Annual Report 2019
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ANNUAL REPORT 2019 A N N U A L R E P O R T 2 0 1 9 ANNUAL REPORT 2019 Message from Chairman On behalf of the Board of Directors, the executives and employees of Noble Development Public Company Limited (the Company), I am delighted to present the results of an outstanding year. 2019 was the first year whereby the Company operated under a new group of majority shareholders, along with a new team of the Board of Directors as well as senior executives. This has led to a change in the vision, mission and set of business strategies that has set the Company towards sustainable development and growth, and which has resulted in the Company generating in excess of ten billion Baht in revenue for the first time since its establishment. In the past year, the Company and its subsidiaries generated revenue of 15,038.5 million Baht and net profits of 3,071.2 million Baht, which is the highest revenue and net profit of the Company since its founding. A closer look at the operating results of 2019 reflects the Company’s new business strategy which focus on enhancement of the corporate management to be more flexible combined with a strong focus on optimizing shareholder value with the goal of maximizing Return on Equity. The Company focused on increasing sales of completed projects which are ready for transfer; strong sales of such inventory has allowed the Company to immediately recognized revenue, as well as improve liquidity cashflow and free up equity for redeployment. Furthermore, the Company has sold some low yielding assets, such as land plots located in areas which is not aligned with the Company’s business plan, office building space, as well as retail space generating low rental returns income. The cashflow from divestment of such assets enabled us to re-invest in new projects with superior returns, thus allowing the Company to generate higher returns on invested caital with lower asset concentration. Another contributing factor to the Company’s success in the previous year was the strong sales achieved from foreign customers, with the result of the Company ending the year as the market share leader in overseas sales of condominiums in Bangkok. This success was a consequence of the Company’s partnership with a new shareholder, nCrowne Pte. Ltd, a subsidiary of Fulcrum Global Capital which is wholly owned by Mr. Frank Leung. The company specializes in international market expansion, and has been instrumental in the Company achieving overseas sales in excess of 3,500 million Baht, which is an increase of 40% compared to 2018. Moreover, the Company’s strong presence in the overseas market has helped to mitigate against the risks of the domestic market conditions, which has been stifled by a slowdown in the economy, highhousehold debt, property loan restrictions imposed by the Bank of Thailand, as well as external factors such as a strong currency and the effects of the US-China trade war which has led to a decline in exports. As a result of the Company’s ANNUAL REPORT 2019 co-operation with Fulcrum Global Capital, the Company was able to achieve its’ goal amidst the backdrop of a slowing domestic market. In addition to cooperation with Fulcrum Global Capital, BTS Group Holdings Public Company Limited (BTS) became another new shareholder of the Company in April, 2019. There are several areas in which the Company may collaborate with BTS, including the co-development of real estate projects in close proximity to BTS stations. This co-operation will provide the Company many opportunities to expand its investment in new areas along the ever growing BTS infrastructure backbone. Looking forward to 2020, the Company aims at maintain its position as a property developer with annual sales exceeding ten billion Baht. Despite more challenges in real estate business, the Company has backlog of 17,064 million Baht which will be recognized as revenue over the next few years thus providing the financial stability and revenue baseline from which the the Company can further build upon. Also, the Company plans to record annual pre-sale in an amount exceeding ten billion Baht. In 2020, 7 new projects with total value in excess of 23,000 million Baht are to be launched in several promising locations, including urban areas which are extensions from the existing Noble positioning with prices ranges between 150,000 – 300,000 Baht per square meter. These locations include Sukhumvit Road, Thong Lo Alley, Ruamrudee Alley, and Wireless Road. In addition, there will be projects in new locations under the concept NUE Brand which will be target customers segments at price ranges between 80,000 – 150,000 Baht per square meter. I am certain that the NUE Brand will be an interesting proposition to a growing segment of customers, combining Noble’s original concept of modern designs for different lifestyles with excellent accessibility with