Annual Report Asian Property Development Public Company Limited

Transcription

1 Annual Report 2005 Asian Property Development Public Company Limited

2 Highlight of World Class Metropolis

3 C ontents Message from the CEO 2 Economic Outlook 4 Property Market Outlook 6 AP Projects Board Of Director 16 Executive Board 18 Pride and achievements 20 Company Background 22 Business Structure 23 Risk Factors Financial Result 28 Shareholding Structure and the Management 32 Supervision of the use of insider information 52 Policy on corporate governance 55 Directors' Report on Financial Statement 60 Report of the Audit Committee 61 Auditor's Report and Financial Statements 63 Balance Sheets 64 Notes to Financial Statement 75 Company Information 101

4 Message from the CEO Dear Shareholders, Throughout 2005, the Thai economy in general and the property sector in particular were affected by a number factors from soaring oil prices and rising interest rates to other domestic problems such as bird flu, drought, Tsunami and unrest in the deep South. As a result, the overall economy and the property market showed the sign of slow down when compared to the year before. However, the past year also witnessed an intense competition in the property market as the key players intensified their investments and other developers sought to maintain their market shares. The Asian Property Development Public Company Limited has been conservative for both strategic management and operation for recent years, given the highly business competitive nature in this field. The company thus continues the conservative financial strategy and control as seen from the net debt-to-equity ratio as one per one basis, with high presales to be recognized as revenues to expansion of companyûs growth. The company continues to improve our products and services in line with the demands from consumers. AP also lauches various new projects with diverse of products and services, in line with our marketing campaigns to strengthening our competitiveness. In 2005, the Company launched 7 new residential projects from detached houses to town houses to condominiums. Thanks to the overwhelming response from the customers, our sales booking grew markedly compared to the year before. However, as most of the projects were Annual Report

5 launched at the end of the year, meaning that most of sales backlog would be recognized as an income in the first half of Last year, the Company also emphasized the improvement of our personnelûs efficiency and competitiveness by focusing on the staffûs training. In 2006, as the Company plans to launch many new projects, we internally need to improve its operation in the areas of information technology, working process and personnel. In the light of intensifying competition in the property market, we see the need to train our staff to better understand and commit themselves to the Companyûs values and objectives. In addition, the Company will continue to develop and improve our products to meet the needs of the customers. In so doing, we should be in a better position to maintain our market share and growth. Allow me to report to you with great pleasure that in 2005 the Company was honoured with two prestigious awards namely the Great Improvement Corporate Governance Report presented by the Stock Exchange of Thailand (SET) and the Asiaûs Best Managed Companies in Thailand (Small Enterprise category) from ASIA MONEY, a world's leading magazine on economics and finance. On behalf of the management of Asian Property Development Public Company Limited, I would like to take this opportunity to thank you all very much for your continued support throughout the past year. Anuphong Assavabhokhin Chief Executive Officer Annual Report

6 Economic Outlook The Thai economy in 2005, as predicted by the Office of National Economic and Social Development Board (NESDB) was expected to grow at an approximate rate of 4.7 % down from 6.1 % in The downward trend was manifest in the first half of the year due to a number of negative factors from soaring oil prices, drought and Tsunami to bird flu, rising interest rates and unrest in the restive South. As a result, the consumer confidence had declined, the private investment and export slowed down. Meanwhile, the sharp increase in import volume due to rising oil prices led to trade and balance account deficits estimated at 7.6 and 3.2 billion US dollar respectively. However, the second half of the year witnessed the improving economic sentiment thanks to such positive factors as rising GDP, decreasing oil prices, recovering tourism industry and growing export. The rising oil prices also drove the inflation in 2005 to 4.5 %, a sharp increase from 2.7 % in the year before. This has prompted the government to raise the interest rates to curb the inflation. Throughout 2005, the Bank of Thailand hiked the interest rates five times in a row resulting in the RP (Repurchase Rate) - 14 day rate being at 3.75 %. In 2006, the interest rates are expected to remain on the slightly upward trend to maintain the economic stability. Annual Report

7 In 2006, the economy is forecasted to grow at the approximate rate of % due in large part to the government and private investments particularly the so-called çmega Projectsé, that will spur large-scale expenses and budget reimbursement. The private investment is also expected to increase as last yearûs productivity had reached its capacity. Besides, such positive factors as the improving agricultural sector in terms of price and production, the upward trend in export especially in agricultural produce, foods, automobile and electronics, and the recovering tourism industry continue to be the main driving force of 2006 economy. However, the Thai economy in 2006 is still possibly subject to both internal and external adverse factors from the slow down in the world economy, the relatively high oil prices and the continued upward trend of inflation to high interest rates, the bird flu and the unrest in the restive South. These factors will continue to put pressure on the future growth of Thai economy. Thus, the government as well as the private sector should take into account these factors and implement any necessary policy and measures to ensure the sustainable economic stability. Annual Report

8 Property Market Outlook In line with the growth of national economy, the property market in 2005 continued to grow despite all the negative factors from the soaring oil prices (particularly in the second quarter when the government allowed the petrol price to float) and the increasing interest rates to the bird flu and unrest in the restive South. Overall, it could very well be said that the property market in the past year still registered a healthy growth. As a result, the new housing registration in Bangkok and its vicinities in 2005 reached 63,899 units, up from 62,796 units or 1.76 % increase from the same period of last year. The record can be broken down as follows: 44,436 units of single detached houses(0.42 % increase), 13,455 units of townhouses (0.18 % decrease), and 6,008 units of condominiums ( % increase). The highest growth rate was in the condominium sector as many projects that had been launched a few years earlier were now completed. Throughout 2005, the competition in the property business was intense, as key players had entered the market while small and medium developers were under pressure both in terms of capital availability and competitiveness. As the commercial banks tightened their credit lending policy, the increasing number of small and medium developers was forced to drop out of the race; hence the tough competition among big players. The competition got even fiercer as the developers sought to develop new products to attract their target Annual Report

9 customers and relied more on sales promotion strategies, while the financial institutions relentlessly vied for mortgage-seeking homebuyers. In light of the intensifying competition, the developers - unable to share most of the higher costs from rising construction materials price as a result of soaring oil price and spending in sales promotions with the customers - had to come up with the cost-effective management had they not wanted to see their profit plunging. In 2005, the top new projects launch in terms of value were single detached houses, condominiums and townhouses respectively. Meanwhile, the price range between 3-5 million baht came first compared to the 10 million baht plus of the year before. The trend toward lower price range was attributed to a number of factors, the most important being the soaring oil price that directly affected the construction cost and hence the higher property price. In addition, the increasing interest rate also took its toll on the consumersû purchasing power. Last but not least, there was clearly an oversupply in medium to high-end detached houses, many of which had been launched throughout Taking these factors into account, many developers in 2005 decided to opt for lower price range projects to match with the consumersû lower purchasing power. Such being the case, throughout 2005, the highest new project launches - in terms of units volume - were condominiums and Annual Report

10 especially with the price range of 1-2 million baht per unit. This was very much owing to the changing lifestyle of urban citizen. As the modern mass transportation such as skytrain and underground has made the commutes more convenient, many consumers have increasingly switched to high-rise city lifestyle in condominiums. Going forward, the property market in Thailand still has a lot of potential for growth and expansion both in terms of demand and supply. The demand is unlikely to dry up as long as the economy continues to grow healthily with low unemployment rate and the consumers have the power to spend - albeit somewhat lower due to increasing interest rates and higher price of goods. In terms of supply, the competition mainly from large players in the property market is expected to be intense still in all segments from single detached houses to townhouses and condominiums. Increasingly, the developers will focus more on the low-end to medium residential projects, as there is still a lot of demand for lower priced units. The expansion of the mass transportation system will help distribute the çproductsé to the suburban areas. Thus, the developers withthe çrighté products will have the advantage in the race. Annual Report

11 V ienna The center of music The luxurious design of architecture As the city of fairly tales where beauty just beyond our imagination Baan Klang Krung Grand Vienna Rama 3 Annual Report

12 AP Projects 2005 The Big City Bring you to civilize Baan Klang Krung Grand Vienna - Rama 3 Baan Klang Muang The Paris - Ratchavibha ß πª ªï

13 Baan Klang Krung Office Park - Ladprao 71 Baan Klang Muang The Notting Hill Srinakarin ß πª ªï

14 Baan Klang Krung Siam - Patumwan Baan Klang Muang Grand De Paris - Ratchada ß πª ªï

15 The City Pinklao - Rama 5 Baan Klang Muang Monte-carlo - Ratchavibha ß πª ªï

16 Baan Klang Krung The Nice (France) Ratchavibha Baan Klang Muang Luzern - Sukhumvit ß πª ªï

17 N ice The city of Mediterraneanûs wind and sea Full of scents bathing in the warmth of memory Simple yet romantic, the great of love is waiting to happen Baan Klang Krung, The Nice (France) Ratchavibha 2005 Annual Report 15

18 Board Of Directors 1. Mr. Chatchaval Bhanalaph 2. Mr. Anuphong Assavabhokhin 3. Mr. Payont Sakdejyont 4. Mr. Pichet Vipavasuphakorn Chairman of Board Vice Chairman Vice Chairman Director and Managing Director and Chairman of Audit Committee and Chief Executive Officer 5. Mr. Pong Sarasin 6. Mr. Chaiyarat Thampeera 7. Mr. Jaroonsak Buntoonginda Director Director Director Annual Report

19 8. Mr. Shaw Sinhaseni 9. Dr. Naris Chaiyasoot 10. Mr. Vilas Pilakasiri Director Director Director and Board Secretary 11. Mr. Kosol Suriyaporn 12. Mr. Nontachit Tulayanonda 13. Mr. Siripong Sombutsiri Director and Audit Director Director and Audit Director Director and Audit Director Annual Report

20 Executive Board 1. Mr. Anuphong Assavabhokhin 2. Mr. Pichet Vipavasuphakorn 3. Mr. Jaroonsak Buntoonginda 4. Mr. Wason Naruenatpaisan Vice Chairman Director and Managing Director Senior Executive Vice President, Senior Executive Vice President, and Chief Executive Officer Project Group 1 Project Group 2 5. Mr. Visanu Suchatlumpong 6. Ms. Kittiya Pongpuchaneekul 7. Mr. Opas Ruangrajitpakorn Senior Executive Vice President, Senior Executive Vice President, Senior Executive Vice President, Project Group 3 Accounting Finance Annual Report

21 8. Mr. Piyawat Suepaisarn 9. Mr. Chaiyayuth Thampeera 10. Mr. Thongchai Jaraskulchai Executive Vice President, Senior Vice President, Senior Vice President, Project Group 1 Project Group 3 Project Development 11. Mr. Pumipat Sinacharoen 12. Mr. Kowit Kokilakanistha 13. Mr. Siriwat Wiwatsakulcharoen Senior Vice President, Vice President, Legal Affairs Vice President, Human Resources Corporate Planning and Investor Relations Annual Report

22 Pride and achievements The Asian Property Develepment Public Company Limited, prides itself as being the leading institution in this industry, with the endorsement of two awards that the com pany recieved. The awards signified an achievement, which committed by all efforts of all branches from the company. Asiaûs Best Managed Companies Voted by ASIAMONEY, one of the world's leading business magazines, as the best company in Asia for management. Best Corporate Governance Report Award being given to the listed company with the best compliance to the 15 rules and regulations stipulated by the Securities Exchange of Thailand We are determined to build the stability and ever strengthening the foundation of our enterprise, and prepare ourselves to become the leader for the property development enterprise in the country. Annual Report

23 And the achievement award to Mr. Anuphong Assavabhokin,CEO of Asian Property Development PCL.(AP) who has received the best CEO Award of Asia in the field of Property Development (sell side view ) from the leading Global Finance and Investment Journal-Institutional Investor of UK. This award is based on the outstanding performance of Mr. Anuphong's management of Asian Property Development PCL especially in the area of discloser of investor information and business strategy, and is the result of an extensive survey conducted amongst sellside analysis and investment professional in the global finance and investment industry Best CEO Property Sell-side view Award being given by the Institutional Investor to the CEO of the Asian Property Development, Mr. Anuphong Assavabhokhin. Annual Report

24 Company Background Asian Property Development Public Company Limited ("the Company") combined with its nine subsidiaries is an integrated property firm engaging primarily in property development for sales. The Company's nine subsidiaries are listed below: (1) Asian Property Co., Ltd. (2) Asian Property Residence Co., Ltd. (currently with no business activities) (3) Asian Property (Lad Phrao) Co., Ltd. (4) Asian Property (Krungthep) Co., Ltd. (5) Asian Property (Ratchavipa) Co., Ltd. (6) Asian Property (Thonglor) Co., Ltd. (7) Thonglor Residence Co., Ltd. (currently with no business activities) (8) Signature Advisory Partners Co., Ltd. (9) Trillion Development Co., Ltd. Our residential projects - under such brand names as Baan Klang Krung, Baan Klang Muang, and The City - that have been developed by the Company and its subsidiaries include townhouse, single detached houses and condominiums. The Company's business policy focuses on developing modern-style residential projects in the city and business locations, where public and other means of transportation are convenient. In addition, one of the Company's subsidiaries, Trillion Development Co., Ltd. (with Asian Property Development Public Company Limited holding 99.99% stake as of September 6, 2005) has developed pre-fabricated construction technology for townhouse project. Aiming to penetrate the property segment with the price range between 800,000 and 1,2000,000 baht - a totally different target from that of Asian Property Development Public Company Limited - Trillion Development Co., Ltd. has launched its first project with the kick-off of sales since the first quarter of In addition, the company holds more than 99% of the Bangkok City Smart Company Limited, the subsidiary company that operates in real estate development agency. Other Businesses Company Proportion of stake holding Type of business Asian Property Holding Co., Ltd % No business activities Pre-Built Public Co., Ltd % Contractor Quality Construction Products 14.97% Manufacture and distribute Public Co., Ltd. light- weight concrete material City Asset Fund 99.84% property and loan fund ; Currently own the building, RS Tower Thonglor Annual Report

25 Business Structure Property Development Asian Property Co., Ltd. 100% Asian Property Residence Co., Ltd. 100% Asian Property (Lad Phrao) Co., Ltd. 100% Asian Property Holding Co., Ltd. 100% Asian Property (Krungthep) Co., Ltd. 100% Asian Property (Thonglor) Co., Ltd. 100% ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED Thonglor Residence Co., Ltd. 100% Asian Property (Ratchavipa) Co., Ltd % Signature Advisory Partners Co., Ltd. 100% Trillion Development Co., Ltd. 100% Bangkok CitiSmart Co., Ltd. 100% Other Businesses City Asset Fund 99.84% Pre Built Public Co., Ltd % PCM Construction Material Co., Ltd. 100% Quality Construction Products 14.97% Annual Report

26 Risk Factors 1. Risk factors from business operations Risks derived from economic fluctuations Due to the economic downturn that caused companies under the real estate development sectors to fall from the expected growth forecast in the past, and as the overall economy begin to pick up in a considerable degrees, and as to heighten the brandûs credibility and maintaining market shares, the company is prepared to improve its products and services fitting to the consumerû needs as ever. And to expand the customer base as much as possible, this in effect will help a company to minimize the risk that may occur. 2. Risks from the production and service areas Risks from the cost of construction materials When company initiated a new project, construction costs could rise to the effect, causing companyûs profit margin to be lower than expected. Generally, the company sets the selling prices in advance in order that prospects or customers could place the purchase before the completion of construction and then transfer of the booked unit to customer as the full ownership when construction completed. However, the company has tried to reduce the unexpected rise of costs from the risk associated with construction materials by trying to facilitate the project to have finished as soon as possible. The company has planned that the timetable for the project, started from the land acquisition, selling of the last unit, and until the completion of the construction, sets to be finished within or 2 years. This is meant to shorten the construction period of each project, which will help the company to estimate its budget and the cost of construction materials more efficiency and accurately. It will also help to reduce the fluctuation of the companyûs cost of construction materials. At the same time, the company has also tried to settle the contract deals on prices and the quantity of construction materials and sanitary wares with the manufactures/suppliers end as much as possible before setting the selling price for each project. Moreover, due to companyûs high project values, which range between 500 to 3,000 million bath per project, it has virtually allowed the company to have bargaining power with construction contracts and material suppliers in favor to the company. This in effect has enabled the company to experience lesser risk exposure. 3. Financial risks Risks derived from customerûs payment delinquency The company and its subsidiaries had account receivables and trade receipts as of December 31, 2005 at the total of million baht. Account Receivables were classified by overdue as following: Annual Report

27 Property Development Manufacturing and Distributing Precast Floors Unit: million baht Total Less than 3 months More than 3 to 6 months More than 6 to 12 months More than 12 months Total Overdue which is longer than 12 months amounted to million baht, are of receivables from the construction materials production and distribution businesses, prior being merged with the Asian Property Company Limited in This was the result of the economic downturn from the 1997 of the baht devaluation. The following effect had caused most borrowers and their inability to repay debts, which amounted to 99.53% of account receivables and all trade receipts. And the company faced risks that the debts may not be paid back. However, the company has already set up a provision of million baht to counter the debt delinquency, which were debts incurred prior the financial crisis. However, the company has undertaken the tasks to evaluate customerûs needs and customersû financial status prior the project being launched. This in effect helped the company to plan the sell more efficiency and timely. It also helps to reduce the risk of unpaid loans, as recently the number of unpaid loans of more than 12 months had been reduced substantially. The risks of guaranteeing liabilities for subsidiaries and related companies The company and its subsidiaries have guaranteed loans for their subsidiaries and other related companies as summarized in the following table. As a result the company and subsidiaries are exposed to risk of being liable to creditors in case that the guaranteed debtors cannot repay their debt on time. This will affect the companyûs and subsidiariesû performance and financial status. However, given the better performance, the company believes that the guaranteed would be able to repay their own debts. Annual Report

