To The Board of
Elephant Reintroduction Foundation

I have audited the balance sheets of The Elephant Reintroduction Foundation, a non-profit organisation, as at 31 December 2005 and 2004, the related statements of revenues and expenses and changes in fund balance for the years then ended. These financial statements are the responsibility of the Foundation's 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 audits 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 the Foundation's management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Elephant Reintroduction Foundation as at 31 December 2005 and 2004, and the results of its operations for the years then ended in accordance with generally accepted accounting principles.

Since The Elephant Reintroduction Foundation is a foundation which operates for the public benefit and not for profit, therefore changes have been made to the recognition of transactions and the reporting in the financial statements to make them appropriate to a non-profit organisation.

Siraporn Ouaanunkun
Certified Public Accountant (Thailand) No. 3844

Ernst & Young Office Limited
Bangkok : 11 April 2006

	Note	2005	2004
ASSETS
CURRENT ASSETS
Cash and deposits at financial institutions		5,461,779	30,523,175
Current investments	3	1,993,594	-
Elephants	4	6,907,235	3,425,600
Other current assets
Receivables from lawsuits in respect of breach of contract		275,000	-
Interest receivable		311,325	-
Others		222,321	219,105
TOTAL CURRENT ASSETS		15,171,254	34,167,880
NON-CURRENT ASSETS
Long-term investment	3	24,630,081	6,000,000
Equipment - net	5	7,272,402	4,124,023
Deposit and advance paid for purchase of fixed assests		30,000	875,101
TOTAL NON-CURRENT ASSETS		31,932,483	10,999,124
TOTAL ASSETS		47,103,737	45,167,004
LIABILITIES AND ACCUMULATED FUNDS
CURRENT LIABILITIES
Accrued expenses		108,371	101,313
Contribution awaiting transfer to provident fund		136,988	270,579
Others		24,296	23,944
TOTAL CURRENT LIABILITIES		269,655	395,836
ACCUMULATED FUNDS
Initial capital funds	6	776,911	776,911
Balance of funds		46,057,171	43,994,257
TOTAL ACCUMULATED FUNDS		46,834,082	44,771,168
TOTAL LIABILITIES AND ACCUMULATED FUNDS		47,103,737	45,167,004

The accompanying notes are an integral part of the financial statements.

	Note	2005	2004
REVENUES
Donations	7	7,868,392	2,044,157
Interest income		1,038,444	426,527
Other income		87,764	1,440
TOTAL REVENUES		8,994,600	2,472,124
EXPENSES
Administrative expenses		6,931,686	7,150,014
TOTAL EXPENSES		6,931,686	7,150,014
SURPLUS (DEFICIT) OF REVENUES TO EXPENSES FOR THE YEAR		2,062,914	(4,677,890)

The accompanying notes are an integral part of the financial statements.

	Accumulated funds
	Initial capital funds	Balance of funds	Total
Balance as at 31 December 2003	776,911	48,672,147	49,449,058
Deficit of revenues to expenses for the year	-	(4,677,890)	(4,677,890)
Balance as at 31 December 2004	776,911	43,994,257	44,771,168
Surplus of revenues to expenses for the year	-	2,062,914	2,062,914
Balance as at 31 December 2005	776,911	46,057,171	46,834,082

The accompanying notes are an integral part of the financial statements.

1. GENERAL INFORMATION
The Elephant Reintroduction Foundation was incorporated as a foundation under Thai laws on 9 August 2002. The main objectives of the Foundation are to return elephants to the wild in cooperation with other organisations to conserve Thai elephants, to act for the public benefit, to operate not for profit and to the exclusion of political action. Its registered address is 624 Yoawaraj Place Building, Room 209, Yaowaraj Road, Sampantawong, Bangkok 10100.

At present, the Foundation has 3 offices as follow:-
- The Bangkok office located on 624 Yoawaraj Place Building, Room 209, Yaowaraj Road, Sampantawong, Bangkok 10100.
- The Chiangmai office located at room D 206, 2nd floor Faculty of Veterinary Medicine, Chiangmai University, Mae Hiae, Muang, Chiangmai 50100.
- The Lopburi office located at Sab Langka Wildlife Sanctuary Area, Gudtaphet Sub-District, Lam Sonthi District, Lopburi, 15190..

