INFORMATION OF CROSS-RELATED TRANSACTION

Information of Cross-related Transaction Between Thantawan Industry Public Co., Ltd. (THIP) And Sunflower Enterprise Co., Ltd. (SE) 1. Date of Transaction Made: Resolution of Board of Directors on February 1, 2000 and expect to enter into the transaction within March 2000. 2. Involved Parties in the Agreement and Relationship with the Listed Company: Buyer : Thantawan Industry Public Co., Ltd. (THIP), a listed company in SET Seller : Sunflower Enterprise Co., Ltd. (SE) who is indirect major shareholder of THIP holding shares in Sunflower Company Ltd.(SC) at 93.99%. Note : SC is a shareholder in THIP having total holding of 56.39%. 3. General Description of Transaction: THIP will buy land with building which located at Mu 8, Soi Kangwarl 2,Petchkasem Road, Tumbon Om-yai, Amphur Sampran, Nakorn Pathom Province as following details: Unit: Million Baht Item Title Area Avg. New Appraisal Prices Deed No. (Rai) AppraisalPrice Appraised by Appraised by Final by Simon Lim Chartered Simon Lim Price and Proteam Property on Jan.18, in 1997-1998 Jan.4,2000 2000 1.Land 55727 1-3-94 13.50 10.32 7.30 10.00 2.Building 55727 3,700 sq.m. 12.67 13.71 12.61 13.00 3.Land 56216 2-2-0 16.00 12.00 9.15 12.00 4.Land 87666 4-0-88 27.95 21.94 15.36 21.00 5.Land 12369 3-1-30 22.62 17.30 12.38 17.00 6.Land 50428 2-2-24 15.86 12.30 9.37 12.00 Total Area 14-2-36 108.60 87.57 Detail of Appraisal Price: Chartered Property Consultant Co.,Ltd.and Simon Lim and Associates Co., Ltd. who are appointed as independent price appraisers and approved bySEC had appraised the land plots prices using Market Approach comparison. On the building price the appraisers had employed Cost Approach to appraise construction cost at present time with Replacement Cost as shown in the following table. Item Title Deed Price per Square Wa. (Baht) No. Avg. Appraisal By: By: Final Price by Simon Chartered Simon Lim Price Lim and Pro-team Property Co.,Ltd.in 1997- 1998 1. 55727 17,003 13,000 9,193 12,594 2. Building(sq.m.) 3,424 3,705 3,408 3,514 3. 56216 16,000 12,000 9,151 12,000 4. 87666 16,558 13,000 9,101 12,441 5. 12369 17,008 13,008 9,308 12,782 6. 50428 15,488 12,018 9,146 11,719 Avg.Price of Landonly 16,438 12,658 9,178 12,337 The purchasing and selling of land with building and the land plots to be entered in this transaction was deemed as the acquistion of assets by the listed company having transaction size of 17.66% of asset values of the listed company shown in financial statements as of September 30, 1999 which had passed auditing from the CPA and had been considered as transaction of Category 2 as announced by SET concerning Criteria, Method, and Disclosure of Acquisition or Selling of Listed Company's Assets in which requiring the listed company to disclose the entering into transaction to SET and to advertise the transaction in one Thai newspaper and one English newspaper within next working day after reporting to SET and has to send a letter notifying the transaction to shareholders within 21 days after advertising done in newspapers. Such purchasing and selling of land with building and the land plots by THIP from SE as seller was deemed as the cross-related transaction having transaction size of 23.27% of book value of net tangible assets of listed company as shown in financial statements as of September 30, 1999 which had passed auditing by the CPA and had been considered as transaction of Category 4 as announced by SET concerning Criteria, Method, and Disclosure of Cross-related Transaction of Listed Company. In this regard, THIP has to disclose the transaction and notify shareholders within 21 days following the advertisement in newspapers by having opinion of financial advisor on reasonable price and justification of the transaction and to convene shareholders' meeting to give approval in entering into the transaction by voting approval not less than 3/4 of total voting rights of shareholders attending the meeting and having voting right but excluding the voting rights of shareholders having stake in the transaction. However, this transaction shall be undertaken upon getting prior approval of the shareholders' meeting in which THIP shall convene the extraordinary meeting to request approval of entering into the transaction which will be held on February 28, 2000. 4. Details of Assets: THIP shall enter into the agreement of purchasing land with building from SE for the purpose of using these assets in business expansion, enhancing management effectiveness, and upgrading production process to meet ISO 9002 and ISO 14001 standards, having details of land with building as following: Land Location : Mu 8, Soi Kangwarl 2, Petchkasem Road, Tumbon Om-yai, Amphur Sampran (Talard Mai), Nakorn Pathom Province where located in the area of existing factories having total 5 land plots with areas of 14-2-36 rai. Building Description: Located on title deed no. 55727, it is a two-storey building built in 1990 having reinforced concrete stucture with brick mortar wall and roofing by steel structural frame and roof tile. The functional area of the building is 3,700 sq.m. Owner of Land with Building and the Land Plots: Sunflower Enterprise Co., Ltd. (SE) 5. Total Amount of Transaction and Payment Schedule: The total amount of purchasing land with building and land plots is Baht 85.0 Million and the payment schedule had been assigned power to Managing Director as negotiator on condition of payment schedule with SE. 6. Investment Budget of this Transaction: Million % 1. Land with building and land plots 85.0 84.66 2. Moving cost for machineries 0.40 0.40 3. Cost of machineries improvement 3.00 2.99 and infrastructure cost 4. Building construction cost and 12.00 11.95 infrastructure system cost Total 100.40 100.00 . Payback Period is approximated to be 11 years. The analysis of above investment figures had shown IRR on project of the Investment Cost in period of next 20 years of approximately 10% per annum which is higher than yield of fixed deposit in financial institutions (under assumption of land's terminal value equals Baht 100 million and the building and machineries were depreciated completely.) 