28 Table summarized guaranteed loans for their subsidiaries and other related companies The Guarantor The Guaranteed The amount of guaranteed as of (million baht) Progress Financial Status Company Company % Guaranteed 31 December December 2004 Shareholders' equity (million baht) APD APL Guaranteeing overdue account 31 Dec 2004 accounted to Dec 2005 accounts to APD APK , Guaranteeing overdue account partially 31 Dec 2004 accounted to and the other loans, repaying to creditors 31 Dec 2005 accounted to by installment on schedule APD APV , , Guaranteeing overdue account partially 31 Dec 2004 accounted to and the other loans, repaying to creditors 31 Dec 2005 accounted to by installment on schedule APD APT Guaranteeing overdue account partially 31 Dec 2004 accounted to (0.15) and the other loan, repaying to creditors 31 Dec 2005 accounted to by installment on schedule APD Trillion Guaranteeing the other loans, repaying to 31 Dec 2004 accounted to creditors by installment on schedule 31 Dec 2005 accounted to APD PB Guaranteeing the other loans, repaying to 31 Dec 2004 accounted to creditors by installment on schedule 31 Dec 2005 accounted to AP PB Guaranteeing the other loans, repaying to 31 Dec 2004 accounted to creditors by installment on schedule 31 Dec 2005 accounted to APD PCMC Guaranteeing the other loans, repaying to 31 Dec 2004 accounted to creditors by installment on schedule 31 Dec 2005 accounted to AP APD Guaranteeing overdue account partially 31 Dec 2004 accounted to 4, and the other loans, repaying to creditors 31 Dec 2005 accounted to 3, by installment on schedule AP APR Guaranteeing overdue account 31 Dec 2004 accounted to Dec 2005 accounted to 6.51 AP APL Guaranteeing overdue account 31 Dec 2004 accounted to Dec 2005 accounted to APD = Asian Property Development Plc. AP = Asian Property Co., Ltd. APL = Asian Property (Lardphraso) Co., Ltd. APV = Asia Property (Ratchavipa) Co., Ltd. APR = Asian Property Resident Co., Ltd. APK = Asian Property (Krungthep) Co., Ltd. PB = Pre Built Plc. APT = Asian Property (Thonglor) Co., Ltd. Trillion = Trillion Development Co., Ltd. PCMC = PCM Construction Materials Co., Ltd. *The guaranteed amount based on the ratios from shareholding excluding the guaranteed PCMCûs loan by APD, for which the guaranteed loan stipulated by APD who held 100% of PCMC in accordance with the previous shareholding structure. The guaranteed loans from the company and for their subsidiaries and other related companies to Pre Built Plc, and PCM Construction Materials Co., Ltd. would be ceased when Pre Built Plc listed in the Stock Exchange of Thailand. Annual Report

29 4. The risks from stocks investment The risks of warrant investment The risks of Time Value from the warrant investment The company will adjust the conversion prices and the conversion ratio throughout the warrant period as specified in the conversion conditions in the prospectus for the existing shareholders. However, the conversion procedures take into account only conversion price and conversion ratio on the specified conversion day only, without having taken into account of the time value of the warrants. And the warrantsû time value will reduce when the validity period of the warrants decrease. Also, if the company offers warrants or new warrants being issued in the future, holders of the new offered warrants after the adjustment might lessen the exercise of rights and the benefits for holders. However, as of the 31 st of December 2005, the total numbers of warrants which have not yet been exercised were 3,097,380 units. And such warrants will expire on the March 12, The risks of warrant exercise price adjustment, which would cause the warrantûs value to be lower than the companyûs common sharesû prices In the case that the adjustment of conversion price and conversion ratio as specified in the conversion condition in the prospectus caused any change in conversion prices, and the new conversion price could lower than the par value of common shares, the company will use the rate of the new conversion price. However, it shall not do so, if the law forbids the company from issuing shares with the price lower than the par value of the companyûs common shares as new conversion price. This would prompt warrant holders to have lower right and interest. The risks of the dilution effect Due to the company has set aside common shares to accommodate warrant conversion in accordance to the companyûs warrants for 34,000,000 shares, at the par value at 3.60 baht per share. This will in effect make the impact to the profit sharing or control dilution. Thus the ratio of dilution effect depends on warrant conversion of warrant holders. Annual Report

30 2005 Financial Result Asian Property Development Public Company Limited (AP.BK / AP TB) released the 2005 net profit of 765 million Baht (EPS of 0.34 Baht/share), down 30.3% from the previous year. Consolidated revenues came at 5,258 million Baht, which the property development and construction material business accounted for 85% and 15% respectively. Note that AP has no longer consolidated Pre Built Plc. (contractor and construction material manufacturer) into its financial statements since September Apart from our non-core business, the property development in 2005 generated revenues of 4,490 million Baht, however, down 6.3% year-on-year, with gross margin of 34.5%. Figure 1 Net Profit (million Baht) 1,300 1,200 1,100 1, , The reason of a decline in property revenues in 2005 was due mainly to most of our projects being launched in late Q4 2005, suggesting that the company was not able to transfer and recognize income within December 2005 although we could achieve strong sales booking. As a result, we left a high backlog of 4,940 million Baht as of December 2005 to be transferred and recognized as an income in the future (of which approximately 2,600 million Baht sales came from the condominium project - Baan Klang Krung (Siam - Patumwan) expectedly completed in 2007). In summary, a drop in 2005 net profit reflected lower revenues, an overall gross margin decline from 34.9% to 32.0% and an increase of effective tax rate from 22.5% to 26.0%. In addition, total SG&A expenses in 2005 were 13.5% of consolidated revenues while SG&A of the residential property was still in line with our budget at 14.3% of property revenues. 1, The top three projects contributed to our residential development revenues in 2005 were - CitiSmart Condo (Sukhumvit 18) 18% - Baan Klang Muang (British Town Srinakarin) 16% - Baan Klang Muang (The Paris Ratchavibha) 15% Annual Report

31 Figure 2 Breakdown of Property Development Revenues by projects in 2005 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES Other 12% Baan Klang Muang (Ladprao 71) Baan Klang Muang 4% (Grand de Paris) 5% Baan Klang Muang (The Paris Ratchavibha) 15% Sydney Office Park 6% Baan Klang Muang (Rama9 - Ladprao) 9% CitiSmart Condo (Sukhumvit 18) 18% Baan Klang Muang (British Town Srinakarin) 16% The City (Rama 5 - Pinkao) 10 % The City (Pinklao) 5 % On the balance sheet side, a slump in Q-CON s share prices continued to lower the unrealized gain (14.97% holding) under our shareholders equity to only 29 million Baht as of December 2005, compared to 684 million Baht at the end of 2004 and 97 million Baht as of Q Net debt of 4,787 million Baht also drove the net debt to equity to 1.2x as of December Nonetheless, we expect the significant sales backlog currently to pull down the gearing going forward. Figure 3 Quarterly Net Debt to Equity Ratio (x) Q Q Q Q Q Q Q Q Annual Report

32 Figure 4 Financial summary Revenues from Property Development (Btm) 4,490 4,793 4,312 2,408 1,052 YoY Chg (%) -6.3% 11.2% 79.0% 128.9% 120.1% Consolidated Revenues (Btm) 5,258 5,740 4,757 2,701 1,281 YoY Chg (%) -8.4% 20.7% 76.1% 110.8% 88.6% Gross profit from Property Development (Btm) 1,551 1,821 1, Gross margin from Property (%) 34.5% 38.0% 38.8% 37.3% 37.4% Overall Gross profit (Btm) 1,683 2,004 1, Gross margin (%) 32.0% 34.9% 37.2% 36.8% 34.1% Operating profit (Btm) 976 1,369 1, Operating margin (%) 18.6% 23.9% 30.3% 27.6% 22.0% Net Profit (Btm) 765 1,097 1, YoY Chg (%) -30.3% -7.9% 73.2% 160.0% 334.3% EPS (Bt) Total assets (Btm) 10,291 9,247 6,620 3,586 2,198 Equity (Btm) 3,983 4,266 3,325 1, Outstanding debt (Btm) 5,303 4,030 2,471 1,464 1,058 Net debt (Btm) 4,787 3,322 1,507 1, Net debt to equity (x) ROE (%) (average equity) 18.5% 28.9% 47.4% 52.2% 34.8% Annual Report

33 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES Figure 5 Ongoing projects Project No. of value Complation % sold Type Rai units (Btm) Launch year (last unit transferred) (in values) Place & Park SDH N/A The City (Rama 5 - Pinklao) SDH ,700 Q Q % The City (Pinklao) SDH Q Q % Baan Klang Muang (British Town Srinakarin) TH ,630 Q Q % Baan Klang Muang(Siam - Patumwan) Condo ,700 Q Q % Baan Klang Muang (The Paris Ratchavibha) TH Q Q % Sydney Office Park (Ladpao 71) TH Q Q % Baan Klang Muang (Grand De Paris Ratchada) TH Q Q % Baan Klang Krung (Grand Vienna RamaIII) TH ,400 Q Q % Baan Klang Krung (Grand Vienna RamaIII) SDH Q Q % Baan Klang Krung (Luzern On-nut 46) TH Q Q % Note: % sold as of 31 December 2005 Figure 6 Projects in the pipeline (planned to be launched) Project No. of value Land Completion Type Rai units (Btm) acquisition Launch year (last unit transferred) Baan Klang Muang ( Monte-carlo Ratchavibha) TH ,273 Q Q Q Baan Klang Krung (The Nice Ratchavibha) SDH Q Q Q Klang Krung Office Park (San Francisco Bangna) TH ,040 Q Q Q Baan Klang Krung (Ratchayotin) TH Q Q Q Baan Klang Krung (Ratchayotin) SDH Q Q Q Baan Klang Krung (Siam - Patumwan) II Condo ,100 Q Q Q Baan Klang Muang (Srinakarin - Anamai) TH Q Q Q Baan Klang Muang (Kaset Navamin) TH Q Q Q Baan Klang Muang (Krungthep Kreeta) TH Q Q Q Total planned-to-be-launched projects 179 1,640 7,933 Note: 1 rai = 0.4 acres = 400 sq.w. = 1,600 sq.m., * SDH = Single Detached Houses, TH = Townhouses Annual Report

34 Shareholding Structure and the Management As of December 31, 2005, the Company had its registered capital at 2,343,150,000 baht or 2,343,150,000 shares with the par value of 1 baht per share. The paid-up capital was 2,271,902,620 baht or 2,271,902,620 shares with the par value of 1 baht each. Top Ten shareholders as of the register book closing on February 8, 2006 Rank Individual/Juristic person No. of Shares Percentage of holding in all sold shares 1. MR. ANUPHONG ASSAVABHOKHIN 552,823, THAI NVDR CO., LTD. 391,849, MR. PICHET VIPAVASUPHAKORN 273,719, STATE STREET BANK AND TRUST COMPANY, FOR LONDON 85,165, STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA 58,536, STATE STREET BANK AND TRUST COMPANY 52,540, FORTIS GLOBAL CUSTODY SERVICE N.V 39,395, CHASE NOMINEES LIMITED 46 36,506, MR. CHANCHAI KRAIRITTCHAI 35,770, CHASE MANHATTAN (SINGAPORE) NOMINEES PTE LIMITED 13 34,496, Total 1,560,804, Dividend payment policy The company has a policy to pay dividend to its shareholders for the amount of not more than 50% of its net profit for each year. To consider the payments, the following factors are to be taken into considerations: companyûs operating results and financial position, liquidity, expansion plans and other related factors. Dividend payments are subjected to the approval by companyûs board of directors and shareholders. For the performance in 2003 and 2004, the company paid dividend at approximately 40% of net profit. Annual Report

35 Management The Management Structure Chief Executive Officer Managing Director Project Group 1 Project Group 2 Project Group 3 Accounting Department Finance Department Marketing and Planning Department Call Center Department IT Department Project Developement Goverment Coordination Corporate Planning and Investor Relations Legal Affairs Department Human Resources Department The Board of Directors The board of directors consists of 13 numbers including 6 independent directors Name Position 1. Mr. Chatchaval Bhanalaph Chaiman of Board and Chairman of Audit Committee 2. Mr. Anuphong Assavabhokhin Vice Chariman and Chief Executive Officer 3. Mr. Payont Sakdejyont Vice Chairman 4. Mr. Pichet Vipavasuphakorn Director and Managing Director 5. Mr. Pong Sarasin Director 6. Mr. Chaiyarat Thampeera Director 7. Mr. Jaroonsak Buntoonginda Director 8. Mr. Shaw Sinhaseni Independent Director 9. Dr. Naris Chaiyasoot Independent Director 10. Mr. Vilas Pilakasiri Director and Secretary 11. Mr. Kosol Suriyaporn Director and Audit Director 12. Mr. Nontachit Tulayanonda Director and Audit Director 13. Mr. Siripong Sombutsiri Director and Audit Director Annual Report

36 Members of the Executive Board, who are executives of the company, are: Name Position 1. Mr. Anuphong Assavabhokhin Vice Chairman and Chief Executive Officer 2. Mr. Pichet Vipavasuphakorn Director and Managing Director 3. Mr. Jaroonsak Buntoonginda Director Members of the Executive Board, who are executives from subsidiaries, are: Name Position 1. Mr. Payont Sakdejyont Vice Chairman 2. Mr. Pong Sarasin Director 3. Mr. Chaiyarat Thampeera Director 4. Mr. Vilas Pilakasiri Director and Secretary There are five directors who are authorized to act on behalf of the company, two of the following five must co-sign an authorized document with the companyûs imprint Mr. Anuphong Assavabhokhin Mr. Pichet Vipavasuphakorn Mr. Jaroonsak Buntoonginda Mr. Chaiyarat Thampeera Mr. Vilas Pilakasiri Authority and responsibilities of the Board of Directors 1. The board of directors has authority and responsibilities to manage the company in compliance with its objectives, regulations and resolutions of shareholdersû meetings 2. Members of the board of directors are not allowed to enter partnership or become directors or the other companies running similar business and compete with the company, except they inform the shareholdersû meeting before their appointments 3. Members of the board must inform immediately if they have direct and indirect involvement in contracts made with the company or report changes of their shareholdings or warrants in the company and subsidiaries. 4. The board of directors must meet at least once in every three month. 5. The board of directors must hold the annual shareholdersû meeting within four months after the end of companyûs financial year. 6. The board of directors must conduct the companyûs balance sheet and financial statement as of the end of financial year and propose them for consideration at the shareholderûs meeting. 7. The board of directors shall consider transactions with major shareholders, directors and management executive as well as those who may have conflicts of interests of connection with the mentioned persons. Annual Report

37 In addition, only the board of directors, not the chairman or the managing director, can direct and implement the companyûs policy on routine operations, i.e., approving budget for land allocations for development, credit line approval, etc. The company organizes regular meetings of the board of director and the full board meetings for consideration or voting of significant issues. The company has sent in advance relevant information to assist the board members to understand clearly the companyû purpose. The company supports the board members to independently follow up the companyûs business operations and the implementations of legal practices and topics stated in agreements related to the companyûs business. The board will also receive reports from the companyûs executives regarding to the significant operations in the company. The company has also appointed a boardûs secretary to assist the board members in organizing their activities. The secretary will also ensure the board and the company have observed and followed laws and regulations. The company boards who are also the companyûs executives and / or managing director and / or chief executive officer are allowed to take a director position in no more than 5 groups of companies, which their business operation would have no conflict of interest with the companyûs benefits (the definition of the group of companies means companies which have been hold directly or indirectly by the same group of shareholders more than 50%). Non-executive board members can use their own judgment in taking the director position in other companies. The Audit Committee The board of directors approved the establishment of the 3 sub-committees which are audit committee, selection and remuneration committee, and the committee on corporate governances. Each committee act in accordance with their responsibilities as follows: (1) Audit Committee consists of; Name Position 1. Mr. Chatchaval Bhanalaph Chairman of the board and chairman of audit commitee 2. Mr. Kosol Suriyaporn Director and audit director 3. Mr. Nontachit Tulayanonda Director and audit director 4. Mr. Siripong Sombutsiri Director and audit director The audit committee has the following duties and responsibilities to report to the Board of Directors Annual Report

38 1. Review the companyûs financial statements to ensure accuracy and adequate disclosures 2. Review the companyûs internal control and audit system to ensure appropriateness and effectiveness 3. Review the operations of the company to ensure they are in compliance with the laws on securities and stock exchange or those related to the companyûs business 4. Recommend the company the nomination of auditors and their remuneration 5. Determine proper and adequate disclosure of the companyûs information in case of connected transactions or lists with potential conflict of interests 6. Perform other duties as assigned by the board of directors and approved by the audit committee 7. Prepare reports on the activities of the audit committee to be included in the companyûs annual reports. The reports must be signed by the chairman of audit committee (2) The selection and remuneration committee consists of Name Position 1. Mr. Shaw Singhaseni Chairman 2. Mr. Anuphong Assavabhokhin Director 3. Mr. Siripong Sombutsiri Director 4. Mr. Nontachit Tulayanonda Director 5. Mr. Chaiyarat Thampeera Director 6. Mr. Vilas Pilakasiri Director 7. Mr. Pichet Vipavasuphakorn Director and Secretary The selection and remuneration committee has responsibilities to set remuneration for directors and select directors when directorship is vacant, as following: 1. Outline policy and rule of remuneration for chief executive officer and managing director 2. Outline policy and rule in selecting directors and audit directors, the audit directors must have the following qualifications: (1) Holding no more than 5% of paid-up capital of the company or of the related companies. (2) Taking no position in the company, related or subsidiary company, or holding a major stakes in the company, not holding a position as a paid staff nor consultant from company, or from related or subsidiary company, or having a major stake from the company. (3) Not having interest both directly or indirectly to finance and management of the company, related or subsidiary company or major shareholders of the company including one year before joining the company as the independent director. Unless considered by the boards that his such interests in the past in the company will have no effect to the company as the independent directors. (4) No relations or close tie to the high-ranking executive boards or to the major sharehoiders. (5) Not be selected by members of the board from the company to act as the nominees for their interests, or selected by the major shareholders from the company. Annual Report

