[Translation] Ref. PDI.B.02.87/98 2 September, 1998 To : President The Stock Exchange of Thailand Re. : Connected transaction on financial assistance granting to a subsidiary We refer to our letter, ref. PDI.B.02.86/98 of 1 September, 1998 regarding guarantee on Bt50.5m short-term loan of Padaeng Poongsan Metals Co., Ltd., a subsidiary company in which PDI has 61.98% shareholding). Enclosed is an information memorandum on the said transaction for the SET's information. Yours truly, - Signature - (Arsa Sarasin) Executive Chairman & CEO [Translation] Padaeng Industry Public Company Limited (PDI) Registration No. Bor Mor Jor 293 Information Memorandum regarding Connected Transaction on Granting Financial Assistance to a Subsidiary 1. Transaction date : PDI's board of directors at its meeting, No. 4/1998 on 31 August, 1998 resolved to approve guarantee to a short term borrowing of Padaeng Poongsan Metals Co., Ltd. (PPM) with Bangkok Bank Plc. The fund will be expended for PPM's production of 408 tonnes of Bt1.00 coin blanks to be equally delivered in 3 times to the Thai Treasury Department. 2. General characteristic of the transaction : Granting financial assistance to PPM, a manufacturer of brass sheet and strip, coin blank and case cup. PDI holds 61.98% of its total shares. 3. Details of the transaction : - Borrower : Padaeng Poongsan Metals Co., Ltd. - Lender : Bangkok Bank Plc. - Guarantor : Padaeng Industry Public Company Limited - Nature of financial assistance : Short-term loan guarantee - Total value of the assistance : Principal amount : Bt50.5m (divided into 6 installments - i.e. Bt29.4m, Bt6.7m, Bt4m, Bt4m, Bt4m and Bt2.3m) from August 1998-January 1999 - Rate of interest : MLR plus 1% per annum - Collateral : Clean - Payment installments and other terms and condition : PPM will transfer its proceeds from the above-referred operation totalling about Bt82.29m .../2 - 2 - to the lender. Any balance will be paid back for previous loan outstandings with the lender. 4. Details of connected persons and of related person : - Directors, senior management and related persons : As of 31 August 1998 Name Position in PDI Position in PPM -Mr. Arsa Sarasin Vice Chairman, Executive Chairman Chairman & CEO -Mr. Suparut Kawatkul Director and Executive Director Director -Mr. Treepon Riebroicharoen AdviserPresident -Dr. Satian Niltawach Executive Vice President Director (Operations) -Mr. Somluck Toonkumtornchai Senior Vice President (Commerce) Director -Mr. Waykin UtarntharmSenior Vice President (Finance) Director -Mr. Yont Thongthai Shareholder (Total shareholding Director including his related persons as of 7 April, 1998 equal to 1.29%) 5. The nature and extent of the interest of the connected persons in the transaction : None. 6. Guarantee objectives : The granting financial assistance is provided as PDI is the major shareholder who has full control and administration in PPM. The value of this transaction is equal to 2.88% of PDI's net tangible assets (Bt1,753.774m) as of 30 June, 1998. The above-referred item falls under clause 9.(2)(a) of the SET's Regulations concerning criteria, method and disclosure of connected transaction of listed companies. (Signed) Arsa Sarasin Executive Director & CEO