AUDIT COMMITTEE AND INDEPENDENT DIRECTOR’S REPORT

Dear Shareholders,

  As provided by the requirements and guidelines of the Stock Exchange
  of Thailand (SET), and outlined in the Best Practice Guidelines for
  the Audit Committee, Tongkah Harbour Public Company Limited (the
  “Company”) has an established Audit Committee to ensure the company’s
  compliance with generally accepted accounting principles and
  regulations, sufficient information disclosure, and to assess the
  Company is well-positioned to continue following best governance
  practices.

  In year 2007, the Audit Committee met on nine occasions to effectively
  and responsibly carry out duties as further outlined in the Corporate
  Governance Statement Section. The Audit Committee held 5 meetings with
  the external auditor, the internal auditor and the management to
  review the consolidated and company financial statements, 2 meetings
  to consider the restate financial statements for the year 2006 by SEC
  instruction, and 2 meeting with internal auditor and the management to
  assess the company’s internal control and risk management and review
  gold mine operation and property development of subsidiary.

  The Audit Committee comprises three independent directors appointed by
  the Board of Directors that have appropriate experiences in accounting
  and financial matters. As independent directors, Audit Committee
  Members do not hold any management positions, are not employees of the
  company, and do not represent any major shareholders. If necessary,
  the Committee may also seek external advice from independent
  professional advisors. A qualified accountant acts as the Internal
  Auditor and secretary to the Audit Committee.

  The financial statements for the year ended 31 December 2007 were
  prepared by Management and audited externally by the appointed
  auditing firm of A.M.T. & Associates. Upon review of these financial
  statements and other activities of the Company for the year 2007, the
  Audit Committee hereby submits its findings as follows:

  1. The Company’s accounting policies are in accordance with generally
  accepted accounting principles and that information disclosures were
  sufficient. Reports and interim consolidated financial statements
  (inclusive of previously implemented connected transactions with
  related companies or parties) were also in accordance with generally
  accepted accounting standards and regulatory requirements.

  2. Internal Control and Internal Audit, the Audit Committee reviewed
  the assessments of the company’s internal control system, the Audit
  Committee is of the opinion that the company’s operations have been
  appropriate and has found no significant weaknesses in its conduct of
  business.

  3. In year 2007, the Company had changed its accounting policy for its
  investments in subsidiaries in the separate financial statements from
  the equity method to the cost method in accordance with the Accounting
  Standard No.44 “Consolidated and Separate Financial Statements”
  (revised 2007), the change had been applied retrospectively for the
  separate financial statements for the year ended December 31, 2006.
  After due and careful consideration, the adjustments made to the
  separate financial statements are appropriate and have been properly
  applied.

  4. On July 9, 2007 the Audit Committee met with external auditor and
  the management to consider the adjustments of financial statements for
  the year 2006 by SEC letter dated June 25, 2007 (ref: SEC.CH.
  1479/2550) in regards to the opinions from the accounting practices
  and governance steering committees with regards to accounting
  treatment and records as well as the disclosures in the financial
  statements by Tongkah Harbour PCL (the Company) was not in compliance
  with Generally Accepted Accounting Practice (GAAP) therefore SEC
  ordered the Company to restate its audited Financial Statement for the
  year ended 31 December 2006 and its reviewed Financial Statement for
  the first quarter 2007. The instruction was as follows:

  (1) Production Sharing for year 2006 paid to Department of Primary
  Industry and Mines (DPIM) amounting Baht 4.1 million should be
  recorded in the Financial Statement for the year ended 31 December
  2006 and removed from the Financial Statement for the first quarter of
  2007.

  (2) The prepayment expenses on the refinancing of loan amounting to
  Baht 11.6 million must be disclosed as “an event after the balance
  sheet date” as a note to Financial Statement for the year ended 31
  December 2006. Also, the Company wishes to disclose the benefits of
  the new borrowing.

  (3) To consider if the legal fee of Baht 4.7 million should be
  deferred and amortized over the loan life in order that the nominal
  interest rate can be computed. After due consideration, the Company is
  under the perception that the practicality of the deferral, adjusting
  to real interest rate and its sizable concern of Baht 4.7 million
  legal fees against Baht 906 million loan would be too marginal and
  immaterial. In addition, the four year amortization would further
  caused the amount to be insignificant to take such action. Further, to
  include the legal fee to interest and cost of assets acquired for the
  expansion and proven-up of reserves would give rise to the problems in
  identifying the amortizable cost of sales to be deferred, real
  interest rate determination, and cost of assets acquired. This
  treatment of the legal fee would be inefficient based on the cost and
  benefit analysis

  5. The Audit Committee is satisfied that there is an ongoing process
  of identification, evaluation, and management of risks faced by the
  Company as internal audit and control systems are continuously
  monitored. The Audit Committee has also ensured that all connected
  party transactions was reviewed by the Committee and satisfied that
  the transactions were at arms length market value and interests
  charged are also per financial institution’s rate.

  The Audit Committee recommended to the Board of Director that
  Professor Kesaree Narongdej and/or Mrs. Natsarak Sarochanunjeen of the
  firm A.M.T. & Associates, be nominated to the shareholders to
  reappoint as the Company auditor(s) to conduct the audit of financial
  statements for the year ended December 31, 2008 at the next Annual
  General Meeting of the Company.

  []

  Mr. Kriang Kiatfuengfoo

  Independent Director and Chairman of the Audit Committee,

  Bangkok: 1 March 2008

Note: Mr. Somsak Potisat was resigned from Audit Committee Member to Non
Audit Committee Member with effective on March 1, 2008.

  Mr. Umyos Huvanandana was appointed as an Independent Director and
  Audit Committee Member by resolution of the Board on February 25,
  2008.