(UNAUDITED BUT REVIEWED)
THAI WAH PUBLIC COMPANY LIMITED
AND ITS SUBSIDIARY COMPANIES
NOTES TO INTERIM FINANCIAL STATEMENTS
30 JUNE 2004 AND 2003
1.	GENERAL INFORMATION
	1.1	Business rehabilitation plans
	The Company
On 23 January 2001, the Company’s business rehabilitation plan was adopted by a special resolution of a meeting of creditors.  Subsequently, on 14 February 2001, the plan was accepted by the Central Bankruptcy Court (“the Court”).
On 12 March 2001, the Court accepted a petition by a contingent creditor, the debt amount of which is still pending determination by the Supreme Court, opposing the plan.  Subsequently, on 27 February 2002, the Supreme Court has issued an order approve the business rehabilitation plan of the Company as approved by the Central Bankruptcy Court.
On 28 February 2003 and 2 June 2003, the Class B directors of the plan administrator submitted a petition for amendment of the business rehabilitation plan to the Court, and on 3 April 2003 and 23 June 2003 the creditors’ meeting passed a special resolution to adopt the motion to amend the business rehabilitation plan. On 30 June 2003, the amendment of the business rehabilitation plan was accepted by the Central Bankruptcy Court.  A summary of the amendments of the business rehabilitation plan is as below: -

(UNAUDITED BUT REVIEWED)
1.	The restructured debts as of 1 January 2003, the effective date of the amended business rehabilitation plan, will be divided into 5 tranches as follows: -
		Restructured Debts	
		Total	US Dollar	Baht	
Tranche	Description	(Million Baht)	(Million USD)	(Million Baht)	
A	Serviceable Debt	1,400.00	25.33	303.17	
B	Convertible Non-Core Asset Debt	
3,700.00	
66.94	
801.24	
C	Incentive Debt	1,176.05	17.39	422.89	
D	Accrued Interest Debt	113.07	1.28	57.44	
E	Converted Debt	200.00	3.62	43.31	
		6,589.12	114.56	1,628.05	
	Contingent debt	1,053.82	22.95	60.00	
	Total	7,642.94	137.51	1,688.05	
	Exchange rate : Baht 43.3039 to US Dollar 1.00
Restructured debts as presented herein include contingent debts of USD 22.95 million which may be payable to a foreign non-bank as a result of the Company’s guarantee of the obligations of Thai Wah Tower (2) Company Limited and Thai Wah Plaza Limited, its subsidiary companies, under the Option Agreement to sell the Promissory Note and Option Agreement for Sale and Purchase of Condominium units, respectively, as per note 16.1, and contingent debts of Baht 60 million which may be payable to a local bank as a result of obligations under a letter of guarantee. There is still uncertainty with regard to the occurrence of these contingent liabilities and the amounts which may have to be paid in the future because the Company is awaiting the judgment of the Supreme Court on the submitted claim of the said foreign non-bank, with the result not being known at this time, and the said local bank has not paid any liabilities under the letter of guarantee it provided on behalf of the Company. The Company has not recorded liabilities for these contingent debts in its accounts since there is still uncertainty as to the judgment of the Supreme Court and the payment to be made under the letter of guarantee. However, the Company has reserved the payment to the two contingent debts creditors in accordance with the plan until the Supreme Court hands down its judgment or payment is made under the letter of guarantee.

(UNAUDITED BUT REVIEWED)
	Under a waiver, Tranche C and D debts may not need to be paid if the Company is able to repay debt or meet certain conditions in accordance with the plan.
	Tranche E debt will be converted to 26,250,000 ordinary shares at Baht 7.62 per share.
	Repayment period
	To be extended to 31 March 2011 except the Tranche B debt which will mature on            31 December 2007 but may be extended to 31 March 2011 by the majority creditors.
	Repayment for the Tranche A debt will be made in 32 installments to be paid on a quarterly basis.
	Interest Rate
	Progressive rate for the Tranche A debt and fixed rate at 0.25% per annum for the Tranche B debt with effect from 1 January 2003.  There is no interest for the Tranche C, D and E debts.
	Interest Rate of Tranche A Debt
From	To	US$ Debt	Baht Debt	
1 January 2003	31 December 2005	SIBOR + 3% - 2.35%	MLR - 2.35%	
1 January 2006	31 December 2008	SIBOR + 3% - 1.35%	MLR - 1.35%	
1 January 2009	31 March 2011	SIBOR + 3% + 1.65%	MLR + 1.65%	
2.	Disposal of non-core assets is extended to the end of 2007.  Another extension till              31 March 2011 may be made by the majority creditors.
	The creditor steering committee will determine and revise the minimum asset prices of the non-core assets including objections to the sale of non-core assets even where the minimum asset prices are reached or exceeded.
3.	The creditor steering committee is empowered to make decisions on behalf of all creditors to defer first two installments under Tranche A Serviceable Debt.

(UNAUDITED BUT REVIEWED)
4.	As security, additional shares held in five subsidiary companies will be pledged.  A summary of the securities are listed below: -
		Mortgage of the undeveloped land, land and factory buildings of the agricultural business group companies.
		Pledge over the machinery, accounts receivable, inventories and operating assets owned by the agricultural business group.
		Pledge of shares held in eight subsidiary companies, two associated companies and one related company.
5.	All relevant subsidiary companies will provide a guarantee of the Company’s performance of its obligations under the debt restructuring agreement.
	The subsidiary company
	On 8 December 2000, the subsidiary company’s business rehabilitation plan was adopted by a special resolution of a meeting of creditors.  Subsequently, on 26 December 2000, the plan was accepted by the Central Bankruptcy Court. On 28 December 2000, the subsidiary company entered into the debt restructuring agreements with two secured creditors.
	Subsequently on 23 December 2003 the Supreme Court abrogated the Central Bankruptcy Court’s order approving the plan as amended of the subsidiary company due to an error in the approval procedure of the amended plan and ordered to forward the petition to amend the plan dated 22 December 2000 to the creditor's meeting for consideration. Subsequently, the planner has amended the plan. On 27 April 2004 the plan and its amendment was approved by a special resolution of a creditors’ meeting. However, on 21 June 2004 the Central Bankruptcy Court abrogated the plan of the subsidiary company and its amendment and ordered the termination of business rehabilitation of the subsidiary company. The subsidiary company is currently preparing an appeal to the Supreme Court.
The significant points of the unaccepted plan and its amendment by the Central Bankruptcy Court are that the total restructured loans of the secured and unsecured creditors will be paid in full within 2013 and 2020 respectively, with repayment to be made in quarterly installments, the interest rate of the secured debts will be reduced and there will be a decrease and an increase of registered capital with the right of debt to equity conversion by the secured creditors.

