12. FINANCIAL POSITION AND OPERATING RESULTS

2.12.1 FINANCIAL STATEMENT

  2.12.1.1 Audit for report of consolidation financial statements of
  year 2005

MR. BOONSRI TECHAVARUTAMA

 CERIFIED PUBLIC ACCOUNT (THAILAND), NO. 3336

 BDO RICHFIELD LIMITED

2.  Summary of independent auditor’s report : Unqualified report as
    follows:

a) As discussed in Note 2 to the financial statements, the Company and
its subsidiary companies have experienced persistent operating losses
and have current liabilities substantially in excess of current assets.
Nevertheless, the accompanying financial statements have been prepared
on the going concern basis, assuming that the realization of assets and
settlement of liabilities and obligations will occur in the ordinary
course of business of the Company and its subsidiary companies, without
any expectation of significant disruption to the ongoing activities.

b) As discussed in Note 14 to the financial statements, land awaiting
development of a subsidiary company (Sky Cliff Limited) amounting to
Baht 409 million, is stated at the fair market value appraised by an
independent appraisal company according to his report dated 14th July,
1999. However according to the report of independent appraisal company
dated 10th November, 2005, the fair market value of the land was
approximately Baht 409 million equal the previous reappraised value.

c) As discussed in Note 25 to the financial statements, due to
persistent losses generated from operating results, the Company and the
subsidiary company (Cholsin Limited) considered whether there had been
impairment of the value of its operating equipment, of which the net
book values as at 31st December, 2005 was approximately Baht 64.1
million and approximately Baht 46.6 million for the Company only (2004 :
Approximately Baht 69.9 million and Baht 49.4 million for the Company
only). To this end, cash flows from the quarry were projected, using a
discounted rate of 7 percent. These projected cash flows suggested that
the future cash flow would be in excess of the net book value of the
assets as at the balance sheet date. The Company believes that the
future projected cash flows from the quarry would not be significantly
different from the projection and will exceed the net book value of the
assets as at the balance sheet date.

d) As discussed in Note 3 to the financial statements, according to the
SET decision to allow the trading of the Company's securities since 25th
March, 2003, the Company has to submit the progress report on the
Company's operation of each business to the SET every 3 months. On 14th
November, 2005 the SET had announce to post “SP” (Suspension) signs to
suspend trading of securities until the Company is able to improve the
qualification and reinstated back to normal sector.

3.  Summary of significant accounting policies

1 Sales

Revenues from sales of tin ore and andesite are recognized when the
goods produced are sold and delivered, after excluding value added tax.

2 Allowance for doubtful accounts

Allowance for doubtful accounts is provided for the estimated collection
losses that may be incurred in collection of receivables. The allowance
is based on collection experience and the current status of receivables
outstanding at the balance sheet date.

3 Inventories

Inventories are valued at the lower of cost (average method) and net
realisable value.

4 Amortisation

Investments in andesite mining (excluded cost of land purchased and cost
of land improvement) and tin mining rights are amortised by equal annual
installments over the period of 25 years.

5 Investments accounted for under equity method

Investments in subsidiaries (only in the financial statements of the
Company) are stated under the equity method. Loss of subsidiaries in
excess of cost of investments in subsidiaries is presented as an
liability under the caption of “Provision for loss from investments
accounted for under equity method”.

6 Other investments

Long-term investments in non-marketable equity securities, which the
Company holds as other investments, are valued at cost. The Company
recognizes loss on impairment of other investments in the earnings
statements when the fair value of the investments is lower than the
cost.

7 Fixed assets and depreciation

Fixed assets are stated at cost less related accumulated depreciation.

Depreciation of fixed assets, less approximate salvage value, is
provided on the straight-line method, over the following estimated
useful lives:

Land improvement - 10 years

Buildings, temporary buildings and dry dock - 5 years and 20 years

Motor vehicles - 5 years

Furniture and office equipment - 10 years

Machinery and equipment - 10 years

Others - 5 years and 10 years

No depreciation is provided for land and work in progress.

8 Land awaiting development

Land awaiting development, which is a fixed asset of a subsidiary
company, was initially recorded at cost. However, the land was
subsequently revalued by an independent appraiser and was therefore
recorded by its reappraised value. Revaluations are to be made with
sufficient regularity to ensure that the carrying amount of assets does
not materially differ from their fair value at the balance sheet date.

The differences arising from revaluation are dealt in the financial
statements as follows :

- When an asset’s carrying amount is increased as a result of the
revaluation, the increase is credited directly to equity under the
heading of “Revaluation surplus”. However, a revaluation increase will
be recognized as income to the extent that it reverses a revaluation
decrease of the same asset previously recognized as an expense.