7. Source of Investment Cost: Net cash gained from business operation which approximate at no less than Baht 30.0 Million. 8. Expected Return on Investment: Assumptions: 1. Expected quantity of production to increase from previously at 500 tonnes per month to be 600 tonnes per month or increasing at 1,200 tonnes per year. 2. Selling price per ton at US$1,720. 3. Exchange rate Baht 38 per 1 US dollar or Baht 65,360 per ton. 4. Sales amount increases Baht 78.43 Million per year. 5. As a result of the factory improvement, the employment cost can be reduced by total of 26 persons as following: -Packaging personnel decreasing 20% of total 53 persons = 10 persons -Store personnel decreasing 50% of total 30 persons = 6 persons -QA personnel decreasing 20% of total 50 persons = 10 persons Total = 26 persons -The average salary of employees is Baht 6,000 per month. -Such above reduction shall save labor cost by Baht 1.87 million. 6. As a result of increasing production capacity: -Variable costs increase in relation with the increase production capacity. -Fixed costs will remain at the same amount. 7. Hence THIP shall have profit before deduction of depreciation,interest and tax (EBITD) equals 15% of sales amount. 8. Depreciation expenses of the investment cost is Baht 15.40 Million which will be depreciated at 20% per annum. Calculation Table: Item Million Baht % Sales increase per year 78.43 100.00 EBITD 11.76 15.00 Less Depreciation per year 3.08 3.93 Profit after depreciation 8.68 11.07 Less Income tax 2.60 3.32 Net profit 6.08 7.75 Add Depreciation expenses 3.08 3.93 Cashflow Received per year 9.16 11.68 9. Reasons for Entering into Transaction of Purchasing Land with Building: 1. Price of purchasing and selling had used appraisal prices in 1997-1998 as base years due to had been agreed upon purchasing in 1997. 2. Acquiring the suitable premise location in adjacent areas was not feasible or if pursuing at all cost shall bear higher cost than purchasing from SE. 3. In relocation and construction of new factories having the same amount of existing functional areas of 24,000 sq.m. will have construction cost amounting Baht 190.43 Million (which included infrastructure costs, machineries relocation and installation costs and interest expenses.) In addition, the potential location of factory in Prachinburi Province still lacks of many aspects of readiness such as skilled labor, infrastructure system and amenities (if not included interest expense will have total cost of Baht 133.0 Million). 4. If pursuing the option of relocation existing building and land which had already developed and invested no less than Baht 65.0 Million, these value investment shall be wasted and have to reinvest in the new location which in current economic condition will adversely affect to financial position of the company. 5. Currently, THIP has advantages and conveniences in all aspects of operation whether customers, suppliers, transportation, and labor employment. The purchasing of this land with building will maximize benefits and financial returns to the company and also gain security and stability of the business and expansion in the future. 6. This transaction is business expansion according to work plan for upgrading production system standard called Upgrading Thantawan Standard (UTS) aiming at increasing productivity and improving infrastructure system in meeting global standards which will result in decreasing expenses and increasing safety. 7. In pursuit of targeted policy and plan stated in item 6, this had enabled THIP to upgrade production meeting global standards of ISO9002 achieved in 1998 and ISO14001 will be further achieve in 2000. 8. In case of THIP is not able to lease or purchase the said land with building and land plots, the following effect will occur and adversely impact the business operation seriously. 1. Has to move out from existing factories immediately in areas which have leased/purchased from SE. 2. Having no premise for production of goods for exporting which cause serious financial damage to the business operation and company. 3. Paying fine to SE at daily rate of Baht 50,000 per day. 4. Most employees and laborers will be layoff due to serious falling business. 5. Besides the above fine payment imposed, SE has legal right to claim for opportunity loss and financial damages resulting from THIP could not move out from the occupied factory and building. 10. Names of Related and Involved Persons: Name % of Share- % of Position in Position in Relationships of holding by Share- THIP SE Management indirect holding and Shareholders way in SC 1.Sunflower 53.007 93.994 - - Major Share- Co.,Ltd. holders in THIP by indirect way 2.Mr.Nam 0.001 0.001 Chairman Chairman none Mahathitirat 3.Mr.Huang Kuan Chiun none none Vice Chairman Vice Chairman none 4.Mr.Thaweewat 0.126 0.001 Vice Chairman Vice Chairman none Yinatsawaphan 5.Mr.Pasit 0.001 0.001 Vice Chairman none none Assamongkol 6 Mr.Chanin none 2.000 Vice Chairman Executive Vice none Saensuk President 7.Mr.Pichai 0.177 2.000 Vice Chairman none none Tangvithetjit 8.Mr.Phietoon 0.001 0.001 Managing Director none Trivijitkasem Director 9.Mr.Jakkapong none none Asst. MD. none none Kongthaweesakullert 10.Mr.Viroon none none Asst. MD. none none Paolinjong Remarks : THIP = Thantawan Industry Public Company Limited SC = Sunflower Co.,Ltd. SE = Sunflower Enterprise Co.,Ltd. Name list of juristic person and natural person stated in the above table is stakeholder in this transaction, therefore, have no voting rights in the extraordinary meeting, Session 1/2543 which will be held on February 28, 2000.