39 (6) Sharing his views and submitting the independent reports assigned by the board of director without any influence from the management and the major shareholder including his relatives or close connections 3. Consider and set remuneration for directors, chief executive officer and managing director 4. Consider and select directors when any director post is vacant 5. Purpose the board of directors and then the shareholdersû meeting for final approval (3) The committee on corporate governance consists of Name Position 1. Mr. Kosol Suriyaporn Chairman 2. Mr. Pichet Vipavasuphakorn Director 3. Ms. Kittiya Pongpuchaneekul Director 4. Mr. Opas Ruangrajitpakorn Director 5. Mr. Pumipat Sinacharoen Director 6. Mr. Vilas Pilakasiri Director and Secretary The board of directors has emphasized the importance of corporate governance and imposed the policy on corporate governance, which is a guideline for the companyûs operation. To follow-up the policy implementation and improve practices on corporate governance, the board of directors thus appointed the committee to supervise as such. The Management (The companyûs executives have qualifications in accordance with the Public Company Act B.E and the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand) Name Position 1. Mr. Anuphong Assavabhokhin Chief Executive Officer 2. Mr. Pichet Vipavasuphakorn Managing Director 3. Mr. Jaroonsak Buntoonginda Senior Executive Vice President, Project Group 1 4. Mr. Wason Naruenatpaisan Senior Executive Vice President, Project Group 2 5. Mr. Visanu Suchatlumpong Senior Executive Vice President, Project Group 3 6. Ms. Kittiya Pongpuchaneekul Senior Executive Vice President, Accounting 7. Mr. Opas Ruangrajitpakorn Senior Executive Vice President, Finance 8. Mr. Piyawat Suepaisarn Executive Vice President, Project Group 1 9. Mr. Chaiyayuth Thampeera Executive Vice President, Project Group Mr. Thongchai Jaraskulchai Executive Vice President, Project Development 11. Mr. Pumipat Sinacharoen Executive Vice President, Corporate Planning and Investor Relations Annual Report

40 Name Position 12. Mr. Kowit Kokilakanistha Vice President, Legal Affairs 13. Mr. Siriwat Wiwatsakulcharoen Vice President, Human Resources Scope of duties of Managing Director Managing Director has authority from the board of directors to take responsibility as following: 1. Direct and handle the companyûs routine operations 2. Consider and screen the companyûs investment plans before proposing to the board of directors for approval 3. Prepare annual budget allocations and submit them to the board of directors for approval 4. Perform other duties assigned by the board of directors on a case-by-case basis. Any transactions might not result in a conflict of interests with the company and subsidiaries or affect the companyûs interests in any manner, except those with clear business scopes. The selection of the directors and a team of management The selection committee under the approval of the board of directors has made selections and definitions of directors into 4 types as follows: 1. The independent directors, define as a person who is - Independent from companyûs major shareholdersû influences, or anyone that related to the major shareholders - Independent from the executive board of directorsû influences, or from his related parties - Holding no more than 5% stakes from the company - Holding no executive positions in the company or from the subsidiary company - Able to provide a fair share of interest to each shareholder in an equal term 2. Directors that are from the subsidiary company, the subsidiary company defines as juristic entity that holds more than 50% stakes of the company 3. Directors that are from the related company, related company defined as the juristic entity that holds no more than 50% stakes, directly or indirectly of the company, in accordance with the Article 258(3) to (7) of the Public Company Act B.E The executive directors defined as the high-ranking executives who manage to run the company on the day-to-day operations, with positions and responsibilities are clearly defined. There are 6 independent directors from 13 directors of the company, for which 4 directors act as the auditing directors Remuneration for Directors and the Executives 1. Remuneration in payment - The company has set out the remuneration for directors in an transparent manner befitting to the qualifications and responsibilities, approved by the shareholders - The company has set out the remuneration for the Executive befitting to their duties, responsibilities and performance. Annual Report

41 (A) The remuneration and bonus paid to director ended 31 st December 2004, and the 31 st December, 2005 has detailed as following: Name of directors Type Position Attended % Year 2005 Year 2004 Bonus (baht) Remuneration (baht) Attended % Remuneration (baht) 1.Mr. Chatchaval Bhanalaph Audit Committee Chairman of the Board and 94% 180, ,000 85% 200,000 Chairman of Audit Committee 2. Mr. Anuphong Assavabhokhin Executive Director Vice Chairman and 100% 180,000 None 100% None Chief Executive Officer 3.Mr. Payont Sakdejyont Director from the Vice Chairman 78% 180, ,000 79% 240,000 related company 4. Mr. Pichet Vipavasuphakorn Executive Director Director and Managing Director 94% 180,000 None 100% None 5.Mr. Pong Sarasin Director from the Director 83% 180, ,000 95% 240,000 related company 6.Mr. Chaiyarat Thampeera Director from the Director 94% 180,000 None 95% None related company 7. Mr.Jaroonsak Buntoonginda* Executive Director Director 100% None None - None 8.Mr. Shaw Sinhaseni Independent Director Director 78% 180, , % 240,000 9.Dr. Naris Chaiyasoot Independent Director Director 78% 180, ,000 89% 240, Mr.Vilas Pilakasiri Director from the Director and Secretary 100% 180,000 None 100% None related company 11. Mr. Kosol Suriyaporn Audit Director Director and audit director 83% 180, ,000 89% 240, Mr. Nontachit Tulayanonda Audit Director Director and audit director 89% 180, ,000 89% 240, Mr.Siripong Sombutsiri Audit Director Director and audit director 94% 180, ,000 89% 240,000 Total 2,160,000 2,035,000 1,880,000 Number of meetings held *Appointed as director by the shareholderûs meeting as of April 28, Note: - Remunerations received between Janurary-December, Director listed at 1 receives the remuneration of 30,000 baht per month. - Directors listed at 3, 5, 8, 9, 11, 12, 13, receive 20,000 baht per month. - In 2004, there were no remunerations paid to directors. Definition: - Independent Directors are directors who are independent on executives and not related to any shareholders, holding no more than 5% stake in the company. The independent directors must not be executives of the company and subsidiaries. They will protect interests and work on behalf of all groups of shareholders equally. - Executive directors is the person who manage and implement companyûs policy, which have the clear role and functions in the company. - Subsidiaries are juristic entities of which the company holds stakes directly and indirectly more than 50%. - Related companies are juristic entities of which the company holds stakes directly and indirectly less than 50%. They are also juristic entities with the definition notified in the Article 258 (3) to (7) in the Securities and Exchange Act B.E.2535 Annual Report

42 (B) Remunerations for the Executive Directors and the Executives in 2005 Remunerations for the Executive Directors and the Executives, at the end of 2005 for 7 persons (the Executive defined as Chief Executive Officer, and 4 other senior executives next from the Chief Executive Officer, and every 4 th Executive Director) in form of salaries and bonuses were at million baht. 2. Other remunerations Since 2004, the company has registered to the çwelfare and Developmenté fund, the fund has been legally licensed to operate. Employees contribute 3, 5 or 6% of their earnings, while the company contributes to the same said amount. The fund is managed by licensed fund manager, in accordance with the fund act for welfare and development enacted in 2542 B.E. Annual Report

43 M onte-carlo The city of versatile characters Where enrichment of multi-cultures meet in harmony On this golden land that will perpetuate your wealth With the airs of celebration being felt all year' round Baan Klang Muang Monte-Carlo, Ratchavibha 2005 Annual Report 41

44 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Mr. Chatchaval Bhanalaph 62 -M.Sc., Forthays Kansas State Present Chairman of Board and Asian Property Development Plc. Property Development College, U.S.A Chairman of Audit Committee -B.A Chulalongkorn University 2004-Present Chairman of Board and Pre Built Plc. Construction -Director Accreditation Program Chairman of Audit Committee - Audit Committee Program - The role of the Chairman Senior Executive Vice President, Siam Commercial Bank Plc. Bank Corporate Banking Group 2004-Present Authorized Director Book Club Finance Plc. Finance Company 2004-Present Director SCB Capital Service Co., Ltd. Asset Management Service 2003-Present Director Sub Sri Thai Warehouse Plc. Warehouse 2002-Present Director Vinsiam Bank Bank 1997-Present Director Dhanamitr Factoring Co., Ltd. Factoring 1994-Present Director Safety Insurance Plc. Insurance Mr. Anuphong Assavabhokhin 44 -M.B.A Present Vice Chairman and Asian Property Development Plc. Property Development Wayne State University, Detroit, Chief Executive Officer Michigan U.S.A Vice Chairman Asian Property Development Plc. Property Development - Bachelor of Engineering 2002-Present Director Asian Property (Ladphrao) Co., Ltd. Property Development (Industrial) 2003-Present Director Asian Property (Krungthep) Co., Ltd. Property Development Chulalongkorn University 1994-Present Director Asian Property Co., Ltd. Property Development -Director Accreditation Program 1996-Present Director Asian Property Holding Co., Ltd. Asset Management 1996-Present Director Asian Property Residence Co., Ltd. Property Development 1994-Present Director Pathumwan Asset Co., Ltd. Property Development 2004-Present Director Asian Property (Ratchavipa) Co., Ltd. Property Development 2004-Present Director Signature Advisory Partners Co., Ltd. Property Development 2004-Present Director Pre Built Plc. Construction Director PCM Construction Material Co., Ltd. Manufacturing and distributing construction material Sep 05 Director Boonchai Holding Co., Ltd. Property Development Sep 05-Present Director Trillion Development Co., Ltd. Property Development Annual Report

45 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Mr. Payont Sakdejayong 61 -MBA Thammasat University Present Vice Chairman Asian Property Development Plc. Property Development -Bachelor of Engineering (Civil) Director PCM Construction Material Co., Ltd. Manufacturing and distributing Chulalongkorn University construction material -Director Accreditation Program 1983-Present Director Land and Houses Plc. Property Development 2000-Present Managing Director Quality Construction Products Plc. Manufacturing and distributing construction material 2001-Present Director LH Muang Mai Co., Ltd. Property Development Director Christiani&Neilsen (Thai) Construction 1995-Present Executive Director SCB Holding Co., Ltd. Investment 1993-Aug 05 Director Mayland Co., Ltd. Investment 1988-Aug 05 Director Atlantic Real Estate Co., Ltd. Property Development 2004-Present Director Q-CON Eastern Co., Ltd. Manufacturing and distributing construction material 1997-Present Director CN Place Silom Development Co., Ltd. Property Development 1985-Aug 05 Director Southern Real Estate Co., Ltd. Property Development 1985-Aug 05 Director Northern Real Estate Co., Ltd. Property Development 1985-Aug 05 Director B.C. Real Estate Co., Ltd. Property Development 1985-Aug 05 Director Prachachuen Real Estate Co., Ltd. Property Development 1985-Aug 05 Director Land and Houses Real Estate Co., Ltd. Property Development 1986-Aug 05 Director Attachat Co., Ltd. Property Development 1987-Aug 05 Director Autumn Land Co., Ltd. Property Development 1985-Aug 05 Director Eastern Real Estate Co., Ltd. Property Development 1985-Aug 05 Director A.A. Property Co., Ltd. Property Development 1985-Aug 05 Director A.A. Property (Chieng Mai) Co., Ltd. Property Development Mr. Pichet Vipavasuphakorn 49 - Bachelor of Business Present Director and Managing Director Asian Property Development Plc. Property Development Administration (Hon), 2003-Present Director Asian Property (Krungthep) Co., Ltd. Property Development Ramkhamhaeng University 2002-Present Director Asian Property (Ladphrao) Co., Ltd. Property Development -Director Accreditation Program 2002-Present Director Asian Property (Thonglor) Co., Ltd. Property Development 2002-Present Director Thonglor Residence Co., Ltd. Property Development 1993-Present Director Asian Property Co., Ltd. Property Development 1996-Present Managing Director Asian Property Residence Co., Ltd. Property Development Director PCM Construction Material Co., Ltd. Manufacturing and distributing construction material Annual Report

46 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business 2001-Present Director Asian Property Holding Co., Ltd. Asset Management 1994-Present Director Pathumwan Asset Co., Ltd. Property Development 2004-Present Director Signature Advisory Partners Co., Ltd. Property Development 2004-Present Director Trillion Development Co., Ltd. Property Development 2004-Present Director Asian Property (Ratchavipa) Co., Ltd Property Development Mr. Pong Sarasin 79 Ph.D. (Hon) in Business Present Director Asian Property Development Plc. Property Development Administration, 1995-Present Director Home Product Center Plc. Distributing construction material Chulalongkorn University 2000-Present Chairman Thai Pure Drinks Ltd. Beverage 1994-Present Director Sammakorn Plc. Property Development 1996-Present Director Asoke Motors Holding Co., Ltd. Property Development 1996-Present Chairman Shangri-la Hotel Hotel 1996-Present Director Thararom Enterprise Plc. Property Development 1994-Present Director Quality Construction Product Plc. Manufacturing and distributing construction material 1997-Present Director Kasemkij Co., Ltd. Construction 2001-Present Director Kaleidoscope Property Co., Ltd. Property Rental 2004-Present Director Q-CON Eastern Co., Ltd. Manufacturing and distributing construction material Present Director Thai Rung Union Car Plc. Automotive 1968-Present Director Crown Seal Plc. Packaging 1991-Present Director Rangsit Prosper Estate Co., Ltd. Property Rental 1994-Present Director Rojana Industrial Park Plc. Property Development 1977-Present Director Chai Fu Holdings Co., Ltd. Property Rental 1977-Present Director Construction Accessories Co., Ltd. Manufacturing and Distributing Construction Material 1970-Present Director Pornwut Co., Ltd. Property Rental 1993-Present Director Floor Industries Co., Ltd. Commerce 1983-Present Director Sarasin Co., Ltd. Property Rental Mr. Chaiyarat Thampeera 50 -M.B.A Mr Present Director Asian Property Development Plc. Property Development Angelo State University, Texas, Chaiyayuthûs 2003-Present Director Asian Property (Krungthep) Co., Ltd. Property Development U.S.A. brother 2002-Present Director Asian Property (Ladphrao) Co., Ltd. Property Development -Bachelor of Law, 2002-Present Director Asian Property Residence Co., Ltd. Property Development Annual Report

47 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Chulalongkorn University 2001-Present Director Quality Construction Products Plc. Manufacturing and distributing -Bachelor of Business construction material Administration, 1999-Present Director Siam Sinthorn Co., Ltd. Property Development Ramkhamhaeng University 1994-Present Director Pathumwan Asset Co., Ltd. Property Development -Finance for Non-Finance Director 1993-Present Vice Chairman Asian Property Co., Ltd. Property Development -Director Accreditation Program Managing Director Wave Development Co., Ltd. Property Development 45/ Present Managing Director Asian Cuisine Co., Ltd. Restaurant 2000-Present Director PCM Construction Material Co., Ltd. Manufacturing and distributing construction material Chief Executive Officer PCM Construction Material Co., Ltd. Manufacturing and distributing construction material Director Siam System Built Co., Ltd. Construction 2001-Present Director Asian Property Holding Co., Ltd. Asset Management 2004-Present Vice Chairman and Chief Pre Built Plc. Construction Executive Officer 2004-Present Director Signature Advisory Partners Co., Ltd. Property Development 2004-Present Director Asian Property (Ratchavipa) Co., Ltd. Property Development 2004-Present Director Trillion Development Co., Ltd. Property Development 2004-Present Director Q-CON Eastern Co., Ltd. Manufacturing and distributing construction material 2004-Present Director Peeranont Co., Ltd. Restaurant 2001-Present Director Siam Retail Development Co., Ltd. Property Rental 2001-Present Director Square Ritz Plaza Co., Ltd. Property Rental Mr. Jaroonsak Buntoonginda 51 -Bachelor of Business Present Director and Senior Executive Asian Property Development Plc. Property Development Administration, Vice President, Project Group1 Ramkhamhaeng University 2005-Present Director Asian Property (Ratchavipa) Co., Ltd. Property Development -Director Accreditation Program 2005-Present Director Asian Property (Krungthep) Co., Ltd. Property Development 45/ Present Director Asian Property (Thonglor) Co., Ltd. Property Development 2005-Present Director Asian Property (Ladphrao) Co., Ltd. Property Development 2005-Present Director Asian Property Co., Ltd. Property Development 2005-Present Director Thonglor Residence Co., Ltd. Property Development 2005-Present Director Signature Advisory Partners Co., Ltd. Property Development 2004-Present Director Pre Built Plc. Construction 2004-Present Director Trillion Development Co., Ltd. Property Development 2005-Present Director Asian Property Holding Co., Ltd. Asset Management 2005-Present Director Asian Property Residence Co., Ltd. Property Development Annual Report

