[Translation] Ref. PDI.B.02.126/1998 9 November, 1998 To : President The Stock Exchange of Thailand Re : Report (No. 2) on readiness to face problems in the year 2000 Attached herewith is a report on the readiness to face problems in the year 2000 (No. 2) of Padaeng Industry Public Company Limited for the SET's information. Yours truly, - Signature - (Mrs. Anita Maria Chanrasmi) Senior Vice President (Finance) Report (No. 2) on readiness to face problems in the year 2000 (Form 57 Y2K) Company : Padaeng Industry Public Company Limited (PDI) Nature of business : Mining and smelting of zinc concentrates Bangkok Office : 26th and 27th Floor, CTI Tower, 191/18-25 Ratchadaphisek Road, Klongtoey District, Bangkok 10110 Telephone : 261-1111 Telefax : 261-1110 Report on the readiness to face problems for the year 2000, No. 2 (As at September 30, 1998) Preparations to face problems in the year 2000 1. Plans for solving problems Steps in this plan for solving problems have already been given in the report on the readiness to face problems for the year 2000 to the SET, No. 1 - i.e. (1) August - November 1997 : Evaluated and made plans to solve problems of the year 2000 which give impact to organization and computer system; (2) October - November 1997 : Solved operating system of mini computer, IBM AS/400 at Bangkok Office; (3) Solving of problems on 3 impact applications (on IBM AS/400) - December 1997 - March 1998 : Modified fixed asset application - April - August 1998: Modified purchasing application - September - December 1998 : Modify sales application (4) April - December 1998 : Check and solve problems on PCs; (5) October 1998 - January 1999 : Solve computer systems which control production at both Tak and Rayong plants; and (6)January - March 1999 : Last solving and checking. .../2 - 2 - 2. Progress on problem solving 2.1 PDI process follow plans and steps as referred in paragraph 1. above. Presently, about 70% of total work have been completed and can be summarized as follows: - November 1997 : IBM (Thailand) Company Limited installed a new version of operating system on mini computer IBM AS/400 which supports the year 2000 free of charge. - December 1997 - March 1998 : Computer team has completely modified fixed asset application. - April 1998 - Present : 85 % completion on modifying purchasing application for Y2K compliance. This application has been delayed from schedule due to complication and numbers of tasks which are higher than expected, coupled with separately located 4 offices at far distance of PDI which has caused communication difficulties. According to new schedule, this application will be completed by November 1998. - Sales application : Still awaited modification following the delay in purchasing application. New schedule for sale application is set during December 1998 - February 1999. - April 1998 - Present : Almost 100% completion on checking PCs and 40% completion on problems solving. Apparently, new PCs (Pentium) can comply to the year 2000. Old PCs (model 486 and below) can be upgraded for Y2K compliance by manual method at no expense - that is on 1 January, 2000, responsible team or user can key 01-01-2000 (day-month-year) on the PC and it will comply to the year 2000 from then on. PDI will use manual method to solve old PCs starting from January 2000. - Computer system used for controlling production both Tak and Rayong Plants are still awaited outsourcing. Rayong plant will be implemented on December 1998, and Tak plant will be implemented on January 1999 .../3 - 3 - 2.2 Expenses remain unchanged from the amount given in the report No.1 - i.e. about 800,000, for Foxboro computer system used for controlling production at both Tak and Rayong plants. Solving problem at this step is dependent on Foxboro (Thailand) Company Limited since Foxboro (Thailand) is sole distributor in Thailand. The expense for Tak refinery will be about Bt600,000 and about Bt200,000 for Rayong plant. 3. Analysis and explanations of management Although problems in the year 2000 have no significant impact on production and application, management has much concern and has given full support. The management has action plans to solve this problem in the course of 2 years with 9 months for reserve time to follow them step by step. Although some applications have been delayed but scheduling is in accordance with the overall plan. And responsible team is accelerating modification works. The management has confidence that PDI and affiliated companies will solve the Y2K problems within a timeframe. We have checked the particulars and information indicated in this report and certify that all particulars and information are true, accurate and not misleading to any persons and nothing in all material aspects which should have been disclosed has been omitted therefrom which would or might cause any damage to holder(s) or purchaser(s) of the securities. As evidence in this regard, all documents which are duly certified by us are being made in one set. We hereby authorize Mrs. Anita Maria Chanrasmi to be our authorised signatory signing on every page of these documents. Should there be no signature of Mrs. Anita page thereof, it shall not be considered that this information has been certified by us. .../4 - 4 - Authorised director Position Signature - Signature - Mr. Arsa Sarasin Chairman & ............................. Executive Chairman Grantee Position Signature - Signature - Mrs. Anita Maria Chanrasmi Senior Vice President (Finance) .................