(UNAUDITED BUT REVIEWED)
	1.2	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, to bring them into line with the full format use 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.
	1.3	Basis of consolidation
		These consolidated financial statements include the financial statements of Thai Wah Public Company Limited and its subsidiary companies and have been prepared on the same basis as that applied for the consolidated financial statements for the year ended 31 December 2003. There have been no changes in the composition of the group companies during the current period. 
	1.4	Significant accounting policies
	The interim financial statements are prepared using the same accounting policies and methods of computation as were used for the financial statements for the year ended 31 December 2003.
2.	PRIOR YEARS ADJUSTMENT 
As discussed in Note 1, the Central Bankruptcy Court abrogated the plan of Thai Wah Plaza Limited   (a subsidiary) and its amendment therefore the subsidiary adjusted its loans and accrued interest expense. The adjustment is made by recording default interest to reflect the conditions stipulated in the original agreements. The Company restated the prior year’s financial statements, presented herein for comparative purposes. The adjustment has the effect of decreasing the net earnings for the three-month and six-month periods ended 30 June 2004 by Baht 9.60 million and Baht 20.09 million, respectively. The cumulative effect up to the beginning of the year 2003 and 2004 is presented in the statements of changes in shareholders’ equity.

(UNAUDITED BUT REVIEWED)
3.	TRADE ACCOUNTS RECEIVABLE
	As at 30 June 2004 and 31 December 2003, the balances of trade accounts receivable are classified by aging as below: -
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
Aging	2004	2003	2004	2003	
Trade accounts receivable - related companies				
   Not over 3 months	6,898	3,624	2,311	5,788	
   3 - 6 months	621	2,182	-	-	
   6 - 12 months	855	1,428	-	-	
   Over 12 months	461	143	-	-	
Total trade accounts receivable	8,835	7,377	2,311	5,788	
   - related companies					
Trade accounts receivable -  others					
   Not over 3 months	160,509	145,394	119,058	84,925	
   3 - 6 months	34,560	27,239	26,655	24,600	
   6 - 12 months	2,138	1,388	-	-	
   Over 12 months	3,161	3,533	-	-	
Total trade accounts receivable -  others	200,368	177,554	145,713	109,525	
Less : Allowance for doubtful accounts	(2,968)	(2,828)	-	-	
Trade accounts receivable - others, net	197,400	174,726	145,713	109,525	
4.	SHORT-TERM LOANS TO RELATED COMPANIES
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Short-term loans					
Subsidiary companies	-	-	38,990	40,980	
Total	-	-	38,990	40,980	

(UNAUDITED BUT REVIEWED)
 (Unit: Thousand Baht)
	The Company Only	
	30 June	31 December	
	2004	2003	
Short-term loans - subsidiary companies			
D.I. Company Limited	8,790	10,780	
Thai Ongkharak Company Limited	13,998	13,998	
Chiang Saen Land Company Limited	7,755	7,755	
Rachada Property Development Company Limited	2,251	2,251	
Mae Hong Sorn Land Development Limited	1,635	1,635	
Bang Thao (6) Company Limited	935	935	
Mae Chan Land Company Limited	832	832	
Thai Wah (6) Company Limited	537	537	
Thai Wah Rice Flour Company Limited	1,500	1,500	
Tha Thungna Land Company Limited	390	390	
Thai Nam Tapioca (1) Company Limited	367	367	
Total	38,990	40,980	
	Short-term loans to subsidiary companies are unsecured. The loans are repayable on demand and carry interest at the rates of 3.13 - 3.52 percent per annum (2003: 3.45 - 4.73 percent per annum).
5.	OTHER RECEIVABLES - RELATED COMPANIES
Other receivables - related companies consist of accrued interest on the inter company loans and the outstanding balance of related parties business transactions.
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Other receivables					
Subsidiary companies	-	-	64,243	61,574	
Associated companies	177	244	177	244	
Related companies	1,024	1,052	1,024	1,052	
Total	1,201	1,296	65,444	62,870	

(UNAUDITED BUT REVIEWED)
 (Unit:Thousand Baht)
	The Company Only	
	30 June	31 December	
	2004	2003	
Other receivables - subsidiary companies			
Thai Wah Realty Limited	36,611	36,624	
Tay Ninh Tapioca Company Limited	1,635	121	
Thai Ongkharak Company Limited	10,319	9,982	
Phang Nga Resort Limited	7	2	
Chiang Saen Land Company Limited	5,454	5,267	
Bang Thao (5) Company Limited	21	8	
Rachada Property Development Company Limited	1,808	1,723	
Thai Wah Alpha Starch Company Limited	107	53	
Mae Hong Sorn Land Development Limited	1,484	1,408	
Bang Thao (6) Company Limited	708	691	
Mae Chan Land Company Limited	846	794	
D.I. Company Limited	24	18	
Tha Thungna Land Company Limited	666	614	
Thai Wah (6) Company Limited	571	534	
Thai Nam Tapioca (1) Company Limited	482	476	
Bangpakong Turakit Company Limited	254	254	
Thai Wah Rice Flour Company Limited	5	6	
Thai Wah Tower (2) Company Limited	1,070	1,070	
Thai Sin Tapioca (1989) Company Limited	936	749	
Bangna Property Development Company Limited	223	180	
Thai Wah Group Planner Company Limited	1,000	1,000	
Laguna (2) Company Limited	12	-	
Total	64,243	61,574	

 (UNAUDITED BUT REVIEWED)
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Other receivables - associated companies					
Mae Joe Land Company Limited	13,225	13,141	13,225	13,141	
Laguna Resorts & Hotels Public					
   Company Limited	68	229	68	229	
Thai Wah Food Products Public 					
    Company Limited	23	13	23	13	
The Walon (1) Company Limited	2	2	2	2	
Total	13,318	13,385	13,318	13,385	
Less: Allowance for doubtful accounts	(13,141)	(13,141)	(13,141)	(13,141)	
Net	177	244	177	244	
Other receivables - related companies					
Tapioca Development Corporation Limited	306	328	306	328	
Banyan Tree Gallery (Thailand) Limited	104	106	104	106	
Others	614	618	614	618	
Total	1,024	1,052	1,024	1,052	
6.	INVESTMENTS IN SUBSIDIARY COMPANIES ACCOUNTED FOR UNDER THE EQUITY METHOD
	Paid-up capital	Percentage of holding	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
	Million Baht	Million Baht	Percent	Percent	
Investments in subsidiary companies					
Agricultural business					
Thai Wah Alpha Starch Company Limited	18.00	18.00	100.0	100.0	
D.I. Company Limited	10.00	10.00	99.9	99.9	
Thai Wah Rice Flour Company Limited	30.00	30.00	83.3	83.3	
Tay Ninh Tapioca Company Limited	124.13	124.13	70.0	70.0	
Thai Nam Tapioca Company Limited	86.60	86.60	70.0	70.0	

