ADDITIONAL NOTIFICATION OF QUOTING PRICE OF LAND

Ref. TP-MT/026/43 (FC023/43) 23 February 2000 Subject: Additional Notification of Rationale for Quoting Selling Price of Land Plot Attention: Director and Manager SET References: 1.SET's letter no. BJ.2315/2542 dated 8 December 1999 2.THIP's letter no. TP-MT015/43(FC010/43) dated 1 February 2000 3.Information Disclosed on Cross-related Transaction as Required by SET as of 2 February 2000 4.SET's letter no. BJ.218/2543 dated 14 February 2000 Enclosures: 1. Asset appraisal reports by Independent Price Appraiser, 4 copies 2. Study report on cost outlays and price appraisal in moving the factory 3. Opinion reports of 2 Independent Financial Advisors, 3 copies Referring to SET's request to Thantawan Industry Public Co.,Ltd. (THIP) for notifying more detailed rationale in quoting selling prices of land plot with building and those vacant land plots for total price of Baht 85.0 million accordingly, THIP therefore is pleased to clarify additional details of purchasing and selling of these land plots together with the cross-related transaction involved for SET's consideration as followings: Details of cross-related transaction between THIP and Sunflower Enterprise Co.,Ltd. (SE) 1. The big land plot incurring cross-related transaction in this case having total areas of 20 rai 3 ngarn and 4 sq.wa. in which the land title deeds separately belong to two companies. The first plot's title having total area of 16 rai 2 ngarn and 29 sq.wa. belongs to SE and has a building of 3,700 sq.m. erected on the land plot. The second plot's title where the factory situated having total areas of 4 rai and 75 wa. belongs to THIP. 2. THIP has utilized for its business operation benefits on the land plot and building which belong to SE by entering into the building rental agreement ONLY (agreement dated 2 January 1994 and addendums dated 22 July 1994 and 25 September 1995). This building rental agreement term had expired on 31 December 1999. 3. THIP had built 2 factory buildings having total size of 750 sq.m. on the land plot belonged to SE due to its necessity of factory expansion for the business growth and production process improvement to meet ISO 9002 quality standard. 4. THIP has another 2 land plots and buildings located in the adjacent area where the first plot has been utilized as drinking straw factory (title deeds no. 24403 and 45445 having total area of 1-3-4 rai) and the second plot has been utilized as reclosable zip bag factory (title deeds no. 24405 and 57373 having total area of 1-2-35 rai). 5. In 1997 SE had notified its willingness and intention for selling these land plots to THIP in accordance with terms and conditions stipulated in the signed rental agreement. THIP then proceeded by having Simon Lim & Partners Co.,Ltd. as price appraiser of the land plots which had issued its appraisal report on 18 December 1997. Furthermore, THIP had appointed Nava Finance & Securities Pcl. and Nava Finance Pcl. as financial advisor which had issued its report on 25 December 1997 and 5 June 1998 respectively. Based upon this transparent procedure, THIP had agreed in purchasing these land plots with its due consideration of financial available and business operation necessity situation by purchasing the land with building plot and other vacant land plots having total areas of 4 rai 1 gnarn and 94 wa. and the buiding having total area of 3,700 sq.m. with total price of Baht 41.0 million. THIP paid the first payment of Baht 20.50 million on 29 December 1997. 6. By the virtue of extraordinary meeting of shareholders' resolution, session 1/2541, held on 22 January 1998, those shareholders having no cross- related interest in the transaction had voted not up to 3/4 of the quorum to proceed with the transaction. And the following extraordinary meeting of shareholders held on 30 June 1998 had also voted not up to 3/4 of the quorum in proceeding with the transaction. 7. THIP had appointed Year Appraisal Co.,Ltd. for doing a feasibility study on relocation of the factory premises and relocation investment outlays in which the report's findings issued on December 1998 had summarized these following alternatives of action: 1. By cost-wise consideration, the appraiser's opinion was purchasing SE's assets shall have the lowest cost investment. 2. If THIP considers it has no problem with its financial capacity, then suggested THIP to purchase the total land plot of 11-1-85 rai which shall enable for THIP's expansion of production capacity in the future. 3. In consideration of relocation THIP's factory to Amphur Kabinburin in Prajinburi province may not feasible because of the skyrocketing costs of investment up at least to Baht 133.0 million when considering and comparing with current economic and financial conditions. 8. THIP had attempted to undertake various courses of action which will not adversely affect to its business operation.Later on SE had filed notice to THIP in claiming for the land plots usage fee payment of those plots having no signed agreement with the total payment of Baht 24.10 million. 9. There were negotiations in solving the problem of this issue between SE and THIP to alleviate problem effecting THIP's ongoing business operation as much as possible. Consequently, the fair exchanging resolution had been commited to each other as following: 1.THIP had renewed the rental agreement (which later expired on 31 December 1999) and entered into land plot rental agreement legitimately. 2.THIP had received offering commitment of selling the land plots as previously signed agreement on 29 December 1997 by the same price quotation for another extended 3 years. In this regard THIP shall pay compensation for the past 5-6 years land utilization for total Baht 6.50 million. When comparing with the land rental price, such compensation was fair and justified by the opinion issued by Thai Sakura and Finance Securities Co.,Ltd., the financial advisor. THIP also agreed and allowed SE to keep the money amounting Baht 20.50 million paid for the first payment of land purchasing as deposit of the land purchasing agreement with binding condition of not to raise the land price for next 3 years. 