Capital structure

1.  Company’s securities

A.  The Company’s common shares

As of 31 December 2002, the Company had total registered capital of
Bt37,069,343,690. Registered and paid-up capital was Bt17,332,548,630
(1,733,254,863 common shares with par value of Bt10 per share).

The Extraordinary General Meeting of Shareholders held on 9 January 2003
has approved the Company’s capital reduction as follows:

-   Approved the reduction of the Company’s registered capital from Baht
    37,069,343,690 (3,706,934,369 shares, each with par value of Bt10)
    to Baht 30,732,477,230 (3,073,247,723 shares, each with par value of
    Bt10) due to the cancellation of an aggregate number of 633,686,646
    unissued ordinary shares, each with par value of Baht 10, previously
    reserved for the exercise of Warrant #1, Warrant #2 and Warrant #3,
    following the expiration of the said warrants (the Company
    registered this capital reduction with Ministry of Commerce on 17
    January 2003)

-   Approved the reduction of the Company’s share capital by way of a
    reduction of par value from Baht 10 to Baht 7.50 per share and a
    subsequent return of Baht 2.50 per share to all the shareholders
    proportionately to their shareholding. The capital reduction was
    registered with the Ministry of Commerce on 21 March 2003.
    Shareholders will receive the return of capital on 9 April 2003.

In December 2002, a holder of warrant #4 exercised his right regarding
2,000 units at the ratio of 1 warrant to 0.10 common shares at the
exercise price of Bt5.00 to receive 200 common shares. As a result the
paid-up capital before capital reduction changed to Bt17,332,550,630
(1,733,255,063 share, at par value of Bt10.00) (The Company registered
the change with the Ministry of Commerce on 8 January 2003)

After the capital reduction, the Company’s registered capital is
Bt23,049,357,922.50 (3,073,247,723 shares, at par value of Bt7.50) and
paid-up capital is Bt12,999,412,972.50 (1,733,255,063 shares, at par
value of Bt7.50) . The Company registered the change with Ministry of
Commerce on 21 March 2003 and shareholders will receive their capital
return on 9 April 2003.

The difference between registered capital and paid-up capital of
Bt10,049,944,950 (1,339,992,660 shares, each with par value of Bt7.50)
will be reserved to accommodate the exercise by the holders of Warrant
no. 4.

B.  The Company’s other securities

Warrant # 3

Warrant # 3 - 700 million units were issued and offered free of charge
on 14 May 1998, with 280 million units issued to existing shareholders
and 420 million units issued to the specific investors who purchased the
Company's new shares capital in March 1998, in a ratio of 1 new ordinary
share per 1 warrant at the exercise price of Baht 5 each. Those warrants
are listed in the Stock Exchange of Thailand under the ticker code of
KGI-W3. The Company adjusted the exercise price and exercise ratio for
two times as follows :-

+---------------+----------------+----------------+------------------+
| Terms &       | Existing terms | First          | Second           |
| Conditions    | &conditions    | Adjustment     | Adjustment       |
|               |                |                |                  |
|               | As of issuing  |                |                  |
|               | date           |                |                  |
+---------------+----------------+----------------+------------------+
| Exercise      | 1 ordinary     | 1.22077        | 0.50 ordinary    |
| ratio         | share          | ordinary       | shares           |
|               |                | shares         |                  |
| (No. of       |                |                |                  |
| shares : 1    |                |                |                  |
| warrant)      |                |                |                  |
+---------------+----------------+----------------+------------------+
| Exercise      | Bt5.00 each    | Bt4.09576 each | Bt4.09576 each   |
| price         |                |                |                  |
+---------------+----------------+----------------+------------------+
| Effective     | 30 June 1998   | 30 June1999    | 1 June 2001      |
| date          |                |                |                  |
+---------------+----------------+----------------+------------------+
| Expired date  | 31 May 2001    | 30 May 2001    | 30 May 2002      |
+---------------+----------------+----------------+------------------+

Upto 31 December 2002, 479,804,487 of the warrants have been exercised
during 2002, leaving 75,166,953 outstanding unexercised warrants # 3
expired on 31 May 2002.

Warrant # 4

The Extraordinary General Meeting of Shareholders No. 1/1999 held on 19
February 1999 approved the issuing of warrants no. 4 at 1,520 million
units to existing shareholders whose name appeared in share register
book as of 12 March 1999, free of charge at the ratio of 1 common share
to 1 warrant. A total of 943.64 million warrants were issued. Those
warrants are listed in the Stock Exchange of Thailand under the ticker
code of KGI-W4.

As of 31 December 2002, the Company had 943,556,564 unexercised warrants
no. 4 (KGI-W4) with the 1,339,992,660 common share reserved to
accommodate the exercise.

