- 29 - 28. Investment Promotion Certificates 28.1 The Company is granted certain rights and privileges as a promoted industry under the Investment Promotion Act of B.E. 2520 (1977) including exemption from customs duties and business tax for certain machinery and equipment imported for the manufacturing plant, and exemption from income tax for annual net income of each product manufactured and distributed as follows: Investment Promotion Certificate Exemption from income tax for a period of 8 years from the No.1575/2539 (1996) date of the start of commercial operations. In addition the Company is granted a reduction of income tax from net income at the rate of 50% of normal rate for a period of 5 years from the expiry date of income tax exemption mentioned above. Exploration (at Prae and Tak) Exemption from income tax for a period of 8 years from Investment Promotion the date of the start of commercial operations. In Certificate addition the Company is granted a reduction of income No. 1422/2537 (1994) tax from net income at the rate of 50% of normal rate for a period of 5 years from the expiry date of income tax exemption mentioned above Zinc Calcines and sulphuric acid Exemption from income tax for a period of 8 years from Investment Promotion Certificate May 1995. In addition the Company granted a reduction of No. 1185/2536 (1993) income tax from net income at the rate of 50% of normal rate for a period of 5 years from the expiry dated of income tax Shareholders of the Company will be exempted from tax on dividend received during the period in which the Company is granted exemption from company income tax. The Company thus has to comply with certain conditions contained in the promotion certificates. 28.2 South East Asia Metals Co.,Ltd. was granted various tax privileges under the Investment Promotion Act B.E. 2520 to process metal and manufacture chemical products. On October 25,1993, the Board of Investment changed the classification of the companys activities to Smelting and Manufacture of Basic Chemicals under the Investment Promotion Act B.E. 2520. The major privileges granted to the Company are as follows : - exemption from import duty on machinery ; - 75 % import duty reduction on raw materials and essential materials used in the production for local sales one time a year for 5 years starting from the date of first important ; /30 - 30 - - exemption from corporate income tax on net income derived from the promoted business for a period of 8 years starting from the date when revenue is first earned. Thereafter, the company will receive a reduction of corporate income tax on net income derived from the promoted business at the rate of 50% of the normal rate for a period of 5 years ; and - the shareholders will be exempted from income tax on dividends received during the period in which the company is granted exemption from corporate income tax. On June 5, 1995, the company issued the letter to the Board of Investment to request a cancellation of privileges given to ammonium sulphate fertilizer. A cancellation of privileges given to the smelting project is being sought. Subsequently the company issued a letter requesting cancellation of privileges given to the smelting project on April 10,1996. On August7, 1996, the companys rights and privileges were revoked by the Board of Investment under order No. Po 40/2539 (1996) 28.3 Padaeng Poongsan Metals Co., Ltd. is granted certain rights and privileges as a promoted industry under the Investment Promotion Act (B.E. 2520) 1977, including exemption from customs duties and business tax for certain machinery and equipment imported for the manufacturing plant, exemption from income tax for a period of 6 years from the date of the company receiving operating revenues, and deduction of 50% of income tax for a succeeding period of 5 years from the expiration date of income tax exemption as mentioned above. Shareholders of the company will be exempted from tax on dividends received during the period in which the company is granted exemption from company income tax. The company thus has to comply with certain conditions contained in the promotion certificate. 29. On October 7, 1998 the Board of Directors resolved to allocate the remaining outstanding 81,630,442 ordinary shares at Baht 14 each to Western Metals Limited and Western Metals International Pty Limited under the Share Subscription Agreement . The shares were offered for subscription and payment in four tranches spread between October 1998 and July 1999 (see Note 16 and Note 1). The first tranche of 6,530,435 ordinary shares (Baht 10 par value and 4 Baht premium each) amounting to Baht 91,426,090 was received on October 9, 1998. The Company registered the paid-up share capital of Baht 1,508,999,930 on November 6, 1998.