- When an asset’s carrying amount is decreased as a result of the
revaluation, the decrease is recognized as an expense. However, a
revaluation decrease will be charged directly against the related
“Revaluation surplus” to the extent that the decrease does not exceed
the amount held in the revaluation surplus in respect of that same
asset. Any excess amount is to be recognized as an expense in the
earnings statements.

9 Exploration expenditures and development costs

Exploration expenditures and development costs incurred before the date
of issuance of mining rights are deferred as assets in the balance
sheets to await amortisation once the concession begins to earn
operating income.

10 Interest capitalisation

The interest cost of the borrowings related to mine exploration and
development has been capitalised and has recorded them under exploration
expenditures and development costs, until the mine is ready for its
intended use.

11 Foreign currency

Exchange rates adopted :-

Foreign currency transactions during the period - at the rates ruling on
the

transaction dates.

Assets and liabilities in foreign currency outstanding

on the balance sheet date - at the rates ruling on the

balance sheet date.

Exchange gains and losses are included in determining earnings.

12 Buffer stock contributions

Believing that the buffer stock contributions will not be recoverable,
the Company has adopted a policy of expending buffer stock contributions
to earnings instead of recognizing them as an asset in the balance
sheets.

13 Impairment of assets

The Company will reduce the carrying amount of the Company’s asset to
its recoverable amount if, and only if, the recoverable amount of an
asset is less than its carrying amount. That reduction is an impairment
loss.

14 Basic loss per share

Basic loss per share as presented in the earnings statements is
determined by dividing net loss for the year by the weighted average
number of ordinary shares in issued during the year.

15 Use of accounting estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities and disclosure of contingent assets and
liabilities. Subsequent actual results may differ from these estimates.

4.  Summary of financial statement

Comparative financial statements and consolidated financial statements
for the past two consecutive years (Audited Account).

  -- --------------- ------------- ----- ------------- ------ ------ ------ -------------- -- ----------- -- -------- -- -----------
     TONGKAH HARBOUR                                                                                                     
     PUBLIC COMPANY                                                                                                      
     LIMITED AND ITS                                                                                                     
     SUBSIDIARIES                                                                                                        

     BALANCE SHEETS                                                                                                      

     AS AT 31st                                                                                                          
     DECEMBER, 2005                                                                                                      
     AND 2004                                                                                                            

                                                                            Consolidated                                 
                                                                            (Unit:                                       
                                                                            Baht'000)                                    

                                                                            %                 2005           %           2004

     Assets                                                                                                              

     Current assets                                                                                                      

     Cash and cash                                                          2.29              31,836         11.36       142,354
     equivalents                                                                                                         

     Current                                                                0.04              602            0.00        2
     investment -                                                                                                        
     fixed deposits                                                                                                      

     Trade accounts                                                         0.45              6,242          0.25        3,159
     receivable -                                                                                                        
     net                                                                                                                 

     Short-term                                                             0.24              3,347          0.37        4,638
     advances to                                                                                                         
     related parties                                                                                                     

     Short-term                                                             -                 -              -           -
     loans to                                                                                                            
     related parties                                                                                                     

     Inventories -                                                          0.76              10,484         1.03        12,853
     net                                                                                                                 

     Other current                                                                                                       
     assets                                                                                                              

                     Cash                                                   0.08              1,171          0.09        1,080
                     advance -                                                                                           
                     general                                                                                             

                     Input tax                                              0.74              10,248         0.34        4,216
                     refundable                                                                                          

                     Others                                                 0.44              6,166          0.37        4,691

                                         Total other                        1.27              17,585         0.80        9,987
                                         current                                                                         
                                         assets                                                                          

     Total current                                                          5.05              70,096         13.81       172,993
     assets                                                                                                              

     Non-current                                                                                                         
     assets                                                                                                              

     Long-term                                                                                                           
     investments                                                                                                         

                     Investments                                            -                 -              0.07        827
                     accounted for                                                                                       
                     under equity                                                                                        
                     method                                                                                              

                     Long-term                                                                                           
                     investment in                                                                                       
                     other                                                                                               
                     projects                                                                                            

                                         Tin mining                         -                 -              0.06        731

                                         Andesite                           3.04              42,148         3.37        42,244
                                         mining                                                                          

                                         Gold mining                        29.10             403,942        29.40       368,315

                                         Phuket                             0.50              7,000          0.56        7,000
                                         project                                                                         

                                         Le Metro                           33.82             469,365        37.62       471,284
                                         Condominium                                                                     
                                         project                                                                         

     Other                                                                  0.01              124            0.01        64
     receivable -                                                                                                        
     related parties                                                                                                     

     Long-term loans                                                        -                 -              -           -
     to related                                                                                                          
     parties                                                                                                             