48 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Mr. Shaw Sinhaseni 53 -M.B.A. (Management), Present Director Asian Property Development Plc. Property Development University of San Francisco, U.S.A Present Director The Thai Insurance Plc. Insurance -Director Accreditation Program Director Home Product Center Plc. Distributing construction material Present Director Mahachon Group Co., Ltd. Hotel Dr. Naris Chaiyasoot 50 - Ph.D. (Economics) Present Director Asian Property Development Plc. Property Development University of Hawaii 2004-Present Director - General Fiscal Policy Office, Ministry of Finance - - M.A. Economics Rector Thammasat University Education (English Program) 1998-Present Chairman National Research Council (Economics) - Thammasat University 2002-Present Director Attorney General Office - - B.A. Economics (Hon) 2003-Present Director Credit Bureau - Thammasat University 1998-Present Chairman Sirinthorn International Institute of Technology Education -Director Accreditation Program 2001-Present Director Government Savings Bank Bank 2003-Present Director State Council Present Director Anti-Money Laundering Office Present Director Fortune Parts Industry Plc. Manufacturing and distributing auto parts Mr. Vilas Pilakasiri 53 - M.B.A., Present Director and Board Secretary Asian Property Development Plc. Property Development Thammasat University 2000-Present Director PCM Construction Material Co., Ltd. Manufacturing and distributing -Bachelor of Economics, construction material Thammasat University 2004-Present Board Secretary Pre Built Plc. Construction -Finance for Non-Finance Director 2005-Present Deputy Managing Director Pre Built Plc. Construction -Director Accreditation Program Mr. Kosol Suriyaporn 43 - Bachelor of Law, Present Director and Audit Director Asian Property Development Plc. Property Development Chulalongkorn University 2001-Present Lawyer Price Sanond Prabhas&Wynne Ltd. Business Law, Taxation Barrister at Law Lawyer Natee International Law Office Ltd. Business Law, Taxation -Audit Committee Program Annual Report

49 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Mr. Nontachit Tulayanonda 47 -M.A at Tarleton State University, Present Director Asian Property Development Plc. Property Development Texas U.S.A and Audit Director -Audit Committee Program 2003-Present Executive Vice President, Book Club Finance Plc. Finance Company Lending Group Chief Executive Officer Wongpaitoon Group Plc. Factory 2005-Present Director Muang Mai Guttry Plc. Latex Transmutation Mr. Siripong Sombutsiri 51 - MBA Present Director and Audit Director Asian Property Development Plc. Property Development Sull Ross University, USA Present Director and Audit Director Bangkok Chain Hospital Plc. Hospital -Director Accreditation Program 2003-Present Director Siam Chai Sri Co., Ltd. Consultant 2002-Present Director Muang Thai Insurance Co., Ltd. Insurance 2001-Present Director and Managing Director United Advisory Services Co., Ltd. Consultant Director United Securities Plc. Securities Managing Director (for) Dhana Siam Securities Company Limited Securities 2005-Present Director Phuket Square Plc. Property Development Mr. Wason Naruenatpaisan 42 - M.B.A., Burapha University Present Senior Executive Vice President, Asian Property Development Plc. Property Development - B.BA, Bangkok University Project Group Present Director Pathumwan Asset Co., Ltd. Property Development 1993-Present Executive Vice President Asian Property Co., Ltd. Property Development Present Director Capital and Property Management Co., Ltd. Asset Management Sep 05-Present Director Trillion Development Co., Ltd. Property Development Mr. Visanu Suchatlumpong 44 - M.B.A., Present Senior Executive Vice President, Asian Property Development Plc. Property Development Thammasat University Project Group 3 - Bachelor of Civil Engineering, Deputy Managing Director United Home Co., Ltd. Property Development Chieng Mai University Executive Vice President Quality House Public Co., Ltd. Property Development Sep 05-Present Director Trillion Development Co., Ltd. Property Development Annual Report

50 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Ms. Kittiya Pongpuchaneekul 42 Ms. In Accounting, Present Senior Executive Vice President, Asian Property Development Plc. Property Development Chulalongkorn University Accounting 1993-Present Executive Vice President, Asian Property Co., Ltd. Property Development Accounting 1996-Present Executive Vice President, Asian Property Residence Co., Ltd. Property Development Accounting Mr. Opas Ruangrajitpakorn 46 - M.B.A., Kasetsart University Present Senior Executive Vice President, Asian Property Development Plc. Property Development - Bachelor of Economics, Finance Thammasat University 2002-Present Director Asian Property (Thonglor) Co., Ltd. Property Development 2002-Present Director Thonglor Residence Co., Ltd. Property Development 1994-Present Executive Vice President, Finance Asian Property Co., Ltd Property Development 1995-Present Director Pre Built Plc. Construction Present Director Capital and Property Management Co., Ltd. Asset Management Mr. Piyawat Suepaisarn 47 Bachelor of Business Present Executive Vice President, Asian Property Development Plc. Property Development Administration, Project Group 1 Ramkhamhaeng University 1994-Present Executive Vice President, Asian Property Co., Ltd. Property Development Sales 2004-Present Director Trillion Development Co., Ltd. Property Development Mr. Chaiyayuth Thampeera 43 - M.B.A., 0.00 Mr Present Senior Vice President, Asian Property Development Plc. Property Development Kasetsart University Chaiyarat's Project Group 3 - Bachelor Degree of Law, brother Assistant Managing Director PCM Construction Material Co., Ltd. Manufacturing and distributing Thammasat University construction material Branch Manager Thai Patanasin(Jinseng) 2000 Equipment Industry Mr. Thongchai Jaraskulchai 45 Bachelor of Engineering (Civil), Present Senior Vice President, Asian Property Development Plc. Property Development Kasetsart University Project Development Project Manager Engineering Plus Co., Ltd. Construction Annual Report

51 Executives of Asian Property Development Plc. As of February 8, 2006 Name Age Education Shares Hold(%) Relationship between Management Experiences Period Position Company Type of Business Mr. Pumipat Sinacharoen 35 M.B.A Present Senior Vice President, Asian Property Development Plc. Property Development The American Graduate School Corporate Planning of International Management and Investor Relations (Thunderbird), USA Present Director and Audit Director Fortune Parts Industry Plc. Manufacturing and distributing auto parts 2005-Present Chief Executive Officer Bangkok Citismart Co.,Ltd. Broker for Sale and Rent Property 2005-Present Performance Measurement The Small Industry Credit Guarantee Director Corporation (SICGC) 2005-Present Human Resource Director Neighboring Countries Economic Development Cooperation Agency (Public Organazation) Financial Planning Manager Hutchinson CAT Wireless Multimedia Communication Company Limited Equity Analyst ING Baring Securities (Thailand) Co., Ltd. Equity Broker Mr. Kowit Kokilakanistha 39 - Bachelor of Law, Present Vice President, Legal Affairs Asian Property Development Plc. Property Development Ramkhamhaeng University Present Vice President, Legal Affairs Asian Property Co., Ltd. Property Development - Director Accreditation Director Thonglor Development Co., Ltd. Property Development Program 42 / Director Thonglor Residence Co., Ltd. Property Development Present Audit Director Mandarin Hotel Plc. Hotel Mr. Siriwat 34 - Master degree in Public Present Vice President, Human Resources Asian Property Development Plc. Property Development Wiwatsakulcharoen Administration, NIDA Assistant Vice President, Trinity Securities Co., Ltd. Finance and Securities - Bachelor Degree of Arts, Human Resources & Admin Dept Faculty of Political Sciences, Assistant Manager, KGI Securities One Plc. Finance and Securities Ramkhamhaeng University Human Resources Dept - Bachelor Degree of Arts, Faculty of Humanities, The University of the Thai Chamber of Commerce Annual Report

52 The Numbers of attended meetings for directors in 2005 Total Meetings 18 times No. Name No.of attended % meetings attended Mr. Chatchaval Bhanalaph o 17 94% Mr. Anuphong Assavabhokhin x x x x x x x x x x x x x x x x x x % Mr. Payont Sakdejyont xxx xxoxxxooxxxxoxx 14 78% Mr. Pichet Vipavasuphakorn o x x x 17 94% Mr. Pong Sarasin x o o o 15 83% Mr. Chaiyarat Thampeera x x o x x 17 94% Mr. Shaw Singhaseni o o x x 14 78% Dr. Naris Chaiyasoot o o o o 14 78% Mr. Vilas Pilakasiri x x x % Mr. Kosol Suriyaporn o o x o x 15 83% Mr. Nontajit Tulayanonda x o o 16 89% Mr. Siripong Sombutsiri x x x x x o 17 94% Mr. Jaroonsak Bantoonginda* x x x x x x x x x x x x x % x Attended o Not Attended - Not serving the member * çserving as director from shareholdersû meeting held on April 28, 2005é Annual Report

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54 Supervision of the use of insider information The company adopts the following policies and methods in monitoring the use of insider information by its executives for their own interests Inform the executives of their duties to report their holding of the companyûs shares as stipulated in the Act on Securities and Stock Exchange Act B.E (1992) and the regulations of the Stock Exchange of Thailand and of related penalties. The company requires that its executives report on changes in their holding of the companyûs shares to the Securities and Exchange Commission as stipulated under Section 59 of the Act on Securities and Stock Exchange B.E (1992) and submit a copy to the company on the same day sending to the Securities and Exchange Commission and Stock Exchange of Thailand. The board has endorsed the strict regulations and punishment guidelines about the abuse of insider information. The board agrees to set policy and methods in supervising directors, executives and employees on the use of insider information, particularly the audited information related to the companyûs financial position as approved by the certified accountant and the meeting of the Audit Committee, prior to the submission to the board and the Stock Exchange of Thailand and the public of their own interests as follows: (1.) Prohibit directors, executives, employee and their spouse and children not yet reached the legal age to use insider information to buy, sell transfer and receive the companyûs shares prior to the disclosure of the information to the public (since April 15 till the disclosure of the first quarter financial statement / since July 15 till the disclosure of the second quarter financial statement / since October 15 till the disclosure of the third quarter financial statement / since Feb 1 till the disclosure of the annual report). The above mentioned persons should also withhold from conducting any trading transactions of the company's shares until the public have sufficient time to evaluate the companyûs shares (15 days after the disclosure). (2.) Inform directors, executives and employees the duty to report their holding and the trading of the companyûs shares including those of their spouses and children not yet reached the legal ages as stipulated in the announcement No. 14/2540 of the Office of the Securities and Exchange Commission about the reports and the disclosure of the holding of shares and penalties under the Act on Securities and Stock Exchange B.E (1992) If employees violate the above regulation, the company will take discipline punishment as follows: First mistake Second mistake Third mistake Written warning Salary cut, suspension of work Termination of work without compensation Annual Report

55 Personnel The company has a policy to constantly develop personnel potential with regular and continuous training to improve staff knowledge and expertise as well as the understanding about the companyûs policies. The trainings were instructed by eminent persons from inside and outside the company in courses such as APûs Corporate Value, Vision and Mission and Corporate Value, MS Project, the control and technical aspect of construction, etc. Or providing executive courses on Executive Team Building and Scotworking Negotiating Skills Workshop, etc. The company was of opinion that these courses would benefit employees and executives as well as improve the companyûs personal efficiency. The company also considers employing more staff to support more works and to ensure the operation effectiveness. In addition, the company and its employees have set up çthe Welfare Development Registered Provident Fundé in accordance with the Provident Fund Act B.E The Fund is contributed by both the employees and the company at the equal rate of 3, 5 or 6% of employees wages based on the number of working years of employee. The benefits will be paid to employees upon their retirement, decease and resignation. Internal controls The company realizes the importance of using the internal controls on both the executive level and operations level, thus, the company has assigned the duties of both the executive level and the operation level in writen. The use of internal controls will also help the company to utilize companyûs assets to its fullest. The internal controls also clearly divide the roles of operating staff, the role of evaluators in order to cross check the functions of each unit fairly. In addition, financial controls will be made in reports to the executive levels, and to the audit committees. The internal controls also apply to the risk management, in order that risk assessments are managed properly. The company also has the internal controls on the transaction process between major shareholders, board of directors, executives, and the concerned parties. Meanwhile, the internal control on the auditing process and monitoring are implemented appropriately to the policy. The company has hired the Alliance Office Co., Ltd. to be an internal audit to handle the duty by emphasized in business risk and operational system. The objective is to make an assurance that the overall operations are run effectively, to increase the assurance to the audit committees and to the high executives levels, that the information of the company is reliable and to create the assurance that the utilization of companyûs asset are managed properly. This will also help the company to reassure itself that the internal controls are run effectively run and the staff submit themselves to the assigned tasks properly. Companyûs auditor, Mrs.Suvimol Krittayakiern who audited the companyûs financial statement was of the opinion related to the evaluation of the company internal accounting control that there was no substantial weakness in the system. In addition, the auditing committee is satisfied that the internal control system manage to run and operate sufficiently, effectively, and in transparency manner. As from the boardûs meeting no. 13/2005 on the 8 th of September 2005, with 3 audit directors attended, the committee Annual Report

56 has assessed the internal control system by asking information from the executives and examined the evidence to make a conclusion that from assessment of the internal control system in 5 different areas which are the organization & environment, the risk management, the operation control from management, information technology & communication and monitoring, the company has the internal control system for the transactions with major shareholders, directors, the executive, or related parties sufficiently. Meanwhile, the other internal control systems are also sufficient. Connected transactions The company has a policy to record the connected transactions, under the conditions set up by normal trading, with market price comparable to the others. The company has also set up the audit committee or independent experts in this field to examine and to provide realistic advices on prices and appropriated transactions. The connected transactions such as selling and purchasing goods, borrowing, lending and guarantee, the directors have to comply with the rule set out by the Stock Exchange of Thailand and also disclosure rule of connected transactions and acquiring and disposal of the company and subsidiary companiesû assets. Should the connected transactions between companies or its subsidiarries appear to run into conflict, or may implicate that transactions may cause conflict in th future. The company will set up the committee to provide as necessary for the particular transactions. And if the audit committee are not experienced with the matters, the company will appoint an independent expert or auditor of the company to look into the matter and will make recommendation to companyûs boards or to shareholders to make decision on the matter. The company will also disclose the connected transaction in the notes to financial statements prepared by auditor of the company. Annual Report

57 Policy on corporate governance T The company has recognized the virtue of good corporate governance, which is the major factor in improving the organization and efficiency as well as leading its mission for the long-term sustainable growth. The company has complied with the 15 principles of good governance stipulated by the Stock Exchange of Thailand. 1. Policy on corporate governance The Board of Directors realizes the importance and virtue of good corporate governance and has adopted policies to the effect on corporate governance in details as following: Recognizing the importance of controlling, monitoring and internal audit system, which will supervise the team of management to comply with companyûs policies and objectives efficiently under the working framework of legal regulations and business ethics. Exercise the fairness and equal treatment to companyûs shareholders and stakeholders The board is determined to manage the company with carefulless, responsibility, efficiency, to maximize benefits for shareholders in a sustainable way, and to prevent any conflict of interests that may occur. The board operates the business with the preconceived awareness and concerns about risks and nominates the internal control system and risk management The board focuses on transparency, accountability and disclosure to keep general public, investors and related parties informed of its operation and activities. The board emphasizes on the companyûs Code of Conduct, which in prior has been made in announcement for employees to implement and be encouraged to observe the Code of Conduct. 2. Rights of Shareholders The company has traditionally organized an ordinary shareholders meeting within 4 months afterward of the end of the financial year. Initially, the company sends the 14 days advance written notices of the meeting, contents of agenda of the meeting and the boardûs opinions to shareholders, this helps shareholders to gather and analyze information prior to the voting on an agenda will have taken place. The company has conveniently set up the date, time and venue for the shareholderûs meeting. And at the meeting, shareholders can register their names at least 1.5 hours prior to the meeting take place. This will allow all shareholders to participate in greater numbers. As for convenience, the company also arranges an appropriate different shareholders to register from individual shareholders to institutional investors. In addition, at the end of each agenda meeting, and before the voting take place, the chairman of the boards will answer any queries by the shareholders, including opinions among shareholders. All votes from shareholders are treated equally. In case when shareholders are unable to attend the meeting, they can authorize independent directors to act on their behalf. Should the company must convene the meeting for an urgent agenda, it can call on an extraordinary shareholderûs meeting on the case-by-case basis. In 2005, the company held the Annual General Meeting of shareholders on the 28th of April, The company had sent written notices of the meeting and information concerning the agenda 14 days prior the meeting was convened. Each agenda comprise opinions from the board and the meeting minutes were recorded accurately and appropriately gathered from shareholderûs questions with the full expressive, explanatory manner regarding to the managementûs functions. The company also arranged for the independent directors to be authorized in full access to act on the behalf Annual Report

58 of shareholders, including the authorization to vote on the shareholderûs behalf, who were unable to attend the meetings themselves. This approach is an alternative means to help shareholders who may not attend the meeting. 3. Right of Stakeholders The company values the rights of all stakeholders of both internal and external from the organization, of those who are the employees, creditors, trading partners, related government agencies and shareholders to ensure fairness for all parties. Employees: the company has treated its employees fairly with fair commensurations. Moreover, the company has provided scholarships to staff and consistently conducting the training programs for employees. In 2005, the company organized various training programs such as APûs Corporate Value, Vision Mission and Corporate Value, MS project, and Modern Construction Technique. As from the last Annual General Meeting of shareholders on the 28 of April, 2005, the company issued the ESOP(Employee Stock Option Plan) for 34,000,000 shares to both executives and employees for two years. These consist of 34,000,000 warrants with 3 years maturity at the conversion price of baht 3.60 per share and 34,000,000 common shares of baht 3.60 per share. The company will issue the shares to employees and to companyûs executives in fairness. Trading partners: In purchasing goods and services from its trading partners, the company has complied the business deals of trade terms and of fulfilling contractual obligations. For its contractors, the company has checked and monitored product quality and has arranged to award those who have dedicated to improve their product quality in a consistent term. Customers: the company has set up the Call Center service to receive customer's input and complaints, as part of the companyûs responsibilities to serve to customerûs needs, for the better improvement of products and services. Creditors: the company has complied with the terms of lending agreements. Competitors: the company has competed within the framework of good competition and forbids it self to employ any unscrupulous means to undermine or discredit competitors. Community: the company is responsible for community environment and society. Various donations have been made, one example being the charitable donation to the Ramathibodi hospital to procure medical equipments to treat the cancerûs patients. 4. Shareholders Meetings At shareholderûs meetings, the chairman of the meetings has provided an equal opportunity for all groups of shareholders to review the companyûs operations, raise questions, and express opinions and suggestions. Their key point of discussion and opinions have also been recorded in the meetingûs minutes. In 2005, the company held meeting, where chairman of the meeting, the chairman of Audit Committee and the chairman of the sub-committee all attended the meeting. While most of the companyûs directors participated and made explanations when shareholders raised questions and expressed opinions. The questions and answers were recorded in the meetingûs minutes. 5. Leadership&Vision The management has proposed strategic and business plans to the board, which has actively participated in determining the companyûs policy, vision, strategy and business plans. The board will ensure that the business has been implemented in line with the laid-down, clear-cut plans, maximizing profits for shareholders and the evaluation plans Annual Report

