10. RELATED PARTIES TRANSACTION

The Company has significant business transactions with its subsidiary,
and with companies associated or related, by means of shareholding, or
by having certain shareholders or directors in common with those of the
Company. The results of these transactions are reflected in the
financial statements on the basis mutually agreed between the Company
and these companies, stipulated in the agreements, and were in the
normal course in accordance with the conditions of business.

The related party transactions between the Company and its subsidiary,
associated and related companies for the year 1998, 1999 and 2000 were
as follows:

+-------------------------------------------+--------+--------+--------+
|                                           |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Transaction with subsidiaries             | 1998   | 1999   | 2000   |
+-------------------------------------------+--------+--------+--------+
|                                           |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Transactions with subsidiary company      |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Capetronic (Thailand) Limited             |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Short-term loan to related company      | 127    | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
| Transactions with associated companies    |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Capetronic Computer USA (Hong Kong) Ltd.  |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 2,237  | 9,475  | 3,479  |
+-------------------------------------------+--------+--------+--------+
|   Exchange gain on forward agreement      | 49     | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Penalty for late shipment               | 0      | 0      | 195    |
+-------------------------------------------+--------+--------+--------+
|   Legal fee                               | 0      | 0      | 52     |
+-------------------------------------------+--------+--------+--------+
| Warranty of quality of goods paid         | 0      | 0      | 12     |
+-------------------------------------------+--------+--------+--------+
| Capetronic Computer International Ltd.    |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 8,870  | 819    | 6,717  |
+-------------------------------------------+--------+--------+--------+
| Compensation for research and product     | 0      | 0      | 79     |
| designed received                         |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Capetronic Computer Sales Limited         |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 791    | 762    | 1,735  |
+-------------------------------------------+--------+--------+--------+
| Capetronic UK Limited                     |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products (material for after   | 1      | 1      | 0      |
|   sales services)                         |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Warranty of quality of goods paid       | 41     | 44     | 63     |
+-------------------------------------------+--------+--------+--------+
| Capetronic (Kaoshiung) Corp.              |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 1,008  | 234    | 0      |
+-------------------------------------------+--------+--------+--------+
|   Purchase of raw material                | 415    | 614    | 13     |
|   (Semiconductor)                         |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Purchase of fixed assets (plastic       | 27     | 40     | 30     |
|   mould, fixture, tooling)                |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Purchase of spare parts                 | 6      | 1      | 0      |
+-------------------------------------------+--------+--------+--------+
| Capetronic Computer USA (HK) Inc.         |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 7      | 1      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Warranty of quality of goods paid       | 77     | 10     | 0      |
+-------------------------------------------+--------+--------+--------+

+-------------------------------------------+--------+--------+--------+
|                                           |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Transaction with subsidiaries (continue)  | 1998   | 1999   | 2000   |
+-------------------------------------------+--------+--------+--------+
|                                           |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Capetronic USA Manufacturing Inc.         |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 0      | 2      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Warranty of quality of goods paid       | 0      | 27     | 0      |
+-------------------------------------------+--------+--------+--------+
| Transactions with related companies       |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Capetronic Interactive Multimedia         |        |        |        |
| Displays Ltd.                             |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 3      | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Compensation expenses for losses from   | 0      | 70     | 0      |
|   sales of products                       |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Copy rights and technical support       | 84     | 0      | 0      |
|   expenses                                |        |        |        |
+-------------------------------------------+--------+--------+--------+
| Capetronic Malaysia Corporation Ltd.      |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 2      | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Sales of fixed assets                   | 4      | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Purchase of raw materials               | 119    | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Purchase of fixed assets                | 0      | 0      | 10     |
+-------------------------------------------+--------+--------+--------+
| Capetronic Computer Malaysia Corporation  |        |        |        |
| Ltd.                                      |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products (raw materials)       | 14     | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Sales of fixed assets                   | 7      | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Purchase of raw materials               | 550    | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
|   Discount on purchase of raw material    | 0      | 12     | 0      |
+-------------------------------------------+--------+--------+--------+
|   Purchase of fixed assets                | 39     | 0      | 0      |
+-------------------------------------------+--------+--------+--------+
| Nakamichi Corporation                     |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 0      | 0      | 4      |
+-------------------------------------------+--------+--------+--------+
|   Purchase of raw materials               | 0      | 0      | 24     |
+-------------------------------------------+--------+--------+--------+
|   Warranty fee                            | 0      | 0      | 9      |
+-------------------------------------------+--------+--------+--------+
| Nakamichi Asia Limited (Hong Kong)        |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 0      | 0      | 11     |
+-------------------------------------------+--------+--------+--------+
| Nakamichi America Corporation             |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 0      | 0      | 6      |
+-------------------------------------------+--------+--------+--------+
|   Warranty fee                            | 0      | 0      | 41     |
+-------------------------------------------+--------+--------+--------+
| E-Zone Management Singapore               |        |        |        |
+-------------------------------------------+--------+--------+--------+
|   Sales of products                       | 0      | 0      | 2      |
+-------------------------------------------+--------+--------+--------+

Note : please refer to notes to financial statement – note 6 related
party transactions

  The Company has also submitted a letter to the SET stating that the
  independent directors will monitor all business transactions,
  technical and financial support and other transactions between the
  Company and other related parties to ensure compliance with the
  contracts. The independent directors have reviewed the transactions
  between the Company and other related parties in 2000 and agreed that
  they were in compliance with the contracts.

  Please refer to the attachment 2 – Summary of written contracts
  governing related party transactions.