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CONTENT Message from the Chairman

01 02 03 05 08 09 12 15 16 17 19 20 21 22 28 32 33 35 36 37 Auditor's Report Consolidated and Company Balance Sheets Consolidated and Company Statements of Income Consolidated and Company Statements of Changes in Shareholders' Equity Consolidated and Company Statements of Cash Flows Notes to the Consolidated and Company Financial Statements

Annual Report 2005

Financial Highlights Company Structure Company Overview Noble Development Projects Revenues Structure Industrial Situation and Trend Risk Factors Shareholders Organization Chart The Board of Directors The Audit Committee The Executives Election of the Board of Directors and Remuneration Board of Directors, Audit Committee and Executive officers Corporate Governance The Audit Committee's Report Charts of Operating Performance and Revenue Structure Analysis of Financial Status and Operating Results Remunerations for External Auditor Company Factsheet

39 40 42 43 45 46

Noble Development Public Company Limited


Message from the chairman

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.

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.

Annual Report 2005

Mr. Kitti Thanakitamnuay Chairman and Managing Director

Noble Development Public Company Limited


Financial Highlights

Unit : Million Baht

2005

2004

2003

2,458 48 2,528 972 22 456

1,770 1,817 705 335

3,087 3,168 991 747

5,363 2,474 2,282 2,889

5,287 2,761 2,282 2,526

4,584 2,201 2,282 2,383

39.53

39.82

32.09

46.44 18.05 8.57 15.80 0.86 0.69 6.33 1.00

18.41 6.78 13.25 1.09 0.86 5.53 0.73

23.58 20.32 31.36 0.92 0.44 5.22 1.64

Operating Performance Revenue from Property Development Business Revenue from Department Store Business Total Revenues Gross Profit from Property Development Business Gross Profit from Department Store Business Net Profit‘

Financial Status Total Assets Total Liabilities Issued and Paid-up Share Capital Shareholders' Equity

Financial Ratios Gross Profit Margin from Property Development Business Gross Profit Margin from Department Business Net Profit Margin Return on Assets Return on Equity Debt to Equity Ratio Net Debt to Equity Ratio Book Value per Share (Baht) Earning per Share (Baht)

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.

100%

Paid-up Capital THB 2 Million Type of Business : Property Development and Housing Construction

ë S&P Property Management Co., Ltd.

100%

Paid-up Capital THB 2 Million Type of Business : Housing Construction and Property Management

ë Continental City Co., Ltd.

100%

Paid-up Capital THB 440 Million Type of Business : Property Development

ë Playground Store Co.,Ltd

85%

Paid-up Capital THB 25 Million Type of Business : Department Store

ë Research & Consultant Co., Ltd.

65%

Paid-up Capital THB 10 Million Type of Business : Housing Construction

ë N.K. Energy Conservation Co.,Ltd.

50%

Annual Report 2005

Paid-up Capital THB 6.5 Million Type of Business : Light Weight Wall Panel

Noble Development Public Company Limited

02


Company Overview

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.

Annual Report 2005

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.

Noble Development Public Company Limited

03


Company Overview (Continued)

The subsidiary companies are set to develop, operate or manage the projects as follows.

Company/Address

Type of Business

Numbers of issued and paid up 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 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 3. Continental City Company Limited 19th Fl., Tonson Tower, 900 Ploenchit Rd., The Noble Lumpini, Pathumwan, Bangkok Property Development Noble Sukhumvit 36 4. Playground Store Company Limited 946/4 Soi Sukhumvit 55, Sukhumvit Rd., Klongton Nue, Wattana, Bangkok Department Store Playground Store 5. Research and Consultant Company Limited 19th Fl., Tonson Tower, 900 Ploenchit Rd., Noble Choice Pinklao Lumpini, Pathumwan, Bangkok Housing Construction Noble Choice Vibhavadee 6. N.K.Energy Conservation Company Limited 54/4 Moo 7, Bang Saothong, Light Weight Noble Choice Pinklao Samutprakarn Wall Panel Noble Choice Vibhavadee

20,000

20,000

4,400,000

250,000

100,000

6,500

04

Annual Report 2005

Noble Development Public Company Limited


Noble Development Projects

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

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

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

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.

Annual Report 2005

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 Public Company Limited

05


Noble Development Projects (Continued) 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

Annual Report 2005

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 21storey 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 floorto-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 3storey commercial units, located in Soi Watcharapol.

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.

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 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 Annual Report 2005

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.

Noble Development Public Company Limited

07


Revenues Structure (Unit : Million Baht)

Revenues Structure

by(1)

% Shares holding

Value

NOBLE WPV(3) BSS NOBLE WPV(3) WT(3) NOBLE NOBLE

100% -

Operated

2005

2004

%

2003 Value

%

Value

%

1,142.14 144.25 1,171.39 -

45.18 5.71 46.33 -

1,297.66 380.11 41.60

71.40 20.92 2.29

2,150.53 169.00 36.16 1.45 1.94 383.09

67.88 5.33 1.14 0.05 0.06 12.09

2,457.78

97.22

1,719.37

94.61

2,742.17

86.55

0.04 0.06

0.00 0.00

47.84 3.01

2.63 0.16

345.05 -

10.89 -

0.10

0.00

50.85

2.79

345.05

10.89

Revenue from Real Estate Development Single Detached House and Land Condominium Condo House Townhouse and Shop house Total Revenue from Real Estate Development

Revenue from Construction Services Detached House

NOBLE S&P

100%

Total Revenue from Construction Services

Revenue from Department Store Sales Rental and Services Total Revenue from Department Store Total Revenue from Core Businesses

PG PG

85% 85%

35.85 12.17 48.02 2,505.90

1.42 0.48 1.90 99.12

1,770.22

97.40

3,087.22

97.44

NOBLE NOBLE (2) (2)

-

15.94 6.20 22.14 2,528.04

0.63 0.25 0.88 100.00

26.99 12.76 7.43 47.18 1,817.40

1.49 0.70 0.41 2.60 100.00

22.61 18.12 16.37 24.03 81.13 3,168.35

0.71 0.57 0.52 0.76 2.56 100.00

41.56 (1,317.00)

(42.66)

2,037.78

194.18

Other Revenues Gain on Sales of Investments in Subsidiaries and Associate, net Gain on Foreign Currency Exchange Interest Income Others Income Total Other Revenues Total Revenues Increase (Decrease) in Revenue from Core Businesses

735.68

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

Annual Report 2005

(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.

Noble Development Public Company Limited

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.

Table 1 : Residential units registered in Bangkok Metropolis and Vicinity. 2000

2001

2002

2003

2004 (Jan-Sep)

2005

2005(2)

6,331 6,679 13,010

9,691 4,650 14,341

14,371 5,118 19,489

30,088 7,399 37,487

40,752 8,439 49,191

27,600 7,629 35,229

36,800 10,172 46,972

18,064

19,639

17,693

18,598

19,859

18,247

24,329

31,074

33,980

37,182

56,085

69,050

53,476

71,301

7.1%

9.4%

9.4%

50.8%

23.1%

13.8%(1)

Developer-Built Single House, Twin House, Townhouse, Shop House Condominium

Total Developer-Built Self-Built Total Residential Units Registered Change from Last Year (%)

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

3.3%

09


The Industrial Situation and Trend (Continued) Interest rates

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:

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.

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.