(UNAUDITED BUT REVIEWED)
	Paid-up capital	Percentage of holding	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
	Million Baht	Million Baht	Percent	Percent	
Property development and hotel business					
Thai Wah Realty Limited	100.00	100.00	100.0	100.0	
Thai Wah Tower (2) Company Limited	21.00	21.00	89.7	89.7	
Thai Wah Tower Company Limited	132.00	132.00	87.5	87.5	
Thai Wah Plaza Limited	1,165.00	1,165.00	87.5	87.5	
Land holding and others					
Bangna Property Development Company Limited	28.14	28.14	100.00	100.00	
Rachada Property Development Company Limited	162.00	162.00	100.00	100.00	
Bangpakong Turakit Company Limited	91.00	91.00	100.00	100.00	
Chiang Saen Land Company Limited	75.00	75.00	100.00	100.00	
Thai Wah (6) Company Limited	29.00	29.00	100.00	100.00	
Bang Thao (6) Company Limited	21.50	21.50	100.00	100.00	
Mae Chan Land Company Limited	15.00	15.00	100.00	100.00	
Tha Thungna Land Company Limited	15.00	15.00	100.00	100.00	
Thai Sin Tapioca (1989) Company Limited	5.00	5.00	100.00	100.00	
Thai Ongkharak Company Limited	4.00	4.00	100.00	100.00	
Phang Nga Resort Limited	1.00	1.00	100.00	100.00	
Bang Thao (5) Company Limited	0.25	0.25	100.00	100.00	
Laguna (2) Company Limited	0.10	0.10	99.4	99.4	
Bang Thao (7) Company Limited	0.03	0.03	99.3	99.3	
Thai Modified Starch Company Limited	10.00	10.00	94.6	94.6	
Mae Hong Sorn Land Development 					
   Company Limited	2.00	2.00	89.4	89.4	
Thai Nam Tapioca (1) Company Limited	1.00	1.00	69.9	69.9	
Thai Wah Group Planner Company Limited	0.50	0.50	87.5	87.5	
Architrave Design & Planning Company Limited	0.50	0.50	99.9	99.9	
Thai Wah Marketing Services Limited	20.00	20.00	80.0	80.0	

(UNAUDITED BUT REVIEWED)
(Unit: Thousand Baht)
	Investments at cost method	Investments at equity method	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Investments in subsidiary companies					
Agricultural business					
Thai Wah Alpha Starch Company Limited	17,999	17,999	53,578	54,480	
D.I. Company Limited	9,409	9,409	72,222	82,998	
Thai Wah Rice Flour Company Limited	24,999	24,999	24,398	25,789	
Tay Ninh Tapioca Company Limited	86,889	86,889	129,584	138,544	
Thai Nam Tapioca Company Limited	60,620	60,620	155,853	158,940	
Property development and hotel business					
Thai Wah Realty Limited	119,012	119,012	-	-	
Thai Wah Tower Company Limited	-	-	9,743	32,570	
Thai Wah Tower (2) Company Limited	34,350	34,350	219,105	218,015	
Thai Wah Plaza Limited	1,006,895	1,006,895	-	-	
Land holding and others					
Bangna Property Development 					
   Company Limited	32,000	32,000	51,780	51,810	
Rachada Property Development Company					
   Limited	161,999	161,999	147,946	148,017	
Bangpakong Turakit Company Limited	90,999	90,999	128,408	128,421	
Chiang Saen Land Company Limited	74,999	74,999	16,563	16,729	
Thai Wah (6) Company Limited	28,999	28,999	40,689	40,712	
Bang Thao (6) Company Limited	21,499	21,499	23,113	23,143	
Mae Chan Land Company Limited	14,999	14,999	14,921	14,956	
Tha Thungna Land Company Limited	14,999	14,999	4,746	4,778	
Thai Sin Tapioca (1989) Company Limited	4,999	4,999	12,879	12,960	
Thai Ongkharak Company Limited	3,999	3,999	19,667	19,988	
Phang Nga Resort Limited	999	999	-	-	
Bang Thao (5) Company Limited	250	250	-	-	
Laguna (2) Company Limited	100	100	-	-	
Bang Thao (7) Company Limited	25	25	-	-	
Thai Modified Starch Company Limited	9,462	9,462	8,053	8,078	
Mae Hong Sorn Land Development Limited 	1,699	1,699	2,434	2,479	

(UNAUDITED BUT REVIEWED)
(Unit: Thousand Baht)
	Investments at cost method	Investments at equity method	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Thai Nam Tapioca (1) Company Limited	700	700	7,705	7,712	
Thai Wah Group Planner Company Limited	-	-	19	35	
Architrave Design & Planning Company 					
     Limited	500	500	-	-	
Thai Wah Marketing Services Limited	16,000	16,000	4,268	2,070	
Total investments in subsidiary companies	1,839,399	1,839,399	1,147,674	1,193,224	
All subsidiary companies were incorporated and operated in Thailand except for Tay Ninh Tapioca Company Limited, which was incorporated and operated in Vietnam.  This subsidiary company is a joint venture in the form of a limited liability company between the Company and a Vietnamese Government Agency, engaging in the manufacture and sale of tapioca products.  The joint venture has a duration of 30 years with an option for renewal.
During the first quarter of the current year, there was dividend received from Tay Ninh Tapioca Company Limited of Baht 23.4 million.
7.	INVESTMENTS IN ASSOCIATED COMPANIES ACCOUNTED FOR UNDER THE EQUITY METHOD
		Paid-up capital	Percentage of holding	
		30 June	31 December	30 June	31 December	
	Nature of business	2004	2003	2004	2003	
		Million Baht	Million Baht	Percent	Percent	
Investments in associated companies						
Mae Joe Land Company Limited	Land rental	3.00	3.00	50.0	50.0	
The Walon (1) Company Limited	Properties development	1.00	1.00	30.0	30.0	
Krispy Snacks Company Limited	Manufacture and 					
	   distribution of snacks	65.00	65.00	33.4	33.4	

(UNAUDITED BUT REVIEWED)
 (Unit: Thousand Baht)
	Consolidated/ The Company Only	
	Investments at cost method	Investments at equity method	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Investments in associated companies					
Mae Joe Land Company Limited	1,500	1,500	-	-	
The Walon (1) Company Limited	299	299	11,921	11,929	
Krispy Snacks Company Limited	10,000	10,000	5,142	5,277	
Total investments in associated companies	11,799	11,799	17,063	17,206	
8.	LONG-TERM INVESTMENTS
(Unit: Thousand Baht)
			Consolidated/                         The Company Only	
	Nature of	Percentage	30 June	31 December	
	Business	of holding	2004	2003	
		Percent			
Available-for-sale investments					
Equity securities					
Thai Wah Food Products Public	Manufacture and				
   Company Limited	   distribution of vermicelli	45.5	221,690	221,690	
Laguna Resorts & Hotels Public	Resorts hotel and property				
   Company Limited	   Development	34.8	1,259,841	1,259,841	
			1,481,531	1,481,531	
Add : Surplus on revaluation of investments			302,975	346,828	
Equity securities - net (presented at fair value)			1,784,506	1,828,359	
Total available-for-sale investments (presented at fair value)		1,784,506	1,828,359	
Other investments					
Ordinary shares					
Tropical Resorts Limited	Resort & Hotel	19.8	109,907	109,907	
Less : Allowance for loss on impairment of					
	investments			(27,993)	(27,993)	
Ordinary shares - net			81,914	81,914	