     Property, plant                                                        27.51             381,828        14.99       187,809
     and equipment -                                                                                                     
     net                                                                                                                 

     Goodwill                                                               0.18              2,543          0.06        801

     Other                                                                  0.78              10,877         0.05        573
     non-current                                                                                                         
     assets                                                                                                              

     Total                                                                  94.95             1,317,827      86.19       1,079,648
     non-current                                                                                                         
     assets                                                                                                              

     Total assets                                                           100.00            1,387,923      100.00      1,252,641
  -- --------------- ------------- ----- ------------- ------ ------ ------ -------------- -- ----------- -- -------- -- -----------

  --------------- ---------------- ------------- --------- -- -------------- -- ----------- -- -------- -- -- -- -----------
  TONGKAH HARBOUR                                                                                                
  PUBLIC COMPANY                                                                                                 
  LIMITED AND ITS                                                                                                
  SUBSIDIARIES                                                                                                   

  BALANCE SHEETS                                                                                                 
  (Continued)                                                                                                    

  AS AT 31st                                                                                                     
  DECEMBER, 2005                                                                                                 
  AND 2004                                                                                                       

                                                                                                                 

                                                              Consolidated                                       
                                                              (Unit:                                             
                                                              Baht'000)                                          

                                                              %                 2005           %                 2004

  Liabilities and                                                                                                
  shareholders'                                                                                                  
  equity                                                                                                         

  Current                                                                                                        
  liabilities                                                                                                    

  Bank overdrafts                                             0.23              3,193          0.03              322

  Trade account                                               0.00              -              0.00              -
  payable -                                                                                                      
  related party                                                                                                  

  Trade account                                               0.46              6,363          0.92              11,582
  payable -                                                                                                      
  others                                                                                                         

  Current portion                                             1.52              21,111         1.65              20,711
  of long-term                                                                                                   
  loans                                                                                                          

  Short-term                                                  0.30              4,195          0.12              1,447
  advances from                                                                                                  
  related parties                                                                                                

  Short-term                                                  0.23              3,164          6.24              78,146
  loans from                                                                                                     
  related parties                                                                                                

  Current portion                                             0.89              12,365         0.48              5,976
  of hire                                                                                                        
  purchase                                                                                                       
  creditors                                                                                                      

  Other current                                                                                                  
  liabilities                                                                                                    

                  Accrued expenses                            0.95              13,126         1.04              12,971

                  Others                                      1.26              17,532         0.98              12,293

                                                              2.21              30,658         2.02              25,264

  Total current                                               5.84              81,049         11.45             143,448
  liabilities                                                                                                    

  Non-current                                                                                                    
  liabilities                                                                                                    

  Long-term loans                                                               -                                -
  from related                                                                                                   
  party                                                                                                          

  Long-term                                                   4.03              55,983         6.11              76,489
  loans - net                                                                                                    

  Hire purchase                                               1.90              26,355         0.94              11,824
  creditors - net                                                                                                

  Provision for                                               0.52              7,200          0.00              -
  loss from                                                                                                      
  investments                                                                                                    
  accounted for                                                                                                  
  under equity                                                                                                   
  method                                                                                                         

  Provision for                                               0.76              10,560         0.00              -
  environmental                                                                                                  
  restoration                                                                                                    
  expenses                                                                                                       

  Total                                                       7.21              100,098        7.05              88,313
  non-current                                                                                                    
  liabilities                                                                                                    

  Total                                                       13.05             181,147        18.50             231,761
  liabilities                                                                                                    

  Shareholders'                                                                                                  
  equity                                                                                                         

  Share capital                                                                                                  

                  Registered                                                                                     

                                   756,939,463                                                                   
                                   ordinary                                                                      
                                   shares of                                                                     
                                   Baht 1 each                                                                   

                                   (2004 :                    54.54             756,940        48.34             605,552
                                   605,551,570                                                                   
                                   ordinary                                                                      
                                   shares of                                                                     
                                   Baht 1 each)                                                                  

                  Issued and fully                                                                               
                  paid-up                                                                                        

                                   756,939,463                                                                   
                                   ordinary                                                                      
                                   shares of                                                                     
                                   Baht 1 each                                                                   

                                   (2004 :                    54.54             756,940        48.34             605,552
                                   605,551,570                                                                   
                                   ordinary                                                                      
                                   shares of                                                                     
                                   Baht 1 each)                                                                  

  Share premium -                                             35.14             487,700        30.35             380,215
  net                                                                                                            

  Revaluation                                                 (0.35)            (4,903)        (0.39)            (4,903)
  surplus                                                                                                        
  (decrease) on                                                                                                  
  land                                                                                                           