10 Chart 1: Minimum Lending Rate (MLR) of Commercial banks during the year 1996-2005

MLR

18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00

14.65

13.55 13.72

9.26 8.07 7.44

7.05

15.25

6.14

13.20 8.40

96

97

98

99

MLR (At the end of the Year)

7.85

00

7.20

01

6.75

02

5.70

5.70

03

04

MLR (Average during the Year)

Source : Bank of Thailand Remark : Average MLR of 5 commercial banks BBL, KBANK, BAY, KTB and SCB

Annual Report 2005

5.69

5.91

11.75

Noble Development Public Company Limited

6.55

05


The Industrial Situation and Trend (Continued) 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.

11

Annual Report 2005

Noble Development Public Company Limited


Risk Factors 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.

Chart 1 : index of construction material prices and the change of the index of construction material Index 130.0

Change (%) 124.3 16

124.3 112.8

110.0

103.9

100.0

11.5

104.8

12

8.0

90.0

8 3.9

70.0

4 0.9

50.0

0.0

0.0

2000

2001

2002

Index of construction material prices

2003

2004

0 2005

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

Annual Report 2005

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.

Noble Development Public Company Limited

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

Annual Report 2005

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.

Noble Development Public Company Limited

13


Risk Factors (Continued) 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.

Annual Report 2005

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.

Noble Development Public Company Limited

14


Shareholders The First Ten Major Shareholders as of May 9, 2005 Shareholders' Name

Number of Shares

1 Thai NVDR Company Limited 2 Thanakitamnuay Group Mr. Kitti Thanakitamnuay Ban Siam Holdings Company Limited 3 CHASE C.S.CENTRAL NOMINEES LIMITED 4 Mr. Taveechat Jurankul 5 Viravan Group Dr. Amnuay Viravan Khun Ying Samornsri Viravan Samvest Company Limited Amvest Company Limited 6 Thai Strategic Asset Fund 7 Mr. Piya Thanakitamnuay 8 SOMERS (U.K.) LIMITED 9 Ms. Chansri Umpornsuwan 10 THE BANK OF NEW YORK (NOMINEES) LIMITED Total

% of Paid up Capital

72,674,300 36,662,296 36,330,919 331,377

15.92 8.03 7.96 0.07

20,425,400 20,200,000 3,664,853 8,471,850 4,778,265 2,389,131

4.47 4.43 0.80 1.86 1.05 0.52

18,750,000 16,353,060 12,997,700 10,758,661 10,521,400 238,646,916

4.11 3.58 2.85 2.36 2.30 52.28

Investors can acquire update information of the major shareholders before the shareholders' meeting from the website www.noblehome.com

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 -

Annual Report 2005

Noble Development Public Company Limited

15


Organization Chart

Board of Directors Audit Committee

Chairman and Managing Director

16 Support Line

CEO Office

Project Operation and Information Technology Line

Internal Audit Line

ë Corporate Finance Department

ë Project Operation Department 1-4

ë Accounting Department

ë Investment Analyst Department

ë Finance Department

ë Marketing and PR Department

ë Legal Service Department

ë Information Technology Department

ë Legal Department

ë After Sales Service Department

ë Human Resources Development Department

ë Project Legal Department ë Playground Store Department

Annual Report 2005

Noble Development Public Company Limited


The Board of Directors The structure of the Company's directors consists of the followings: ë The Board of Directors ë The Audit Committee

9 persons 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 2. Mr. Sitti 3. Mr. Thongchai 4. Miss Vasana 5. Mr. Vicharn 6. Mr. Thakonkiat 7. Mrs. Boonperm

Thanakitamnuay Leelakasamelerk Busrapan Thieansirisak Busrawong Viravan Jiamtiranat

8. Mr. Narong

Taychachaiwong

9. Mr. Surachet

Suboonson

Chairman and Managing Director Director Director Director Independent Director Independent Director Independent Director and Chairman of the Audit Committee Independent Director and Member of the Audit Committee 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 Annual Report 2005

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.

Noble Development Public Company Limited

17


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:

1. Mr. Kitti 2. Mr. Sitti 3. Mr. Thongchai 4. Miss Vasana 5. Mr. Vicharn 6. Mr. Thakonkiat 7. Mrs. Boonperm 8. Mr.Narong 9. Mr. Surachet

Thanakitamnuay Leelakasamelerk Busrapan Thieansirisak Busrawong Viravan Jiamtiranat Taychachaiwong Suboonson

No. of meeting attended (Times) Regular meeting Sub-meeting* 10 27 10 27 10 27 10 25 7 4 6 8 7 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.

Annual Report 2005

(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.

Noble Development Public Company Limited

19


The Executives

As of December 31, 2005 the Company's Executives are as follows: 1. Mr. Kitti Thanakitamnuay 2. Mr. Sitti Leelakasamelerk 3. Mr. Thongchai Busrapan 4. Miss Vasana

Thieansirisak

5. Mr. Arat 6. Miss Songsri 7. Mr. Sira 8. Mr. Manit 9. Mrs. Angkana

Sawatatat Panich Udol Ngamsantiwongsa Intravichien

Annual Report 2005

Chairman and Managing Director Executive Vice President : Support Line Executive Vice President : Project Operation and Information Technology Line Senior Vice President : Corporate Finance Department Vice President : Project Operation Department Vice President : Project Operation Department Vice President : Project Operation Department Vice President : After Sales Service Department Vice President : Accounting and Finance Department

Noble Development Public Company Limited

20


Election of the Board of Directors and Remuneration

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 ĂŤ 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. 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

Annual Report 2005

ĂŤ 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. ĂŤ 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-

Noble Development Public Company Limited

21


Board of Directors, Audit Committee and Executive Officers

Mr.Kitti Thanakitamnuay Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Chairman and Managing Director B.A., Political Science, Chulalongkorn University

36,330,919 shares No 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.

22 Mr. Sitti Leelakasamelerk Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Annual Report 2005

Director and Executive Vice President: Support B.A., Accounting, Chulalongkorn University Director Accreditation Program (DAP) Class 11/2004 No 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

Noble Development Public Company Limited


Board of Directors, Audit Committee and Executive Officers (Continued)

Mr. Thongchai Busrapan Position

Director and Executive Vice President: Project Operation and Information Technology Line Master of Science in Management SASIN Graduate Institute of Business Administration of Chulalongkorn University

Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Director Accreditation Program (DAP) Class 52/2006 20,000 Shares No 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 Thieansirisak Position Education

Director and Senior Vice President: Corporate Finance Department Master of Science, Managerial Accounting and Master of Science, Economic Law Chulalongkorn University

Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Annual Report 2005

23

Director Accreditation Program (DAP) Class 45/2005 No 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

Noble Development Public Company Limited


Board of Directors, Audit Committee and Executive Officers (Continued)

Mr. Vicharn Busrawong Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Independent Director Secondary School

3,735,000 Shares No 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 Viravan Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Annual Report 2005

Independent Director Master of Science, Boston University, USA

No 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

Noble Development Public Company Limited

24


Board of Directors, Audit Committee and Executive Officers (Continued)

Mrs. Boonperm Jiamtiranat Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Independent Director and Chairman of the Audit Committee B.A., Accounting, Chulalongkorn University Director Accreditation Program (DAP) Class 13/2004 No 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

Mr. Narong Taychachaiwong Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Independent Director and Member of the Audit Committee B.FA., Fine Art, University of Central Florida, USA. Director Accreditation Program (DAP) Class 2/2003 No 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 Suboonson Position Education Training from Thai Institute of Directors Association Number of Shares Number of Shares Changed in 2005 Experience

Annual Report 2005

Independent Director and Member of the Audit Committee B.A., Accounting, Thammasat University

No Present ë Independent Director and Member of the Audit Committee Noble Development Public Company Limited