(UNAUDITED BUT REVIEWED)
 (Unit: Thousand Baht)
			Consolidated/                         The Company Only	
	Nature of	Percentage	30 June	31 December	
	Business	of holding	2004	2003	
		Percent			
Convertible loan stock					
Tropical Resorts Limited	Resort & Hotel	-	12,658	48,830	
Interest receivable			5,760	17,423	
Less: Allowance for loss on impairment of					
	investments			(18,418)	(26,000)	
Convertible loan stock - net			-	40,253	
Total other investments			81,914	122,167	
Total long-term investments			1,866,420	1,950,526	
During the second quarter of the current year, there were dividends received from Thai Wah Food Products Public Company Limited and Laguna Resorts & Hotels Public Company Limited of Baht 38.8 million and Baht 58.8 million, respectively.
The convertible loan stock of Tropical Resorts Limited, which is unsecured, transferable, denominated in United States Dollars, and bears interest at the Singapore Inter Bank Offered Rate (SIBOR) plus         2 percent per annum, matured on 31 December 2001. Tropical Resorts Limited did not redeem the principal at that date. However, during the second quarter of the current year, the Company received part of principal and accrued interest therefore the Company reversed allowance for loss on impairment of investments amounting to Baht 7.6 million.

(UNAUDITED BUT REVIEWED)
9.	DEPOSITS AT FINANCIAL INSTITUTIONS SUBJECT TO RESTRICTIONS
	As at 30 June 2004 and 31 December 2003, deposits at financial institutions of the Company and subsidiary companies which are subject to restrictive conditions are as follows: -
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Fixed deposits pledged to secure 					
   bank overdraft, letter of credit and letter of					
   guarantee facilities	52,815	52,815	42,000	42,000	
Deposits reserved for payment of					
   contingent debts creditors	52,940	24,296	52,940	24,296	
Total	105,755	77,111	94,940	66,296	
	The Company will make payments to contingent debts creditors from its reserved deposits once the contingent debts creditors are transferred to be USD creditors or Baht creditors in accordance with a final judgement of the Supreme Court, and after obligations under a letter of guarantee have been settled by such creditor.
10.	LONG-TERM LOANS
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Long-term loans	8,124,026	8,182,064	6,088,487	6,196,406	
Less : Current portion of long-term loans	(2,107,801)	(2,056,218)	(72,262)	(70,560)	
Long-term loans, net of current portion	6,016,225	6,125,846	6,016,225	6,125,846	

(UNAUDITED BUT REVIEWED)
The Company
	As of 30 June 2004, the restructured loans are presented in accordance with the conditions stipulated in the amended business rehabilitation plan accepted by the Central Bankruptcy Court on 30 June 2003. The significant points of the amended debt restructuring agreements which from part of the business rehabilitation plan are that the restructured loans and accrued interest outstanding under the original debt restructuring agreements as at 1 January 2003 are classified into 5 tranches with different interest rates and repayment schedules, as follow:-

Tranche	

Description	Debts amount
as at
1 January 2003
(Million Baht)	

Interest rate	

Maturity	
A	Serviceable Debt	1,400.00	Year 2003-2005	SIBOR+3%-2.35%
	MLR - 2.35%
Year 2006-2008	SIBOR+3%-1.35%
	MLR - 1.35%	
Year 2009-2011	SIBOR+3%+1.65%
	MLR + 1.65%	Payable in quarterly installments up to 31 March 2011	
B	Convertible Non-Core Asset Debt	3,700.00	Year 2003 - maturity  0.25%	Within 2007 but may be extended to 31 March  2011 by majority creditors	
C	Incentive Debt	1,176.05	No interest charged 	31 March 2011	
D	Accrued Interest Debt	113.07	No interest charged 	31 March 2011	
E	Converted Debt	200.00	No interest charged 	Within 361 days after the Central Bankruptcy Court approved the plan	
	Total	6,589.12			
	In 2003, the Company recorded the excess of the book value of loans over the future cash outflows (with no discount applied), which is calculated using the existing floating interest rates and under the conditions of the amended debt restructuring agreements, amounting to Baht 68.5 million, as a gain on debts restructuring, presenting it as an extraordinary item in the statement of earnings for the year 2003. 

(UNAUDITED BUT REVIEWED)
	In addition, a restructured loan in tranche E debt of Baht 172 million was converted to 22,576,244 ordinary shares to Class 1 (USD creditors) and Class 2 (Baht creditors) creditors. The payment of such shares were made by means of converting Tranche E converted debt into equity of the Company at a conversion rate of Baht 7.62 per share, which is in compliance with the conditions of the amended business rehabilitation plan.
Subsequently, during the first and second quarter of the current year, the Company received notification from the Facility Agent of debt forgiveness of Baht 75.29 million, because during the year 2003 and 2004 the Company was able to meet schedule loan repayments and to proceed accordance with the conditions stipulated in the plan. The said debt was forgiven in accordance with the amended business rehabilitation plan conditions. The resulting gain was recorded as gain on debts restructuring and presented as an extraordinary item in the statement of earnings.
The restructured loans are secured by the mortgage of undeveloped land and the land and factory buildings of the agricultural business group companies, and by pledged of the machinery, accounts receivable, inventories and operating assets of the agricultural business group companies, and the shares the Company holds in eight subsidiary companies, two associated companies and one related company. In addition all relevant subsidiary companies have provided guarantees of the Company’s performance of its obligations under the debt restructuring agreement.
The subsidiary company
In the first quarter of the current year, the planner has amended the plan of the subsidiary company and on 27 April 2004 the plan and its amendment was approved by a special resolution at the creditors’ meeting. However, on 21 June 2004 the Central Bankruptcy Court abrogated the plan of the subsidiary company and its amendment and ordered the termination of the business rehabilitation of the subsidiary company. The subsidiary company is currently preparing an appeal to the Supreme Court.
The significant points of the unaccepted plan and its amendment by the Central Bankruptcy Court are that the total restructured loans from secured and unsecured creditors will be paid in full within 2013 and 2020 respectively, with repayment to be made in quarterly installments, the interest rate of the secured debts will be reduced, and there will be a decrease and an increase of registered capital with the right of debt to equity conversion by the secured creditors. 

