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 2006 and 2005, 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 2006 and 2005, 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 : 30 March 2007

	Note	2006	2005
ASSETS
CURRENT ASSETS
Cash and deposits at financial institutions		6,576,054	5,461,779
Current investments	3	17,022,674	1,993,594
Elephants	4	11,390,485	6,907,235
Other current assets
Receivables from lawsuits in respect of breach of contract		275,000	275,000
Interest receivable		308,039	311,325
Others		321,065	222,321
TOTAL CURRENT ASSETS		35,893,317	15,171,254
NON-CURRENT ASSETS
Long-term investment	3	7,485,939	24,630,081
Equipment - net	5	6,799,551	7,272,402
Deposit		30,000	30,000
TOTAL NON-CURRENT ASSETS		14,315,490	31,932,483
TOTAL ASSETS		50,208,807	47,103,737
LIABILITIES AND ACCUMULATED FUNDS
CURRENT LIABILITIES
Accrued expenses		71,799	108,371
Contribution awaiting transfer to provident fund		23,760	136,988
Others		25,973	24,296
TOTAL CURRENT LIABILITIES		121,532	269,655
ACCUMULATED FUNDS
Initial capital funds	6	776,911	776,911
Balance of funds		49,310,364	46,057,171
TOTAL ACCUMULATED FUNDS		50,087,275	46,834,082
TOTAL LIABILITIES AND ACCUMULATED FUNDS		50,208,807	47,103,737

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

	Note	2006	2005
REVENUES
Donations	7	13,059,576	7,868,392
Interest income		1,144,578	1,038,444
Other income		2,419	87,764
TOTAL REVENUES		14,206,573	8,994,600
EXPENSES
Administrative expenses		10,953,380	6,931,686
TOTAL EXPENSES		10,953,380	6,931,686
SURPLUS (DEFICIT) OF REVENUES TO EXPENSES FOR THE YEAR		3,253,193	2,062,914

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 2004	776,911	43,994,257	44,771,168
Deficit 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
Surplus of revenues to expenses for the year	-	3,253,193	3,253,193
Balance as at 31 December 2006	776,911	49,310,364	50,087,275

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

1. GENERAL INFORMATION
The Elephant Reintroduction Foundation (hereinafter refered to as "the 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. SIGNIFICANT ACCOUNTING POLICIES

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 or died.

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

Depreciation is included in determining operating results.
No depreciation is provided for equipment under installation.

2.5 Employee benefits
Salary, wages and contributions to the social security fund and provident fund are recognised as expenses when incurred.

2.6 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.

2.7 Use of accounting estimates
Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

3. INVESTMENTS
At as 31 December 2006 and 2005, 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 2006, 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 2005	373,150	4,609,776	474,759	2,552,698	59,030	1,121,442	9,190,855
Acquisition using cash from donation/Transfer in	181,500	298,437	247,080	821,654	5,632	115,025	1,669,328
Donated	-	(54,002)	(43,228)	-	-	-	(97,230)
31 December 2006	554,650	4,854,211	678,611	3,374,352	64,662	1,236,467	10,762,953
Accumulated depreciation :
31 December 2005	101,972	596,657	207,384	759,030	-	253,410	1,918,453
Depreciation charged for the year	90,294	963,361	123,597	641,210	-	245,973	2,064,435
Accumulted depreciation of donated equipment	-	(13,852)	(5,634)	-	-	-	(19,486)
31 December 2006	192,266	1,546,166	325,347	1,400,240	-	499,383	3,963,402
Net book value :
31 December 2005	271,178	4,013,119	267,375	1,793,668	59,030	868,032	7,272,402
31 December 2006	362,384	3,308,045	353,264	1,974,112	64,662	737,084	6,799,551
Depreciation for the year
2005	1,174,402
2006	2,064,435

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 2006 and 2005 as listed below :-

8. PROVIDENT FUNDS
The Foundation and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The Foundation contributed to the fund monthly at the rate of 5 - 10 percent of basic salary and employees contributed to the fund monthly at the rate of 5 percent of basic salary. The fund, which is managed by TISCO Asset Management Company Limited, will be paid to employees upon termination of their membership of the fund, in accordance with the fund rules. During the year 2006, the Foundation contributed Baht 65,320 (2005 : Baht 65,390) to the fund.

9. COMMITMENTS
As at December 2006, the Foundation has commitments regarding office building rental and service amounting Baht 0.15 million (2005 : Baht 0.13 million).

10. EMPLOYEES AND RELATED COSTS

11. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were authorised for issue by the Foundation's Authorised Directors on 30 March 2007.