Noble Development Public Company Limited

25


Board of Directors, Audit Committee and Executive Officers (Continued)

Mr. Arat Sawatatat Position Education Number of Shares Number of Shares Changed in 2005 Experience

Vice President: Project Operation Department Master of Science (Land Development), Texas (A&M) University, USA No Present ë Director S&P Property Management Company Limited ë Vice President: Project Operation Department Noble Development Public Company Limited

Miss Songsri Panich Position Education Number of Shares Number of Shares Changed in 2005 Experience

Vice President: Project Operation Department Master of Business Administration (Marketing), Dominican University, USA No Present ë Vice President: Project Operation Department Noble Development Public Company Limited

26 Mr. Sira Udol Position Education Number of Shares Number of Shares Changed in 2005 Experience

Annual Report 2005

Vice President: Project Operation Department Master of Management SASIN Graduate Institute of Business Administration of Chulalongkorn University No Present ë Director Research and Consultant Company Limited Idirexdotcom Company Limited ë Vice President: Project Operation Department Noble Development Public Company Limited

Noble Development Public Company Limited


Board of Directors, Audit Committee and Executive Officers (Continued)

Mr. Manit Ngamsantiwongsa Position Education Number of Shares Number of Shares Changed in 2005 Experience

Vice President : After Sales Service Department B.ENG., Sanitary Engineering and Civil Engineering, Chulalongkorn University No Present ë Director Research and Consultant Company Limited ë Vice President: After Sales Service Department Noble Development Public Company Limited

Mrs. Angkana Intravichien Position Education Number of Shares Number of Shares Changed in 2005 Experience

* Remark

Vice President: Accounting and Finance Department Master of Business Administration, NIDA No Present ë Vice President: Accounting and Finance Department Noble Development Public Company Limited

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

27


Corporate Governance

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

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

Annual Report 2005

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. ĂŤ 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.

Noble Development Public Company Limited

28


Corporate Governance (Continued) 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.

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 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.

Annual Report 2005

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.

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.

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 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.

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.

11. The Board of Directors' Meeting

15. The Investor Relation

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.

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 vasana@noblehome.com, or visit us at www.noblehome.com.

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.

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

Annual Report 2005

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.

Noble Development Public Company Limited

31


The Audit Committee's Report

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.

32 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.

(Mrs. Boonperm Jiamtiranat) Chairman of the Audit Committee February 28, 2006

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

Annual Report 2005

Noble Development Public Company Limited


Charts of Operating Performance and Revenue Structure Charts of Operating Performance Total Assets and Shareholders' Equity 6,000 5,000 4,000 3,000 2,000 1,000 0

5,363

5,287 Shareholders' Equity Total Assets

2,889

2,526

2005

2004

33 Debt and Net Debt to Equity Ratio 1.2 1.0 0.8 0.6 0.4 0.2 0.0

1.09 0.86

0.86 0.69

2005

D/E Ratio Net D/E Ratio

2004

Total Revenues and Net Profit 3,000 2,500 2,000 1,500 1,000 500 0

Total Revenues Net Profit

2,528 1,817 456

2005

Annual Report 2005

335

2004

Noble Development Public Company Limited


Charts of Revenue Structure Unit : Million Baht Revenue from Property Development Business Revenue from Department Store Business Others Income Total

2005 Revenues Structure

2005

2004

2,458 48 22 2,528

1,770 47 1,817

2004 Revenues Structure

0.9% Others Income 1.9% Revenue from Department Store Business 97.2% Revenue from Property Development Business책

2.6% Others Income 97.4% Revenue from Property Development Business

34

Annual Report 2005

Noble Development Public Company Limited


Analysis of Financial Status and Operating Results

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.

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.

Annual Report 2005

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.

Noble Development Public Company Limited

35


Remunerations for External Auditor 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

36

Annual Report 2005

Noble Development Public Company Limited


Company Factsheet

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, 6th- 7th 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

Annual Report 2005

Noble Development Public Company Limited

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


AUDITOR'S REPORT

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.

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

Annual Report 2005

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

Noble Development Public Company Limited

39


Noble Development Public Company Limited Balance Sheets As at 31 December 2005 and 2004

Notes

Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

Assets Current Assets Cash and cash equivalents 3 470,859,539 Short-term investments 4 23,836,603 Trade accounts receivable - retail business 1,140,296 Trade accounts receivable - real estate development business 5 808,503 Unbilled completed work 5 622,299,151 Short-term loans to and amounts due from subsidiaries, net 10 Inventories, net 7 195,899,620 Real estate development cost 8 3,425,488,295 Other current assets 9 213,932,044 Total Current Assets 4,954,264,051

578,220,428 53,153,634 -

436,366,352 12,836,916 -

560,023,999 53,153,634 -

1,642,763 153,075,741

808,503 622,299,151

1,642,763 153,075,741

56,491,917 3,843,630,351 293,586,398 4,979,801,232

568,017,308 173,209,685 2,276,832,218 226,193,553 4,316,563,686

420,651,719 56,491,917 2,767,275,658 298,513,582 4,310,829,013

Non-Current Assets Long-term trade accounts receivable, net Long-term loans to and amounts due from other company Investments - equity method Land held for future development, net Property and equipment, net Deferred tax assets, net Other assets Total Non-Current Assets

Total Assets

5

680,000

680,000

680,000

680,000

6 10 11 12 17 13

93,374,203 276,320,943 19,346,233 19,304,070 409,025,449

86,055,029 57,195,808 46,333,088 73,197,033 43,754,684 307,215,642

93,374,203 392,066,811 228,613,623 19,346,233 16,385,470 750,466,340

86,055,029 394,002,134 57,195,808 39,299,895 73,197,033 43,061,663 693,491,562

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.

Annual Report 2005

Noble Development Public Company Limited

40


Noble Development Public Company Limited Balance sheets (Continued) As at 31 December 2005 and 2004

Notes

Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

Liabilities and Shareholder's Equity Current Liabilities Short-term loans from financial institutions Accounts payable - construction ë related company ë others Trade accounts payable ë related company ë others Billing in excess of work in progress Amount due to and loans from subsidiary Current portion of long-term borrowings Deposits and advances received from customers Retention payable Other current liabilities Total Current Liabilities

15

367,498,381

633,701,452

367,498,381

633,701,452

25

88,729,889

245,454,761

185,991 76,998,486

185,991 226,804,598

25

14,543,142 -

1,668,493

422,559 -

1,668,493

25 15 1,000,000,000

-

109,219,052 1,000,000,000

121,325,511 -

69,013,150 80,463,404 14 130,519,329 1,750,767,295

70,275,029 96,633,127 117,800,164 1,165,533,026

68,813,150 75,405,814 106,851,028 1,805,394,461

70,143,799 92,657,163 92,600,287 1,239,087,294

15

653,149,000

1,557,600,000

283,149,000

1,187,600,000

10 17

68,041,369 2,464,800 723,655,169

38,268,935 46,550 1,595,915,485

15,350,546 68,041,369 366,540,915

13,928,098 38,268,935 46,550 1,239,843,583

2,474,422,464

2,761,448,511

2,171,935,376

2,478,930,877

18 2,373,912,825

2,373,912,825

2,373,912,825

2,373,912,825

18 2,282,355,875 18 18 (843,768,010)

2,282,355,875 781,292,711 (1,625,060,721)

2,282,355,875 (843,768,010)

2,282,355,875 781,292,711 (1,625,060,721)

