sor. (Vor) 3/2549 of the Office of the Securities
and Exchange Commission, dated 8 February 2006, relating to the removal of share discount,
the management had considered the matter and would bring it to the Board of Directors'
meeting in March 2006 to seek solutions to remove the balance of share discount outstanding
as at 31 December 2005 amounting to Baht 844 million in full within 2007.
64
Consolidated Company
2005 2004 2005 2004
Notes Baht Baht Baht Baht
Net profit for the year 456,434,475 334,608,059 456,434,475 334,608,059
Interest expenses 38,491,963 5,158,558 52,825,526 33,836,698
Income tax 112,554,188 (11,641,721) 112,554,188 (11,641,721)
Profit before interest expenses
and income tax 607,480,626 328,124,896 621,814,189 356,803,036
Adjustments:
Depreciation and amortisation 25,338,553 9,274,540 16,551,080 8,991,653
Gains on cancelled contracts 22 (2,382,054) (2,807,016) (2,182,054) (2,807,016)
Losses on disposals of property
and equipment 32,168 14,570 1,361 14,570
Gain on foreign currency exchange 22 - (26,989,664) - (26,989,664)
Net loss of subsidiary attributable
to minority interest 16 (9,406,279) (571,335) - -
Share of losses of subsidiaries, net 10 - - 41,028,365 13,249,269
Changes in operating assets and
liabilities
ë trade accounts receivable (306,036) 45,535,560 834,260 45,535,560
ë unbilled completed work (469,223,410) (129,430,324) (469,223,410) (129,430,324)
ë amounts due from subsidiaries - - (29,804,182) (22,249,987)
ë amounts due from other company 6 (5,819,174) (4,756,009) (5,819,174) (4,756,009)
20 Cash flows from operating activities
Reconciliation of net profit for the year to cash flows from operating activities is as follows:
19 Legal reserve
Consolidated and Company
2005 2004
Baht Baht
Beginning balance 67,348,943 50,618,540
Decrease during the year - -
Appropriation during the year 22,821,724 16,730,403
Ending balance 90,170,667 67,348,943
Under the Public Companies Act, the Company is required to set aside as a statutory reserve at
least 5 percent of its net profit after accumulated deficit brought forward (if any) until the reserve
is not less than 10 percent of the registered capital. The legal reserve is not distributable as a
dividend. During the year, the Company sets aside additional legal reserve amounting to
approximately Baht 23 million (2004 : 17 million).
Annual Report 2005 Noble Development Public Company Limited
65
Annual Report 2005 Noble Development Public Company Limited
21 Income tax
Consolidated and Company
2005 2004
Baht Baht
Current income tax (28,930,954) (23,286,377)
Deferred income taxes (Note 17) (107,695,899) 105,355,464
Less: Valuation allowance (Note 17) 24,072,665 (70,427,366)
Income tax expense for the year (Note 28) (112,554,188) 11,641,721
Reconciliation of current year income tax
Consolidated Company
2005 2004 2005 2004
Notes Baht Baht Baht Baht
ë inventories (25,259,553) - (2,569,618) -
ë real estate development cost 454,559,358 (923,189,573) 501,991,495 (703,429,001)
ë other current assets 79,654,354 (2,541,560) 55,320,029 8,431,926
ë other assets (5,485,238) (2,902,092) (3,140,091) (2,437,617)
ë accounts payable - construction (156,724,872) (17,831,065) (149,806,112) (33,229,278)
ë trade accounts payable 14,543,142 - 422,559 -
ë deposits and advances received
from customers (548,318) (36,438,767) (817,088) (34,107,009)
ë retention payable (16,169,723) 37,488,082 (17,251,349) 34,998,846
ë other current liabilities 9,665,700 7,273,862 11,707,541 (3,832,383)
ë other liabilities 2,418,250 - (46,550) -
Cash flows receipts from (used in)
operating activities before interest
and income tax paid 502,367,494 (719,745,895) 569,011,251 (495,243,428)
Interest paid (95,193,306) (87,462,699) (81,524,347) (79,093,802)
Income tax paid (26,639,198) (13,677,044) (26,639,198) (13,677,044)
Proceeds from refunds of
withholding tax receivable 28,278,668 8,417,561 28,159,100 8,417,561
Cash flows receipts from (used in)
operating activities 408,813,658 (812,468,077) 489,006,806 (579,596,713)
20 Cash flows from operating activities (Continued)
66
Annual Report 2005 Noble Development Public Company Limited
23 Basic earnings per share
Consolidated and Company
For the year ended 31 December
2005 2004
Net profit attributable to shareholders (Baht) 456,434,475 334,608,059
Weighted average number of paid-up ordinary shares in issue (shares) 456,471,175 456,471,175
Basic earnings per share (Baht) 1.00 0.73
Basic earnings per share is calculated by dividing the net profit for the year attributable to
shareholders by the weighted average number of paid-up ordinary shares in issue during the year.