(UNAUDITED BUT REVIEWED)
The secured US dollar loans carry interest at the London Inter Bank Offered Rate (LIBOR) (3 months) plus 2.75 percent per annum. The secured baht loans carry interest at the Minimum Loan Rate (MLR) plus 0.75 percent per annum until the plan is approved, and at MLR per annum from the approval date onwards. The unsecured US dollar and baht loans carry interest at LIBOR (3 months) and at progressive rates of between nil and 2.75 percent per annum.
Because the plan of the subsidiary company is abrogated by the Central Bankruptcy Court, the subsidiary company has reclassified all of its loans which are being restructured in the current portion of long-term loans.
Part of the land of the Company and part of the land and buildings of the subsidiary companies have been mortgaged as collateral for the long-term loans of the subsidiary company.
As at 30 June 2004, the current portion of long-term loans in the consolidated financial statements consists of USD 33.51 million and Baht 727.19 million (the Company only: USD 1.32 million and Baht 18.25 million). 
As at 30 June 2004, long-term loans, net of the current portion, as presented in the consolidated financial statements consist of USD 108.53 million and Baht 1,562.98 million (the Company only: USD 108.53 million and Baht 1,562.98 million).
None of the long-term loans of the Company and the subsidiary company denominated in foreign currency are hedged against foreign exchange risk.
11.	LONG-TERM LOANS AND ADVANCES FROM RELATED COMPANIES
(Unit: Thousand Baht)
	Consolidated	The Company Only	
	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	
Long-term loans  - subsidiary companies      					
Thai Wah Rice Flour Company Limited	-	-	20,000	20,000	
Thai Modified Starch Company Limited	-	-	7,890	7,890	
Thai Sin Tapioca (1989) Company Limited	-	-	1,900	1,900	
Total	-	-	29,790	29,790	
Advances					
Subsidiary companies	-	-	307	332	
Total	-	-	307	332	
Total	-	-	30,097	30,122	

(UNAUDITED BUT REVIEWED)
	Under the business rehabilitation plan, the loans from the above subsidiary companies are interest free loans and due for repayment when the Company has paid off all debt to Class 1 (USD creditors) and Class 2 (Baht creditors) in accordance to conditions stipulated in the amended rehabilitation plan.
12.	PROVISION FOR LOSS ON INVESTMENTS IN SUBSIDIARY COMPANIES
(Unit: Thousand Baht)
	
Investments at	
Loans and advances to 	Provision for loss on investments	
	equity method	subsidiary  companies	in subsidiary companies	
	30 June	31 December	30 June	31 December	30 June	31 December	
	2004	2003	2004	2003	2004	2003	
		(Restated)				(Restated)	
Property development and hotel business							
Thai Wah Plaza Limited 	(592,262)	(519,370)	256,268	252,077	(335,994)	(267,293)	
Thai Wah Realty Limited	(205,717)	(203,075)	205,717	203,075	-	-	
Land holding and others							
Phang Nga Resort Limited	(19,151)	(18,835)	19,151	18,835	-	-	
Bang Thao (5) Company Limited	(11,504)	(11,369)	11,504	11,369	-	-	
Laguna (2) Company Limited	(306)	(292)	306	291	-	(1)	
Bang Thao (7) Company Limited	(83)	(70)	57	30	(26)	(40)	
Architrave Design & Planning Company Limited      	(9,732)	(9,584)	9,571	9,407	(161)	(177)	
Total	(838,755)	(762,595)	502,574	495,084	(336,181)	(267,511)	
	Most of the loans to subsidiary companies are unsecured, repayable on demand and carry interest at rates of 3.14 - 3.52 percent per annum (2003: 3.18 - 4.73 percent per annum).  The conditions of the loan to Thai Wah Plaza Limited under a business rehabilitation plan of that company as preparing an appeal to the Supreme Court are that the total restructured loans will be paid in full within 2020 with repayment to be made in quarterly installments and carries interest at the London Inter Bank Offered Rate (LIBOR) (3 months) and at progressive rates of between nil and 2.75 percent per annum.
13.	CORPORATE INCOME TAX
Corporate income tax is calculated on the earnings of subsidiary companies after adding back certain disallowed expenses and after deducting tax loss brought forward from prior years.

(UNAUDITED BUT REVIEWED)
14.   FINANCIAL INFORMATION BY SEGMENT
The operations of the Company and its subsidiary companies are virtually all conducted in Thailand.  However, sales of the manufactured agricultural products are made both in domestic and export markets, and the results of the operations for the three-month and six-month periods ended 30 June 2004 and 2003 are as  follows: -
(Unit: Thousand Baht)
	For the three-month period ended 30 June 2004	
		Property			
		development			
	Agricultural	and			
	business	hotel business	Others	Total	
Revenues	363,070	161,415	-	524,485	
Operating gain (loss)	17,673	(3,164)	(378)	14,131	
Dividend income				97,783	
Interest income				2,033	
Reversal of allowance for loss on					
   impairment of investments				7,582	
Other income				8,999	
Loss on exchange				(214,645)	
Share of loss from investment in					
   associated companies accounted					
   for under the equity method				(67)	
Financial advisory expenses				(9,045)	
Interest expense				(29,754)	
Corporate income tax				(717)	
Gain on debts restructuring				54,731	
Minority interest				11,175	
Net loss for the period				(57,794)	
Fixed assets by segment 					
    (as at 30 June)	888,265	2,158,298	139,300	3,185,863	

 (UNAUDITED BUT REVIEWED)
 (Unit: Thousand Baht)
	For the three-month period ended 30 June 2003	
		Property			
		development			
	Agricultural	 and			
	business	hotel business	Others	Total	
Revenues	296,986	109,526	-	406,512	
Operating gain (loss)	207	(1,731)	(281)	(1,805)	
Gain on sales of investment				68,333	
Dividend income				89,141	
Interest income				1,993	
Gain on exchange				130,924	
Other income				12,847	
Share of loss from investment in					
   associated companies accounted					
   for under the equity method				(14)	
Financial advisory expenses				(11,427)	
Interest expense				1,259	
Corporate income tax				159	
Gain on debt restructuring				35,397	
Minority interest				(1,126)	
Net earnings for the period				325,681	
Fixed assets by segment 					
    (as at 30 June)	778,608	1,854,837	208,343	2,841,788	

(UNAUDITED BUT REVIEWED)
 (Unit: Thousand Baht)
	For the six-month period ended 30 June 2004	
		Property			
		development			
	Agricultural	 and			
	business	hotel business	Others	Total	
Revenues	729,942	339,999	-	1,069,941	
Operating gain (loss)	66,519	19,641	(683)	85,477	
Dividend income				97,783	
Interest income				3,971	
Reversal of allowance for loss on					
   impairment of investments				7,582	
Other income				16,462	
Loss on exchange				(182,442)	
Share of loss from investment in					
   associated companies accounted					
   for under the equity method				(203)	
Financial advisory expenses				(13,624)	
Interest expense 				(59,560)	
Corporate income tax				(4,932)	
Gain on debt restructuring				75,289	
Minority interest				4,945	
Net earnings for the period				30,748	
Fixed assets by segment 					
    (as at 30 June)	888,265	2,158,298	139,300	3,185,863	