  Retained                                                                                                       
  earnings                                                                                                       
  (deficit)                                                                                                      

                  Unappropriated                              (9.55)            (132,616)      (5.08)            (63,600)

  Equity                                                      79.77             1,107,121      73.23             917,264
  attributable to                                                                                                
  the Company's                                                                                                  
  shareholders                                                                                                   

  Minority                                                    7.18              99,655         8.27              103,616
  interests -                                                                                                    
  equity                                                                                                         
  attributable to                                                                                                
  minority                                                                                                       
  shareholders of                                                                                                
  subsidiaries                                                                                                   

  Total                                                       86.95             1,206,776      81.50             1,020,880
  shareholders'                                                                                                  
  equity                                                                                                         

  Total                                                       100.00            1,387,923      100.00            1,252,641
  liabilities and                                                                                                
  shareholders'                                                                                                  
  equity                                                                                                         

                                                                                                                 
  --------------- ---------------- ------------- --------- -- -------------- -- ----------- -- -------- -- -- -- -----------

  ---------------- -------------- ------------- ---------- ------ -------------- -- ---------- -- ---------- -- ----------
  TONGKAH HARBOUR                                                                                               
  PUBLIC COMPANY                                                                                                
  LIMITED AND ITS                                                                                               
  SUBSIDIARIES                                                                                                  

  STATEMENTS OF                                                                                                 
  EARNINGS                                                                                                      

  FOR THE YEARS                                                                                                 
  ENDED 31st                                                                                                    
  DECEMBER, 2005                                                                                                
  AND 2004                                                                                                      

                                                                  Consolidated                                  
                                                                  (Unit:                                        
                                                                  Baht'000)                                     

                                                                  %                 2005          %             2004

  Revenues                                                                                                      

  Sales                                                                                                         

                   Tin ore sales                                  8.52              2,352         66.63         39,769

                   Andesite sales                                 77.72             21,461        29.13         17,388

  Other income                                                    0.00                            0.00          

                   Interest                                       3.35              925           0.06          36
                   income                                                                                       

                   Amortization                                   0.00                            0.00          
                   of excess of                                                                                 
                   net book value                                                                               
                   over cost of                                                                                 

                                  investments                     0.00              -             0.04          22
                                  accounted for                                                                 
                                  under equity                                                                  
                                  method                                                                        

                   Others                                         10.41             2,875         4.14          2,472

  Total revenues                                                  100.00            27,613        100.00        59,687

  Expenses                                                                                                      

  Cost of sales                                                                                                 

                   Cost of tin                                    8.22              2,271         62.08         37,056
                   ore sales                                                                                    

                   Cost of                                        74.99             20,706        27.36         16,330
                   andesite sales                                                                               

  Selling and                                                     229.57            63,392        107.81        64,351
  administrative                                                                                                
  expenses                                                                                                      

  Loss from                                                       7.18              1,982         1.34          799
  diminution in                                                                                                 
  value of                                                                                                      
  inventories                                                                                                   

  Directors'                                                      0.88              243           0.51          303
  remuneration                                                                                                  

  Share of loss                                                   0.00              -             0.52          311
  from investments                                                                                              
  accounted for                                                                                                 
  under equity                                                                                                  
  method                                                                                                        

  Share of loss                                                   25.11             6,933         0.00          -
  before purchase                                                                                               
  of shares - Sea                                                                                               
  Minerals Limited                                                                                              

  Goodwill                                                        0.68              188           0.00          -
  amortization                                                                                                  

  Total expenses                                                  346.63            95,715        199.62        119,150

  Loss before                                                     (246.63)          (68,102)      (99.62)       (59,463)
  interest                                                                                                      
  expenses                                                                                                      

  Interest                                                        (18.89)           (5,215)       (8.83)        (5,268)
  expenses                                                                                                      

  Loss before                                                     (265.52)          (73,317)      (108.45)      (64,731)
  minority                                                                                                      
  interest                                                                                                      

  Minority                                                        15.58             4,301         12.59         7,517
  interest in                                                                                                   
  (earnings) loss                                                                                               
  of subsidiaries                                                                                               

  Net earnings                                                    (249.94)          (69,016)      (95.86)       (57,214)
  (loss)                                                                                                        

  Basic earnings                                                                                                
  (loss) per share                                                                                              
  (Baht per share)                                                                                              

  Net earnings                                                                      (0.10)                      (0.11)
  (loss)                                                                                                        

  Weighted average                                                                  715,048                     537,122
  numbers of                                                                                                    
  ordinary share                                                                                                
  (Thousand                                                                                                     
  shares)                                                                                                       
  ---------------- -------------- ------------- ---------- ------ -------------- -- ---------- -- ---------- -- ----------