22 Profit before interest expenses
Consolidated Company
2005 2004 2005 2004
Baht Baht Baht Baht
Employee costs 85,757,530 62,818,177 68,512,510 60,966,291
Depreciation on property and
equipment (Note 12) 23,681,369 5,481,823 14,893,896 5,350,576
Selling and marketing expenses 49,449,550 145,083,800 23,985,929 145,083,800
Project management expenses 34,402,574 58,385,535 33,262,574 53,613,526
Gain on foreign currency exchange (Note 20) - (26,989,664) - (26,989,664)
Gains on cancelled contracts (2,382,054) (2,807,016) (2,182,054) (2,807,016)
The following expenditures , classified by nature, have been charged in arriving at profits before
interest expenses.
In 2005, the Company and the Group cancelled certain sales contracts and forfeited the deposits
from those contracts amounting to Baht 2.18 million (2004 : Baht 2.81 million) and Baht 2.38 million
(2004 : Baht 2.81 million), respectively, (Note 20).
67
Annual Report 2005 Noble Development Public Company Limited
Foreign currency Baht
Within 1 year US$ 16.35 million 693,240,000
The net unrecognised gains at 31 December
2003 on open contracts for hedging foreign
currency repayment amounted to Bahts 10.2
million. The gains of Baht 27 million were
fully recognised in the statement of income
in March 2004.
Credit risk
Credit risk is the risk that one party to a
financial instrument will fail to discharge an
obligation and cause the Company to incur
a financial loss.
The Group has no significant concentrations
of credit risk. Cash is placed with reputable
financial institutions. Concentrations of credit
risk with respect to trade accounts receivable
are limited due to the Group's large number of
customers in a variety of businesses. Due to
these factors, management believes that no
additional credit risk beyond the amounts
provided for collection losses is inherent in the
Group's trade accounts receivable.
24 Financial instruments
A financial instrument is any contract that
gives rise to both a financial asset of one entity
and a financial liability or equity instrument of
another entity.
Risks relating to significant financial instruments
held by the Group are summarised as follows:
Foreign exchange risk
Foreign exchange risk is the risk that the
value of a financial instrument will fluctuate
due to changes in market foreign exchange
rate.
The Group has no significant exposure to
foreign exchange risk. The Group purchases
some retail products in foreign currencies.
However, the Group considers that it is not
necessary to use derivative financial instruments
to hedge such risk since management believes
that future movements in market foreign
exchange will not materially affect the Group's
operating results.
Cross currency interest rate swap option contract
The Company entered into a cross currency
interest rate swap option contract to alter
the interest rate and currency characteristic
for long-term borrowings from other
company into Thai Baht currency. Under
the cross currency interest rate swap option,
the Company agreed with a foreign bank to
exchange the fixed rate at 6% per annum
on US Dollar notional 16,350,000 to the
bank's deposit rate plus 4% per annum on
Thai Baht notional 693,240,000.