67,348,943 1,019,452,890 2,525,389,698 178,665 2,525,568,363

90,170,667 1,366,336,118 2,895,094,650 2,895,094,650

67,348,943 1,019,452,890 2,525,389,698 2,525,389,698

5,287,016,874

5,067,030,026

5,004,320,575

Non-Current Liabilities Long-term borrowings Liabilities arisen from investments in subsidiaries Deferred tax liability Other liabilities Total Non-Current Liabilities

Total Liabilities Shareholder's Equity Share capital Registered share capital Issued and paid-up share capital Share premium Share discount Retained earnings Appropriated Legal reserve Unappropriated

Total Parent's Shareholder's Equity

Minority interest

Total Shareholder's Equity

19

90,170,667 1,366,336,118 2,895,094,650 16 (6,227,614) 2,888,867,036

Total Liabilities and Shareholders' Equity

5,363,289,500

The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements. Annual Report 2005 Noble Development Public Company Limited

41


Noble Development Public Company Limited Statements of Income For the year ended 31 December 2005 and 2004

Notes

Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

Revenues Revenues from sales - real estate development business Revenues from construction services Revenues from sales - retail business Revenues from rental and services Gain on foreign currency exchange Interest income Share of profits in investments ĂŤ equity method Other income

2,457,774,836 105,897 35,848,370 12,168,130 20, 22 15,945,172 10

Total Revenues

1,719,367,202 50,854,637 26,989,664 12,757,055

2,313,526,836 44,028 22,606,533 49,771,187

1,719,367,202 47,845,173 26,989,664 45,390,916

6,199,975 2,528,042,380

7,426,782 1,817,395,340

14,913,310 4,977,056 2,405,838,950

7,359,280 1,846,952,235

1,486,159,629 17,857,755 7,860,549 417,185,100 905,000

1,026,460,330 38,809,173 423,747,276 825,000

1,388,343,996 8,084,368 330,749,722 905,000

1,026,460,330 36,772,165 412,842,435 825,000

Expenses Cost of sales - real estate development business Cost of construction services Cost of sales - retail business Cost of rental and services Selling and administrative expenses Director's remuneration Share of losses of investments ĂŤ equity method

10

1,929,968,033

1,489,841,779

55,941,675 1,784,024,761

13,249,269 1,490,149,199

Profit before interest expenses and income tax

22

598,074,347 (38,491,963) 559,582,384 (112,554,188) 447,028,196

327,553,561 (5,158,558) 322,395,003 11,641,721 334,036,724

621,814,189 (52,825,526) 568,988,663 (112,554,188) 456,434,475

356,803,036 (33,836,698) 322,966,338 11,641,721 334,608,059

9,406,279 456,434,475

571,335 334,608,059

456,434,475

334,608,059

1.00

0.73

1.00

0.73

Total Expenses

42

Interest expenses

Profit before income tax Income tax

Profit before minority interest

21

Net loss of subsidiary attributable to minority interest 16

Net profit for the year

Basic earnings per share Net profit for the year

23

The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements. Annual Report 2005 Noble Development Public Company Limited


Noble Development Public Company Limited Statements of changes in shareholders' equity For the year ended 31 December 2005 and 2004 Consolidated (Baht)

Opening balance 2005 Transfer of share premium to offset against share discount (Note 18) Net profit for the year Dividend paid (Note 18) Legal reserve Increase during the year

Closing balance - 31 December 2005 Opening balance 2004

Net profit for the year Dividend paid (Note 18) Legal reserve Increase during the year

Closing balance - 31 December 2004

Issued and paid-up share capital (Note 18)

Share premium (Note 18)

Share discount (Note 18)

Retained earnings Appropriatedlegal reserve (Note 19) Unappropriated

2,282,355,875

781,292,711

(1,625,060,721)

67,348,943

2,282,355,875

(781,292,711) -

781,292,711 (843,768,010)

2,282,355,875 2,282,355,875

781,292,711 781,292,711

(1,625,060,721) (1,625,060,721)

Minority interest (Note 16)

Total

1,019,452,890

178,665

2,525,568,363

22,821,724 90,170,667

456,434,475 (86,729,523) (22,821,724) 1,366,336,118

(6,406,279) (6,227,614)

456,434,475 (86,729,523) (6,406,279) 2,888,867,036

50,618,540 16,730,403 67,348,943

893,293,128 334,608,059 (191,717,894) (16,730,403) 1,019,452,890

178,665 178,665

2,382,499,533 334,608,059 (191,717,894) 178,665 2,525,568,363

The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements.

Annual Report 2005

Noble Development Public Company Limited

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Noble Development Public Company Limited Statements of changes in shareholders' equity (Continued) For the year ended 31 December 2005 and 2004 Company (Baht)

Opening balance 2005 Transfer of share premium to offset against share discount (Note 18) Net profit for the year Dividend paid (Note 18) Legal reserve

Closing balance - 31 December 2005 Opening balance 2004 Net profit for the year Dividend paid (Note 18) Legal reserve

Closing balance - 31 December 2004

Issued and paid-up share capital (Note 18)

Share premium (Note 18)

Share discount (Note 18)

Retained earnings Appropriatedlegal reserve (Note 19) Unappropriated

2,282,355,875

781,292,711

(1,625,060,721)

67,348,943

1,019,452,890

2,525,389,698

2,282,355,875

(781,292,711) -

781,292,711 (843,768,010)

22,821,724 90,170,667

456,434,475 (86,729,523) (22,821,724) 1,366,336,118

456,434,475 (86,729,523) 2,895,094,650

2,282,355,875 2,282,355,875

781,292,711 781,292,711

(1,625,060,721) (1,625,060,721)

50,618,540 16,730,403 67,348,943

893,293,128 334,608,059 (191,717,894) (16,730,403) 1,019,452,890

2,382,499,533 334,608,059 (191,717,894) 2,525,389,698

The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements. Annual Report 2005 Noble Development Public Company Limited

Total

44


Noble Development Public Company Limited Statements of Cash Flows For the year ended 31 December 2005 and 2004

Notes Cash flows receipts from (used in) operating activities

Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

20

408,813,658

(812,468,077)

489,006,806

(579,596,713)

6 12 9

29,317,031 (1,500,000) (53,457,984) (236,150,000)

24,246,548 (8,300,000) (14,099,333) (140,000,000) -

40,316,718 (218,651,687) (1,500,000) (3,965,577) (236,150,000)

24,246,548 (202,906,000) (8,300,000) (6,955,062) (140,000,000) -

-

-

80,419,687

621,200,000

6

-

9,500,000

-

9,500,000

10

-

-

-

(404,250,000)

9 16

3,000,000

750,000

-

(17,000,000) -

(258,790,953)

3,800 (127,898,985)

(339,530,859)

3,800 (124,460,714)

15

(266,203,071) 470,400,000

11,286,445 557,600,000

(266,203,071) 470,400,000

11,286,445 187,600,000

15

(374,851,000)

-

(374,851,000)

117,720,000 -

18

(86,729,523)

(191,717,894)

(15,750,000) (86,729,523)

(191,717,894)

(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

56,952,342

23,112,817

56,952,342

23,112,817

200,243,408

-

200,243,408

-

57,195,808

-

57,195,808

-

Cash flows from investing activities Decrease in guaranteed deposits at banks Short-term loans to subsidiaries Long-term loans to other company Purchases of property and equipment Payment for land deposit Payment for land Proceeds from repayments of short-term loans to subsidiaries Proceeds from repayments of loans to other company Cash invested in investments in subsidiaries Increase in share subscription receivable Proceed from minority interest for capital increase Proceeds from disposals of property and equipment Net cash used in investing activities

Cash flows from financing activities (Repayments) proceeds from short-term loans from financial institutions, net Proceeds from long-term borrowings Proceeds from short-term loans from subsidiary Repayments of long-term borrowings Repayments of short-term loans from subsidiary Dividend payment Net cash (used in) receipts from financing activities

Non-cash transactions Operating activities Transferred projects which 90% of projects have been sold from real estate development cost to inventories Transfer from real estate development cost to property and equipment (Note 12) Transfer from land held for future development to inventories (Note 11)

The notes to the consolidated and company financial statements on pages 46-74 form an intergral part of the financial statements. Annual Report 2005 Noble Development Public Company Limited

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2 Accounting policies

Noble Development Public Company Limited Notes to the consolidated and company financial statements For the years ended 31 December 2005 and 2004

1 General information

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.

