[Translation] Ref. PDI.B.02.21/99 2 March, 1999 To : President The Stock Exchange of Thailand Re. : Report (No. 3) 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. 3) of Padaeng Industry Public Company Limited for the SET's information. Yours truly, - Signature - (Miss Kanitha Ujjin) Manager (Board Security) [Translation] Report 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 ore and concentrates Bangkok Office : 26th -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. 3 (Information as at December 31,1998) Preparations to face problems in the year 2000 1. Plans for solving problems PDI has reviewed the previous plan to be in line with current circumstances. The new plan is as follows : (1) August-September 1997: Evaluated and made plans to solve problems of the year 2000 which could give impact to the organization and the computer system; (2) October-November 1997: Solved operating system of mini computer, IBM AS/400 at Bangkok Office; (3) Solving problems on application impact on IBM AS/400 and on applications impact on PCs. - December 1997-March 1998: Modified fixed asset application on IBM AS/400; - April-November 1998: Modified purchasing application on IBM AS/400; - December 1998-February 1999: Modified purchasing application on PC; - September-December 1998: Modified sales application on PC; - January-March 1999: Modifies sales application on IBM AS/400; (4) April-October 1998: Checked all PCs of PDI. Some PCs had been fixed and the remainder will be done in January 2000; (5) January-March 1999: Each office prepares contingency plan; (6) April-June 1999: Solve computer systems which control production at both Rayong and Tak plants; and (7) May-June 1999: Contracted external Y2K auditor to proceed with last checking and modification. 2. Progress on problem solving up to September 30, 1998 2.1 PDI has followed the plans and steps as referred in paragraph 1. above. Presently, about 75% of total work have been completed and can be summarized as follows: . . . / 2 2 - August-September 1997: Completed evaluation and made plans to solve problems of the year 2000 which impact on the organization and computer system. - 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 on IBM AS/400. - April-November 1998: Computer team has completed modifications to the purchasing application on IBM AS/400. (This application has been delayed from the previous schedule due to complication and numbers of tasks, which are greater than expected.) - December 1998: To date, 50 % completion of modifications to the purchasing application on PC. This application will be completed on time according to new schedule - that is, in February 1999. (Scheduling of this application was postponed by purchasing application on IBM AS/400) - September-December 1998: Computer team completely modified sales application on PC. - Sales application on IBM AS/400: Still being modified. New schedule for this application is set during January-March 1999. - April 1998 - Almost 100% completion on checking PCs and 40% completion on problems solving. New PCs (Pentium and Pentium II) can comply with the year 2000. Old PCs (model 486 and below) can be upgraded for Y2K compliance by manual method at no expense - that is, on January 1, 2000 and thereafter, responsible team or user can key 01-01-2000 (day-month-year) on that PC and it will comply with the year 2000 from then on. In fact, PDI will use manual method to solve old PCs and will start in January 2000. - Computer system used for controlling production at both Rayong and Tak plants are waiting for software upgrades from the supplier. Rayong plant will implement the upgrade in April 1999 and Tak plant in June 1999. (The upgrading work will be done concurrently with the plants shutdown for annual maintenance to avoid an impact on production target.) - Contingency planning is in progress but 30 % of plans are complete. - Last checking and modification of Y2K to be done by sub-contracting an external auditor is still undue. 2.2 Expenses remain unchanged from the amount given in the report Nos. 1 and 2 - i. e. about Bt800,000 (for Foxboro computer system being used for controlling production at both Rayong 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 Rayong plant will be about Bt200,000 and about Bt600,000 for Tak plant. 3. Analysis and explanations of management Although problems in the year 2000 have no significant impact on production and applications, 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 6-month reserved time for following them step by step. Although some applications have been delayed but scheduling is according to plan. Responsible team is accelerating the modification works. The management is confident that PDI and affiliated companies will solve the Y2K problems within the time frame. Indeed, the impact is not significant for the company . . . / 3 3 and it can be expect that the year 2000 problem solving will be finished on time, but the management has assigned each office to prepare contingency plan when the date is January 1,2000. 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 Maria Chanrasmi affixed on any page thereof, it shall not be considered that this information has been certified by us. Authorised director Position Signature - Signature - Mr. Brett T. Lambert President & CEO - Signature - Mrs.Anita Maria Chanrasmi Senior Vice President (Finance)