On 14 March 2003, the Ministry of Finance announced The Elephant Reintroduction Foundation had been listed as public charity organisation or institution No. 508 under Notification of the Ministry of Finance (No. 210).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies adopted by The Elephant Reintroduction Foundation (hereinafter referred to as "the Foundation") are summarised below:-

2.1 Accrual basis
The financial statements have been generally prepared on an accrual basis.

2.2 Investments
Held to maturity debt investments are represented at amortized cost.

2.3 Elephants
Elephants purchased using cash from donation are stated at cost.
Elephants acquired through donations are recorded at their fair value, which is evaluated by specialist of the Foundation.
Elephants are written off from the Foundation's balance sheets when they are offically released to their natural habitat.

2.4 Equipment / depreciation
Equipment is stated at cost less accumulated depreciation. Depreciation is calculated by reference to cost on a straight-line basis over the following estimated useful lives :-

Mobile Office	-	5	Years
Furniture and fixtures	-	5	Years
Computer and equipment	-	5	Years
Vehicle and equipment	-	5	Years
Other	-	5	Years

No depreciation is provided for equipment under installation.

2.5 Corporate income tax
Under the Revenue Code, the Foundation is a public charity organization or institution under Notification of the Ministry of Finance (No.210) which is exempted from income tax.

2.6 Use of accounting estimates
Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates for certain accounting transactions, affecting amounts reported in the financial statements and notes related thereto. Subsequent actual results may differ from these estimates.

3. INVESTMENTS
At as 31 December 2005 and 2004, the balance of current investments and long-time investments consist of :-

These investments represent investment in private fund made under the private fund management agreement date 20 January 2005, which the Foundation entered into with an asset management company, assigning the asset management company to manage the Foundation's private fund ("the Fund") for investment in debt instruments. The asset management company is to receive a management fee and a fund custody fee at a certain percentage rate per annum of the net asset value of the Fund as stipulated in the agreement.

4. ELEPHANTS
At as 31 December 2005, elephants under care of the Foundation are listed as follow :-

5. EQUIPMENT - NET

(Unit : Baht)
	Mobile office	Furniture and fixtures	Computer and equipment	Vihicle and equipment	Equipment under installation	Others	Total
Cost:
31 December 2004	373,150	729,771	382,239	1,485,398	1,185,543	711,973	4,868,074
Acquisition using cash from donation/Transfer in	-	3,880,005	92,520	1,067,300	2,339,414	409,469	7,788,708
Transfer out	-	-	-	-	(3,465,927)	-	(3,465,927)
31 December 2005	373,150	4,609,776	474,759	2,552,698	59,030	1,121,442	9,190,855
Accumulated depreciation :
31 December 2004	27,383	170,576	126,987	357,416	-	61,689	744,051
Depreciation charged for the year	74,589	426,081	80,397	401,614	-	191,721	1,174,402
31 December 2005	101,972	596,657	207,384	759,030	-	253,410	1,918,453
Net book value :
31 December 2004	345,767	559,195	255,252	1,127,982	1,185,543	650,284	4,124,023
31 December 2005	271,178	4,013,119	267,375	1,793,668	59,030	868,032	7,272,402
Depreciation charged to statement of revenues and expenses for the year ended 31 December
2004	521,364
2005	1,174,402

6. INITIAL CAPITAL FUNDS
Initial capital funds consists of cash donations of approximately Baht 0.50 million and fixed assets of approximately Baht 0.27 million donated by WWF Thailand Programme office.

7. DONATIONS
The Foundation received the donations for the year ended 31 December 2005 and 2004 as listed below :-

8. COMMITMENTS
As at December 2005, the Foundation has commitments regarding office building rental and service amounting Baht 0.13 million (2004 : Nil).

9. EMPLOYEES AND RELATED COSTS

10. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were authorised by the Foundation's Authorised Derectors on 11 April 2006.