59 afterwards will be conducted to assess the management and employees Moreover, to segregate the duties and make a balance of management, the chairman of the board of directors is an independent director, and not the same person as the chairman of the executive board. 6. Conflict of interest The company has set up plans to prevent the potentially of conflict of interests by assigning its Audit Committee to examine and consider the rationality of connected transactions based on the criteria of the Stock Exchange of Thailand. Details of connected transactions have been disclosed in notes to financial statements. 7. Business Ethics The company focuses and runs its business functions in an uncorrupted means with transparency, and issued the Code of Conduct for the board of directors, management, and employees, so that the related parties can use it as a guideline in performing their duties with the sense of pride and integrity according to the companyûs objective and mission. The company also adhere its policy with the full compliance of the code regularly. A sub-committee was established to implement policies on corporate governance and improved corporate governance practices. 8. Balance of Power for Non-executive Directors The board of directors consists of 13 members, of which three are the companyûs executive directors (Mr. Anuphong Assavabhokhin, Mr. Pichet Vipavasuphakorn and Mr. Jaroonsak Buntoonginda) and four are from related companies (Mr. Pong Sarasin, Mr. Payont Sakdejyont, Mr. Chaiyarat Thampeera, and Mr. Vilas Pilakasiri), the remaining six or more than one-third of the board are of independent directors, of which four out of six are audit directors. The audit directors have authority to review the company's operation and functioning as the balance of power on the board. Moreover, they can reject or act against some issues at the meetings independently, this in effect will produce the highest efficiency of board's decisions. 9. Aggregation or Segregation of Positions The chairman of the board of directors is from one of the independent directors, while the chief executive officer and managing director holding 24.33% and 12.04% of the paid-up shares, respectively. Thus, the chief executive officer and managing director are the company'ûs shareholders, representing all groups of shareholders in managing the company and maximizing profits for them. However, the chairman of the board of directors, chief executive officer and managing director are not the same person as this will create the separation of work functions, producing the balance of power of management. 10. Remumeration for Directors and the Management The company appointed the selection and remuneration committee to consider remuneration for directors and the management by making the comparison with the other companies in the same business enterprise. The compensation for directors and the management will be paid in the form of monthly salaries and bonuses, based on the companyûs operating result and performance of each executive. For non-executive directors, they will be remunerated in the form of monthly returns and bonus. The company has sought approval on remuneration from the shareholderûs meetings. Annual Report

60 11. Board of Directors'meetings The board of directors normally holds a number of meetings on the monthly basis with special meeting may take place from time to time should the board may be held if necessary. Agendas with clear information and those related to the follow-ups of work implementation as well as the minutes of the previous meeting will be prepared and circulated to directors seven days prior to the meeting, in order that the directors will have time to study the details before the meeting is staged. At each meeting, the minutes will be recorded and the board will sign to approve the minutesin the next meeting. In case independent directors express opinions and call on a special meeting to consider for special agendas, the management is assigned to facilitate the special meeting for them as soon as possible. 12. The sub-committee The company nominated and appointed the Audit Committee, which is responsible to consider and to provide opinions and views toward special agendas before submitting them for approval by the board of directors. Moreover, the company appointed the selection and remuneration committee, which will select and nominate qualified persons to become a member of the board in case when any director position is vacant. The selection committee will consider remuneration and compensation for directors and also for the management. The company also appointed a sub-committee on corporate governance, which has followed the implementation of corporate governance policy, outlining action plans and improving policies to meet with changing conditions. The sub-committee will report directly to the board of directors. 13. Controlling System and Internal Audit The company selected and appointed Alliance Office Co., Ltd, of which it has no stakes in or no relation with the company, as an internal audit for the company. The internal audit has duties to make revision and evaluation of the companyûs internal control system, to see whether the system was sufficient and proper managed. In addition, the internal audit will consult and assist the company to improve some of the defect points in the internal control system to ensure that it is efficient and effective. Alliance Office Co., Ltd will conduct an assessment report on the internal control system and provide suggestions on some of the defect points before submitting the report directly to the Audit Committee. 14. Directorûs Reporting The board of directors and the audit committee has considered financial statements of the company and subsidiaries to ensure that all financial statements show financial positions and operating results with accuracy and adequate information disclosure. In addition, the boards had participated in reviewing the internal control system to ensure that the system was satisfactory and the information disclosed to investors was sufficient in an annual report. 15. Investor Relations The company always recognizes the virtue and the importance of disclosing the adequate, reliable and timely information to investors and related parties with equal access. It has set up the investor relationûs facility to provide information, in order that investors can monitor the status of various corporations and to communicate with the company through the telephone line at (66) , investor@ap-thai.com or at the website: Annual Report

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62 Directorsû Report on Financial Statement The Board of Directors of Asian Property Development Public Company Limited is responsible for the consolidated financial statement of the company and its subsidiaries and financial information as prepared in the annual report. The financial statement were prepared base on generally accepted accounting standards in Thailand. The accounting standards have been appropriate and used regularly and carefully, providing adequate information disclosure in notes to financial statements. The board established and maintained an efficient controlling system and internal audit to ensure that accounting information stated in financial statements was accurate and reliable. The adequate internal controls were also to maintain the companyûs assets and recognize corporate weakness, which would significantly revent corruptions and wrong-doings. Therefore, the board nominated the Audit Committee, which consists of non-executive members who are responsible for the quality of financial statements and internal control system. The Audit Committee also opinions about the companyûs internal audit system in the annual reports. The board was of the opinion that the internal control system was satisfactory and can create confidence in relation to the credibility of financial statements of the company and its subsidiaries as of December 31, The financial statements showed financial position, operation performance and cash flow with accuracy and reliability. (Mr. Chatchaval Bhanalaph) (Mr. Anuphong Assavabhokhin) (Mr. Payont Sakdejyont) Chairman of the Board of Directors and Vice Chairman and Chief Executive Officer Vice Chairman Chairman of the Audit Committee (Mr. Pichet Vipavasuphakorn) (Mr. Pong Sarasin) (Mr. Chaiyarat Thampreera) Director and Managing Director Director Director (Mr. Jaroonsak Buntoonginda) (Mr. Shaw Singhaseni) (Dr. Naris Chaiyasoot) Director Director Director (Mr. Vilas Pilakasiri) (Mr. Kosol Suriyaporn) (Mr. Nontachit Tulayanonda) (Mr. Siripong Sombutsiri) Audit Director Audit Director Audit Director Audit Director Annual Report

63 Report of the Audit Committee Dear Shareholders Asian Property Development Public Company Limited For the financial year, ended at December 31, 2005, the Audit Committee, consisted of four directors of whom, did not hold any positions in the company, had concluded their fourth meetings, of reviewing the adequacy concerning the companyûs internal control system, monitoring and operations, and had made advices and proposed measures to enhance the efficiency, and effectiveness to the company. The Audit Committee had appointed an outside auditor to assess and inspect the work process to run strictly and accordingly to the laid out measures. Suggestions made by the inspection control system will be taken into full account and the overall improvements will be made accordingly. The Audit Committee was of the opinion that the companyûs internal control system operated in the satisfactory stage, with the whole business operations being adequate, efficient, and transparent. The Audit Committee had reviewed the quarterly and yearly financial statements, ended at December , working together with the companyûs auditor and some companyûs executives. The Audit Committee found that the financial statements showed the adequacy and credibility of financial status; the operating results established on the widely accepted accounting standards. Furthermore, as the Securities Exchange Commission, Thailand (SEC) set the rule for listed companies to change the auditor in every 5 financial years. The audit committee thus raised the issue to the Board of Directors to ask for the approval of shareholders to change the auditor from Mrs. Suvimol Krittayakiern and/or Mrs.Vilairat Rojnakarin, Office of DIA International Auditing to Mr. Ruth Chaowanagawi and/or Mrs.Saifon Inkaew and/or Ms. Thipawan Nananuwat, Ernst&Young Office Limited. (Mr. Chatchaval Bhanalaph) Chairman of the Audit Committee (Mr. Siripong Sombutsiri) Audit Director (Mr. Nontachit Tulayanonda) Audit Director (Mr. Kosol Suriyaporn) Audit Director Annual Report

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65 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES AUDITORûS REPORT To The Shareholders of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED I have audited the consolidated balance sheets of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES and the balance sheets of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED as at December 31, 2005 and 2004, the related of consolidated statements of income and statements of income, consolidated statements of changes in shareholdersû equity and statements of changes in shareholdersû equity, and consolidated statements of cash flows and statements of cash flows of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES and of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED for the years then ended. These financial statements are the responsibility of the Companyûs management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the consolidated financial statements and the financial statements referred to above present fairly, in all material respects, the consolidated financial position and the financial position of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES and of ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED as at December 31, 2005 and 2004, the results of their operations and its operations and their cash flows and its cash flows for the years then ended in conformity with generally accepted accounting principles. Office of D I A International Auditing March 1, 2006 (Mrs. Suvimol Krittayakiern) C.P.A. Thailand Registration No Annual Report

66 BALANCE SHEETS AS AT DECEMBER 31, 2005 AND 2004 Assets Note Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Current assets Cash and cash equivalents 516, , , ,731 Short-term investments , ,843 Accounts and notes receivable - net , Unbilled construction income 6 155, , , ,191 Inventories - net 7 8,811,414 5,759,743 4,673,306 2,286,113 Other current assets Deposits for land 18,193 84,900 12,587 84,900 Accrued interest income ,937 56,371 Others 78, ,586 38,767 41,536 Total current assets 9,581,190 7,332,843 5,139,408 3,151,380 Annual Report

67 AS AT DECEMBER 31, 2005 AND 2004 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (Cont.) Assets Note Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Non-current assets Loans to related parties ,011,247 1,600,880 Investments in subsidiaries and affiliates 8 136, ,969,239 2,612,413 Long-term investments 9 164, , , ,769 Other investments , Cash at banks - commitment 31,500 58,006 27,857 34,725 Land and cost of project held for development , , Property, plant and equipment - net 12 66, ,258 52,816 49,345 Other non-current assets Intangible assets 8 131, , Withholding income tax 26,139 22, Others 11,880 30,053 9,396 11,514 Total non-current assets 710,268 1,913,665 4,234,620 5,040,646 Total assets 10,291,458 9,246,508 9,374,028 8,192,026 Notes to financial statements are parts of these financial statements. Annual Report

68 BALANCE SHEETS (Cont.) AS AT DECEMBER 31, 2005 AND 2004 Liabilities and shareholdersû equity Note Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Current liabilities Bank overdrafts and short-term loans from financial institutions , , , ,658 Accounts and notes payable 171, , ,400 72,394 Unearned revenue 454,019 82, ,894 13,683 Current portion of long-term debts , , , ,000 Other current liabilities Accrued interest 36,363 38,759 36,067 37,186 Accrued expense 61,338 79,566 48,959 41,719 Accrued income tax 124, ,150 75, ,238 Others 58, ,373 35,185 45,567 Total current liabilities 1,975,210 1,301,641 1,597, ,445 Non-current liabilities Loans from related parties ,000 Long-term liabilities 14 1,634, ,713 1,145, ,008 Debentures 15 2,600,000 2,600,000 2,600,000 2,600,000 Other non-current liabilities 86,801 42,510 47,824 25,124 Total non-current liabilities 4,321,358 3,532,223 3,793,753 3,198,132 Total liabilities 6,296,568 4,833,864 5,391,213 3,925,577 Notes to financial statements are parts of these financial statements. Annual Report

69 AS AT DECEMBER 31, 2005 AND 2004 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (Cont.) Liabilities and shareholdersû equity (cont.) Note Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Shareholdersû equity Share capital Authorized share capital 2,343,150,000 common shares of Baht 1 each 16 2,343,150 2,343,150 2,275,000,000 common shares of Baht 1 each 2,275,000 2,275,000 Issued and paid-up share capital 2,271,902,620 common shares 2,271,903 2,271,903 of Baht 1 each 2,265,114,120 common shares 2,265,114 2,265,114 of Baht 1 each Premium (Discount) on share capital (1,007,859) (1,007,859) (1,007,859) (1,007,859) Unrealized gain on changing in investments value 9 28, ,555 28, ,555 Premium on common shares - from investment in subsidiaries and affiliates , ,662 54, ,662 Retained earnings Appropriated Legal reserve 189, , , ,000 Unappropriated 2,446,201 2,173,977 2,446,201 2,173,977 Total shareholdersû equity 3,982,815 4,266,449 3,982,815 4,266,449 Minority interest 12, , Total shareholdersû equity including minority interest 3,994,890 4,412,644 3,982,815 4,266,449 Total liabilities and shareholdersû equity 10,291,458 9,246,508 9,374,028 8,192,026 Notes to financial statements are parts of these financial statements. Annual Report

70 STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Note Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Revenues Sales and services 5,257,599 5,740,205 1,838,659 2,768,536 Share of profits from investments for using the equity method 3, , ,144 Interest income 1,605 1,931 41,431 49,536 Dividend received 15,217 25,197 14,969 14,300 Gain on sales of investments 8, 9 120,148 87, ,623 87,452 Other income 15,691 24,260 7,254 7,403 Total revenues 5,413,987 5,879,193 2,658,094 3,453,371 Expenses Cost of sales and services 3,574,157 3,736,011 1,265,724 1,728,120 Share of loss from investments for using the equity method 0 0 8,713 9,590 Directorsû remuneration 5,175 1,980 4,195 1,980 Selling and administrative expenses 707, , , ,368 Total expenses 4,286,548 4,372,787 1,656,627 2,070,058 Profit before interest expenses and income tax 1,127,439 1,506,406 1,001,467 1,383,313 Interest expenses (59,250) (66,263) (87,528) (113,030) Income tax (277,689) (323,958) (149,077) (173,101) Profit before income tax 790,500 1,116, ,862 1,097,182 (Profit) Loss of minority interest (25,638) (19,003) 0 0 Net profit 764,862 1,097, ,862 1,097,182 Notes to financial statements are parts of these financial statements. Annual Report

71 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME (Cont.) FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Note Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Basic earnings per share 21 Net profit Diluted earnings per share 21 Net profit Notes to financial statements are parts of these financial statements. Annual Report

72 STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Consolidated Note Issued and paid up share capital Premium(Discount) on share capital Unrealized gain on changing in investments value Premium on common shares from investment in subsidiaries and affiliates Legal reserve Retained earnings (Deficit) (Thousand Baht) Minority interest Total Beginning balance as at January 1,2004 2,242,184 (1,007,859) 410, ,000 1,584, ,325,361 Warrants to purchase common shares 18 22, ,930 Legal reserve ,000 (55,000) 0 0 Dividend paid (452,749) 0 (452,749) Unrealized gain on changing in investment value , ,065 Purchase of investments in subsidiaries , , ,852 Net profit for the year ,097,182 19,003 1,116,185 Ending balance as at December 31,2004 2,265,114 (1,007,859) 581, , ,000 2,173, ,195 4,412,644 Warrants to purchase common shares 18 6, ,789 Legal reserve ,300 (38,300) 0 0 Dividend paid (454,338) (13,738) (468,076) Unrealized gain on changing in investment value 8, (552,733) 4, (548,584) Sales of investments in subsidiaries (52,363) 0 0 (146,020) (198,383) Net profit for the year ,862 25, ,500 Ending balance as at December 31, ,271,903 (1,007,859) 28,822 54, ,300 2,446,201 12,075 3,994,890 Notes to financial statements are parts of these financial statements. Annual Report

73 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 (Thousand Baht) Parent company Note Issued and paid up share capital Premium(Discount) on share capital Unrealized gain on changing in investments value Premium on common shares from investment in subsidiaries and affiliates Legal reserve Retained earnings (Deficit) Total Beginning balance as at January 1,2004 2,242,184 (1,007,859) 410, ,000 1,584,544 3,325,359 Warrants to purchase common shares 18 22, ,930 Legal reserve ,000 (55,000) 0 Dividend paid (452,749) (452,749) Unrealized gain on changing in investment value , ,065 Purchase of investments in subsidiaries , ,662 Net profit for the year ,097,182 1,097,182 Ending balance as at December 31,2004 2,265,114 (1,007,859) 581, , ,000 2,173,977 4,266,449 Warrants to purchase common shares 18 6, ,789 Legal reserve ,300 (38,300) 0 Dividend paid (454,338) (454,338) Unrealized gain on changing in investment value 8, (552,733) 4, (548,584) Sales of investments in subsidiaries (52,363) 0 0 (52,363) Net profit for the year , ,862 Ending balance as at December 31, ,271,903 (1,007,859) 28,822 54, ,300 2,446,201 3,982,815 Notes to financial statements are parts of these financial statements. Annual Report

