Capital Increase Report Form 53-4 (STECON)

(F 53-4) Capital Increase Report Form Sino-Thai Engineering & Construction Public Company Limited 12 July 2004 We, Sino-Thai Engineering & Construction Public Company Limited (the "Company"), hereby report the resolution of the Board of Directors' Meeting No. 3/2004, held on 12 July 2004 from 10.30 a.m. to 11.45 a.m. in respect of the capital increase and the allotment of newly issued shares as follows: 1. Capital increase: The meeting of the Board of Directors passed a resolution approving the increase of registered capital of the Company from Baht 1,020,000,000 to Baht 1,190,250,000 by way of issuing 170,250,000 new ordinary shares with a par value of Baht 1 each, totaling Baht 170,250,000. 2.Allotment of new shares: The meeting of the Board of Directors passed a resolution approving the allotment of 170,250,000 newly issued ordinary shares with par value of Baht 1 each. The details of which are as follows: 2.1 Details of allotment Allotted for: 1. Warrants to purchase ordinary shares allotted to existing shareholders 2. Warrants to purchase ordinary shares allotted to existing shareholders (STECON-W) (additional allotment pursuant to right adjustment) No. of shares: 1. 170,000,000 2. 250,000 Ratio(old : new): 1. 6:1 2. Adjustment of right will be made accordingly Offering price per share (Baht): 1. 8.50 2. Adjustment of right will be made accordingly Subscription and payment period: 1. Every 3 months 2. Every 3 months Note: -none- The details of the warrants to purchase ordinary shares of the Company are as follows: Issuing company: Sino-Thai Engineering & Construction Public Company Limited ("STECON") Category of Warrants: Warrants to purchase ordinary shares of Sino-Thai Engineering & Construction Plc No. 2 ("Warrants") Type of Warrants: Transferable and specified the name of the holders. Maturity Period: 3 years from the issuing date Number of Warrants to be issued and offered for sale: 170,000,000 Units Allocation and offering method: Warrants will be allocated and offered to the Company's existing shareholders whose names appear on the share register book as at the date of close of share register book (XW) after receiving approval from the Office of Securities and Exchange Commission. The offering ratio will be one warrant to every six ordinary shares held (any excess will be deleted.) In case of any warrants left from the subscription following the offering described above, the Board of Directors, the Executive Board of Directors or any person entrusted by the Board of Directors or the Executive Board of Directors may allocate and offer the remaining warrants to the existing shareholders who subscribe the warrants more than their entitlement. Offering Price/Warrant: Baht 3.00 (Three Baht) per unit Exercise Ratio: One unit of warrant is entitled to one ordinary share unless the rights is adjusted according to the warrants Exercise Price: Baht 8.50 per share unless the rights is adjusted according to the warrants Number of shares reserved for the exercise of warrants: 170,000,000 shares, accounting for 16.8 per cent of the total shares sold prior to this offering. Exercise Period: The first exercise date is the last business day of the end of the financial statement's first quarter starting from the day the warrant is issued, and other exercise dates are the last business day of every quarter of the financial statement according to the Company's fiscal year, whereby the last exercise date is the last business day the warrant is due for its three-year maturity period. Offering Period: The Board of Directors, the Executive Board of Directors or any person entrusted by the Board of Directors or the Executive Board of Directors will determine details and conditions after the Office of Securities and Exchange Commission approves to offer of warrants for sale. Secondary Market: The Company will list the warrants in the Stock Exchange of Thailand. Reason to issue new shares to accommodate any change of rights exercise: The Company shall change the exercise of right both the exercise price and the exercise ratio in accordance with the calculating method to be further determined when any event stipulated in the relevant Notification of the Securities and Exchange Commission occurs. This includes, for example, when the par value of the Company's share is changed as a result of share combination or division, or when the Company pays all or part of the dividends as newly-issued shares to the shareholders, or any other cases which may result in the warrant holders entitling to less benefit than they deserve when exercising their rights. Effect to Shareholders: Dilution Effect to the net market value ratio (Price Dilution) In case all warrants at the offering price of Bath 3 per unit are exercised to buy 170,000,000 shares at Baht 8.50 per share at the market price (closing price) as of 9 July 2004 at Baht 11.70 per share and the Company has the total of 1,190,250,000 shares registered, the price dilution will cause the market