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:

The consolidated and company financial statements have been prepared under the historical cost convention except for impairment as disclosed in the accounting policies below.

900 Tonson Tower, 19th floor, Ploenchit Road, Lumpini, Pathumwan, Bangkok.

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.

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.

Annual Report 2005

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.

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2 Accounting policies (Continued) 2.3 Consolidation

2.4 Cash and cash equivalents

a) Subsidiaries

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.

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.

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.

b) Associates

2.7 Inventories 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.

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.

A list of the Group's associates is set out in Note 10. Annual Report 2005

Noble Development Public Company Limited

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2 Accounting policies (Continued) 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

Annual Report 2005

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 Building Building improvements Furniture and fixtures, and office equipment Vehicles

5 - 20 years 20 years 10 years 5 years 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.

Noble Development Public Company Limited

48


2 Accounting policies (Continued) 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.

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.

Cross currency and interest rate swap option contracts protect the Company from Annual Report 2005

Noble Development Public Company Limited

49


2 Accounting policies (Continued) 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

Annual Report 2005

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.

Noble Development Public Company Limited

50


3 Cash and cash equivalents Consolidated 2005 Baht

Company 2005 Baht

2004 Baht

2004 Baht

Cash on hand Deposits on call, fixed deposits and promissory notes with maturity periods within 3 months

40,714,366

1,536,417

33,517,839

1,536,417

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

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).

4 Short-term investments 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).

51 5 Unbilled completed work and trade accounts receivable Consolidated 2005 Baht Total value of contracts signed Percentage of total projects

2004 Baht

Company 2005 Baht

2004 Baht

4,903,448,124

4,697,096,080

4,756,442,996 4,693,899,699

57.22

50.46

62.06

50.44

4,253,160,624 (3,630,861,473) -

3,538,959,334 (3,387,552,086) 1,668,493

4,106,155,496 (3,483,856,345) -

3,535,762,954 (3,384,355,706) 1,668,493

622,299,151

153,075,741

622,299,151

153,075,741

Unbilled completed work Revenues recognised to date Less: Installments due Add: Billing in excess of work in progress Unbilled completed work

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).

Annual Report 2005

Noble Development Public Company Limited


5 Unbilled completed work and trade accounts receivable (Continued) Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

Trade accounts receivable Installments due Less: Collections Trade accounts receivable - installments due Less: Short-term trade accounts receivable Long-term trade accounts receivable Less: Allowance for doubtful accounts Long-term trade accounts receivable, net

3,630,861,473 (3,629,125,250)

3,387,552,086 (3,384,981,603)

3,483,856,345 (3,482,120,122)

3,384,355,706 (3,381,785,223)

1,736,223

2,570,483

1,736,223

2,570,483

(808,503)

(1,642,763)

(808,503)

(1,642,763)

927,720

927,720

927,720

927,720

(247,720)

(247,720)

(247,720)

(247,720)

680,000

680,000

680,000

680,000

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: Consolidated and Company 2005 2004 Baht Baht Within 3 months 3 - 6 months 6 - 12 months Over 12 months

405,022 141,200 262,281

613,844 411,902 617,017 -

Total short-term trade accounts receivable

808,503

1,642,763

Annual Report 2005

Noble Development Public Company Limited

52


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: Consolidated and Company 2005 2004 Baht Baht Beginning balance Additional loans Increase in interest receivable (Note 20) Loan repayments received

86,055,029 1,500,000 5,819,174 -

82,499,020 8,300,000 4,756,009 (9,500,000)

Ending balance

93,374,203

86,055,029

7 Inventories, net Consolidated 2005 Baht Condominium units for sale Condominium units bought for sale Houses for sale Land for sale Supplies for construction Retail products

2004 Baht

Company 2005 Baht

2004 Baht

Less: Allowance for obsolescence Allowance for impairment

27,331,000 6,048,100 68,729,540 125,551,970 3,969,939 22,689,935 254,320,484 (1,420,864) (57,000,000)

27,331,000 6,048,100 11,756,655 11,356,162 1,420,864 57,912,781 (1,420,864) -

27,331,000 6,048,100 68,729,540 125,551,970 2,549,075 230,209,685 (57,000,000)

27,331,000 6,048,100 11,756,655 11,356,162 56,491,917 -

Inventories, net

195,899,620

56,491,917

173,209,685

56,491,917

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).

Annual Report 2005

Noble Development Public Company Limited

53


8 Real estate development cost Consolidated 2005 Baht Land development Construction in progress Capitalised interest Mocks up and project offices Other related costs Total Less: Transfer to cost of sales Transfer to property and equipment (Note 12) Real estate development cost Capitalised interest during the year

2004 Baht

Company 2005 Baht

2004 Baht

2,381,121,835 3,491,761,129 151,659,313 131,094,399 20,524,944 6,176,161,620 (2,550,429,917)

2,472,536,222 3,281,965,776 111,759,577 208,988,567 18,116,559 6,093,366,701 (2,249,736,350)

1,566,064,187 3,139,565,397 91,975,894 116,855,021 15,229,411 4,929,689,910 (2,452,614,284)

1,656,652,575 3,066,593,443 76,945,405 202,421,315 14,399,271 5,017,012,009 (2,249,736,351)

(200,243,408) 3,425,488,295

3,843,630,351

(200,243,408) 2,276,832,218

2,767,275,658

57,463,052

65,252,668

32,593,805

30,438,496

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 9 Other current assets Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

Advances to contractors Land deposit Accrued management fees ë related companies (Note 25) ë other companies Accrued rental and service income ë related companies (Note 25) Share subscription receivable (Note 10) Others

35,537,233 140,000,000

129,226,450 140,000,000

34,121,346 140,000,000

125,104,965 140,000,000

6,697,128

6,697,128

4,585,076 6,697,128

4,585,076 6,697,128

31,697,683

17,662,820

23,630,000 17,160,003

124,000 17,000,000 5,002,413

Total other current assets

213,932,044

293,586,398

226,193,553

298,513,582

Annual Report 2005

Noble Development Public Company Limited


10 Investments in and short-term loans to and amounts due from subsidiaries, associate and other investment

Investments in subsidiaries Continental City Company Limited Ban Suk Sabai Company Limited S&P Property Management Company Limited Research & Consultant Company Limited Playground Store Company Limited

Company Paid-up share capital Principal 2005 2004 activities Million Baht Million Baht Real estate Real estate Management service Construction service Retail business, Rental and services

Percentage of holding 2005 2004 Percent Percent

440.0 2.0

440.0 2.0

100.0 100.0

100.0 100.0

2.0

2.0

100.0

100.0

10.0

10.0

65.0

65.0

25.0

5.0

85.0

85.0

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 Company Limited

Light weight wall panel

6.5

6.5

50.0

50.0

Real estate

265.0

265.0

1.9

1.9

Other investment Khonkaenland Development Group Company Limited

55 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. Investments in subsidiaries - equity method Company 2005 Baht