The remaining term and notional principal
amount of the outstanding cross currency
interest rate swap contract at 31 December
2003 were:
68
Annual Report 2005 Noble Development Public Company Limited
25 Related party transactions
Average interest rates Company
2005 2004 2005 2004
% % Baht Baht
Subsidiaries
Ban Suk Sabai Company Limited 5.12 4.85 30,673,031 22,934,934
Playground Store Limited 6.00 - 3,065,490 -
Continental City Company Limited - 4.00 - 9,551,307
Research and Consultant Company Limited 7.05 5.34 193,520 180,636
Total 33,932,041 32,666,877
a) Interest income
Interest rate risk
Interest rate risk is the risk that the value of
a financial instrument will fluctuate due to
changes in market interest rates.
The Group borrowed by issuance of debentures
with fixed interest rate for operation and for
project development to reduce the uncertainty
of future cash flows which may incur from
changes in interest rates. Therefore, the
interest rate risk for the Group is reduced.
Liquidity risk
Liquidity risk, or funding risk, is the risk that
the Group will encounter difficulty in raising
funds to meet commitments associated with
financial instruments. Liquidity risk may
result from an inability to sell a financial
asset quickly at close to its fair value.
The Group's financial assets mainly comprise
cash and deposits at financial institutions,
loans to and amounts due from other
company and unbilled completed work. The
ability to raise funds to be able to settle the
contractual liabilities depends on the ability
of the other company to repay the debts
and the ability of collection of unbilled
customers where the sale contracts were
signed.
Fair values
The carrying amounts at the balance sheet
date of cash and deposits at financial
institutions, trade accounts receivable, loans,
unbilled completed work and other financial
liabilities approximate to their fair values.
The majority of the Company's shares are widely held by public through the Stock Exchange of
Thailand.
The following significant transactions incurred during the years 2005 and 2004 are carried out with
related parties:
69
Annual Report 2005 Noble Development Public Company Limited
The selling price is at market value.
b) Sale of real estate development project
Company
2005 2004
Baht Baht
Subsidiary
Ban Suk Sabai Company Limited - 826,000
c) Revenues from rental and services
Company
2005 2004
Baht Baht
Subsidiary
Playground Store Limited
ë Revenues from rental 9,757,003 -
ë Revenues from services 12,849,530 -
22,606,533 -
d) Purchase of goods
Company
2005 2004
Baht Baht
Subsidiary
Playground Store Limited 422,559 -
e) Interest expense
Company
2005 2004
Baht Baht
Subsidiary
Continental City Company Limited 4,318,417 2,851,682
70
25 Related party transactions (Continued)
Annual Report 2005 Noble Development Public Company Limited
f) Account payable - construction
Company
2005 2004
Baht Baht
Subsidiar
Research & Consultant Company Limited 185,991 185,991
g) Account payable
Company
2005 2004
Baht Baht
Subsidiary
Playground Store Limited 422,559 -
h) Accrued management fees
Company
2005 2004
Baht Baht
Subsidiaries
Ban Suk Sabai Company Limited 2,310,962 2,310,962
S & P Property Management Company Limited 2,274,114 2,274,114
Total 4,585,076 4,585,076
i) Accrued rental and service income
Company
2005 2004
Baht Baht
Subsidiaries
Playground Store Limited 23,506,000 -
Research and Consultant Company Limited 124,000 124,000
Total 23,630,000 124,000
71
25 Related party transactions (Continued)
Annual Report 2005 Noble Development Public Company Limited
j) Amount due to and loans from subsidiary
The Group and the Company have commitments and contingent liabilities as follows:
26 Commitments and contingent liabilities
Company
2005 2004
Baht Baht
Subsidiary
Continental City Company Limited 109,219,052 121,325,511
Consolidated Company
2005 2004 2005 2004
Million Baht Million Baht Million Baht Million Baht
Capital commitments
Commitments under contracts to
invest in development projects
until completion 276 1,371 263 1,290
Commitments under land purchase
contracts 110 136 110 136
Commitments under service contracts 17 52 17 52
Commitments under office rental
agreements 10 15 8 15
Total capital commitments 413 1,574 398 1,493
Contingent liabilities in respect of
bank guarantees (Note 4) 24 53 13 53
Contingent liabilities in respect of
guarantees 10 - 10 -
As at 31 December 2005 and 2004, loans from a subsidiary carry interest at MLR minus 2% per
annum and are repayable on demand.