74 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Cash flows from operating activities Net profit 764,862 1,097, ,862 1,097,182 Minority interest 25,638 19, Adjustments to reconcile net profit to cash receipt (disbursement) Depreciation 26,680 25,038 2,940 1,873 Bad debt and doubtful accounts 2,060 5, Reversal of provision for impairment 0 (595) 0 (595) Share of (profit) from investments for using the equity method (3,727) 0 (637,158) (526,144) Share of loss from investments for using the equity method 0 0 8,713 9,590 (Gain) Loss from sales of assets 617 (749) (Gain) on sales of investments in subsidiaries (32,756) 0 (32,756) 0 (Gain) on sales of investments affiliaties and related parties (87,392) (87,600) (85,867) (87,452) Amortization of prepaid interest 7,436 14,219 7,336 14,219 Other amortizations 19,424 49,981 16,279 19,851 Profit from operation before changes in operating assets and liabilities 722,842 1,121,964 44, ,787 (Increase) Decrease in operating assets Accounts and notes receivable (79,638) (70,545) 197 1,560 Unbilled construction income 217,460 (439,311) 234,561 (367,984) Inventories (2,678,643) (1,984,725) (2,387,193) (527,887) Other current assets 54,202 40,298 79,516 32,944 Other non-current assets (22,797) (15,862) 2,118 (3,047) Increase (Decrease) in operating liabilities Accounts and notes payable 83,645 21,861 34,006 4,303 Unearned revenue 437,791 (207,799) 386,211 (117,956) Other current liabilities (70,948) 32,127 (48,479) 2,903 Other non-current liabilities 44,291 30,309 22,849 5,183 Net cash provided by (used in) operating activities (1,291,795) (1,471,683) (1,631,726) (441,194) Annual Report

75 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS(Cont.) FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Cash flows from investing activities Received (Paid) from loans to subsidiary and related companies ,633 (939,912) (Increase) Decrease in cash at banks with commitment (11,308) (7,537) 6,868 (16,649) Cash received from sales of short-term investments 570, , , ,405 Cash paid for purchase of short-term investments (455,157) (114,843) (415,157) (114,843) Purchase of investments in subsidiaries (45,048) (37,592) (249,160) (167,587) Sales of investments in subsidiaries 61, , Sales of investments in affiliaties and related parties 64, ,782 0 Dividend received from investments in subsidiaries , ,500 Other investments 0 (400) 0 0 Long-term investments 3, ,291 0 Cash received from sales of marketable equity securities 66, ,642 66, ,642 Cash received from sales of fixed assets 859 1, Cash paid for purchase of fixed assets (39,992) (54,033) (7,166) (3,271) Net cash provided by (used in) investing activities 214, ,517 1,045,366 (577,222) Cash flows from financing activities Cash received (paid) for bank overdrafts and short-term loans from financial institutions 434, , , ,751 (Paid) for loans from related companies 0 0 (75,000) 0 Debentures issuance 0 1,100, ,100,000 Received (Paid) from long-term loans 1,027,788 87, , ,412 Payables and loans from directors 0 (10,204) 0 0 Dividend paid (468,076) (452,749) (454,338) (452,749) Cash received from increase share capital 6,789 72,881 6,789 22,930 Net cash provided by (used in) financing activities 1,000,602 1,125, , ,344 Increase (Decrease) in cash and cash equivalents - net (76,474) (76,373) 29,952 (69,072) Cash and cash equivalents, beginning of the period 592, , , ,803 Cash and cash equivalents, end of the period 516, , , ,731 Annual Report

76 STATEMENTS OF CASH FLOWS(Cont.) FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Additional disclosure of cash flows information 1. Cash paid during the period Interest expenses 218, , ,777 89,639 Income tax 314, , , ,118 Interest expenses consist of interest for operating and capitalized as project cost. 2. Sales of subsidiaries In the third quarter of 2005, the Company has sold part of investment in Pre Built Public Company Limited, this company was changed the status from subsidiary to be affiliate company and has book value of assets and liabilities at the selling date as follows: Thousand Baht Cash received from sales of investment in Pre Built Public Company Limited 83,476 Less Cash on hand and at banks of Pre Built Public Company Limited (22,386) Cash received (net) from sales of investment in Pre Built Public Company Limited 61,090 Less Trade accounts and notes receivable - net 223,009 Unreceived revenue 126,365 Inventories 217,796 Other current assets 93,844 Long - term investments 1,430 Property, plant and equipment - net 318,161 Other non - current assets 72,157 Bank overdrafts and short - term loans from financial institution (135,472) Trade accounts and notes payable (178,786) Unearned revenue (68,115) Other current liabilities (64,110) Long - term loans from financial institution (175,494) Other non - current liabilities (665) Minority interest (189,476) Premium on share capital in subsidiaries in proportion of selling (32,469) 208,175 Net assets (147,085) Add Investment in Pre Built Public Company Limited on the remaining portion 179,841 Gain on sales of investment in Pre Built Public Company Limited 32,756 Notes to financial statements are parts of these financial statements. Annual Report

77 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS AS AT DECEMBER 31, 2005 AND FINANCIAL STATEMENTS PREPARATION BASIS These financial statements have been prepared in conformity with the generally accepted accounting standards in Thailand and presented in accordance with the notification of the Department of Business Development dated September 14, 2001 regarding çthe abbreviate items must be shown in the financial statementsé and prepared in conformity with the generally accepted accounting principles as prescribed by the Accounting Act B.E The Company and subsidiaries financial statements have been prepared under the historical cost convention, except as transaction disclosed in related accounting policy. The accounting policies are applied in accordance with the Accounting Standards issued by the Institute of Certified Accountants and Auditors of Thailand (currently named the Federation of Accounting Professions) of which promulgated by the Board of Supervision of Auditing Practices. 2. CONSOLIDATED FINANCIAL STATEMENTS 2.1 These financial statements were consolidated by including the accounts of its subsidiaries which controlled by Asian Property Development Public Company Limited. In the third and fourth quarter of 2005, the Company has reduced the percentage of investment in Pre Built Public Company Limited from holds at 64 % to 43 % and 24 % shareholding, respectively. Thus, the status of Pre Built Public Company Limited was changed from subsidiary to be affiliated company of the Company. Therefore, these financial statements are consolidated only statements of income of Pre Built Public Company Limited and subsidiaries up to the selling date of investment. In addition, in the third quarter of 2005, the Company has purchased common shares of Trillion Development Co., Ltd. increasing the proportion from 40 % to 100 % shareholding as stated in note In the consolidated financial statements preparation for the year ended December 31, 2005 and 2004 have been included the financial statements of Asian Property Development Public Company Limited, a parent company by holding shares in subsidiaries as follows:- Percentage Type of business Relationship - Asian Property Co., Ltd.and subsidiaries Real Estate Shareholding/Command by director (Asian Property Residence Co., Ltd. Real Estate 100% shareholding, Asian Property Holding Asset management Co., Ltd. 100% shareholding) - Asian Property (Ladphrao) Co., Ltd Real Estate Shareholding/Command by director - Asian Property (Krungthep) Co., Ltd Real Estate Shareholding/Command by director - Pre Built Plc. and subsidiaries Construction contract Shareholding/Command by director (PCM Construction Material Co., Ltd. Precast floor 100% shareholding and Trillion manufacturing Development Co., Ltd., 0% and 60% and Real Estate shareholding in 2005 and Thong-lor Residence Co., Ltd. and subsidiaries Real Estate Shareholding/Command by director (Signature Advisory Partners Co., Ltd., 100% shareholding) - Trillion Development Co., Ltd Real Estate Shareholding/Command by director - Asian Property (Thong-lor) Co., Ltd Real Estate Shareholding/Command by director - City Assets Mutual Fund Property and loan fund Shareholding/Command by director - Asian Property (Ratchavipa) Co., Ltd Real Estate Shareholding/Command by director - Bangkok CitiSmart Co., Ltd Service Shareholding/Command by director Annual Report

78 2.3 Transactions between subsidiary companies Transactions between Asian Property Development Public Company Limited and its subsidiaries have been eliminated under the equity method as if Asian Property Development Public Company Limited owns 100 percent shareholding in those subsidiaries, and the interest of other shareholders is shown as çminority interesté. The significant outstanding balance and transactions between Asian Property Development Public Company Limited and its subsidiaries were eliminated from the consolidated financial statements. 2.4 The results of operations of subsidiaries are included in the consolidated financial statements from the control date to the selling date. 2.5 The consolidated financial statements have been prepared in conformity with the same accounting policy for the accounts and accounting events to the Company and subsidiaries. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1 Income and expenses are recorded on an accrual basis except for no and no Revenue from sales of property Revenue from sales of property is recorded on the percentage of completion which is based on the proportion of actual costs (excluding cost of land) to the total estimated costs. The Company recognized revenues when collection received exceeds 20 per cent of each contract value and the progress of completed construction work is more than 10 per cent of total construction project. Revenues from sales of condominium is recorded on the installment due. The Company recognizes revenues when sales contracts have been executed not less than 40 percent of the area opened for sales and collection received exceeds 20 percent of each contract value, and the progress of completed construction work is more than 10 percent Revenues from construction work Revenues from construction are recognized as income on the percentage of completion. Undue of realized income are shown as unbilled construction income in balance sheets. Costs of construction of each project are recognized on the percentage of completion to the total estimated costs. The difference of the estimated costs and the actual costs are recorded as current liabilities in balance sheets. Provision for possible loss will be recorded when a project encounters potential operating loss. Costs of construction consist of raw materials, direct labour and construction overhead. Other expenses and administrative expenses are recorded as expenses occurred during a period in the income statement. 3.2 Inventories Valuation Inventories are valued at the lower of cost or net realizable value. Cost of inventories are detailed as follows : Land for sales Land for sales is valued at cost on a weighted average method (calculated separately for each project) Deferred interest Interest expenses relating to land for sales are recorded as deferred interest as a part of inventories. Such deferred interest is recognized as cost of sales in accordance with the average revenues recognition (calculated separately for each project) Infrastructure The cost of construction for infrastructure like road, electricity system, water supply system and others are recorded as a part of inventories and recognized as cost of sales in accordance with the average revenues recognition Deferred project development costs Project development costs and preparation costs before sales are recorded as a part of inventories and recognized as cost of sales in accordance with the average revenues recognition Finished goods,direct raw materials and indirect raw materials are valued at cost on a first-in first-out (FIFO) basis. Annual Report

79 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 3.3 Property, plant and equipment, and depreciation Land are stated at cost, building and equipment are stated at cost less accumulated depreciation and provision for impairment of assets. Property, plant and equipment of subsidiary çpcm Construction Material Co., Ltd.é in the preparing of consolidated financial statements are stated at fair value since the appraised fair value of assets was indicated for the investment purchasing. Depreciation are presented on a straight-line basis over the estimated useful life of the assets as follows: Land improvement 5 years Building and construction 20 years Club houses, swimming pool and play ground 20 years Sample houses and salesû office 5 years Machinery, fixtures and equipment 5 years Vehicles 5 years Other assets 5 years Sand pit land is depreciated based on the quantity of sand excavated. The Companyûs engineer estimated its useful life of such land capable of giving sand 2.9 million cubic meters. (Sand pit land is located at Kranchanaburi Province with an area of 155 rais) In the preparing of consolidated financial statements, fixed assets which were appraised fair value of PCM Construction Material Co., Ltd. are redepreciated for building and equipment on the straight-line basis over the estimated useful life of assets from the date of investment restructuring Building and construction years Machinery and equipment 2-14 years 3.4 Transactions in foreign currencies Foreign currency transactions are converted into Thai Baht at the exchange rate prevailing on the transaction date. The outstanding foreign currency accounts as at the Balance Sheets date are converted by using the exchange rates prevailing at that date. Gain or loss from exchange rates are taken into income or expenses as incurred. 3.5 Allowance for doubtful accounts The Company provides the allowance for doubtful accounts of accounts receivable outstanding over three months and expected to be uncollectable under the management consideration. 3.6 Investments in subsidiaries and associates Investments in subsidiaries and associates are recorded under the equity method. 3.7 Investments in equity securities Short-term investment in the form of securities for trading are stated at fair value. The changes in value have been recorded in statements of income Long-term investments in the form of securities available for sales are stated at fair value. The different between book value and fair value are separately presented in shareholdersû equity. Premium or iscount from changes in investments value are recognized in the statements of income when the investments are sold Investments in other companies in the form of non-marketable equity securities are held as other investments and are stated at cost less the provision for impairment of investment (if any) Short-term investments and long-term investments which sold during the period, are valued at the weighted average cost. 3.8 Corporate income tax The Company recognizes tax obligations on a tax basis on the condition described in the Revenue Code. Annual Report

80 3.9 Impairment of assets The Company has considered the impairment of investment, property, plant and equipment and intangible assets whenever events or changes indicate that the book value of an asset exceeds its net realizable value. The Company will consider the impairment for each asset item or each asset unit generating cash flow, whichever is practical. In case the book value of an asset exceeds its net realizable value, the Company will recognize an impairment loss in the statements of income. The Company will reverse the impairment loss whenever there is an indication that there is no longer impairment or reduction in impairments as çother incomeé 3.10 Intangible assets The Companyûs intangible assets comprise of deferred goodwill which is the premium of investment exceeds the fair value of net assets of subsidiary and associated companies at the investment date by presenting as intangible assets and amortized on a striaght - line method within 5-20 years 3.11 Cash and cash equivalents Cash and cash equivalents mean cash on hand and all type of bank deposit excluding deposit which held to maturity and liquid short-term investments that had slightly risk in changing value Provident fund In 2004, the Company and its employees joined to be member of çthe Welfare Development Registered Provident Fundé in accordance with the Provident fund Act B.E by appointing Kasikorn Thai Asset Management Co., Ltd. to be fund manager. The fund is contributed by both the employees and the Company at the rate of 3 % or 5 % or 6 % of employee wages based on the period of their work. The benefits will be paid to employees upon their retirement, death or resignation Earnings per share Basic earnings per share Earnings (Loss) per share as presented in the statements of income is the basic earnings (loss) per share which is determined by dividing the net profit (loss) for the year by the weighted average number of share issued and paid-up during the year Diluted earnings per share Diluted earnings per share is calculated by using net profit (loss) after adjusted by relevant revenues or expenses, net from income tax divided by the sum of weighted average number of common share issued during the period and the number of common shares issued in the conversion of potential common shares to common shares. For the comparison purpose, the basic earnings per share for the year ended December 31, 2004 was re-calculated by dividing net profit for the year by the weighted average number of shares issued and paid-up during the year multiplied by the number of shares which calculated from fair value of common shares before and after exercise right Use of accounting estimates The preparation of financial statements in conformity with generally accepted accounting principles required the management to make estimates for certain accounting transactions that affect to the amounts in the financial statements. Subsequent actual results may differ from those estimates. 4. SHORT-TERM INVESTMENT Short-term investment are in form of treasury bill and units trust of open-ended fund for fixed-income investment. Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Treasury bill 0 114, ,843 Units trust of open-ended fund Total , ,843 Annual Report

81 5. ACCOUNTS AND NOTES RECEIVABLE - NET The Companyûs delinquent accounts receivable classified by aging as follows: ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Accounts receivable Less than 3 months , Over 3 months to 6 months 0 8, Over 6 months to 12 months 0 1, Over 12 months 33,605 44,017 33,605 33,802 Total 33, ,142 33,605 33,802 Notes receivable 0 11, Less Allowance for doubtful accounts (33,107) (43,209) (33,107) (33,107) Accounts and notes receivable - net , UNBILLED CONSTRUCTION INCOME The Company and subsidiaries had the projects on hand as detailed following: Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Recognized revenue 9,791,916 8,022,739 3,372,010 3,488,262 Less Receipt of payment (9,635,972) (7,522,970) (3,237,380) (3,119,071) Unbilled construction income 155, , , ,191 CONTRACTED SALES VALUE AND ITS PROPORTION TO PROJECT TOTAL SALES Consolidated Parent company Beginning project on hand Closed project (6) (6) (2) (2) New project launched Ending project on hand Project total sales (million Baht) 9,880 7,753 6,593 3,607 % Sales value of project on hand to total sales Annual Report

82 7. INVENTORIES - NET Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Land 4,972,933 3,938,977 2,859,674 1,712,304 Land and construction 634, Land improvement 410, , , ,616 Work in progress 2,089,147 1,014,644 1,371, ,640 Infrastructure 469, , ,401 47,983 Deferred interest expenses 307, ,789 56,070 3,981 Deferred project development 82,914 45,179 46,511 19,589 Finished goods 0 18, Raw materials and supplies 0 50, Total 8,966,880 5,922,841 4,673,306 2,286,113 Less Allowance for devalue of inventories (155,466) (163,098) 0 0 Inventories - net 8,811,414 5,759,743 4,673,306 2,286,113 The Company and subsidiaries mortgaged most of land as collateral for overdrafts and loans from banks (note 13 and 14). In 2005, parts of inventories belong to a subsidiary which is a Property Fund. It has purchased the right to claim on debt repayment from another company at Baht 400 million. Such right to claim was guaranteed by land and construction. Later, there are prosecution and on June 24, 2005, such collaterals was taken into the auction for bidding by the Execution Department and such fund could win the bid such collaterals in the price of Baht million and made payment by offsetting with the right to claim on debt repayment of Baht 400 million. Therefore, such land and construction was recorded in investment account at fair value which is the bidding price. However, in the consolidated financial statements preparation, such land and construction were presented as parts of inventories at cost to purchase the right to claim including related expenses in the amount of Baht million in order to present inventories at cost or net realizable value whichever is lower. Annual Report

83 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 8. INVESTMENTS IN SUBSIDIARIES AND AFFILIATES Investments in subsidiaries consist of Type of business Million Baht % Thousand Baht Thousand Baht Thousand Baht Paid-up of share capital Percentage of investments Investments (Equity method) Investments (Cost method) Asian Property Co., Ltd. and subsidiaries Real estate , , , , Deferred goodwill 113, , Net 847, , , , Dividend Asian Property (Ladphrao) Co., Ltd. Real estate , , , , , ,500 Deferred goodwill 8,661 13, Net 601, , , , , ,500 Asian Property (Krungthep) Co., Ltd. Real estate , ,889 20,016 20, Deferred goodwill 8,640 12, Net 418, ,986 20,016 20, Pre Built Plc. and subsidiaries Construction contract , ,401 24,512 0 Thong-lor Residence Co., Ltd. and subsidiaries Real estate ,195 3,170 1, Trillion Development Co., Ltd. Real estate ,249 39, ,059 40, Asian Property (Thong-lor) Co., Ltd. Real estate , , City Assets Mutual Fund Property and loan fund , , , , Asian Property (Ratchavipa) Co., Ltd. Real estate ,547 29,124 37,560 37, Bangkok CitiSmart Co., Ltd. Services , , Total investments in subsidiaries 2,833,093 2,612,413 1,293,724 1,164, , ,500 Investments in affiliates consist of Pre Built Plc. and subsidiaries Construction contract , , Total investments in affiliates 136, , Total investments in subsidiaries and affiliates 2,969,239 2,612,413 1,341,763 1,164, , ,500 Annual Report