(UNAUDITED BUT REVIEWED)
 (Unit : Thousand Baht)
	For the six-month period ended 30 June 2003	
		Property			
		development			
	Agricultural	 and			
	business	hotel business	Others	Total	
Revenues	723,039	248,650	-	971,689	
Operating gain (loss)	41,149	17,897	(584)	58,462	
Gain on sales of investment				68,333	
Dividend income				89,141	
Interest income				7,012	
Gain on exchange				174,815	
Other income				19,139	
Share of profit from investment in 
   associated companies accounted for 
   under the equity method 				

83,600	
Financial advisory expenses				(24,115)	
Interest expense				(66,299)	
Corporate income tax				(935)	
Gain on debts restructuring				35,397	
Minority interest				(7,483)	
Net earnings for the period				437,067	
Fixed assets by segment 					
    (as at 30 June)	778,608	1,854,837	208,343	2,841,788	
15.	RELATED PARTY TRANSACTIONS
During the periods, the Company had significant business transactions with its subsidiary companies, associated companies and related companies (related by way of share holding or common shareholders and/or directors). Related party transactions for three-month and six-month periods ended 30 June 2004 and 2003 are summarised below: -	

(UNAUDITED BUT REVIEWED)
	Transactions for the three-month period ended 30 June :-
						 (Unit: Million Baht)
Transaction type	Payee	Payer	2004	2003	Price policy	
Transactions between the Company and subsidiary companies with associated companies	
Rental and service	TWPL	TWFP	1.56	1.20	Agreement (1.1)	
	TWPL	LRH	4.23	1.91	Agreement (1.1)	
	TWC	TWFP	0.74	0.70	Agreement (1.1)	
	LRH	TWPL	0.94	1.10	Agreement (1.2)	
	Others		0.06	0.03	Agreement and agreed basis 	
					(1.1 and 1.3)	
Purchase of goods	TWC	TWFP	2.31	1.92	Agreed basis (3.1)	
Sales investment in LBC	TWC	LRH	-	85.00	Agreement	
Dividend	TWC	TWFP	38.89	30.25	As declared	
	TWC	LRH	58.89	58.89	As declared	
Transactions between the Company and subsidiary companies with related companies			-	85.00	
Rental and service	BTS	TWPL	16.50	6.69	Agreed basis (1.4)	
	TWPL	LBTL	1.10	0.27	Agreement (1.1)	
	TWC	TDC	0.93	0.98	Agreement (1.5)	
	TWPL	BTS	5.68	4.13	Agreement and agreed basis 	
					(1.1, 1.6 and 1.7)	
	TWPL	TDC	0.67	0.54	Agreement (1.1)	
	TWPL	AVC	1.42	1.23	Agreement (1.1)	
	Others		0.76	0.53	Agreed basis (1.3, 1.6, 1.8 and 1.9)	
Interest	TWC	TRL	0.01	0.02	Agreement (2.2)/(Million USD)	
Purchase of goods	TDC	TWC	5.42	5.69	Agreed basis (3.1)	
	BTG	TWPL	2.24	1.84	Agreed basis (3.1)	
Management fee	BTHR	TWPL	7.92	3.96	Agreement (1.15)	
Transactions between the Company and subsidiary companies (eliminated from consolidated financial statements)	
Rental and service	TWT	TWPL	1.25	1.25	Agreement (1.10)	
	TWPL	TWT	0.50	0.50	Agreement (1.11)	
	TW2	TWPL	0.66	0.66	Agreement (1.10)	
	Others		0.85	0.40	Agreement and agreed basis	
					(1.11, 1.12, 1.13 and 1.16)	

(UNAUDITED BUT REVIEWED)
						 (Unit: Million Baht)
Transaction type	Payee	Payer	2004	2003	Price policy	
Interest	TWC	TWPL	0.54	0.31	Agreement (2.1)	
	TWC	TWRL	1.20	1.56	Agreement (2.1)	
	Others		0.56	0.83	Agreement (2.1 and 2.3)	
Purchase of goods	TN	TWC	47.82	39.75	Agreed basis (3.1)	
	DI	TWC	3.50	21.11	Agreed basis (3.1)	
 	TWC	TWAS	6.36	1.00	Agreed basis (3.1)	
	TWAS	TWC	0.91	0.52	Agreed basis (3.1)	
	TWC	TAY	1.62	-	Agreed basis (3.1)	
	Transactions for the six-month period ended 30 June :-
 (Unit : Million Baht)
			Consolidated	Price policy	
Transaction type	Payee	Payer	2004	2003		
Transactions between the Company and subsidiary companies with associated companies	
Rental and service income	TWPL	TWFP	2.77	2.60	Agreement (1.1)	
	TWPL	LRH	6.24	3.99	Agreement (1.1)	
	TWC	LRH	1.44	1.38	Agreement (1.1)	
	LRH	TWPL	0.94	1.10	Agreement (1.2)	
	Others		0.09	0.15	Agreement and agreed basis 	
					(1.1 and 1.3)	
Purchase of goods	TWC	TWFP	4.42	4.15	Agreed basis (3.1)	
Sale of investment in LBC	TWC	LRH	-	85.00	Agreement	
Dividend	TWC	TWFP	38.89	30.25	As declared	
	TWC	LRH	58.89	58.89	As declared	

(UNAUDITED BUT REVIEWED)
(Unit : Million Baht)
			The Company Only	Price policy	
Transaction type	Payee	Payer	2004	2003		
Transactions between the Company and subsidiary companies with related companies	
Rental and service income	BTS	TWPL	18.54	16.54	Agreed basis (1.4)	
	TWPL	LBTL	1.19	0.64	Agreement (1.1)	
	TWC	TDC	1.88	1.96	Agreement (1.5)	
	TWPL	BTS	6.10	5.37	Agreement and agreed basis	
					(1.1, 1.6 and 1.7)	
	TWPL	TDC	1.21	1.07	Agreement (1.1)	
	TWPL	AVC	2.84	2.52	Agreement (1.1)	
	Others		1.52	1.67	Agreed basis (1.3,1.6,1.8 and 1.9)	
Interest income	TWC	TRL	0.02	0.10	Agreement (2.2)/(Million USD)	
Purchase of goods	TDC	TWC	10.79	11.84	Agreed basis (3.1)	
	BTG	TWPL	3.50	2.69	Agreed basis (3.1)	
Management fee	BTHR	TWPL	17.89	10.37	Agreement (1.15)	
Transactions between the Company and subsidiary companies (eliminated from the consolidated financial statements)	
Rental and service income	TWT	TWPL	2.50	2.50	Agreement (1.10)	
	TWPL	TWT	1.00	1.00	Agreement (1.11)	
	TW2	TWPL	1.32	1.32	Agreement (1.10)	
	Others		1.93	2.19	Agreement and agreed basis	
					(1.11, 1.12, 1.13 and 1.16)	
Interest income	TWC	TWPL	3.95	0.64	Agreement (2.1)	
	TWC	TWRL	2.63	3.27	Agreement (2.1)	
	Others		1.32	1.95	Agreement (2.1 and 2.3)	
Purchase of goods	TN	TWC	133.22	169.40	Agreed basis (3.1)	
	DI	TWC	38.60	61.46	Agreed basis (3.1)	
 	TWC	TWAS	8.92	9.05	Agreed basis (3.1)	
	TWAS	TWC	3.47	0.68	Agreed basis (3.1)	
	TWC	TAY	1.62	0.58	Agreed basis (3.1)	
Dividend	TWC	TAY	0.60	0.23	As declared (Million USD)	