  --------------- ------------- ------------- ----- ----- ----------- -- ----------- -- -------- -- -----------
  TONGKAH HARBOUR                                                                                   
  PUBLIC COMPANY                                                                                    
  LIMITED AND ITS                                                                                   
  SUBSIDIARIES                                                                                      

  BALANCE SHEETS                                                                                    

  AS AT 31st                                                                                        
  DECEMBER, 2005                                                                                    
  AND 2004                                                                                          

                                                          Company                                   
                                                          Only (Unit:                               
                                                          Baht'000)                                 

                                                          %              2005           %           2004

  Assets                                                                                            

  Current assets                                                                                    

  Cash and cash                                           0.02           222            1.13        13,277
  equivalents                                                                                       

  Current                                                 0.00           1              0.00        1
  investment -                                                                                      
  fixed deposits                                                                                    

  Trade accounts                                          0.48           6,242          0.27        3,159
  receivable -                                                                                      
  net                                                                                               

  Short-term                                              0.16           2,005          0.12        1,383
  advances to                                                                                       
  related parties                                                                                   

  Short-term                                              -              82,893         -           66,970
  loans to                                                                                          
  related parties                                                                                   

  Inventories -                                           0.77           9,880          1.00        11,704
  net                                                                                               

  Other current                                                                                     
  assets                                                                                            

                  Cash                                    0.08           1,063          0.07        825
                  advance -                                                                         
                  general                                                                           

                  Input tax                               0.21           2,690          0.23        2,674
                  refundable                                                                        

                  Others                                  0.20           2,590          0.19        2,211

                                Total other               0.49           6,343          0.49        5,710
                                current                                                             
                                assets                                                              

  Total current                                           8.35           107,586        8.73        102,204
  assets                                                                                            

  Non-current                                                                                       
  assets                                                                                            

  Long-term                                                                                         
  investments                                                                                       

                  Investments                             -              671,123        60.28       706,059
                  accounted for                                                                     
                  under equity                                                                      
                  method                                                                            

                  Long-term                                                                         
                  investment in                                                                     
                  other                                                                             
                  projects                                                                          

                                Tin mining                -              -              0.06        731

                                Andesite                  3.27           42,148         3.61        42,244
                                mining                                                              

                                Gold mining               0.00           -              0.00        -

                                Phuket                    0.54           7,000          0.60        7,000
                                project                                                             

                                Le Metro                  0.00           -              0.00        -
                                Condominium                                                         
                                project                                                             

  Other                                                   1.35           17,364         1.55        18,179
  receivable -                                                                                      
  related parties                                                                                   

  Long-term loans                                         -              321,549        -           174,057
  to related                                                                                        
  parties                                                                                           

  Property, plant                                         9.38           120,780        10.30       120,611
  and equipment -                                                                                   
  net                                                                                               

  Goodwill                                                0.00           -              0.00        -

  Other                                                   0.04           519            0.02        275
  non-current                                                                                       
  assets                                                                                            

  Total                                                   91.65          1,180,483      91.27       1,069,156
  non-current                                                                                       
  assets                                                                                            

  Total assets                                            100.00         1,288,069      100.00      1,171,360
  --------------- ------------- ------------- ----- ----- ----------- -- ----------- -- -------- -- -----------

  --------------- ---------------- ------------- --------- -- ----------- -- ----------- -- -------- -- -----------
  TONGKAH HARBOUR                                                                                       
  PUBLIC COMPANY                                                                                        
  LIMITED AND ITS                                                                                       
  SUBSIDIARIES                                                                                          

  BALANCE SHEETS                                                                                        
  (Continued)                                                                                           

  AS AT 31st                                                                                            
  DECEMBER, 2005                                                                                        
  AND 2004                                                                                              

                                                                                                        

                                                              Company                                   
                                                              Only (Unit:                               
                                                              Baht'000)                                 

                                                              %              2005           %           2004

  Liabilities and                                                                                       
  shareholders'                                                                                         
  equity                                                                                                

  Current                                                                                               
  liabilities                                                                                           

  Bank overdrafts                                             0.25           3,193          0.03        322

  Trade account                                               1.32           16,978         1.46        17,129
  payable -                                                                                             
  related party                                                                                         

  Trade account                                               0.04           484            0.13        1,581
  payable -                                                                                             
  others                                                                                                

  Current portion                                             1.52           19,520         1.63        19,120
  of long-term                                                                                          
  loans                                                                                                 

  Short-term                                                  0.08           972            0.11        1,255
  advances from                                                                                         
  related parties                                                                                       

  Short-term                                                  0.54           6,908          6.87        80,520
  loans from                                                                                            
  related parties                                                                                       

