2.11 Transaction and Connected Parties

2.11.1 Connected Parties

+--------+----------------+-------------------------+----------------+
| Name   | AsPac          | Sino Pac Development (  | S              |
| of     | Construction L | Thailand) Limited (SPD) | intana Holding |
| C      | imited (ASPAC) |                         | s Limited (SH) |
| ompany |                |                         |                |
+--------+----------------+-------------------------+----------------+
| Transa | Overdraft      | As SPD (through AsPac)  | Loan from SH   |
| c-tion | (O/D) facility | allowed THL to use the  |                |
| Type   |                | 14 million Baht credit  |                |
|        |                | facility described in   |                |
|        |                | column 1 (in addition   |                |
|        |                | to cash advances and    |                |
|        |                | outstanding debts of    |                |
|        |                | about 4 million Baht),  |                |
|        |                | THL was requested by    |                |
|        |                | SPD to provide a        |                |
|        |                | secondary land mortgage |                |
|        |                | resgistration with the  |                |
|        |                | bank for another 15     |                |
|        |                | million Baht on behalf  |                |
|        |                | of SPD. The secondary   |                |
|        |                | mortgage registration   |                |
|        |                | was subsequently        |                |
|        |                | reduced to 12 million   |                |
|        |                | Baht.                   |                |
+--------+----------------+-------------------------+----------------+
| Transa | 14 Million     | 12 Million Baht         | The balance of |
| c-tion | Baht           |                         | advance short  |
| Value  |                | This value represents   | term loan was  |
| &      |                | less than 3% of the     | Baht           |
| Cri    |                | latest audited net      | 1,226,037.     |
| terion |                | tangible assets of THL  |                |
| on Net |                | as per the Stock        |                |
| Ta     |                | Exchange of Thailand    |                |
| ngible |                | (SET)’s regulation      |                |
| Assets |                | (ref: Bor Jor: 52-2-01, |                |
|        |                | clause 9(1) and (2),    |                |
|        |                | page 122). The          |                |
|        |                | Transaction Value       |                |
|        |                | divided by THL’s Net    |                |
|        |                | Tangible Assets         |                |
|        |                | (12                     |                |
|        |                | ,000,000/1,385,380,000) |                |
|        |                | derives a percentage of |                |
|        |                | 0.87%.                  |                |
+--------+----------------+-------------------------+----------------+
| Reason | In 1999 THL    | To provide working      | To provide     |
| for    | accepted       | capital for THL and its | funds for the  |
| Transa | financial      | controlled entities     | capital        |
| c-tion | assistance     |                         | increase of    |
|        | from AsPac due |                         | its            |
|        | to severe cash |                         | subsidiary,    |
|        | flow           |                         | Tungkum        |
|        | restraints     |                         | Limited, in    |
|        | brought on by  |                         | accordance     |
|        | the extremely  |                         | with the       |
|        | tight credit   |                         | requirements   |
|        | market. The    |                         | of the of      |
|        | financial      |                         | Banking        |
|        | assistance     |                         | institutions   |
|        | rendered was   |                         | that are       |
|        | used primarily |                         | providing the  |
|        | to support the |                         | medium term    |
|        | high strength  |                         | loan for its   |
|        | aggregate      |                         | gold project.  |
|        | quarry         |                         |                |
|        | operations and |                         |                |
|        | as THL’s       |                         |                |
|        | working        |                         |                |
|        | capital.       |                         |                |
+--------+----------------+-------------------------+----------------+
| Terms  | 1) The         | When THL no longer      | In terms of    |
| and    | facility was   | needs the Baht 14       | the loan,      |
| Cond   | made           | million OD facility     | interest       |
| itions | exclusively    | detailed in column 1,   | charged        |
| of     | for THL and    | the Baht 12 million     | between each   |
| Transa | its controlled | secondary registration  | party is at    |
| c-tion | entities for   | will be released.       | the rate       |
|        | working        |                         | charged by the |
|        | capital        |                         | bank.          |
|        |                |                         |                |
|        |   2) THL pays  |                         |                |
|        |   the monthly  |                         |                |
|        |   interest     |                         |                |
|        |   charge       |                         |                |
|        |   directly to  |                         |                |
|        |   a bank at    |                         |                |
|        |   the rate     |                         |                |
|        |   charged by   |                         |                |
|        |   the bank     |                         |                |
|        |                |                         |                |
|        | 3) THL         |                         |                |
|        | provided       |                         |                |
|        | collateral     |                         |                |
|        | consisting of  |                         |                |
|        | land at        |                         |                |
|        | Saraburi       |                         |                |
|        | province in    |                         |                |
|        | the amount of  |                         |                |
|        | 4 million      |                         |                |
|        | Baht. The      |                         |                |
|        | remaining 10   |                         |                |
|        | million Baht   |                         |                |
|        | of the         |                         |                |
|        | facility is    |                         |                |
|        | secured by     |                         |                |
|        | AsPac’s group  |                         |                |
|        | collateral.    |                         |                |
|        |                |                         |                |
|        | 4) The OD      |                         |                |
|        | facility is    |                         |                |
|        | allocated to   |                         |                |
|        | THL and its    |                         |                |
|        | controlled     |                         |                |
|        | entities       |                         |                |
|        | without        |                         |                |
|        | charge.        |                         |                |
+--------+----------------+-------------------------+----------------+
| Scope  | THL and AsPac  | THL and SPD are         | THL and SH are |
| of     | are connected  | connected to the extent | connected as   |
| Con    | to the extent  | that Mr. R. Ng, the     | SH is one of   |
| nected | that Mr. R. Ng | late Mr. W. Sukasem,    | the major      |
| Pe     | and the late   | and Dr. J.P. Mills were | shareholders   |
| rsons/ | Mr. W. Sukasem | directors of both THL   | in THL.        |
| Re     | were directors | and SPD at the time of  |                |
| lation | of both THL    | the transaction. As per |                |
| -ships | and AsPac at   | THL policy, these       |                |
|        | the time of    | persons abstained from  |                |
|        | the            | voting in connection    |                |
|        | transaction.   | with these              |                |
|        | Per THL        | transactions.           |                |
|        | policy, these  |                         |                |
|        | persons        |                         |                |
|        | abstained from |                         |                |
|        | voting in      |                         |                |
|        | connection     |                         |                |
|        | with this      |                         |                |
|        | transaction.   |                         |                |
+--------+----------------+-------------------------+----------------+
| Transa | This           | This transaction was    | This           |
| c-tion | transaction    | reported in THL’s       | transaction    |
| T      | was reported   | financial statements,   | was reported   |
| ranspa | in THL’s       | annual and quarterly    | in THL’s       |
| -rency | financial      | reports, and submitted  | financial      |
|        | statements,    | quarterly to the SET,   | statements,    |
|        | annual and     | THL shareholders, and   | annual and     |
|        | quarterly      | the public.             | quarterly      |
|        | reports, and   |                         | reports, and   |
|        | submitted      |                         | submitted      |
|        | quarterly to   |                         | quarterly to   |
|        | the SET, THL   |                         | the SET, THL   |
|        | shareholders,  |                         | shareholders,  |
|        | and the        |                         | and the        |
|        | public.        |                         | public.        |
+--------+----------------+-------------------------+----------------+
| Transa | This           | This transaction was    | This           |
| c-tion | transaction    | reviewed by an external | transaction    |
| Ap     | was reviewed   | auditor, legal counsel, | was reviewed   |
| proval | by an external | and the THL’s Audit     | by an external |
| P      | auditor, legal | Committee and Board of  | auditor, THL’s |
| rocess | counsel, THL’s | Directors who deemed    | Audit          |
|        | Audit          | said transactions to be | Committee, and |
|        | Committee and  | fair, reasonable and in | Board of       |
|        | Board of       | compliance with         | Directors who  |
|        | Directors who  | generally acceptable    | deemed said    |
|        | deemed said    | accounting procedures.  | transactions   |
|        | transaction to |                         | to be fair,    |
|        | be fair,       |                         | reasonable,    |
|        | reasonable and |                         | and in         |
|        | in compliance  |                         | compliance     |
|        | with generally |                         | with generally |
|        | acceptable     |                         | acceptable     |
|        | accounting     |                         | accounting     |
|        | procedures.    |                         | procedures.    |
+--------+----------------+-------------------------+----------------+