(UNAUDITED BUT REVIEWED) 
	During the period, movement of short-term loans and long-term loans to related companies are as   follows: -
(Unit: Thousand Baht)
	Balance as at	During the period	Balance as at	
	1 January 2004	Increase	Decrease	30 June 2004	
Short-term loans					
	Subsidiary companies					
		DI	10,780	32,110	(34,100)	8,790	
		ADP	7,380	33	-	7,413	
		RPD	2,251	-	-	2,251	
		TOC	13,998	-	-	13,998	
		CSL	7,755	-	-	7,755	
		TW6	537	-	-	537	
		BT5	6,839	-	-	6,839	
		BT6	935	-	-	935	
		MCL	832	-	-	832	
		MHS	1,635	-	-	1,635	
		PNR	11,161	-	-	11,161	
		TTL	390	-	-	390	
		TWRF	1,500	-	-	1,500	
		TN1	367	-	-	367	
	Associated company					
		MJL	8,048	-	-	8,048	
Long-term loans					
	Subsidiary companies					
		TWPL	250,482	75	-	250,557	
		TWRL	148,325	-	-	148,325	

(UNAUDITED BUT REVIEWED) 
Abbreviation			
TWC	=	Thai Wah Public Company Limited	
Subsidiary companies	
TWRF	=	Thai Wah Rice Flour Company Limited	
TOC	=	Thai Ongkharak Company Limited	
TN	=	Thai Nam Tapioca Company Limited	
PNR	=	Phang Nga Resort Limited	
ADP	=	Architrave Design & Planning Company Limited	
TWT	=	Thai Wah Tower Company Limited	
TWAS	=	Thai Wah Alpha Starch Company Limited	
TWRL	=	Thai Wah Realty Limited	
DI	=	D.I. Company Limited	
TWPL	=	Thai Wah Plaza Limited	
RPD	=	Rachada Property Development Company Limited	
CSL	=	Chiang Saen Land Company Limited	
TW6	=	Thai Wah (6) Company Limited	
BT5	=	Bang Thao (5) Company Limited	
BT6	=	Bang Thao (6) Company Limited	
MCL	=	Mae Chan Land Company Limited	
MHS	=	Mae Hong Sorn Land Development Limited	
TTL	=	Tha Thungna Land Company Limited	
TN1	=	Thai Nam Tapioca (1) Company Limited	
TW2	=	Thai Wah Tower (2) Company Limited	
TAY	=	Tay Ninh Tapioca Company Limited	
Associated companies	
TWFP	=	Thai Wah Food Products Public Company Limited	
LRH	=	Laguna Resorts & Hotels Public Company  Limited	
MJL	=	Mae Joe Land Company Limited	

(UNAUDITED BUT REVIEWED) 
Related companies	
(Related by way of share holding or common shareholders and/or directors)	
BTS	=	Banyan Tree Spa Company Limited	
TDC	=	Tapioca Development Corporation Limited	
TRL	=	Tropical Resorts Limited	
AVC	=	Allamanda Vacation Club Limited	
BTG	=	Banyan Tree Gallery (Thailand) Limited	
BTHR	=	Banyan Tree Hotels and Resorts Pte Limited	
LBTL	=	Laguna Banyan Three Company Limited	
Pricing policy
1.	    These transactions relate to:
1.1	Monthly rental and service charges for office space are at Baht 350 - 550 per square metre which depended upon location while other utility charges are reimbursed at cost.
1.2	Service charges for shared expenses for group corporate finance, Human Resources, Information Technology, Legal, Corporate Affairs and Administration, actual expenses are allocated on pre-agreed formulas which are based on factors relating to the function of the corporate head office department (e.g., human resources on headcount, legal on time and number of court cases).  The allocation of these expenses are on normal commercial terms.
1.3	Reimbursement of photocopy expenses, telephone charges with no extra charges.
1.4	Reimbursement of spa package serviced to Banyan Tree Bangkok Hotel’s guest is at no extra charges.
1.5	Land rental for factory premises is Baht 294,689 per month.
1.6	Reimbursement of hotel accommodation from Banyan Tree Bangkok is at normal market rate.
1.7	Office rental for spa operation charges is at 5 percent of total spa revenue.
1.8	Warehouse rental charges are at Baht 0.75 - 30 per bag per month which depended upon size of bag.
 (UNAUDITED BUT REVIEWED)
1.9	Land rental for Chonburi office is charged at Baht 10,000 per month.
1.10	Office space rental charge is at Baht 5 Million per year and land rental charge is at Baht 2.63 million per year.
1.11	Service charges for shared expenses for management, accounting etc. are ranging from Baht 0.36 to 2 Million per year which depended upon the size of the company.
1.12	Land rental for factory premise charge is Baht 20,000 per month.
1.13	Reimbursement of utilities, administrative expenses etc. is at cost.
1.14	Reimbursement of legal and financial expenses relate to debt restructuring is at actual cost.
1.15	The management contract of the Banyan Tree Bangkok Hotel pays a basic management fee of 3% of gross operating revenue and an incentive fee of 10% of gross operating profit.  In addition, expenses relating to the sharing of promotional campaigns and adverts, sales staff salaries, central reservations and international sales offices incurred by the Banyan Tree corporate head office are reimbursed on the basis of each of the individual hotels revenue in the group.
	The management fees are consistent with industry practice.
1.16	Land rental for factory premise charge is Baht 604,800 per year.
2.	These transactions relate to:
2.1	Interest charged is at the rate equivalent to cost of fund plus 1 percent per annum.
2.2	Interest charged is at the Singapore Inter Bank Offered Rate (SIBOR) plus 2 percent per annum.
2.3	Interest charged is at fixed deposit rate.
3.	These transactions relate to:
3.1	Selling price is market price of each type of product.