2004 Baht

Beginning balance Share of losses in subsidiaries, net (Note 20) Additional investments

305,186,157 (41,028,365) 17,000,000

(85,814,574) (13,249,269) 404,250,000

Ending balance

281,157,792

305,186,157

Annual Report 2005

Noble Development Public Company Limited


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 Company - 2005 (Baht)

Ban Suk Sabai Company Limited Continental City Company Limited Research & Consultant Company Limited S&P Property Management Company Limited Playground Store Company Limited

Investments at cost

Average Interest Rates (%)

Short-term loans to and amounts due from subsidiaries

Less: Investment value using equity method

Short-term loans to and amounts due from subsidiaries, net

1,360,000 442,783,506

5.12 -

565,712,252 -

(55,370,620) 392,066,811

510,341,632 -

392,066,811

-

6,500,000

7.05

4,898,038

(5,909,426)

-

-

(1,011,388)

5,000 21,250,000 471,898,506

6.00

92,965,491 663,575,781

(14,339,158) (35,289,815) 281,157,792

57,675,676 568,017,308

392,066,811

(14,339,158) (15,350,546)

Liabilities arisen Investments in from investments subsidiaries, net in subsidiaries, net

Company - 2004 (Baht)

Ban Suk Sabai Company Limited Continental City Company Limited Research & Consultant Company Limited S&P Property Management Company Limited Playground Store Company Limited

Investments at cost

Average Interest Rates (%)

Short-term loans to and amounts due from subsidiaries

1,360,000 442,783,506

4.85 -

490,935,649 -

(70,283,930) 392,989,696

420,651,719 -

392,989,696

-

6,500,000

5.34

4,603,949

(4,964,496)

-

-

(360,547)

5,000 4,250,000

-

-

(13,567,551) 1,012,438

-

1,012,438

(13,567,551) -

495,539,598

305,186,157

420,651,719

394,002,134

(13,928,098)

454,898,506

Less: Investment value using equity method

Short-term loans to and amounts due from subsidiaries, net

Liabilities arisen Investments in from investments subsidiaries, net in subsidiaries, net

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 shortterm loans to and amounts due from subsidiaries. Annual Report 2005

Noble Development Public Company Limited

56


10 Investments in and short-term loans to and amounts due from subsidiaries, associate and other investment (Continued) Consolidated and Company 2005 2004 Baht Baht Investment in associate N.K. Energy Conservation Company Limited Less: Allowance for impairment Investment, net

3,247,400 (3,247,400) -

3,247,400 (3,247,400) -

5,000,000 (5,000,000) -

5,000,000 (5,000,000) -

Other investment Khonkaenland Development Group Company Limited Less: Allowance for impairment Investment, net

11 Land held for future development, net Consolidated and Company 2005 2004 Baht Baht Land cost Capitalised interest Other expenses Total Less: Allowance for impairment Land held for future development, net

-

113,032,026 590,459 573,323 114,195,808 (57,000,000) 57,195,808

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: Consolidated and Company 2005 2004 Baht Baht Opening net book value Less: Transfer to inventories (Note 7) Ending net book value

57,195,808 (57,195,808) -

57,195,808 57,195,808

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.

Annual Report 2005

Noble Development Public Company Limited

57


12 Property and equipment, net Consolidated (Baht)

Year ended 31 December 2004

Furniture and fixtures, office Building Furniture Building equipment Building improvements and fixtures Land Clubhouses improvements and vehicles for lease for lease for lease

Total

Opening net book value Additions Disposals Depreciation charge (Note 22)

12,792,000 -

10,553,775 489,302 -

-

14,388,173 13,610,031 (18,370)

-

-

- 37,733,948 - 14,099,333 (18,370)

-

(777,788)

-

(4,704,035)

-

-

- (5,481,823)

Closing net book value

12,792,000

10,265,289

-

23,275,799

-

-

- 46,333,088

26,532,000

106,519,095

3,087,016

79,133,145

-

-

- 215,271,256

(13,740,000)

(53,258,447)

-

-

-

-

- (66,998,447)

-

(42,995,359)

(3,087,016)

(55,857,346)

-

-

- (101,939,721)

12,792,000

10,265,289

-

23,275,799

-

-

- 46,333,088

Opening net book value 12,792,000 Additions Disposals Transfer from real estate development cost (Note 8) 83,022,979 Depreciation charge (Note 22) -

10,265,289 85,880 -

-

23,275,799 53,372,104 (32,168)

-

-

- 46,333,088 - 53,457,984 (32,168)

-

-

- 81,384,375

31,520,619

4,315,435 200,243,408

(1,057,331)

-

(14,539,670) (4,069,219)

(3,152,062)

(863,087) (23,681,369)

95,814,979

9,293,838

-

62,076,065 77,315,156

28,368,557

3,452,348 276,320,943

109,554,979

106,604,975

3,087,016

132,463,309 81,384,375

31,520,619

4,315,435 468,930,708

(13,740,000)

(53,258,447)

-

-

-

- (66,998,447)

-

(44,052,690)

(3,087,016)

(70,387,244) (4,069,219)

(3,152,062)

(863,087) (125,611,318)

95,814,979

9,293,838

-

62,076,065 77,315,156

28,368,557

3,452,348 276,320,943

At 31 December 2004 Cost Less: Allowance for impairment of assets Accumulated depreciation Net book value

Year ended 31 December 2005

Closing net book value

58

At 31 December 2005 Cost Less: Allowance for impairment of assets Accumulated depreciation Net book value

-

As at 31 December 2005 and 2004, all property and equipment of the Group are free-hold.

Annual Report 2005

Noble Development Public Company Limited


Company (Baht)

Land

Clubhouses

Furniture and fixtures, office equipment and vehicles

Opening net book value Additions Disposals Depreciation charge (Note 22)

12,792,000 -

10,553,776 489,302 -

14,368,003 6,465,760 (18,370)

-

-

-

37,713,779 6,955,062 (18,370)

-

(777,788)

(4,572,788)

-

-

-

(5,350,576)

Closing net book value

12,792,000

10,265,290

16,242,605

-

-

-

39,299,895

26,532,000

101,194,231

67,746,197

-

-

-

195,472,428

(13,740,000)

(49,531,042)

-

-

-

-

(63,271,042)

-

(41,397,899)

(51,503,592)

-

-

-

(92,901,491)

12,792,000

10,265,290

16,242,605

-

-

-

39,299,895

Opening net book value 12,792,000 Additions Disposals Transfer from real estate development cost (Note 8) 83,022,979 Depreciation charge (Note 22) -

10,265,290 85,880 -

16,242,605 3,879,697 (1,361)

-

-

-

39,299,895 3,965,577 (1,361)

-

-

81,384,375

31,520,619

4,315,435

200,243,408

(1,057,331)

(5,752,197)

(4,069,219)

(3,152,062)

(863,087)

(14,893,896)

95,814,979

9,293,839

14,368,744

77,315,156

28,368,557

3,452,348

228,613,623

Cost Less: Allowance for impairment of assets Accumulated depreciation

109,554,979

101,280,111

71,621,663

81,384,375

31,520,619

4,315,435

399,677,182

(13,740,000)

(49,531,042)

-

-

-

-

(63,271,042)

-

(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

Year ended 31 December 2004

Building Building improvements for lease for lease

Furniture and fixtures for lease

Total

At 31 December 2004 Cost Less: Allowance for impairment of assets Accumulated depreciation Net book value

Year ended 31 December 2005

Closing net book value

At 31 December 2005

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.