projects located in prime sites along the BTS infrastructure. For new super luxury projects priced over 300,000 Baht per square meter, the Company has also set new milestones through the establishment of a Joint Venture with Hongkong Land, a key strategic partner with strong regional presence, to develop a super luxury condominium project on Wireless Road. It is expected that the project will be worth ten billion Baht and provide another growth engine for the Company as it develops its’ capabilities in collaborative project management. I strongly believe that Noble in the modern world will need to be managed proactively, where rapid decision making and a stakeholder mentality will be critical in a dyanmic operating environment. The Company realizes the importance of reorganization to meet the rapidly changing environment and as such implemented the Partnership Program which is a compensation system focused on creating a sense of participation and aligning incentives to mid management who plays a key part in the execution of the strategic decisions of the Company. I believe that this program will allow the successful execution of the Company’s strategy so as to ensure sustainable growth and maximize shareholdere and stakeholder value in the long run. ANNUAL REPORT 2019 I would like to express my gratitude to our employees for their dedication which has led to the Company’s extraordinary success in 2019. Finally, I, on behalf of Noble Development Public Company Limited, our Board of Directors, executives, and employees, would like to thank all shareholders, customers, financial institutions, business partners and the media for your continued trust and support. We hope to remain your trusted partner and count on your support in the many years to come. Thongchai Busrapan Chairman Noble Development Public Co., Ltd. ANNUAL REPORT 2019 CONTENT 1 01 Company Overview 1 02 Business Characters 7 03 Risk Factors 22 04 Company Factsheet 30 05 Shareholders 40 06 Dividend Policy 41 07 Management Structure 42 • Details of Company’s Directors, Executive Officers, Authorized Person and 53 Company Secretary • Details of subsidiaries and associated companies’ Directors 72 08 Corporate Governance 73 09 Corporate Social Responsibilities 115 10 Internal Control and Risk Management 121 • The Audit Committee’s Report 125 • The Nomination Committee’s Report 128 • The Remuneration Committee’s Report 129 • The Risk Management Committee’s Report 130 • The Corporate Governance Committee’s Report 131 11 Connected Transaction 132 12 Financial Highlights 135 13 Management Discussion and Analysis 137 14 Report of The Board of Directors’ Responsibilities for Financial Reporting 144 2 01 Independent Auditor’s Report 02 Consolidated and Company Statements of Financial Position 6 03 Consolidated and Company Statements of Comprehensive Income. 8 04 Consolidated and Company Statements of Changes in Equity 9 05 Consolidated and Company Statements of Cash Flows 11 06 Notes to the Consolidated and Separate Financial Statements 13 “Investors can learn more on the information of the issuing company from the annual statement (Form 56-1) of the company which are listed on www.sec.or.th or the company’s website (if available)” ANNUAL REPORT 2019 PART 1 ANNUAL REPORT 2019 1 COMPANY OVERVIEW The core business of Noble Development Public Company Limited and its subsidiaries is property development, composed of various types of residential projects such as land plot, single detached houses, townhouses, low rise and high-rise condominiums. The Company aims to offer exceptional design living and creative innovation to satisfy customers various desires as an alternative option. 2019 brought a considerable change to Noble since the shareholders have been changed to Mr. Thongchai Busrapan, nCrowne Pte. Ltd, a subsidiary of Fulcrum Global Capital which is wholly owned by Mr.Frank Fung Kuen Leung and BTS Group Holdings Public Company Limited, which share the common goal in business development to expand the stable and modern real estate development in accordance with the vision and mission determined by Noble. Vision We do not build houses, we create homes. We set the new paradigm in property development, with our goal to enhance the living experience of each individual who become our clients. We will be uniquely modern and iconic, go above and beyond our boundary to reach the exciting new world, and always keep reinventing ourselves to make the world a better place than it was yesterday. Mission • We develop our residential projects from affordable to high-end, we will expand internationally. • We surprise our clients with unexpected design and uniqueness with the highest quality that bring them a sense of pride to be proud member of noble community. • We treat and take care of our employees as our own family. We listen to their voice and ideas. We empower them to be both outstanding team leader and strongest team player.