84 8.1 Asian Property Co., Ltd. has investment in common shares of two subsidiary companies which are included the equity gain (loss) from operation as detailed following : Paid-up of Percentage of Cost Name of companies Type of share captial investment method Equity method (Thousand Baht) business Thousand Baht % Thousand Baht Investment in subsidiary companies Thousand Baht Asian Property Residence Co., Ltd. Real estate 20, ,008 6,512 21,578 Asian Property Assets Holding Co., Ltd. Management ,280 2,211 Total 7,792 23,789 Investments in two subsidiaries which were brought into the computation of investment under equity method were taken from their audited financial statements. 8.2 Pre-Built Public Company Limited has investment in common shares of subsidiaries which were included the equity gain (loss) from operation as detailed following : Paid-up of Percentage of Cost Name of companies Type of share captial investment method Equity method (Thousand Baht) business Thousand Baht % Thousand Baht PCM Construction Manufacturing Material Co., Ltd. of Precast floor 30, , , ,126 Trillion Development Co., Ltd. Real estate 100, ,977-58,550 Total 239, ,676 Investments in a subsidiary consolidated under the equity method was taken from their audited financial statements According to the minutes of shareholdersû extraordinary meeting no. 1/2004 held on February 17, 2004, passed the resolution to proceed as following : (1) The Company sold 499,993 common shares of PCM Construction Material Co., Ltd. which is 99.99% held by the Company to Pre-Built Public Company Limited in the amount of Baht 8.01 million on February 17, (2) The Company purchased the new common share of Pre-Built Public Company Limited for 98,048,898 shares at Baht 1.00 each by dividing the payment as follows : (2.1) The 8,013,536 common shares valued at Baht 8.01 million was exchanged by selling PCM Construction Material Co, Ltd. of 499,993 shares at the same value of Baht 8.01million on February 17, From such exchange, Pre-Built Public Company Limited recorded investments in common shares of PCM Construction Material Co., Ltd. at fair value by calculating from net assets value at the purchasing date added revaluation increment which appraised by the independent appraisal hired by PCM Construction Material Co., Ltd. to appraise parts of property, plant and equipment on replacement cost method due to the appraisal report dated November 23, The different between fair value of investments and increase share capital value are shown as çpremium on common shares from investments in subsidiariesé in shareholdersû equity. (2.2) The remaining 90,035,362 common shares of Baht million paid on February 27, 2004 were offered to the existing shareholders at 1 old share for 10 new shares. Annual Report

85 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES According to the minutes of shareholdersû extraordinary meeting of PCM Construction Material Co., Ltd. no. 1/2004 held on January 6, 2004 and no. 3/2003 held on December 19, 2003, passed the resolution to increase its share capital of Baht 25 million, 2.5 million shares at Baht each, by offering to Pre-Built Public Company Limited, total registered share capital is Baht 30 million, 3 million shares at Baht each. The change of share capital was registered at the Ministry of Commerce on March 29, Finally, Pre-Built Public Company Limited holds 99.99% in PCM Construction Material Co., Ltd. and as at December 31, 2005, the Company indirectly held 24.02% through Pre-Built Public Company Limited According to the minutes of shareholdersû extraordinary meeting of Pre Built Public Company Limited no. 1/2005 held on July 14, 2005, pass the resolution to pay interim dividend at Baht 0.25 each, amounting to Baht million which ratified to pay on August 29, The Company received dividend in the amount of Baht million On August 31, 2005, the Company and Asian Property Co., Ltd. sold 32 million common shares of Pre Built Public Company Limited or 21% of its paid-up capital in the amount of Baht 86 million, resulted in gain on sales of investment of Baht million. The Company has reduced shareholding in Pre Built Public Company Limited from 64% to 43%, hence, the status of Pre Built Public Company Limited was changed from subsidiary to be affiliated company of the Company. The consolidated financial statements have been included only statements of income of Pre Built Public Company Limited and subsidiaries up to the selling date of investment and as at November 18, 2005, Pre Built Public Company Limited has offered 47 million common shares to the public and the Company also sold 19 million common shares of Pre Built Public Company Limited at the price of Baht 3.25 each, resulted gain on sales of investment of Baht million. After IPO, the percentage of shareholding in Pre Built Public Company Limited by the Company was changed from 43% to 24% and premium on selling shares exceeded the par value was Baht 4.15million.The Company has recorded such premium as premium on common shares from investment in subsidiaries and affiliates On August 31, 2005, the Company has additionally purchased common shares of Trillion Development Co., Ltd. from Pre Built Public Company Limited at Baht per share, amounting to Baht million, the percentage of shareholding increased from 40% to 100%. The financial statements of Trillion Development Co., Ltd. have been consolidated to the Companyûs financial statements since the beginning of the period because such company was a subsidiary of Pre Built Co., Ltd. before the Company increased its stake. 8.3 According to the minutes of shareholdersû extraordinary meeting of Asian Property (Thonglor) Co., Ltd. no. 4/2005 and no. 5/2005 held on May 4, 2005 and May 19, 2005, respectively, passed the special resolution to increase its capital of Baht 19,900, (1,990,000 common shares of Baht 10 each), thus total authorized share capital is Baht 20,000, (2,000,000 common shares of Baht 10 each). The Company purchased all additional shares on May 20, According to the minutes of shareholdersû extraordinary meeting of Thonglor Residence Co., Ltd. no. 2/2005 and no. 3/2005 passed the special resolution to increase its capital of Baht 900, (90,000 common shares of Baht 10 each), thus total authorized share capital is Baht 1,000, (100,000 common shares of Baht 10 each). The Company purchased all additional shares on June 27, On March 1, 2005, the Company sold 2,446 common shares of Asian Property (Ratchavipa) Co., Ltd. to Asian Property (Ladphrao) Co., Ltd. and Asian Property (Krungthep) Co., Ltd. at book value of Baht each, totalling amount of Baht 32, According to the minutes of shareholdersû extraordinary meeting of Asian Property (Ladphrao) Co., Ltd. passed the resolution to pay interim dividend at Baht per share for 35 million shares or Baht 350 million in total. On August 26, 2005, the Company fully received dividend of Baht 350 million. 8.7 In 2005, the Company purchased 299,994 common shares of Bangkok CitiSmart Co., Ltd. a Baht 10 per share or Baht 2,999,940 in total. 8.8 In 2005, the Company purchased million unit trusts of City Assets Fund at book value of Baht and Baht per unit at the purchasing date, amounting to Baht 165 million. As at December 31, 2005, the remaining million units of Baht each equal to Baht 1, million. Annual Report

86 9. LONG-TERM INVESTMENTS Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Quality Construction Products Plc. 135, , , ,914 Add Unrealized gain on changing in investment value 28, ,555 28, ,555 Total 164, , , ,469 Siam System Built Co., Ltd. 0 3, ,300 Government bonds 0 1, Total 164, , , ,769 In 2005 and 2004, the Company sold investment in Quality Construction Products Public Company Limited at the amount of Baht million and Baht million, resulted in gain from sales of investments of Baht million and Baht million, respectively. The Company recorded gain from sales of investments as revenues in statements of income. 10. OTHER INVESTMENTS In the consolidated financial statements, other investments was the investment in City Assets Fund for purchasing the right to claim on repayment of debt of another company as at December 31, for the amount of Baht 400 million. Such debt was guaranteed by 6 title deed of land with its construction. As at June 24, 2005, the fund has won the bid of such assets from the Execution Department in the amount of Baht million. The Company has recorded such assets as inventories at cost including related expenses of Baht million as stated in note LAND AND COST OF PROJECT HELD FOR DEVELOPMENT Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Land 118, , Deferred interest expenses 91,992 91, Deferred expenses Total 211, , Less Allowance for devaluation of inventories (68,383) (68,383) 0 0 Land and cost of project held for develoment 142, , Parts of land was mortgaged as collateral for guarantee overdrafts and long-term loans of subsidiaries as mentioned in note 13 and Annual Report

87 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 12. PROPERTY, PLANT AND EQUIPMENT - NET Consolidated Baht : Thousand 2004 Increase Disposal Transfer in (out) 2005 Cost :- Land and improvement 234, (178,662) 55,801 Building and construction 45, (41,647) 4,084 Sample houses and salesû office 20,858 1,433 (3,551) (11,446) 7,294 Club houses - swimming pool and play ground 42, ,474 Tools and machinery 120,896 15,851 (10,752) (125,995) 0 Fixtures and equipment 19,013 8,352 (2,037) (7,981) 17,347 Vehicles 19, (639) (17,976) 1,505 Other fixed assets 12,437 3,408 0 (6,381) 9,464 Assets under installation 19,808 10,119 0 (28,317) 1,610 Total 534,971 39,992 (16,979) (418,405) 139,579 Accumulated depreciation : Land improvement 11, (3,737) 8,558 Building and construction 10,616 1,592 0 (10,361) 1,847 Sample houses and salesû office 13,552 1,267 (3,074) (6,448) 5,297 Club houses - swimming pool and play ground 30, ,053 Tools and machinery 54,167 13,166 (1,269) (66,064) 0 Fixtures and equipment 8,884 3,320 (749) (2,185) 9,270 Vehicles 6,742 2,287 (271) (7,895) 863 Other fixed assets 5,516 4,081 0 (6,411) 3,186 Total 141,858 26,680 (5,363) (103,101) 60,074 Provision for impairment : Land and improvement 6, ,639 Building and construction Club houses - swimming pool and play ground 5, ,694 Total 12, ,855 Net book value 380,258 66,650 Annual Report

88 Parent company Baht : Thousand 2004 Increase Disposal Transfer in (out) 2005 Cost :- Land and improvement 55, ,801 Building and construction 4, ,084 Fixtures and equipment 5,298 3,776 (914) 0 8,160 Vehicles (88) Other fixed assets 2,989 2, ,089 6,704 Assets under installation (1,089) 0 Total 69,212 7,166 (1,002) 0 75,376 Accumulated depreciation : Land improvement 8, ,558 Building and construction 1, ,847 Fixtures and equipment 1,521 1,634 (243) 0 2,912 Vehicles (4) Other fixed assets ,790 Total 12,706 2,940 (247) 0 15,399 Provision for impairment : Land and improvement 6, ,639 Building and construction Total 7, ,161 Net book value 49,345 52,816 As at December 31, 2005, the Company has an unused property, plant and equipment - net amounting to Baht million and held for sales (as at December 31, 2004 amounting to Baht million) In 2004, cost of land, building and equipment of PCM Construction Materials Co., Ltd. in the consolidated financial statements presented at fair value of purchased investment which the value of purchased assets was appraised. This caused an increase in appraised value of land of Baht million by using market value, building and equipment of Baht million by replacement cost. Meanwhile, this increase of the appraised value led to higher depreciation amount of building and equipment for eight months ended August 31, 2005 of PCM Construction Materials Co., Ltd. in the consolidated financial statements than in the financial statements of PCM Construction Materials Co., Ltd. itself in the amount of Baht 6.37 million. However, the consolidated financial statements as at December 31, 2005 do not include property, plant and equipment - net of PCM Construction Materials Co., Ltd., a subsidiary of Pre Built Public Company Limited since the Company has sold part of investment in Pre Built Public Company Limited as stated in note 8.2. In 2004, part of land, factory building and machinery of subsidiaries were used as guarantee for overdraft, loans from banks and contingent liabilities. Annual Report

89 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 13. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS The Company and subsidiaries have overdrafts and short-term loans from financial institutions as follows: Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Bank overdrafts 1,391 2, Short-term loans from financial institutions 560, , , ,000 Less Prepaid interest (4,066) (2,442) (4,066) (2,342) Total 557, , , , As at December 31, 2005, the Company has overdrafts line of Baht 70 million, guaranteed by mortgaging par of land project of the Company and of Asian Property Co., Ltd. As at December 31, 2005, subsidiaries have overdrafts line with several banks totalling of Baht 115 million, guaranteed by Asian Property Development Public Company Limited and land project which belong to subsidiaries As at December 31, 2005, the Company has loans from bank and financial institutions by issuing bill of exchange of Baht 560 million at the interest rate of % and MLR-1.5% per annum, due on October 27, LONG - TERM LIABILITIES The Company and subsidiaries have long - term loans from bank and financial institutions as following: Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Long-term loans 2,145,843 1,181,545 1,485, ,000 Less Current portion of Long-term debt (511,286) (289,840) (340,000) (250,000) Prepaid interest 0 (1,992) 0 (1,992) Long-term loans - net 1,634, ,713 1,145, ,008 Annual Report

90 14.1 Long-term loans of Asian Property Development Public Company Limited consist of Institute Balance (Thousand Baht) Interest Repayment Guarantee by rate Bank 1,045, , 65-70% of selling price Mortgage land and MLR-0.75 whenever redemption of construction of each to MLR-2 selling project was made project Bank - 200, Due in October 27, 2005 Redemption Opened fund 440, , to 4.00 Due in July June Redemption (Net book value of 2007 Baht 440 million) Total 1,485, ,000 Annual Report

91 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 14.2 Long-term loans - subsidiaries consist of Company Institute Balance (Thousand Baht) Interest Repayment Guarantee by rate 1. Asian Property Bank Bank 321, , % of selling price Mortgage land of (Krungthep) and MLR-0.25 whenever redemption of project and guarantee Co., Ltd. to 1.5 selling project was made, by Asian Property due in November 2006 Development Plc. and December Asian Property Bank 20 0 MLR % of selling price Mortgage land of (Ratchavipa) MLR-1.25 whenever redemption of project and guarantee Co., Ltd. selling project was made, by Asian Property due in August 2009 Development Plc. 3. Asian Property Bank 194,000 0 MLR-2 65% of selling price Mortgage land of (Thong-lor) MLR-1.50 whenever redemption of project and guarantee Co., Ltd. selling project was made, by Asian Property due within 2 years Development Plc. 4. PCM Construction Bank 0 90, Monthly repayment Mortgage land, factory Material of Baht 1.5 million building and parts of Co., Ltd. to Baht 1.77 million machinery due in August Asian Property Bank 94, MLR % of selling price Mortgage land of (Ladphrao) to 1.5 whenever redemption of project and guarantee Co., Ltd selling project was made, by Asian Property due within 6 years Development Plc. 6. Trillion Development Bank 50,607 84,000 FIX + 3 or 65% of selling price Mortgage land of Co., Ltd. MLR whenever redemption of project and guarantee to 1.5 selling project was made by proportion of due within 6 years shareholders Total 659, ,545 2,145,843 1,181,545 Fixed rate at 3.9% per annum up to the year 2005 and MLR thereafter. Annual Report

92 15. DEBENTURES 15.1 On July 30, 2003, the Company issued and offered debentures according to the Board of directorsû meeting no. 4/2003 held on March 18, 2003 and according to the minutes of shareholders ordinary meeting for the year 2003 held on April 22, 2003 by issuing and offering unsubordinated debentures with periodic payments, unsecured and without debentureholdersû representative for 1.5 million units at the offering price of Baht 1, each, amounting to Baht 1,500 million for the maturity period of 5 years 11 months 20 days at the interest rate of 3.1% per annum. Such debentures were offered to the institutional investors in no. 12/1(3) and no. 12/2(5) of the Securities Exchange and Commissionûs notification no. Kor Jor. 44/2000. The interest payment has been paid every January 20, and July 20, commencing on January 20, The first principal will be repaid on January 20, 2007 and the last principal will be redeemed on July 20, The Company has registered such debentures with the Thai Bond Dealing Centre on July 31, On May 13, 2004, the Company issued and offered debentures according to the shareholdersû ordinary meeting no. 1/2004 held on April 1, 2004 by issuing and offering unsubordinated debentures, unsecured and with debentureholderûs representative for 1 million units at the offering price of Baht 1, each, amounting to Baht 1,000 million with the 3 years term at the fixed interest rate of 4.25% per annum. Such debentures were offered to the public and institutional investors in accordance with the Securities Exchange and Commissionûs notification no. Kor. Jor. 32/2001. The interest payment was paid quarterly, commencing on August 13, 2004 and the debentures will be redeemed on May 13, The Company has registered such debentures with the Thai Bond Dealing Centre on May 26, On December 3, 2004, the Company issued and offered unsecured debentures, named, unsubordinated and with debentureholderûs representative for 1 unit at the offering price of Baht 100 million per unit, amounting to Baht 100 million for the maturity period of 2 years and 43 days at the interest rate of 4.125% per annum. Such debenture were offered to private placement in accordance with no. 4 of the Securities and Exchange Commissionûs notification no. Kor. Jor. 34/2004. The interest payment was paid quarterly, commencing on January 15, 2005 and the debentures will be redeemed on January 15, SHARE CAPITAL 16.1 According to the minutes of shareholdersû annual general meeting no. 1/2005 held on April 28, 2005, passed the resolution as follows: Approved an increase of the Companyûs registered capital by additional Baht 68,150,000 from Baht 2,275,000,000 to Baht 2,343,150,000 dividend into 2,343,150,000 ordinary shares of Baht 1 each Approved an issuance of 34,000,000 units of warrant offered to employees of the Company and its subsidiaries which is more than 90% of its total paid-up capital held by the Company Approved the allotment of 68,150,000 new ordinary shares at par value of Baht 1 each as following : (1 ) 150,000 new ordinary shares will be additionally reserved for the exercise of warrants no. 1issued to the existing warrantholders of the Company (AP-W1) which may be effected from adjustment of an exercise right according to the terms and conditions specified in the prospectus. (2 ) 34,000,000 new ordinary shares will be offered to employees of the Company and its subsidiaries (ESOP) which is more than 90% of its total paid-up capital held by the Company. (3 ) 34,000,000 new ordinary shares will be reserved for the exercise of ESOP warrants offered to employees of the Company and its subsidiaries according to clause The Company has registered the change in share capital with the Ministry of Commerce on May 10, According to the minutes of shareholdersû extraordinary meeting of Asian Property (Ratchavipa) Co., Ltd. no. 5/2004 and no. 1/2005 held on December 27, 2004 and January 17, 2005, respectively, unanimously passed the resolution to decrease share capital of Baht 155,019,600 by reducing the value of ordinary share by Baht 75 each, the remaining 2,066,928 shares of Baht 25 each, amounting to Baht Annual Report