Annual Report 2005

Noble Development Public Company Limited

59


13 Other assets Consolidated 2005 Baht Withholding tax receivable Deposit for investment Others Total other assets

1,733,895 4,000,000 13,570,175 19,304,070

2004 Baht

28,285,575 4,000,000 11,469,109 43,754,684

Company 2005 Baht 253 4,000,000 12,385,217 16,385,470

2004 Baht 28,159,353 4,000,000 10,902,310 43,061,663

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.

14 Other current Liabilities Consolidated 2005 Baht Accrued interest expenses Accrued expenses Account payable for land Loans from other company Accrued corporate income tax Others Total other current liabilities

7,793,873 55,268,231 15,500,000 13,085,701 11,901,088 26,970,436 130,519,329

2004 Baht

7,489,210 38,550,906 15,500,000 12,628,655 9,609,332 34,022,061 117,800,164

Company 2005 Baht 7,702,640 51,405,148 15,500,000 11,901,088 20,342,152 106,851,028

2004 Baht 7,451,196 32,075,888 15,500,000 9,609,332 27,963,871 92,600,287

15 Borrowings Consolidated 2005 Baht

Current borrowings Promissory notes issued to financial institutions Debentures - current portion of long-term borrowings Total current borrowings

2004 Baht

Company 2005 Baht

2004 Baht

367,498,381

633,701,452

367,498,381

633,701,452

1,000,000,000 1,367,498,381

633,701,452

1,000,000,000 1,367,498,381

633,701,452

653,149,000 653,149,000

1,000,000,000 557,600,000 1,557,600,000

283,149,000 283,149,000

1,000,000,000 187,600,000 1,187,600,000

2,020,647,381

2,191,301,452

1,650,647,381

1,821,301,452

Non-current borrowings Debentures Borrowings from financial institutions Total non-current borrowings Total borrowings

Annual Report 2005

Noble Development Public Company Limited

60


15 Borrowings (Continued) The movements in the long-term borrowings for the year ended 31 December can be analysed as follows: Consolidated 2005 Baht Beginning balance Additional borrowings Loan repayments paid Transfer to current borrowings Closing net book value

Company 2005 Baht

2004 Baht

2004 Baht

1,557,600,000 470,400,000 (374,851,000) (1,000,000,000)

1,000,000,000 557,600,000 -

1,187,600,000 470,400,000 (374,851,000) (1,000,000,000)

1,000,000,000 187,600,000 -

653,149,000

1,557,600,000

283,149,000

1,187,600,000

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).

Annual Report 2005

Noble Development Public Company Limited

61


15 Borrowings (Continued) As at 31 December, the followings are undrawn borrowing facilities:

Consolidated 2005 2004 Million Baht Million Baht

Company 2005 2004 Million Baht Million Baht

Unused credit lines Floating interest rate

1,012

1,202

212

402

16 Minority interest Consolidated 2005 Baht Beginning balance Acquisition of investment in subsidiary (Note 10) Share of net loss of subsidiary (Notes 20 and 28) Ending balance

178,665 3,000,000 (9,406,279) (6,227,614)

2004 Baht 750,000 (571,335) 178,665

62

17 Deferred income taxes Deferred income taxes are calculated on all temporary differences under the liability method using a principal tax rate of 25%. Consolidated and Company 2005 2004 Baht Baht Statements of income (Note 21) Less: Valuation allowance Deferred income tax assets, net Deferred income tax liability

Annual Report 2005

Noble Development Public Company Limited

65,700,934 (46,354,701) 19,346,233

143,624,399 (70,427,366) 73,197,033

68,041,369

38,268,935


17 Deferred income taxes (Continued) 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 Statements of income (Note 21) Less: Valuation allowance Ending balance

73,197,033 (77,923,465) 24,072,665 19,346,233

143,624,399 (70,427,366) 73,197,033

38,268,935 29,772,434 68,041,369

38,268,935 38,268,935

Deferred income tax liability Beginning balance Statements of income (Note 21) Ending balance

Deferred income tax assets and liability as at 31 December are derived from the following temporary differences: Consolidated and Company 2005 2004 Baht Baht Deferred income tax assets, net Allowances for doubtful loans and long-term accounts receivable Allowance for impairment in value of land Deposits and advances received from customers Allowance for impairment in value of investment Others Total deferred income tax assets Less: Valuation allowance Deferred income tax assets, net

63 23,578,034 28,043,129

102,505,405 28,043,129

7,400,767

7,839,273

2,061,850 4,617,154 65,700,934 (46,354,701) 19,346,233

2,061,850 3,174,742 143,624,399 (70,427,366) 73,197,033

68,041,369

38,268,935

Deferred income tax liability Unbilled completed work

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.

Annual Report 2005

Noble Development Public Company Limited


18 Share capital, premium and discount on share capital, and dividend Number of shares

Consolidated and Company (Baht) Ordinary Share 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 Issued and paid-up At 31 December 2003 Decrease during the year Issue of shares during the year At 31 December 2004 At 31 December 2004 Transfer of share premium to offset against share discount Decrease during the year Issue of shares during the year At 31 December 2005

-

- 2,373,912,825

456,471,175 2,282,355,875 456,471,175 2,282,355,875

781,292,711 (1,625,060,721) 1,438,587,865 781,292,711 (1,625,060,721) 1,438,587,865

456,471,175 2,282,355,875

781,292,711 (1,625,060,721) 1,438,587,865

- (781,292,711) 456,471,175 2,282,355,875 -

781,292,711 (843,768,010) 1,438,587,865

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.

Annual Report 2005

Noble Development Public Company Limited

64


19 Legal reserve Consolidated and Company 2005 2004 Baht Baht Beginning balance Decrease during the year Appropriation during the year Ending balance

67,348,943 22,821,724 90,170,667

50,618,540 16,730,403 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).

20 Cash flows from operating activities Reconciliation of net profit for the year to cash flows from operating activities is as follows:

Notes Net profit for the year Interest expenses Income tax Profit before interest expenses and income tax Adjustments: Depreciation and amortisation Gains on cancelled contracts Losses on disposals of property and equipment Gain on foreign currency exchange Net loss of subsidiary attributable to minority interest Share of losses of subsidiaries, net Changes in operating assets and liabilities ë trade accounts receivable ë unbilled completed work ë amounts due from subsidiaries ë amounts due from other company

Annual Report 2005

Consolidated 2005 Baht

2004 Baht

Company 2005 Baht

2004 Baht

456,434,475 38,491,963 112,554,188

334,608,059 5,158,558 (11,641,721)

456,434,475 52,825,526 112,554,188

334,608,059 33,836,698 (11,641,721)

607,480,626

328,124,896

621,814,189

356,803,036

22

25,338,553 (2,382,054)

9,274,540 (2,807,016)

16,551,080 (2,182,054)

8,991,653 (2,807,016)

22

32,168 -

14,570 (26,989,664)

1,361 -

14,570 (26,989,664)

16 10

(9,406,279) -

(571,335) -

41,028,365

13,249,269

(306,036) (469,223,410) 6 (5,819,174)

45,535,560 (129,430,324) (4,756,009)

834,260 (469,223,410) (29,804,182) (5,819,174)

45,535,560 (129,430,324) (22,249,987) (4,756,009)

Noble Development Public Company Limited

65


20 Cash flows from operating activities (Continued) Consolidated 2005 Baht

Notes ë inventories ë real estate development cost ë other current assets ë other assets ë accounts payable - construction ë trade accounts payable ë deposits and advances received from customers ë retention payable ë other current liabilities ë other liabilities Cash flows receipts from (used in) operating activities before interest and income tax paid Interest paid Income tax paid Proceeds from refunds of withholding tax receivable Cash flows receipts from (used in) operating activities