Contingent liabilities in respect of guarantees amounting to Baht 10 million (2004 : nil) are
contingent liabilities in respect of guarantees with a financial institution for letters of guarantees
issued by the financial institution to the Land Allotment Supervision Board.
25 Related party transactions (Continued)
72
Annual Report 2005 Noble Development Public Company Limited
Financial information by business segments
28 Segment information
For the year ended 31 December 2005
Construction Retail
Sales - real estate services - real business,
development estate development Rental and
business business services Consolidated
Baht'000 Baht'000 Baht'000 Baht'000
Revenues 2,457,775 106 48,016 2,505,897
Segment results 971,615 106 22,298 994,019
Interest income 15,945
Other income 6,200
Unallocated costs (418,090)
Operating profit 598,074
Interest expenses (38,492)
Income tax (Note 21) (112,554)
Profit before minority interest 447,028
Net loss of subsidiary attributable
to minority interest (Note 16) 9,406
Net profit for the year 456,434
For the year ended 31 December 2004
Construction Retail
Sales - real estate services - real business,
development estate development Rental and
business business services Consolidated
Baht'000 Baht'000 Baht'000 Baht'000
Revenues 1,719,367 50,854 - 1,770,221
Segment results 692,907 12,045 - 704,952
Interest income 12,757
Other income 34,417
Unallocated costs (424,572)
Operating profit 327,554
Interest expenses (5,159)
Income tax (Note 21) 11,642
Profit before minority interest 334,037
Net loss of subsidiary attributable
to minority interest (Note 16) 571
Net profit for the year 334,608
27 Provident fund
The Company established a contributory
registered provident fund on 1 October 1994
in accordance with the Provident Fund Act,
B.E. 2530, Ministerial Regulations, the Office
of the Securities and Exchange Commission's
notification and related amendments.
Under the provident fund, the Company
contributes 3% - 7% and employees can
choose to contribute 3% - 7% of their basic
salaries. The Company appointed an
authorised fund manager to manage the fund
in accordance with the terms and conditions
described in the Provident Fund Act,
Ministerial Regulation and related regulations.
During the year, the Company contributes
THB 1.9 million (2004 : THB 1.8 million).
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Annual Report 2005 Noble Development Public Company Limited
Sales- real estate Consruction
development services - real estate Retail business,
business development business Rental and services Consolidated
2005 2004 2005 2004 2005 2004 2005 2004
Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000
Segment assets 5,241,924 5,182,567 4,256 5,538 97,764 25,715 5,343,944 5,213,820
Unallocated assets 19,346 73,197
Consolidated total assets 5,363,290 5,287,017
Segment liabilities 2,365,272 2,698,627 17,377 17,050 23,732 7,503 2,406,381 2,723,180
Unallocated liabilities 68,041 38,269
Consolidated total 2,474,422 2,761,449
liabilities
Capital expenditure 4,105 8,333 - - 49,353 5,766 53,458 14,099
Unallocated total capital
expenditure - -
Consolidated total capital
expenditure 53,458 14,099
Depreciation and
amortisation 16,902 9,005 3 161 8,434 109 25,339 9,275
Unallocated depreciation
and amortisation - -
Consolidated total
depreciation and
amortisation 25,339 9,275
The Group operates only in Thailand. Therefore, no geographical segmental information is presented as
secondary information.
28 Segment information (Continued)
74