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SINO-THAI RESOURCES DEVELOPMENT PUBLIC COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS
1.	GENERAL INFORMATION
	1.1	ASSUMPTION OF PREPARATION OF THE FINANCIAL STATEMENTS
		As shown in the financial statements, as at the balance sheet date although, the Company had operating losses continuously resulted significant deficit. However, the Company has prepared the accompanying financial statements on the going-concern basis, assuming that the Company will be able to continue its business operations as a going concern and that its assets will be realized and its liabilities discharged in the ordinary course of business without any compulsory actions.
1.2	TIN MINING RIGHTS
Tin mining concession no. 17996/12345, which covers 18,855 rai 1 ngan 59 square wah, expired in February 2004, while concession no. 17997/12563, covering 7,064 rai 2 ngan 66 square wah will expire in August 2004. The Company has no policy to apply for extensions of the concessions and as a result, the Company will not be able to mine tin in those concession areas. However, the Company retains a policy to apply to the Department of Primary Industries and Mines for concessions to mine new underseas areas in the future.
1.3	FUEL TRADING
		On 8 April 2004, the Annual General Meeting of the Company’s shareholders No. 26/2004 passed a resolution approving an addition to the Company’s business objectives, relating to the petroleum business. The Company registered such addition with the Ministry of Commerce on 23 June 2004, and on 9 June 2004, registered as a fuel trader under section 10 of the Fuel Trade Act, B.E. 2543 with the Department of Energy Business, under license No. Kor Tor 79/4/2547.
		However, since the beginning of July 2004, the Company has had no revenue from its fuel trading business.

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	1.4	BASIS FOR THE PREPARATION OF INTERIM FINANCIAL STATEMENTS
		These interim financial statements are prepared in accordance with Accounting Standards Pronouncement No. 41 “Interim financial statements”, with the Company choosing to present condensed interim financial statements. However, additional line items are presented in the balance sheets, and the statements of earnings, changes in shareholders’ equity, and cash flows as in the annual financial statements.
		The interim financial statements are intended to provide information additional to that included in the latest annual financial statements. Accordingly, they focus on new activities, events and circumstances so as not to duplicate information previously reported. These interim financial statements should therefore be read in conjunction with the latest annual financial statements. 
	1.5	SIGNIFICANT ACCOUNTING POLICIES
		The interim financial statements are prepared using the same accounting policies and methods of computation as were used for preparation of the financial statements for the year ended 31 December 2003 and with the following accounting policy :-
		Revenue recognition – Sales of fuel
		Sales of fuel is recognized, excluding value added tax, when the goods is sold and delivered.

