Clarification of STEC' s financial statement ended 30 Septem

Ref. No.: A/C ST. 0866/2006 November 14, 2006 Subject : Clarification of STEC' s financial statement ended 30 September 2006. 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 quarterly financial statement ended 30 September 2006 which shows the decreased of net profit in the amount of Baht 135.45 million equal to 92.32% for the three month period and Baht 2,164.43 million equal to 584.282% for the nine month period comparing to the same period of the previous year due to the following reasons: 1. The company 's gross (loss) margin for the three months period and nine month period was amount Baht 89.13 million and Baht (1,581.09) million comparing to the same period of the previous year at Baht 186.36 million and Baht 548.61 million respectively. These amounts reflect the decreased of Baht 97.23 million and Baht 2,129.71 million, which equal to 52.17%and 388.20% for the three month period and nine month period due to the prices of construction materials, wages, oil, and transportation costs have significantly risen. 2. For the nine month period of this year,provision for loss on construction project of the company increased at the amount of Baht 814.59 million comparing to the same period of the previous year since the prices of construction materials, wages, oil, and transportation costs have significantly risen. In addition, major construction contracts have been extended due to uncontrollable external factors. Because of these, the company has decided to reserve for loss on construction for long term project and has recorded the whole amount of loss into its accounts. Please kindly be informed. Yours sincerely, ___________________________ (Mr. Woraphant Chontong) Director