  Current portion                                             0.03           440            0.11        1,248
  of hire                                                                                               
  purchase                                                                                              
  creditors                                                                                             

  Other current                                                                             0.00        
  liabilities                                                                                           

                  Accrued expenses                            0.52           6,718          0.58        6,852

                  Others                                      0.52           6,711          0.12        1,449

                                                              1.04           13,429         0.71        8,301

  Total current                                               4.81           61,924         11.05       129,476
  liabilities                                                                                           

  Non-current                                                                               0.00        
  liabilities                                                                                           

  Long-term loans                                                            7,455          0.67        7,815
  from related                                                                                          
  party                                                                                                 

  Long-term                                                   4.16           53,597         6.19        72,512
  loans - net                                                                                           

  Hire purchase                                               0.03           334            0.05        536
  creditors - net                                                                                       

  Provision for                                               4.07           52,485         3.32        38,854
  loss from                                                                                             
  investments                                                                                           
  accounted for                                                                                         
  under equity                                                                                          
  method                                                                                                

  Provision for                                               0.02           250            0.00        -
  environmental                                                                                         
  restoration                                                                                           
  expenses                                                                                              

  Total                                                       8.86           114,121        10.22       119,717
  non-current                                                                                           
  liabilities                                                                                           

  Total                                                       13.67          176,045        21.27       249,193
  liabilities                                                                                           

  Shareholders'                                                                             0.00        
  equity                                                                                                

  Share capital                                                                             0.00        

                  Registered                                                                0.00        

                                   756,939,463                                              0.00        
                                   ordinary                                                             
                                   shares of                                                            
                                   Baht 1 each                                                          

                                   (2004 :                    58.77          756,940        51.70       605,552
                                   605,551,570                                                          
                                   ordinary                                                             
                                   shares of                                                            
                                   Baht 1 each)                                                         

                  Issued and fully                                                                      
                  paid-up                                                                               

                                   756,939,463                                                          
                                   ordinary                                                             
                                   shares of                                                            
                                   Baht 1 each                                                          

                                   (2004 :                    58.77          756,940        51.70       605,552
                                   605,551,570                                                          
                                   ordinary                                                             
                                   shares of                                                            
                                   Baht 1 each)                                                         

  Share premium -                                             37.86          487,700        32.46       380,215
  net                                                                                                   

  Revaluation                                                 0.00           -              0.00        -
  surplus                                                                                               
  (decrease) on                                                                                         
  land                                                                                                  

  Retained                                                                                              
  earnings                                                                                              
  (deficit)                                                                                             

                  Unappropriated                              (10.30)        (132,616)      (5.43)      (63,600)

  Equity                                                      86.33          1,112,024      78.73       922,167
  attributable to                                                                                       
  the Company's                                                                                         
  shareholders                                                                                          

  Minority                                                    0.00           -              0.00        -
  interests -                                                                                           
  equity                                                                                                
  attributable to                                                                                       
  minority                                                                                              
  shareholders of                                                                                       
  subsidiaries                                                                                          

  Total                                                       86.33          1,112,024      78.73       922,167
  shareholders'                                                                                         
  equity                                                                                                

  Total                                                       100.00         1,288,069      100.00      1,171,360
  liabilities and                                                                                       
  shareholders'                                                                                         
  equity                                                                                                
  --------------- ---------------- ------------- --------- -- ----------- -- ----------- -- -------- -- -----------

  ---------------- -------------- ------------- ---------- ------ ----------- -- ---------- -- --------- -- ----------
  TONGKAH HARBOUR                                                                                           
  PUBLIC COMPANY                                                                                            
  LIMITED AND ITS                                                                                           
  SUBSIDIARIES                                                                                              

  STATEMENTS OF                                                                                             
  EARNINGS                                                                                                  

  FOR THE YEARS                                                                                             
  ENDED 31st                                                                                                
  DECEMBER, 2005                                                                                            
  AND 2004                                                                                                  

                                                                                                            

                                                                  Company                                   
                                                                  Only (Unit:                               
                                                                  Baht'000)                                 

                                                                  %              2005          %            2004

  Revenues                                                                                                  

  Sales                                                                                                     

                   Tin ore sales                                  5.53           2,352         49.09        39,769

                   Andesite sales                                 50.44          21,461        21.46        17,388

  Other income                                                    0.00                         0.00         

                   Interest                                       31.78          13,519        11.71        9,488
                   income                                                                                   

                   Amortization                                   0.00                         0.00         
                   of excess of                                                                             
                   net book value                                                                           
                   over cost of                                                                             

                                  investments                     0.00           -             0.00         -
                                  accounted for                                                             
                                  under equity                                                              
                                  method                                                                    

                   Others                                         12.25          5,214         17.73        14,363