price of the share to decline by 0.58 per cent of its original price. Dilution effect to the shareholding ratio (Control Dilution) The offering of 170,000,000 warrants to existing shareholders at Baht 3 per unit with the exercise price at Baht 8.50 per share will result in a dilution effect to the shareholding ratio where voting rights of the existing shareholders will be effected at the rate of 14.30 per cent of the total shares sold after the issuing of 170,000,000 capital-increase ordinary shares and after the exercise of rights under the warrants by non-existing shareholders. Other terms and conditions Board of Directors agreed to propose the matter, as well as authorize the Board of Directors, the Executive Board of Directors or any person entrusted by the Board of Directors or the Executive Board of Directors to have the power to determine and/or change the details of terms and conditions, events where the issuance of new ordinary shares is required for the adjustment of exercise of warrants, details process or conditions in relation to the offering of warrants for sale for examples, the offering period, the offering process and other details and conditions, including the case where existing shareholders of the Company may be entitled to subscribe warrants to purchase ordinary shares exceeding their entitlement, allocation and offering of warrants exceeding shareholders' entitlement, fixing the date to close share register book in order to determine shareholders' right to subscribe warrants, as well as to undertake any other acts and things necessary for the offering of warrants for sale including to list the warrants in the Stock Exchange of Thailand, for further shareholders' consideration. 2.2 The Company's treatment of share fractions Share fractions shall be deleted. 2.3 The number of shares remaining from the allotment - none - 3.Schedule for shareholders' meeting to approve the capital increase / allotment The extraordinary shareholders' meeting No. 1/2004 is scheduled to be held at 9:00 a.m. on 16 August 2004 at the Conference room 30th Floor of the Company's head office, 32/59-60, 29th- 30th Floor, Sino-Thai Tower, Sukhumvit Soi 21, Asoke Road, Klongtoey Nua, Wattana, Bangkok. The shareholders' registration book will be closed for share transfer in order to determine the rights to attend this meeting from 12.00 p.m. on 27 July 2004 until the meeting has been duly adjourned. 4.Approval of the capital increase/share allotment by relevant governmental agency and conditions thereto (if any) The Company's shareholders must obtain approval to offer and issue warrants from Securities and Exchange Commission. 5. Objectives of the capital increase and plans for utilizing proceeds received from the capital increase 5.1 Business expansion for the Company and its affiliates. 5.2 Working capital for the Company and its affiliates. 6.Benefits which the Company will receive from the capital increase / share allotment: 6.1 To increase the Company's capacity to bid for high-value projects, thereby improving its revenues and financial strength. 6.2 To enhance the Company's liquidity and improve its working capital position. 6.3 To allow the company to maintain its debt to equity ratio at 1:1. 7.Benefits which the shareholders will receive from the capital increase / share allotment: 7.1 Dividend policy: The Company's dividend payment policy is to distribute approximately 40% of its net profit annually, given that such dividend payment does not adversely affect the Company's on-going operations. 7.2 Subscribers of new shares issued for this capital increase will be entitled to receive dividends from the Company's business operations starting from: In case that the person to whom the warrants to purchase ordinary shares have been allotted has exercised his right to purchase shares, such person will be entitled to received dividends from the Company's business operation at the same rate as to be paid to the shareholders of the Company. 7.3 Others: - none - 8. Other details necessary for shareholders to approve the capital increase / share allotment: - none - 9.Schedule of action where the Board of Directors of the Company passes a resolution approving the capital increase or allotment of new shares: See Attachment 1. The Company hereby certifies that the information contained in this report form is true and complete in all respects. Signed........................................................................... Authorized Director (Mr. Vallop Rungkijvorasathien , Mr. Woraphant Chontong) Attachment 1 Transaction Schedule Transaction / Date 1. Board of Directors' Meeting 12 July 2004 2. Notice to the SET as the resolution of the Board of Directors' Meeting 12 July 2004 3. Posting of XM to determine shareholders' right to attend the meeting 21 July 2004 4. Closing shareholders' register book in order to determine shareholders' right to attend extraordinary shareholders' meeting No. 1/2004 27 July 2004 5. Extraordinary shareholders' meeting No. 1/2004 16 August 2004