The Company adjusted terms and conditions of warrants no. 4 three times
as follows:

+------------+-----------+---------------+-------------+-------------+
| Terms &    | Existing  | First         | Second      | Third       |
| Conditions | terms     | Adjustment    | Adjustmnet  | Adjustmnet  |
|            | &c        |               |             |             |
|            | onditions |               |             |             |
|            |           |               |             |             |
|            | As of     |               |             |             |
|            | issuing   |               |             |             |
|            | date      |               |             |             |
+------------+-----------+---------------+-------------+-------------+
| Exercise   | 1         | 1.22077       | 0.10        | 0.27806     |
| ratio      | ordinary  | ordinary      | ordinary    | ordinary    |
|            | share     | shares        | shares      | shares      |
| (No. of    |           |               |             |             |
| shares : 1 |           |               |             |             |
| warrant)   |           |               |             |             |
+------------+-----------+---------------+-------------+-------------+
| Exercise   | Bt10.00   | Bt8.19152     | Bt5.00 each | Bt1.79816   |
| price      | each      | each          |             | each        |
+------------+-----------+---------------+-------------+-------------+
| Effective  | 31 May    | 30 June 1999  | 1 May 2001  | 12 March    |
| date       | 1999      |               |             | 2003        |
+------------+-----------+---------------+-------------+-------------+
| Expired    | 30 April  | 30 April 2001 | 30 April    | 30 April    |
| date       | 2001      |               | 2004        | 2004        |
+------------+-----------+---------------+-------------+-------------+

C.  The Company’s Thai Trust Fund (TTFs)

As of 14 March 2001, the Office of Securities and Exchange Commission
granted the approval to establish and manage the investment units of the
Thai Trust Fund (TTF) by investing in the shares of KGI Securities
(Thailand) Public Company Limited. TTF is an open-ended fund established
for foreign investors. The fund has no maturity. As of 31 December 2002,
there were no shares in the TTF.

  (D). Non Depository Voting Receipts (NVDRs)

As of 31 December 2002, investors had bought 32,310,274 shares
(equivalent to 1.86%.of paid-up capital) as Non Depository Voting
Receipts (NVDRs) which had the Company’s common shares as the underlying
asset. (Investors can search for information on NVDRs in the Stock
Exchange of Thailand’s website at www.set.or.th).

(E) Debentures and convertible debentures

At the Extraordinary General Shareholders’ Meeting No. 1/2001 on 8 March
2001, shareholders voted to sell the shares in the overseas securities
companies owned by HOLDCO, the Company’s wholly owned subsidiary, to KGI
International Holding Limited (KGII). In return, the Company received
US$35million in Secured Convertible Notes and Bt1,575million in Secured
Notes issued by KGII. The Extraordinary General Meeting of Shareholders
No. 1/2003 held on 9 January 2003 approved the Company’s capital
restructuring plan, and approved the sale by HOLDCO of the Secured
Convertible Notes and Secured Notes to KG Investment Holdings Limited
(KGIH) which is a KGI Group company. HOLDCO sold the Secured Convertible
Notes and Secured Notes plus accrued interest up to 21 March 2003 at the
price of US$71.306 by exercising a put option issued by KGIH on 15
January 2003. The sale was settled on 21 March 2003. As of 31 December
2002, Secured Notes and Secured Convertible Notes value was US$71.306
million (approximately Bt3,080 million). The Secured Convertible Notes
(US$35 million) offered HOLDCO the right to convert the bonds into KGII
common shares. In order to maintain HOLDCO’s right to buy KGII common
shares, KGIH has guaranteed that KGII will issue a replacement warrant
to HOLDCO (the warrant shall have similar terms and conditions as the
conversion option in the convertible bonds). In the case where KGII is
listed on an overseas stock market the key conditions of the warrants
are as follows:

Exercise price : KGII’s IPO price

 Maturity date : 30 March 2006

However, in 2002, KGII which has KGI Group as a major shareholder, made a loss as a result making any listing less likely. The listing of KGII shares in the stock market depends on condition of the markets and other uncertain factors. 

2.  Company’s securities

KGI Group is the Company’s major shareholder. As of 17 March 2003 (the
last registration close book date), the top ten major shareholders as in
the share register book were as follows:

  ------------------------------------- ------------------ ---------------
  Shareholder                           Number of shares   %

  1. Hegemony Pte., Ltd.*               320,864,400        18.51

  2. Clearstream Nominees Ltd.*         225,980,500        13.04

  3. Bangkok Tiger Co., Ltd.*           121,650,000        7.02

  4. Xenner Pte., Ltd.                  117,918,150        6.80

  5. Vanderee Pte., Ltd.                39,512,700         2.28

  6. Thai NVDR Co., Ltd.                37,580,468         2.17

  7. Pacific Line Co., Ltd.*            29,100,000         1.68

  8. Raffles Nominees Pte., Ltd.        25,089,100         1.45

  9. One Holdings Plc.                  19,332,466         1.12

  10. Mr. Sithichai Charongchaiworakarn 10,202,800         0.59

  Total                                 947,230,584        54.66
  ------------------------------------- ------------------ ---------------

  Note: * companies which held shares owned by KGI Group

  For Clearstream Nominees, only 225,000,000 shares are owned by KGI
  Group

3.  Company’s dividend policy

As the Company still has accumulated loss, therefore, the Company is not
allowed by law to pay dividend. However, after the elimination of all
loss , the Company has a plan to pay dividend to shareholders. The Board
will recommend the appropriate dividend by looking at the profit of the
Company and available investment opportunities and the Board’s
recommendation will be put to shareholders to consider and approve.

For our subsidiary’s dividend policy, One Asset Management Limited (97%
owned by the Company as at 31 December 2002) on 29 November 2002, had
announced the interim dividend payment of Bt10.50 per share, or a total
of Bt105 million in respect of the performance during 1 January 2002 to
31 October 2002 and retained earnings.

4.  
5.  

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+------------------------------------+-----------------+--------------+
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+------------------------------------+-----------------+--------------+
| 39.                                | 40.             | 41.          |
+------------------------------------+-----------------+--------------+

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