  Total revenues                                                  100.00         42,546        100.00       81,008

  Expenses                                                                                                  

  Cost of sales                                                                                             

                   Cost of tin                                    5.34           2,271         45.74        37,056
                   ore sales                                                                                

                   Cost of                                        45.69          19,440        21.97        17,801
                   andesite sales                                                                           

  Selling and                                                     63.60          27,060        35.31        28,604
  administrative                                                                                            
  expenses                                                                                                  

  Loss from                                                       4.66           1,982         0.99         799
  diminution in                                                                                             
  value of                                                                                                  
  inventories                                                                                               

  Directors'                                                      0.57           243           0.37         303
  remuneration                                                                                              

  Share of loss                                                   123.37         52,489        57.13        46,280
  from investments                                                                                          
  accounted for                                                                                             
  under equity                                                                                              
  method                                                                                                    

  Share of loss                                                   0.00           -             0.00         -
  before purchase                                                                                           
  of shares - Sea                                                                                           
  Minerals Limited                                                                                          

  Goodwill                                                        0.00           -             0.00         -
  amortization                                                                                              

  Total expenses                                                  243.23         103,485       161.52       130,843

  Loss before                                                     (143.23)       (60,939)      (61.52)      (49,835)
  interest                                                                                                  
  expenses                                                                                                  

  Interest                                                        (18.98)        (8,077)       (9.11)       (7,379)
  expenses                                                                                                  

  Loss before                                                     (162.22)       (69,016)      (70.63)      (57,214)
  minority                                                                                                  
  interest                                                                                                  

  Minority                                                        0.00           -             0.00         -
  interest in                                                                                               
  (earnings) loss                                                                                           
  of subsidiaries                                                                                           

  Net earnings                                                    (162.22)       (69,016)      (70.63)      (57,214)
  (loss)                                                                                                    

  Basic earnings                                                                                            
  (loss) per share                                                                                          
  (Baht per share)                                                                                          

  Net earnings                                                                   (0.10)                     (0.11)
  (loss)                                                                                                    

  Weighted average                                                               715,048                    537,122
  numbers of                                                                                                
  ordinary share                                                                                            
  (Thousand                                                                                                 
  shares)                                                                                                   
  ---------------- -------------- ------------- ---------- ------ ----------- -- ---------- -- --------- -- ----------

5.  Table of important financial ratios of the fiscal year 2005 and 2004
    (Audited)

  -------------------------------- -------------- ---------- ----------- ----------
                                                             (Audited)    

                                   Consolidated              The Company 
                                                             only        

                                   2005           2004       2005        2004

  LIQUIDITY RATIO                                                        

  Current Ratio (Times)            0.86           1.21       1.74        0.79

  Quick Ratio (Times)              0.48           1.01       0.10        0.13

  Quick Ratio (Cash Basis) (Times) (0.40)         (0.81)     (0.70)      (0.66)

  Receivable Turnover (Times)      5.07           22.55      5.07        22.55

  Collection Period (Days)         71.06          15.96      71.06       15.96

  Inventory Turnover (Times)       1.97           5.60       2.01        4.86

  Inventory Turnover (Days)        182.82         64.25      178.95      74.02

  Accounts Payable Turnover (Days) 2.56           1.90       1.20        29.26

  Payment Period (Days)            140.58         189.66     299.89      12.30

  Cash Cycle (Days)                113.30         (109.45)   (49.88)     77.68

  PROFITABLE RATIO                                                        

  Gross Profit Margin (%)          3.51%          6.60%      8.83%       4.02%

  Net Profit Margin (%)            (249.94%)      (95.75%)   (143.23%)   (70.55%)

  Return on Equity (%)             (6.20%)        (6.26%)    (5.99%)     (7.05%)

  EFFICIENCY RATIO                                                        

  Return on Total Assets (%)       (5.23%)        (4.88%)    (4.96%)     (5.47%)

  Return on Fixed Assets (%)       (15.78%)       (21.82%)   (44.37%)    (40.82%)

  Asset Turnover (Times)           0.02           0.05       0.03        0.08

  FINANCIAL POLICY RATIO                                                  

  Debt to Equity Ratio (Times)     0.15           0.23       0.16        0.27

  Interest Coverage (Times)        (13.06)        (9.85)     (7.54)      (6.74)

  Contingency Coverage (Times)     (9.14)         (6.89)     (5.28)      (4.72)

  Contingency Coverage (Cash       (0.30)         (1.37)     0.01        (0.77)
  Basis) (Times)                                                         

  Pay Out Ratio (%)                0.00%          0.00%      0.00%       0.00%
  -------------------------------- -------------- ---------- ----------- ----------

2.12.2 SUMMARY OF FINANCIAL POSITION AND OPERATING RESULTS

REVIEW OF FINANCIAL RESULTS

The Company continues to incur a loss of Baht 69.02 million in 2005. The
Company’s income still derived from two of its three major mining
projects (the tin and andesite mining operations). The stockpile of Tin
has been fully sold due to shortage of contractors who opt to work
elsewhere in the neighboring countries. In late 2004, the Company has
obtained USD13.3 million loan for plant construction and equipment of
its gold mine project in the Loei province. The construction is expected
to be completed and commence its commercial operation by the second
quarter of 2006. Thus, from the year 2006 onwards, the Company shall
realize income from its two mining projects, i.e. andesite and gold
mining.