93 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 51,673,200 was registered with the Ministry of Commerce on April 28, According to the minutes of shareholdersû extraordinary meeting of Asian Property (Ratchavipa) Co., Ltd. no. 3/2005 and no. 4/2005 held on August 16, 2005 and September 16, 2005, respectively, unanimously passed the resolution to decrease share capital of Baht 37,204, by reducing the value of ordinary share by Baht 18 each,the remaining 2,066,928 shares of Baht 7 each, amounting to Baht 14,468,000 was registered with the Ministry of Commerce on December 31, PREFERRED SHARES The Company held preferred shares of Asian Property Co., Ltd. for 26 million shares of Baht each (100% holding) with accumulated dividend at the rate of 15% per annum of the paid-up share capital. The Company will record accrued dividend whenever the shareholdersû meeting passed the resolution to pay dividend. As of December 31, 2005, the accrued preferred dividend of Baht million was not recorded (in 2004, amounted to Baht million). However, the preferred shares transaction was eliminated from the consolidated financial statements preparation. 18. WARRANTS The allotment of warrants to purchase common shares has been approved by the Stock Exchange of Thailand. The trading in the Stock Exchange has begun since March 21, Number of untis Warrants issued as at March 13, ,000, ,000,000 Less Cumutative number of warrants (346,902,620) (340,114,120) Balance of warrants at the end of the period 3,097,380 9,885,880 The Company has registered the issued and paid-up share capital ended December 31, 2005 at the Ministry of Commerce on January 11, LEGAL RESERVE According to the Public Company Limited Act, appropriated legal reserve must be retained by not less than 5% of the annual net profit deducted by the retained loss brought forward (if any) until the reserve reached an amount not less than 10% of the authorized share capital. 20. DIVIDEND PAID According to the minutes of shareholdersû annual general meeting no. 1/2005 held on April 28, 2005, passed the resolution to pay dividend to the Companyûs shareholders from its operation for the year 2004 at Baht 0.20 per share (at par value of Baht 1 each) which was paid on May 20, The dividend payment to the shareholders is Baht million. According to the minutes of shareholdersû annual general meeting no. 1/2004 held on April 1, 2004, passed the resolution to pay dividend to the Companyûs shareholders from its operation for the year 2003 at Baht 0.20 per share (at par value of Baht 1 each) which was paid on April 23, The dividend payment to the shareholders was Baht million. Annual Report

94 21. DILUTED EARNINGS PER SHARE Consolidated and parentûs financial statements For the year ended December 31, 2005 Profit (Baht) Number of share Baht/share Basic earnings per share Net profit of common shareholders 764,861, ,270,165, Effects of diluted potential common share Exercise rights 2,191,713 Diluted earnings per share Profit of common shareholders assumed as conversion to common share 764,861, ,272,357, For the year ended December 31, 2005 Profit (Baht) Number of share Baht/share Basic earnings per share Net profit of common shareholders 1,097,181, ,282,013, Diluted earnings per share Profit of common shareholders assumed as conversion to common share 1,097,181, ,294,859, The number of common shares which was taken to calculate basic earnings per share for the year ended December 31, 2004 have been changed according to the number of exercised right to purchase common shares after December 31, 2004 for comparison purpose. 22. TRANSACTIONS BETWEEN RELATED COMPANIES The Companyûs financial statements are included the transaction with its related companies classified by common shareholders and/or directorship. These transactions are determined to be policy as follows: Type of inter-transaction Trading transaction between the Company and subsidiaries with related companies Pricing determination policy Price and benefits are concluded in the normal course of business or the agreement concerned for non-market value transactions. Related persons/companies Relationship - Quality Construction Products Plc. Common director and the Company is a shareholder - Land and Houses Plc. Common director and the Company is a shareholder - Quality Houses Plc. Common shareholder - Pre Built Plc. Subsidiary up to August 31, 2005/at present, an affiliate - Advisory Services Co., Ltd. Common director - Siam Chai Sir Co., Ltd. Common director - Siam Tanee Real Estate Co., Ltd. Major shareholder is closely relative of the parentûs director - Pacific Real Estate Co., Ltd. Major shareholder is closely relative of the parentûs director - Mr. Viroj Charoentra Director and shareholder of Pre Built Plc. Annual Report

95 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES Consolidated Parent company 2005 Thousand Baht Thousand Baht 2004 Accounts receivable: - Land and Houses Plc. 0 19, Quality Houses Plc. 0 2, Siam Tanee Real Estate Co., Ltd. 0 4, Total 0 26, Unbilled construction income: - Land and Houses Plc. 0 19, Siam Tanee Real Estate Co., Ltd. 0 14, Total 0 33, Accrued interest income: - Asian Property (Krungthep) Co., Ltd ,066 34,574 - Asian Property (Ratchavipa) Co., Ltd ,725 13,284 - Asian Property (Thong-lor) Co., Ltd ,804 7,644 - Thong-lor Residence Co., Ltd Signature Advisory Partners Co., Ltd , Trillion Development Co., Ltd Total ,937 56,371 Other accounts receivable: - Pre Built Plc. 10, Retention receivable: - Land and Houses Plc Siam Tanee Real Estate Co., Ltd Total 0 1, Accounts payable: - Pre Built Plc. 5, ,283 - PCM Construction Material Co., Ltd. 11, ,374 9,334 - Quality Construction Products Plc Total 17, ,619 12,735 Accrued expenses: - Advisory Services Co., Ltd Retention payable: - Pre Built Plc. 32, ,150 11,228 Sales and services: - Asian Property (Krungthep) Co., Ltd , Signature Advisory Partners Co., Ltd , Land and House Plc. 26,508 91, Quality House Plc. 10,428 14, Siam Tanee Real Estate Co., Ltd. 2,547 35, Annual Report

96 Consolidated Parent company 2005 Thousand Baht Thousand Baht Pacific Real Estate Co., Ltd. 56, Total 95, ,300 69,374 0 Dividend income - Quality Construction Products Plc. 14,969 14,300 14, ,300 Total 14,969 14,300 14, ,300 Interest income: - Asian Property Co., Ltd Asian Property (Krungthep) Co., Ltd ,828 25,113 - Asian Property (Ratchavipa) Co., Ltd ,494 13,284 - Asian Property (Thong-lor) Co., Ltd ,820 7,644 - Thong-lor Residence Co., Ltd Signature Advisory Partners Co., Ltd , PCM Construction Material Co., Ltd ,045 - Trillion Development Co., Ltd Total ,615 48,469 Goods purchases: - PCM Construction Material Co., Ltd. 122, ,697 34,767 - Quality Construction Products Plc. 1,316 18,000 1,316 17,417 Total 124,122 18,000 83,013 52,184 Wage under construction: - Pre Built Plc. 736, , ,175 Consultant fee: - Advisory Services Co., Ltd. 1,284 2,354 1,284 2,354 - Siam Chai Sir Co., Ltd. 0 4, ,280 Total 1,284 6,634 1,284 6,634 Interest expenses: - City Assets Mutual Fund 0 0 1,416 2,820 - Asian Property (Ladphrao) Co., Ltd Total 0 0 1,764 2,820 Annual Report

97 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES In 2005, the Company has lended to related parties as detailed following: Baht : Thousand Company Relationship 2004 Increase Decrease 2005 Asian Property (Krungthep) Co., Ltd. A 748, ,731 (661,200) 556,111 Asian Property (Ratchavipa) Co., Ltd. A 531, ,828 (937,178) 202,000 Asian Property (Thong-lor) Co., Ltd. A 298,082 94,718 (202,982) 189,818 Thong-lor Residence Co., Ltd. A Signature Advisory Partners Co., Ltd. A 22,568 23,450 (8,000) 38,018 Trillion Development Co., Ltd. A 0 25, ,000 Total 1,600,880 1,219,727 (1,809,360) 1,011,247 The Company has lended to related companies by receiving their promissory notes, due at call with the interest rate of 4.20% per annum without collaterals. In 2005, the Company has obtained loans from related parties as the following details: Baht : Thousand Fund Relationship 2004 Increase Decrease 2005 City Assets Fund B 75,000 0 (75,000) 0 Asian Property (Ladphrao) Co., Ltd. A 0 66,000 (66,000) 0 Total 75,000 66,000 (141,000) 0 The Company has obtained loans from related company by issuing promissory notes, due at call with the interest rate of 3.75% and 4.20% per annum without collaterals. Note Relationship A = Directorship and common shareholders B = Company is unit trust holder Annual Report

98 Investment trading transaction Consolidated Parent company 2005 Thousand Baht Thousand Baht Sold 10 million common shares of Pre Built Plc. to Mr. Viroj Charoentra at the selling price close to the selling price of the others 25, , Purchased 6 million common shares of Trillion Development Co., Ltd. from Pre Built Plc. at the purchasing price indicated by the independent appraiser , Sold 0.50 million common shares of PCM Construction Material Co., Ltd. to Pre Built Plc ,013 - Purchased 8.01 million increase common shares of Pre Built Plc. at Baht 1.00 each ,013 On February 17, 2004, the Company purchased 8.01 million common shares of Pre Built Public Company Limited at Baht 1 each, amounting to Baht 8.01 million by exchanging with 0.50 million shares of PCM Construction Material Co., Ltd., holding by the Company, with the same amount of Baht 8.01 million. The exchange price stated in note 8.2. Annual Report

99 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 23. SEGMENT INFORMATION Consolidated Baht : Million Real estate development For the year ended December 31, 2005 and 2004 Sales and installation service Construction contract Total Inter-transaction Total Sales and services income 4,490 4, ,758 6,266 (501) (526) 5,257 5,740 Gross profit 1,551 1, ,692 2,019 (8) (15) 1,684 2,004 Dividend income Share of profit from investment for using the equity method 4 - Other income Selling and administrative expenses (712) (637) Profit before interest expenses and income tax 1,128 1,506 Interest expenses (59) (66) Income tax (278) (324) Net profit of minority interests 791 1,116 (Gain) Loss of minority interests (26) (19) Net profit 765 1,097 Fixed assets - net For the parent financial statements, it does not present the segmental information since the Companyûs operations involve virtually a single eal estate development business in one geographical segment since the Company has operated only in domestic. Annual Report

100 24. COMMITMENT AND CONTINGENT LIABILITIES The Company has commitment and contingent liabilities as follows: 24.1 The Company has contingent liabilities from guaranteed loans from banks and guarantee all debts of subsidiaries and related companies as follows: Guarantee lines (Million Baht) Asian Property (Ladphrao) Co., Ltd Asian Property (Krungthep) Co., Ltd , Asian Property (Ratchavipa) Co., Ltd. 1, , Asian Property (Thong-lor) Co., Ltd Pre Built Public Company Limited PCM Construction Material Co., Ltd Trillion Development Co., Ltd Asian Property Co., Ltd. has contingent liabilities from being guarantor for loans from banks and all liabilities of subsidiary and related companies of Asian Property Co., Ltd. as following details: Guarantee lines (Million Baht) Asian Property Development Public Company Limited Asian Property Residence Co., Ltd Asian Property (Ladphrao) Co., Ltd Pre-Built Plc Such commitment are included the unuse credit line of subsidiaries and/or the credit which was repaid for the part of loans without redemption of such commitment. Such guarantees are based on the percentage of shareholding except: (A) The guarantee liabilities of PCM Construction Material Co., Ltd. is guaranteed in the existing proportion of shareholding before February 18, 2004 which the Company held 100% and on December 26, 2005, Pre Built Public Company Limited has got in such guarantee instead of the Company in order to conform to shareholding restructuring in August (B) The guarantee liabilities of Pre Built Public Company Limited by Asian Property Co., Ltd. for Baht 23 million, is jointly guaranteed with directors of Pre Built Public Company Limited which is the old facility before shareholding restructuring in February 2004 and on December 26, 2005, Asian Property Co., Ltd. and the director of Pre Built Public Company Limited were released such guarantee in order to conform to shareholding restructuring in August (C) The guarantee liabilities of Pre Built Public Company Limited and Trillian Development Co., Ltd. is guaranteed in the existing proportion of shareholding before shareholding restructuring in August 2005 and On December 26, 2005, the Company was released from the debt guarantee of Pre Built Public Company Limited. In addition, the Company is under the guarantee all debt of Trillion Development Co., Ltd. in order to conform to the proportion of shareholding in August 2005 which the Company held 100%. Annual Report

101 ASIAN PROPERTY DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES 24.2 The Company and subsidiaries have commitment and contingent liabilities to complete developing projects and from banksû issuance of letter of guarantee as following details: (Baht : Million) Commitment under contracts to use in development project until completion Contingent liabilities from banksû issuance of letter of guarantee to Government agency and individuals Asian Property Development Plc. 2, , Asian Property Co., Ltd Asian Property (Krungthep) Co., Ltd Asian Property (Ladphrao) Co., Ltd Asian Property (Ratchavipa) Co., Ltd Asian Property (Thong-lor) Co., Ltd Pre Built Plc Trillion Development Co., Ltd Asian Property Residence Co., Ltd PCM Construction Material Co., Ltd Total 4, , DISCLOSURE AND PRESENTATION OF FINANCIAL INSTRUMENTS 25.1 Accounting Policy The significant accounting policies and method adopted the basis of recognition and measurement relating to each class of financial assets and financial liabilities have been disclosed in note Credit risk Credit risk derives from failure by counterparties to discharge their obligations resulting in financial loss to the Company and subsidiaries. Financial assets shown in balance sheets at the book value deducted by allowance for doubtful accounts is maximum value of credit risk Exchange rate risk The Company has no exchange rate risk since there is no transactions denominated in foreign currencies at the end of the period Interest rate risk Interest rate risk from changes in interest rate resulting in financial loss to the Company and subsidiaries in the current and following period. Information about interest rate, maturity date of loans from bank or financial institutions and long-term liabilities have been discolsed in notes to financial statements no 13 and Fair value of financial instruments Financial assets shown in balance sheets consist of cash on hand, cash at banks, accounts receivable, loans to related parties and fixed deposit. Financial liabilities shown in balance sheets consist of bank overdrafts, loans from financial institutions, accounts payable and long-term liabilities carrying value equal to the estimated fair value. Since most of financial assets are in form of the short-term and these loans carry interest at the rate Annual Report

102 close to current market rates except debentures of Baht 2,600 million was charged interest at the lower rate than current market value, if the interest charged at 6.75% by using present value of cash flow up to the repayment date, the fair value is equal to Baht 1, million. 26. SUBSEQUENT EVENT On February 1, 2006, the Company has issued and offered warrants to purchase common shares to the employees of the Company and subsidiaries no. 1 (ESOP - W1) for 34 million units as following details: Type Term Offering price Exercise ratio Exercise price Exercise date Percentage of exercise : Specific name and non-transferable : 3 years from the issuance date : Baht 0 per unit : 1 unit per 1 common share : Baht 3.60 per 1 common share : On the 20th of February, May, August and November, the first exercise date is on February 20, 2006 and the last date on February 2,2009. : The 1st year, not over than 50% of allotted warrants. The 2nd year, not over than 25% of allotted warrants. The 3rd year, not over than 25% of allotted warrants. According to the criteria and conditions as indicated in the prospectus for offering warrants and new common shares to be reserved for the warrants no.1 to the existing shareholders (AP-W1) which effective on March 11, The exercise price for changing is Baht 1.00 per shares and exercise ratio is 1 common share per unit of warrant. The Company changed the price and/or the exercise ratio to purchase common shares as following details: Old New Exercise price (Baht/share) Exercise ratio (per 1 unit of warrant) On February 20, 2006, the 667,600 units of warrants were exercised to purchase common shares, and the remaining 33,332,400 units of warrants were not exercised. 27. OTHERS According to the minutes of shareholdersû extraordinary meeting of Thonglor Development Co., Ltd. no. 1/2005 held on March 9, 2005 and no. 2/2005 held on March 25, 2005, passed the resolution to change its title name to çasian Property (Thong-lor) Co., Ltd.é which was registered with the Ministry of Commerce on April 4, FINANCIAL STATEMENTS APPROVAL These financial statements have been approved to publicize by the Companyûs Board of directors on March 1, Audit Fee In 2005, the company and its subsidiaries paid for an audit fee to the office of DIA International Auditing totaling 2,426,000 baht. Annual Report

103 Company Information Home Page : Name : Asian Property Development Public Company Limited Office : 170/57 18 Fl., Ocean Tower 1, Ratchadapisek Rd., Klongtoey, Bangkok Type of Business : Property Development Company Registration: Bor Mor Jor 261 Telephone : Facsimile : Home Page : Auditor Name : Office of DIA International Auditing Office : 316/32 Soi Sukhumvit 22, Sukhumvit Road, Klongtoey, Bangkok Telephone : Facsimile :

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