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2. 	TRADE ACCOUNTS RECEIVABLE
The balance as at 30 June 2004 and 31 December 2003 classified by the aging of due date are as follows :-
	(Unit: Baht)	
	30 June 2004	31 December 2003	
		(Audited)	
Trade accounts receivable			
   Not yet due	2,013,297	878,772	
   Overdue under 4 months	3,251,970	1,516,688	
   Overdue for 4-12 months	388,590	4,296	
   Overdue over 12 months	528,290	627,915	
	6,182,147	3,027,671	
Less: Allowance for doubtful accounts	(275,660)	(275,660)	
Net	5,906,487	2,752,011	
	The Company believes that the allowance for doubtful accounts set up in the accounts is adequate in the current circumstance.
3.	RELATED PARTY TRANSACTIONS
The Company had sales transactions with a related company amounting to approximately Baht 60 million during the three-month and six-month periods ended 30 June 2004. These transactions were presented on the basis of market price, and were conducted between the Company and that company in the ordinary course of their business. 
	The Company had a long outstanding balance due from Siam Dimension Stone Company Limited, a related company, amounting to Baht 2.8 million. The Company has set aside a full allowance for doubtful accounts for the balance in the accounts.	
4.	INVESTMENTS IN RELATED COMPANIES
	The Company had investments in Sea Minerals Company Limited, Siam Dimension Stone Company Limited and Cholsin Limited, of which the total cost was Baht 73.3 million. The Company has set aside a full provision for impairment of these investments since the investee companies have experienced operating difficulties and some have ceased their operations.
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5.  Bank overdraft
The bank overdraft facility is secured by the transfer of the rights over a fixed deposit account of a shareholder of the Company.
6.	DEBT RESTRUCTURING
	On 27 March 2003, the Company and a local bank entered into an amendment agreement (“the Agreement”) of the debt restructuring agreement dated 4 November 1999, under which outstanding loan principal of Baht 186 million and related accrued interest, which in the Company’s books of account amounted to Baht 53.8 million, were restructured. The significant conditions of the Agreement can be summarized as follows :-
	1.	Baht 20 million of the principal balance to be repaid.
	2.	Land and structures thereon with a cost of Baht 19.9 million and a fair value of Baht 107.8 million to be transferred to the Bank.
	3.	Debt to be converted to equity through the issue of 1,000,000 ordinary shares with a fair value for conversion purposes of Baht 3.4 each.
	4.	The remaining principal and accrued interest to be waived if the Company complies with the conditions 1 through 3 above.
	As a result of the recording of such transactions in accordance with the Agreement, the Company had Baht 87.9 million gain on the transfer of assets and Baht 108.6 million gain on debt restructuring in the earnings statements for the six-month period ended 30 June 2003.
7. 	CORPORATE INCOME TAX
	No corporate income tax was payable on net earnings for the six-month period ended 30 June 2003 since gains on debt restructuring are income tax exempted.

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8.	FINANCIAL INFORMATION BY SEGMENT
The Company is engaged in tin ore mining, construction stone mining and fuel trading. Sales and cost of sales broken down by business segment are presented in the earnings statements. A breakdown of the Company’s assets by business segment as at the balance sheet dates is presented below: -
				(Unit: Million Baht)	
		Construction 			
	Tin ore mining	stone mining	Fuel Trading	Total	
	30 June	31 December	30 June	31 December	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	2004	2003	2004	2003	
		(Audited)		(Audited)		(Audited)		(Audited)	
Trade accounts receivable-net  	-	0.1	2.6	2.7	3.3	-	5.9	2.8	
Inventories	-	-	4.4	2.9	-	-	4.4	2.9	
Property, plant and equipment-net	0.3	0.3	39.5	39.5	-	-	39.8	39.8	
Property, plant and equipment-center-net							2.5	3.0	
Other assets							12.9	3.1	
Total assets							65.1	51.6	
9.     CAPITAL INCREASE 
On 20 March 2003, the Annual General Meeting of the Company’s shareholders approved the increase of the Company’s registered share capital to Baht 200 million, through the issue of 7 million ordinary shares at Baht 10 each, of which 1 million ordinary shares are to be reserved for the debt to equity conversion discussed in Note 6 and the remaining 6 million ordinary shares are to be reserved for limited specific persons.
During the third quarter of 2003, the Company received Baht 20.4 million from the issuance of 6 million ordinary shares at 3.4 Baht each. The Company registered this with the Ministry of Commerce on 17 September 2003, to present registered and paid up share capital of Baht 200 million, comprising      20 million ordinary shares.
10.	COMMITMENTS
As at 30 June 2004, the Company had commitments in respect of agreements to lease office space for a period of 3 years beginning February 2004. The total rental commitments amount to approximately Baht 7.5 million.

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11.	BANK GUARANTEES
	As at 30 June 2004, there were outstanding bank guarantees amounting to approximately Baht 0.5 million (31 December 2003 : Baht 0.7 million) issued by banks on behalf of the Company in respect of certain performance bonds as required in the normal course of business of the Company.
12.	PRESENTATION
	The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543.
	Certain amounts in the financial statements for the year ended 31 December 2003 have been reclassified to conform to the current period classifications, with no effect on previously reported net earnings or shareholders’ equity.
13.	APPROVAL OF INTERIM FINANCIAL STATEMENTS
	These interim financial statements have been approved by the Company’s directors.