Clarification of STECON Q2/2004

Ref. No. : A/C ST. 051/ 2004 6 August 2004 Subject : Clarification of STECON' s financial statement ended 30 June 2004. To : President of the Stock Exchange of Thailand Dear Sirs, We, Sino-Thai Engineering & Construction Public Company Limited, would like to provide the clarification on our quarterly financial statement ended 30 June 2004 which shows the decrease of net profit in the amount of Baht 106.13 million equal to 72.36% for the three month period and Baht 167.89 million equal to 62.36% for the six month period comparing to the same period of the previous year due to the following reasons: 1. The company has recorded share of profit from investments accounted for under equity method Baht 2.85 and 11.09 million for the three month period and six month period respectively. When considering in the same period of the previous year, the company recorded share of profit from investments accounted for under equity method Baht 19.79 and 40.86 million equivalent to 14.39% and 27.13% decreased for the three month period and six month period of the previous year. 2. For the six month period of 2003, the company reversed the Baht 28.1 million provision for the loss of Joint venture to be other income, since the company had no obligations to the joint venture. Whereas no transaction has been done in the same period of this year. 3. The company 's gross margin for the three month period and six month period were amount Baht 106.34 and 220.91 million respectively. The company's gross margin in the same period of the previous year were amount Baht 170.78 and 279.84 million respectively. These amounts reflect the decreased of Baht 64.44 million equal to 37.73% for the three month period and Baht 58.93 million equal to 21.06% for the six month period comparing to the same period of the previous year due to the increasing of main material prices. 4. Interest expense increased at the amount of Baht 5.03 and 8.95 million for the three month period and six month period of the previous year since the company issued the unsecured amortizing debenture. Please kindly be informed. Yours sincerely, ___________________________ (Mr. Vallop Rungkijvorasathien) Director ___________________________ (Mr. Woraphant Chontong) Director