[Translation] Ref. PDI.B.02.78/1998 14 August, 1998 To: President The Stock Exchange of Thailand Re. : Clarifications on company's performance in the second quarter and the first half of 1998 Attached please find a copy each of Thai and English version of the unaudited consolidated and equity method interim financial statements of Padaeng Industry Public Company Limited for the quarter ended 30 June, 1998 for the SET's information. From the statement of profit and loss, the company has a net loss of Bt177.76m in the second quarter of 1998 as compared with the same period of 1997 which had a net profit of Bt121.61m. This was due mainly to a loss on exchange rate of Bt134.97m and acknowledgement of equity in undistributed net loss of affiliated companies totaling Bt132.55m. However, performance in the first six-month of 1998 has much improved. The net profit amounts to Bt465.29m, up by Bt333.04m or 251.82% due to increases in zinc production by 18.99% and sales by 43.37% which result in a rise in sales revenues by Bt1,381.46m or 104.57%, whilst cost of sales was up by 79.70% due to greater volume and value of imported raw materials. From the consolidated financial statement for the first six months of 1998 total revenues equal to Bt3,292.18m, an increase of Bt1,392.54m or 73.31% from the same period of 1997. This was attributed partly to the sales increase and a gain on exchange rate of Bt226.63m, whereas total expenses rose by Bt1,044.28m or 58.56%. Yours truly, - Signature - (Arsa Sarasin) Executive Chairman & CEO