10. THIP had been notified from SE that SE has had its necessity to sell all those land plots. By consideration of all concerned aspects particularly if there will be interested third party to purchase the land plots where currently utilized by THIP, that shall adversely affect to THIP's business operation in which these land plots are still its high priority necessity. Besides THIP had previously agreed to purchase some of those land plots and in the past 2 years THIP has had sufficient operational cashflow to purchase the land plots without affecting the profit of its venture, therefore, the two parties had negotiated the land price once again by resorting to price appraisal done and issued the report by Simon Lim & Partners Co.,Ltd. and another report by Chartered Property Consultants Co.,Ltd. as following table comparison details: (Unit : Million Baht) Item Title Area Appraisal Price By New Appraisal Price By Deed (Rai) Proteam Simon Lim Avg. Chartered Prop. Simon Lim Avg. No. May 27, 98 Dec.18, 97 Jan.4, 2000 Jan.18, 2000 1. Land & 55727 1-3-94 12.70 14.29 13.50 10.32 7.30 8.81 Building 3,700 sq.m 13.40 11.93 12.67 13.71 12.61 13.16 2. Land 56216 2-2-0 15.00 17.00 16.00 12.00 9.15 10.58 3. Land 87666 4-0-88 27.00 28.90 27.95 21.94 15.36 18.65 4. Land 12369 3-1-30 21.30 23.94 22.62 17.30 12.38 14.84 5. Land 50428 2-2-24 14.30 17.41 15.86 12.30 9.37 10.84 Total 103.70 113.47 108.60 87.57 66.17 76.88 11. Price quoted for purchasing and selling: The agreement for purchasing and selling prices are divided into two parts in which the first part has followed the committed agreement and the memorandum of agreement dated 25 November 1999 as shown in comparison table below: (Unit : Million Baht) Title Appraisal Price Previous Criteria to Deed Simon Lim Proteam Average Purchasing stipulate purchasing No. Dec.18, 1997 May 27, 1998 Price Price 55727 14.29 12.70 13.50 14.00 14.00 Building 11.93 13.40 12.67 11.00 11.00 56216 17.00 15.00 16.00 16.00 16.00 Total 43.22 41.10 42.16 41.00 41.00 The second part has followed to the new appraisal price done and issue the report by aforementioned price appraisers Title Deed New Appraisal Price Criteria to No. Simon Lim Chartered Prop. Avg.Price stipulate purchasing Jan.21, 2000 Jan. 11, 2000 Price 87666 15.36 21.94 18.65 12369 12.38 17.30 14.84 50428 9.37 12.30 10.84 Total 37.11 51.54 44.33 44.00 Rationale for Quotation of Purchasing and Selling Price THIP and SE has obligation to each other according to the agreement made on 25 November 1999 to complete the land plot purchasing and selling deal within 3 years in which they had quoted the selling price and was the same previous agreement (before new price appraisal done). And for the additional land purchasing, SE had agreed to sell according to average new appraisal prices despite of disagreement with the appraisal issued by Simon Lim & Partners Co.,Ltd. who had under appraised the price below the prevailing market price. Another significant justification of purchasing these land plots was that these land were fully developed and ready for THIP's business operation where fully equipped with needed utility infrastructure having investment value more than Baht 10 million in which readily available for immediate usage in operation without wasting time. Criteria of Fair Price Quotation The prices of these land plots before economic crisis arisen in 1997 were appraised at Baht 25,000 - 30,000 per square wa. The appraisal prices in 1997 and 1998 had been appraised under the slump period of economy which had price levels between Baht 14,000 - 18,000 per square wa. For the lastest appraisal done, there were rather much difference in price opinion between Baht 66.17 million and Baht 87.57 million while the Land Department had announced decline of land price appraisal in general by approximately 20% which was underprice appraisal than due prevailing market price from the previous base price. In particular of appraisal price of Baht 66.17 million made by Simon Lim & Partners Co.,Ltd. which was reduced from its previous appraisal at Baht 113.47 million on December 1997. Anyhow if considering the quoted selling price in total scenario amounting Baht 85.0 million, this selling price is still within the appraisal price range issued by these two independent price appraisers. And the independent financial advisor has also issued its opinion that this selling price is suitable and reasonable price with due justification. Opinion of the Audit Committee: Based upon the meeting of Board of Directors, session 1/2543 held on 1 February 2000, in which the whole 3 audit committee members attended the meeting had questioned about the necessity of these land plots purchasing, the reasonable and justified price, and the suitability in entering to this cross- related transaction. In clarification to all questions, THIP's management team had explained and clarified all details up to satisfaction of the whole audit committee members which evidenced by the report of independent financial advisor and the reports issued by 2 independent price appraisers. Consequently, all 3 audit committee members then agreed with this transaction and approved the entering into these 3 cross-related transactions as proposed by the company management with following resolution: 1. The compensation payment for damage amounting Baht 6.50 million and the renting of land with building and vacant land plots at rental price of Baht 8.35 million per annum. 2. The memorandum of agreement confirming the selling price of land and building within 3 years. 3. The purchasing of land with building and vacant land plots totally 5 plots having total areas of 14-2-36 rai with total price amounting Baht 85.0 million. Please be informed accordingly. Very truly yours, (Mr.Thaveewat Yinatsawaphan) (Mr.Huang Kuan Chiun) Director Director