2004 Baht

Company 2005 Baht

2004 Baht

(25,259,553) 454,559,358 79,654,354 (5,485,238) (156,724,872) 14,543,142

(923,189,573) (2,541,560) (2,902,092) (17,831,065) -

(2,569,618) 501,991,495 55,320,029 (3,140,091) (149,806,112) 422,559

(703,429,001) 8,431,926 (2,437,617) (33,229,278) -

(548,318) (16,169,723) 9,665,700 2,418,250

(36,438,767) 37,488,082 7,273,862 -

(817,088) (17,251,349) 11,707,541 (46,550)

(34,107,009) 34,998,846 (3,832,383) -

502,367,494 (95,193,306) (26,639,198)

(719,745,895) (87,462,699) (13,677,044)

569,011,251 (81,524,347) (26,639,198)

(495,243,428) (79,093,802) (13,677,044)

28,278,668

8,417,561

28,159,100

8,417,561

408,813,658

(812,468,077)

489,006,806

(579,596,713)

21 Income tax Reconciliation of current year income tax

66 Consolidated and Company 2005 2004 Baht Baht Current income tax Deferred income taxes (Note 17) Less: Valuation allowance (Note 17) Income tax expense for the year (Note 28)

Annual Report 2005

Noble Development Public Company Limited

(28,930,954) (107,695,899) 24,072,665 (112,554,188)

(23,286,377) 105,355,464 (70,427,366) 11,641,721


22 Profit before interest expenses The following expenditures , classified by nature, have been charged in arriving at profits before interest expenses.

Consolidated 2005 Baht Employee costs Depreciation on property and equipment (Note 12) Selling and marketing expenses Project management expenses Gain on foreign currency exchange (Note 20) Gains on cancelled contracts

2004 Baht

Company 2005 Baht

2004 Baht

85,757,530

62,818,177

68,512,510

60,966,291

23,681,369 49,449,550 34,402,574 (2,382,054)

5,481,823 145,083,800 58,385,535 (26,989,664) (2,807,016)

14,893,896 23,985,929 33,262,574 (2,182,054)

5,350,576 145,083,800 53,613,526 (26,989,664) (2,807,016)

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).

23 Basic earnings per share 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. Consolidated and Company For the year ended 31 December 2005 2004 Net profit attributable to shareholders (Baht) Weighted average number of paid-up ordinary shares in issue (shares) Basic earnings per share (Baht)

Annual Report 2005

Noble Development Public Company Limited

456,434,475 456,471,175 1.00

334,608,059 456,471,175 0.73

67


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:

Within 1 year

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.

Annual Report 2005

Foreign currency

Baht

US$ 16.35 million

693,240,000

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.

Noble Development Public Company Limited

68


Interest rate risk

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.

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.

Fair values

Liquidity risk

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.

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.

25 Related party transactions 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:

a) Interest income Average interest rates 2005 2004 % %

Company 2005 Baht

2004 Baht

Subsidiaries Ban Suk Sabai Company Limited Playground Store Limited Continental City Company Limited Research and Consultant Company Limited Total

Annual Report 2005

5.12 6.00 7.05

Noble Development Public Company Limited

4.85 4.00 5.34

30,673,031 3,065,490 193,520 33,932,041

22,934,934 9,551,307 180,636 32,666,877

69


25 Related party transactions (Continued) b) Sale of real estate development project Company 2005 Baht

Subsidiary Ban Suk Sabai Company Limited

-

2004 Baht 826,000

The selling price is at market value.

c) Revenues from rental and services

Company 2005 Baht

Subsidiary Playground Store Limited ĂŤ Revenues from rental ĂŤ Revenues from services

9,757,003 12,849,530 22,606,533

2004 Baht -

70 d) Purchase of goods Company 2005 Baht

Subsidiary Playground Store Limited

422,559

2004 Baht -

e) Interest expense Company 2005 Baht

Subsidiary Continental City Company Limited

Annual Report 2005

Noble Development Public Company Limited

4,318,417

2004 Baht 2,851,682


25 Related party transactions (Continued) f) Account payable - construction Company 2005 Baht

Subsidiar Research & Consultant Company Limited

185,991

2004 Baht 185,991

g) Account payable Company 2005 Baht

Subsidiary Playground Store Limited

422,559

2004 Baht -

h) Accrued management fees Company 2005 Baht

Subsidiaries Ban Suk Sabai Company Limited S & P Property Management Company Limited Total

2,310,962 2,274,114 4,585,076

71 2004 Baht 2,310,962 2,274,114 4,585,076

i) Accrued rental and service income Company 2005 Baht

Subsidiaries Playground Store Limited Research and Consultant Company Limited Total

Annual Report 2005

Noble Development Public Company Limited

23,506,000 124,000 23,630,000

2004 Baht 124,000 124,000


25 Related party transactions (Continued) j) Amount due to and loans from subsidiary Company 2005 Baht

Subsidiary Continental City Company Limited

109,219,052

2004 Baht

121,325,511

As at 31 December 2005 and 2004, loans from a subsidiary carry interest at MLR minus 2% per annum and are repayable on demand.

26 Commitments and contingent liabilities The Group and the Company have commitments and contingent liabilities as follows: Consolidated 2005 2004 Million Baht Million Baht Capital commitments Commitments under contracts to invest in development projects until completion Commitments under land purchase contracts Commitments under service contracts Commitments under office rental agreements Total capital commitments

Company 2005 2004 Million Baht Million Baht

276

1,371

263

1,290

110 17

136 52

110 17

136 52

10 413

15 1,574

8 398

15 1,493

Contingent liabilities in respect of bank guarantees (Note 4)

24

53

13

53

Contingent liabilities in respect of guarantees

10

-

10

-

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.

Annual Report 2005

Noble Development Public Company Limited

72


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).

28 Segment information Financial information by business segments 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 Segment results Interest income Other income Unallocated costs Operating profit Interest expenses Income tax (Note 21) Profit before minority interest Net loss of subsidiary attributable to minority interest (Note 16) Net profit for the year

2,457,775

106

48,016

2,505,897

971,615

106

22,298

994,019 15,945 6,200 (418,090) 598,074 (38,492) (112,554) 447,028 9,406 456,434

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 Segment results Interest income Other income Unallocated costs Operating profit Interest expenses Income tax (Note 21) Profit before minority interest Net loss of subsidiary attributable to minority interest (Note 16) Net profit for the year

Annual Report 2005

1,719,367

50,854

-

1,770,221

692,907

12,045

-

704,952 12,757 34,417 (424,572) 327,554 (5,159) 11,642 334,037

Noble Development Public Company Limited

571 334,608

73


28 Segment information (Continued) 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 Unallocated liabilities Consolidated total liabilities Capital expenditure Unallocated total capital expenditure Consolidated total capital expenditure Depreciation and amortisation Unallocated depreciation and amortisation Consolidated total depreciation and amortisation

2,365,272 2,698,627

4,105

16,902

8,333

9,005

17,377

17,050

23,732

7,503 2,406,381 68,041 2,474,422

-

-

49,353

5,766

3

161

8,434

109

2,723,180 38,269 2,761,449

53,458

14,099

-

-

53,458

14,099

25,339

9,275

-

-

25,339

9,275

The Group operates only in Thailand. Therefore, no geographical segmental information is presented as secondary information.

Annual Report 2005

Noble Development Public Company Limited

74


Noble 05