(UNAUDITED BUT REVIEWED)
16.	COMMITMENTS
16.1	Loan agreement commitments
In accordance with the loan agreement for the USD 22.95 million promissory note issued by Thai Wah Plaza Limited, a subsidiary company, as the lender entered into a “Option Agreement to sell the Promissory Note” with Thai Wah Tower (2) Company Limited, a subsidiary company, to sell the said promissory note to Thai Wah Tower (2) Company Limited in July 2002 at the option price of USD 15 million plus interest calculated using the rate between 9.0 and 12.3 percent per annum. In May 2002, the lender notified Thai Wah Tower (2) Company Limited to purchase promissory note back from the lender at the price stipulated in the “Option Agreement to sell the Promissory Note”.  However, Thai Wah Tower (2) Company Limited informed the lender that they are no longer obliged to purchase such promissory note since Thai Wah Plaza Limited is in the process of rehabilitating its business in accordance with the plan approved by the Central Bankruptcy Court.  Debts from the promissory note is regarded as part of restructuring debts which has to perform in accordance with the plan.
Thai Wah Plaza Limited (“TWPL”) also entered into an “Option Agreement for Sale and Purchase of Condominium Units” with the lender in the previous paragraph.  Under this agreement, the lender has an option to purchase certain condominium units at approximately 10 percent of the total floor areas of Thai Wah Tower II Building, owned by TWPL, within July 2002 at the price of Baht 394 million (“Option Price”) which is payable in United State Dollars using the average rate of exchange determined under the agreement.  Upon the exercise of this option, TWPL is required to enter into a lease agreement to be expired in July 2002 with the lender to lease all those condominium units from the lender at their request.  According to the lease agreement, the rental fee per annum is 9 percent of Option Price and is payable on the termination of the lease agreement. Up till now, the lender has not yet exercise its right of the said option which was expired since July 2002.

(UNAUDITED BUT REVIEWED)
16.2	Operating agreement commitment
	Thai Wah Plaza Limited, a subsidiary company, entered into an operating agreement with Banyan Tree Hotels and Resorts Pte Ltd. whereby that company is to operate Banyan Tree Bangkok Hotel.  In consideration for such services, Thai Wah Plaza Limited is committed to pay remunerations as follow: -
Contract period	Fees	
20 years from 1 January 2002	-  Basic management fee	:	3% of total revenue	
and has option to extend for 20 years	-  Incentive fee	:	10% of gross operating profit	
17.	CONTINGENT LIABILITIES
	17.1	Guarantees
		The Company has contingent liabilities in respect of loan guarantees and credit facilities with banks, financial institutions and financial creditors given on behalf of subsidiary companies as follows: -
 (Unit: Million Baht)
	Facilities	
	30 June	31 December 	
	2004	2003	
Thai Wah Plaza Limited	682	682	
D.I. Company Limited	20	20	
Thai Nam Tapioca Company Limited	20	20	
Total	722	722	
(Unit: Million USD)
	Facilities	
	30 June	31 December 	
	2004	2003	
Thai Wah Plaza Limited	37	37	

		(UNAUDITED BUT REVIEWED)
			The Company has guaranteed the obligation of Thai Wah Tower (2) Company Limited and Thai Wah Plaza Limited under the Option Agreement to sell the Promissory Note and Option Agreement for Sale and Purchase of Condominium Units respectively as per note 16.1. These Option Agreements are part of a USD 22.95 million loan that Thai Wah Plaza Limited obtained from its lender which is a non-bank without placing collateral. The lender has submitted a claim on Thai Wah Plaza Limited under the business rehabilitation plan as an unsecured creditor and, at the same time, to the Company as a contingent creditor. The debt amount is being considered by the Supreme Court, and the result of this is not known at this time. The Company has not recorded liabilities for this contingent debt in its accounts since there is still uncertainty with regard to the occurrence of this contingent liability and the amount which may have to be paid in the future. 
	17.2	Bank guarantees	
		As at 30 June 2004, there were outstanding bank guarantees issued by the banks on behalf of the Company and its subsidiary companies approximately Baht 83.7 million (the Company only: Baht 28.2 million) in respect of certain performance bonds as required in the ordinary course of business of the Company and its subsidiary companies.
		The liabilities under the above letters of guarantee include those under a letter of guarantee issued by a local bank which submitted a claim against the Company as a contingent creditor. To date that bank does not pay any liabilities on behalf of the Company. The Company does not record the contingent debt in its accounts since there is still uncertainty with regard to the occurrence of this contingent liability and the amount which may have to be paid in the future.
18.	PENDING LAWSUITS
	The Company and subsidiary companies have the following pending lawsuits: -
	1.	In the year 1997, the Company and one subsidiary company were sued for damanges for wrongful eviction of the plaintiff from land.  In the year 2002, the Court of First Instance ruled against the plaintiff, and the case is being considered by the Appeals Court.  In the opinion of the Company’s lawyer, the Appeals Court will hand down the same opinion as the Court of First Instance.

 (UNAUDITED BUT REVIEWED)
	2.	In the year 2002 and 2003, two subsidiary companies were sued by a lender for payment of interest and penalties on the grounds that the subsidiary companies had defaulted on a loan agreements.  At present, the cases are being considered by the Court of First Instance. In the opinion of the Company’s lawyer, if the Court finds against the subsidiary companies it is likely to reduce the amount that must be paid.
19.	FINANCIAL INSTRUMENTS
19.1	Financial risk management and policies
The Company and its subsidiary companies are exposed to risks from changes in market interest rates and in currency exchange rates, and from non-performance of contractual obligations by counter parties.  The Company and its subsidiary companies use derivative financial instruments as and when they consider appropriate to manage such risks.  They do not hold or issue derivative financial instruments for speculative or trading purposes.
19.2	Interest rate risk
The interest rate risk is the risk that future movements in market interest rates will affect the results of the Company and its subsidiary companies’ operations and their cash flows.  The Company and its subsidiary companies’ exposure to interest rate risk relate primarily to their deposits with financial institutions, bank overdrafts and loans from financial institutions.  The Company and its subsidiary companies do not use derivative financial instruments to hedge such risk.  The details of loans are set out in Note 10.
19.3	Foreign currency risk
The Company and its subsidiary companies’ exposure to foreign currency risk relate primarily to their receivables, payables and loans which are denominated in foreign currency. In addition to those transaction exposures, the Company is also exposed to foreign exchange movements on its investment in foreign companies, which currently are not hedged by any derivative financial instrument.
Below is the summary of the Company and its subsidiary companies’ foreign currency-denominated assets/liabilities as at 30 June 2004 which were not hedged by forward exchange contracts or similar hedging instruments.

(UNAUDITED BUT REVIEWED)
 (Unit: Million USD)
	Consolidated	The Company Only	
Foreign currency	Assets	Liabilities	Assets	Liabilities	
USD	18	142	18	110	
19.4	Credit risk
The Company and its subsidiary companies are exposed to credit risk primarily with respect to trade accounts receivable. However, the Company and subsidiary companies have a policy to enter into financial instruments with credit worthy counterparties, therefore the Company and its subsidiary companies do not anticipate material losses from their debt collection.
19.5	Fair value
	As at 30 June 2004, the aggregate carrying value of the financial assets and liabilities of the Company and its subsidiary companies does not materially differ from their fair value.
20.	RECLASSIFICATION
	Certain amounts in the financial statements, as presented herein for comparative purposes, have been reclassified to conform to the current period classifications.
21.	APPROVAL OF INTERIM FINANCIAL STATEMENTS
	These interim financial statements have been approved by the director of Thai Wah Group Planner Company Limited (the Company’s plan administrator).