TIN PERFORMANCE

The Company’s income from tin and tantalum was based on production and
price levels at the international metals market. In 2005, revenue from
tin was derived from selling of tin ore totaling Baht 2.35 million as
compared to Baht 39.77 million in the year 2004, representing a decrease
of 94.09%. Likewise, operational costs charged by the contractor
decreased by 93.87% from Baht 37.06 million charged in the year 2004 to
Baht 2.27 million charged in 2005. Overall, the Company’s net income
from its tin mining operations decreased 97.01% from the previous year
due to the suspension policy. However, the Company’s gross margin from
tin decreased from 6.81% to 3.44% in 2005.

QUARRY PERFORMANCE

Revenue from andesite sales in 2005 increased 23.42% from the preceding
year. Total sales amounted to Baht 21.46 million for the year as
compared to Baht 17.34 million last year. The Company managed to have a
positive gross margin of 3.52%, a slight decrease from 6.08% in the year
2004. The decrease was due mainly to the higher oil price during the
year. There were efforts and improvement carried out to increase in
aggregate sales as the Company diversified its aggregate product to a
new market, the highway construction sector.

OVERALL PERFORMANCE

Total revenue for the Company was Baht 27.61 million, a decrease of
46.16% from Baht 59.69 million in 2004. The decrease in revenue was due
mainly to decreasing in tin revenue. Nevertheless, the Company
experienced its 23.42% increases in andesite operation.

General and administrative expenses decreased from Baht 64.35 million in
2004 to Baht 63.39 million in 2005. The decrease was in line with the
Company’s stringent expense control policy. In addition, the increase of
loss from 2005 due partly to the increase investment in Sea Minerals
Limited which the Company has to take share of loss amount Baht 6.93
million from this investment. Also, the Company incurred further
consulting and report fees as required by lending institutions for loan
approval with respect to the Company’s gold mining project in Loei
province. Interest expenses remained at the same level as last year.

LIQUIDITY ANALYSIS

As at 31 December 2005, the Company’s current assets decreased to Baht
70.10 million as compared to Baht 172.99 million for the preceding year.
The Company’s current liabilities also decreased from Baht 143.45
million in 2004 to Baht 81.05 in 2005, representing a decrease of
43.50%. As a result, the current ratio stood at 0.86 times when compared
to 1.21 times in 2004.

In 2004 the ratio improvement was due to the Company’s capital increase.
However, there was significant aspect in 2005 as the current portion of
hire purchase agreements on purchase of major heavy vehicles for uses in
the gold mining has become due. The gold mining and processing plant is
at its near completion, extensive uses of bank overdraft were resulted
in enormous rises. Nevertheless, the short term liability was greatly
decreased, enabling the Company with more liquidity in its own working
capital management.

CASH FLOW FOR OPERATING ACTIVITIES

The net cash flow utilized for operations amounted to approximately Baht
44.44 million, the majority of which was expended to increase the
acquisition of major equipments and tooling for the gold mining and
processing plant.

CASH FLOW FOR INVESTING ACTIVITIES

The net cash flow utilized for investment purposes amounted to Baht
253.66 million. Funds were mainly utilized to invest in Tungkum Limited,
the Company’s gold mining project.

CASH FLOW FOR FINANCING ACTIVITIES

The net cash flow from financing activities amounted to Baht 187.58
million. The Company increased its capital by issuing 151.39 million
shares at Baht 1 par value in April 2005. The paid-up capital of the
Company increased from Baht 605.55 million to Baht 756.94 million. This
has resulted in Baht 258.87 million premium on share realized and
earned. Funds were mainly utilized in the above investment activities.
The Company also repaid a short term loan as well as a portion of the
long term debt.

PROFITABILITY ANALYSIS

The Company managed to get the approval of USD 13.3 million loan for
plant construction and equipment of its gold mine project in December
2004. The Company has now commenced the construction of infrastructure
and preparation for the plant foundation construction. It is expected
that the commercial production shall commence by the second quarter of
2006. The Company’s profitability shall definitely improve once its gold
mine starts operations.