2.11.2 Necessary and Reason of Transaction

The connected transactions were financial assistance for the Company’s
working capital because of low liquidity. Terms and conditions of
transaction benefit the Company. For example, the Company pays interest
charge directly to a bank at the rate charged by the bank and if the
Company pays directly to lender, the Company will pay interest at the
same rate as render borrowing rate without charge. Thus, the lender
requested the Company to provide a secondary land mortgage registration.

Above said transactions were approved by the Company’s Board of
Director, and reported to the Stock Exchange of Thailand (SET) following
SET’s regulations of connected transaction disclosure.

2.11.3 Policy of Connected Transaction Approval

The Company tries to minimize or avoid further financial assistance from
connected and/or related parties. Such transactions may occur when the
Company is short of working capital to meet immediate financial
commitments. Upon entering such transactions, controls are in effect
pursuant to the Board of Director’s guidelines (meeting no. 4, August
27, 2002) stating that sums up to Baht 500,000 require approval of the
Managing Director or two directors, amounts between Baht 500,000 and 2
million require the Managing Director’s approval, and transactions of
more than Baht 2 million must be approved by the Board of Directors. In
the latter case, any involved parties must abstain from voting on the
transaction and said transaction must be scrutinized by the Audit
Committee and reported to the SET pursuant to SET regulations on
connected transaction disclosure.

4.  Future of Connected Transactions

The Company operates business based on Company benefit. Connected
transactions with related companies or parties (financial assistance)
will occur in significant circumstance. In future, the Company has no
intent to do connected transactions, except where the Company encounters
severe circumstances. However, the Company follows the policy of
connected transaction approval as stated in clause 11.3. In addition,
the Company will report connected transactions to SET.