10. RELATED PARTIES TRANSACTION

    The Company has significant business transactions with its
    subsidiary, its associated companies or related companies and
    certain shareholders or directors in common with the Company. These
    transactions were in the normal course in accordance the normal
    business terms.

    The results of these transactions are reflected in the financial
    statements on the basis of mutually agreed terms between the Company
    and these companies as stipulated in the agreements.

    The related party transactions between the Company and its
    subsidiary, associated and related companies for the year 2000, 2001
    and 2002 were as follows:

    Million Baht

+-------------------------------------+----------+----------+----------+
|                                     | 2002     | 2001     | 2000     |
+-------------------------------------+----------+----------+----------+
| - Sales                             |          |          |          |
+-------------------------------------+----------+----------+----------+
| Capetronic Computer USA (HK)        | 46       | 581      | 3,368    |
| Limited                             |          |          |          |
+-------------------------------------+----------+----------+----------+
| Nakamichi America Corporation       | -        | 3        | 6        |
+-------------------------------------+----------+----------+----------+
| Capetronic Computer International   | -        | 4,766    | 6,699    |
| Limited                             |          |          |          |
+-------------------------------------+----------+----------+----------+
| Nakamichi Corporation               | -        | 16       | 4        |
+-------------------------------------+----------+----------+----------+
| Nakamichi Asia Limited              | -        | -        | -        |
+-------------------------------------+----------+----------+----------+
| Capetronic Multimedia Development   | -        | -        | -        |
| Pte Ltd.                            |          |          |          |
+-------------------------------------+----------+----------+----------+
| Nakamichi Research Institute        | -        | -        | -        |
| (Taiwan) Corporation                |          |          |          |
+-------------------------------------+----------+----------+----------+
| The Grande Group (HK) Limited       | -        | -        | -        |
+-------------------------------------+----------+----------+----------+
| The Grande Group Limited            | -        | -        | -        |
+-------------------------------------+----------+----------+----------+
| E-Zone Management Pte Ltd.          | -        | -        | 2        |
+-------------------------------------+----------+----------+----------+
| N.A.K.S Enterprise Limited          | 13       | -        | -        |
+-------------------------------------+----------+----------+----------+
| Nakamichi Enterprise Limited        | 5        | -        | -        |
+-------------------------------------+----------+----------+----------+
| Nakamichi Sales Corporation         | -        | -        | -        |
+-------------------------------------+----------+----------+----------+
| Sansui Electric Co., Ltd.           | -        | -        |          |
+-------------------------------------+----------+----------+----------+
| Capetronic Computer Sales Limited   |          |          | 1,695    |
+-------------------------------------+----------+----------+----------+
| Nakamichi Asia Limited              |          |          | 10       |
+-------------------------------------+----------+----------+----------+
| Total                               | 64       | 5,366    | 11,784   |
+-------------------------------------+----------+----------+----------+
| - Sales Returns                     |          |          |          |
+-------------------------------------+----------+----------+----------+
| Maple Profit Ltd.(note 6.1.1)       | 111      | -        |          |
+-------------------------------------+----------+----------+----------+
|  Total                              | 111      |          |          |
+-------------------------------------+----------+----------+----------+
| - Loss on restructuring             |          |          |          |
+-------------------------------------+----------+----------+----------+
| Capetronic Computer USA (HK)        | 2,560    | -        |          |
| Limited                             |          |          |          |
+-------------------------------------+----------+----------+----------+
| Nakamichi Corporation               | 2        | -        |          |
+-------------------------------------+----------+----------+----------+
| Total                               | 2,562    | -        |          |
+-------------------------------------+----------+----------+----------+
| -Purchases                          |          |          |          |
+-------------------------------------+----------+----------+----------+
|  T.W.D Asia Limited                 | -        |          |          |
+-------------------------------------+----------+----------+----------+
|  Soshin Onkyo International Limited |          | -        |          |
+-------------------------------------+----------+----------+----------+
|  Nakamichi Malaysia Sdn. Bhd.       |          | -        |          |
+-------------------------------------+----------+----------+----------+
| Nakamichi Corporation               | -        | 1        | 24       |
+-------------------------------------+----------+----------+----------+
| Capetronic (Kaoshiung) Corporation  |          |          | 13       |
+-------------------------------------+----------+----------+----------+
| Total                               | 0        | 1        | 37       |
+-------------------------------------+----------+----------+----------+
|                                     |          |          |          |
+-------------------------------------+----------+----------+----------+

The Significant Inter-company transaction are as follows :-

-   In 2001, the Company recorded a sales of Baht 520 million, the cost
    of which Baht 488 million, to Capetronic Computer USA (HK) Limited
    which is a foreign associated company. As at December 31, 2001, the
    Company still supervised the inventory already sold and the goods
    were kept in the Company’s warehouse. However, the ownership of
    goods was transferred to the buyer according to the purchase and
    sale agreement dated December 31, 2001. The Company’s legal counsel
    gave an opinion that the ownership of goods had transferred to the
    buyer at the date of the agreement, despite not having been
    delivered to the customer. In the third quarter of 2002, the Company
    shipped all the said goods to a company in the industrial export
    promotion zone as instructed by the buyer, except for some sales
    returned in September 2002 by the buyer amounting to Baht 110.6
    million.

-   In the third quarter of 2002, an associated company, Capetronic
    Computer Products Holdings (“CCPH”) and certain of its subsidiaries
    went into voluntary winding up. CCPH’s company’s registration was
    withdrawn on November 1, 2002. Another associate company, Capetronic
    Computer Peripherals Holdings Limited and certain of its
    subsidiaries also went into voluntary winding up. As a result of the
    above, the Company offset the related goodwill and translation
    adjustments in the amount of Baht 987.79 million and Baht 413.83
    million respectively as against shareholders funds.

-   During 2002, the Company and two associated companies entered into a
    Settlement Agreement and General Release with a contracting party in
    order settle on outstanding legal case. Under this settlement, it
    was agreed that a contracting party would pay the cost of goods owed
    to the associated companies and USD 0.43 million to avoid additional
    costs and expenses of litigation or arbitration on or before July
    23, 2002

    This enabled the Company to reverse a Baht 48.08 million accrued
    litigation fee.

-   At the end of November 2002, the Company agreed to a debt
    restructuring plan though the offsetting of various related party
    balances.

-   As at November 1,2002 the Company had a receivable from Capetronic
    USA (HK) Limited (“CCU”) of approximately US Dollar 135 million. It
    also had a loan from The Alpha Capital Group Limited (“ACGL”) Group
    of approximately US Dollar 73 million.

-   At November 1,2002 CCU had a negative stockholders’ equity of
    approximately US Dollar 80 million and management of the Company
    concluded that they would have difficulty in collecting the
    outstanding receivable.

-   Effective November 30,2002 the Company agreed the following with
    ACGL, CCU, Lafe International Holding Limited (“LIHL”) and other
    related parties.

-   ACGL agreed that the Company could offset its approximately Baht
    3,216.70 million (approximately US Dollar 73 million) loan from ACGL
    with its approximately US Dollar 135 million receivable from CCU,
    thus transferring the loan to CCU.

-   ACGL further agreed that CCU could offset the assigned loan at
    approximately US Dollar 73 million with amounts owed to it by LIHL.
    In addition, a sum of Baht 114.72 million (approximately US Dollar 3
    million) of net payables to related companies has also been offseted
    against the receivable from CCU.