[Translation] Ref. PDI.B.02.152/98 23 December 1998 To : President The Stock Exchange of Thailand Re. : Discontinuation of executive committee, appointment of audit committee, appointment of agent for oversea sulphide concentrate procurement and marketing and sales of zinc metal for export, assets mortgaged contracts with creditors, and provisions of additional advances to a subsidiary company The board of directors of Padaeng Industry Public Company Limited at its meeting, No. 8/1998 on 22 December 1998 has resolved the followings : 1. Approved to discontinue the executive committee in compliance with a condition precedent of the Share Subscription Agreement with the foreign investor (Western Metals Ltd. - WML) and appointed the company's Audit Committee, to be effective from 1 January 1999. The said committee, which will report to the board of directors, comprises 3 audit members, namely : 1. Audit Committee ChairmanMr. Vinai Vamvanij 2. Audit Committee MemberDr. Vuthipong Priebjrivat 3. Audit Committee MemberMr. John Grahame Young and Audit Committee SecretaryDr. Surin Tanticharoenkiat The audit committee report on members and scope of duties (F24-1) is enclosed herewith. .../2 - 2 - 2. Approved appointment of Western Metals Marketing Pty Ltd., WML's wholly owned subsidiary to be the company's sole and exclusive agent for (i) the procurement of zinc sulphide concentrate from sources outside Southeast Asia and (ii) the marketing and sales of metal surplus for export for a two-year period from 1 November 1998 to 31 October 2000, an extension for which is subject to both parties mutual agreement to the term of extension one year prior to the expiry date. 3. Approved some assets mortgaged contracts pursuant to the Override Agreement with 9 creditors - i.e. land (including buildings) and machinery at Tak refinery and Rayong Calcine plant, within a maximum mortgaged amount of Bt4,200 million comprising Bt2,400 million for land title deeds and land sale agreements mortgage and Bt1,800 million for machinery mortgage. 4. Ratified Bt43.155 million additional advances to Padaeng Poongsan Metals Co., Ltd. (PPM), an affiliated company in which PDI holds 61.98% of total shares, for a principal repayment, interests for short-and long-term loans and other expenses incurred in the fourth quarter of 1998; and approved approx. Bt136.103 million advances to PPM for the same financial items to be incurred in 1999 until official winding up of PPM. It has also approved to provision the above- referred advances totalling approx. Bt180 million. Indeed, all provisions including those previously made for written-offs of investments in and loans to the company's subsidiaries will be submitted to 1999 general meeting for final approval in April 1999. approval in April 1999. .../3 - 3 - Please be notified accordingly. Yours truly, - Signature - (Brett Lambert) President & CEO AUDIT COMMITTEE REPORT ON MEMBERS AND SCOPE OF DUTIES (F 24-1) The board of directors of Padaeng Industry Public Company Limited at a meeting No. 8/1998 held on 22 December 1998 passed resolutions concerning the appointment of the company's Audit Committee, effective from 1 January 1999. I. The members of the Audit Committee are : 1. Audit Committee ChairmanMr. Vinai Vamvanij 2. Audit Committee MemberDr. Vuthipong Priebjrivat 3. Audit Committee MemberMr. John Grahame Young 4. Audit Committee SecretaryDr. Surin Tanticharoenkiat Enclosed please find a signed statement providing complete and accurate personal profiles of the members of the committee (F 24-2). II. The Audit Committee reports to the board of directors and has the following responsibilities: 1. Oversea the financial statements of the company and ensure that they are correct, complete, sufficient and reliable. 2. Ensure that the company has adequate and effective internal control system. 3. Recommend the external auditing firm for appointment by the board. 4. Ensure that the company follows all relevant laws and regulations. 5. Prepare an Audit Committee report for disclosure in the company annual report. The reportis to be signed by the chairman of the Audit Committee. 6. Ensure that the company does not engage in any activities that may lead to conflict of interest. 7. Review the performance and effectiveness of both external and internal audit. .../2 - 2 - 8. Consider other matters as assigned by the board of directors. III. The term of service for Audit Committee members is 3 years (including the appointment and the withdrawal of audit committee members). Members retired by rotation are eligible for re-election. In case of a vacancy in the Audit Committee by any reason other than rotation, the board of directors shall appoint a qualified person to be an Audit Committee member such that the number of the Audit Committee members corresponds with that defined by the board. The substitute Audit Committee member shall hold the office only for the remaining term of the Audit Committee member whom he or she replaces. We hereby confirm that the Audit Committee members have the qualifications required by the Stock Exchange of Thailand. - Signature - (Brett Lambert) President & CEO