2.11 Transaction and Connected Parties

2.11.1 Connected Parties

The significant of the Company’s connected parties is financial
assistance, an Overdraft (OD) facility of Baht 14 million, from Aspac
Construction Limited (Aspac). Collateral of this facility are assets of
Aspac groups and the Company. Aspac group (including Sino Pac
Development (Thailand) Limited (SPD)) requested the Company to provided
secondary land mortgage registration on behalf of SPD. The details of
the said financial assistance, and others, are as following:

+--------+-----------------+-----------------------+------------------+
| Name   | AsPa            | Sin                   | Sintana Holdi    |
| of     | c Construction  | o Pac Development (Th | ngs Limited (SH) |
| C      | Limited (ASPAC) | ailand) Limited (SPD) |                  |
| ompany |                 |                       |                  |
+--------+-----------------+-----------------------+------------------+
| Trans  | Overdraft (O/D) | As SPD (through       | Loan and Advance |
| action | facility        | AsPac) allowed THL to | to and from SH   |
| Type   |                 | use the 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.   |                  |
+--------+-----------------+-----------------------+------------------+
| Trans  | 14 Million Baht | 12 Million Baht       | At the end of    |
| action |                 |                       | 2003, there were |
| Value  |                 | This value represents | a balance of     |
| &      |                 | less than 3% of the   | loan to SH of    |
| Cri    |                 | latest audited net    | Baht 1,722,000   |
| terion |                 | tangible assets of    | and a balance of |
| on Net |                 | THL as per the Stock  | Advance to SH of |
| Ta     |                 | Exchange of Thailand  | Baht 3,168,000   |
| ngible |                 | (SET)’s regulation    | totaling Baht    |
| Assets |                 | (ref: Bor Jor:        | 4,890,000. The   |
|        |                 | 52-2-01, clause 9(1)  | balance of       |
|        |                 | and (2), page 122).   | advance from SH  |
|        |                 | The Transaction Value | was Baht         |
|        |                 | divided by THL’s Net  | 880,000.         |
|        |                 | Tangible Assets       | However, during  |
|        |                 | (12                   | the year, the    |
|        |                 | ,000,000/693,616,000) | Company also     |
|        |                 | derives a percentage  | accepted         |
|        |                 | of 1.73%.             | financial        |
|        |                 |                       | assistance       |
|        |                 |                       | several time     |
|        |                 |                       | from SH for the  |
|        |                 |                       | amount approx.   |
|        |                 |                       | Baht 15 million. |
+--------+-----------------+-----------------------+------------------+
| Reason | In 1999 THL     | To provide working    | To provide       |
| for    | accepted        | capital for THL and   | working capital  |
| Trans  | financial       | its controlled        | for THL and SH   |
| action | assistance from | entities              |                  |
|        | AsPac due to    |                       |                  |
|        | severe cash     |                       |                  |
|        | flow restraints |                       |                  |
|        | brought on by   |                       |                  |
|        | the extremely   |                       |                  |
|        | tight credit    |                       |                  |
|        | market. The     |                       |                  |
|        | financial       |                       |                  |
|        | assistance      |                       |                  |
|        | rendered was    |                       |                  |
|        | used primarily  |                       |                  |
|        | to support the  |                       |                  |
|        | high strength   |                       |                  |
|        | aggregate       |                       |                  |
|        | quarry          |                       |                  |
|        | operations and  |                       |                  |
|        | as THL’s        |                       |                  |
|        | working         |                       |                  |
|        | capital.        |                       |                  |
+--------+-----------------+-----------------------+------------------+
| Name   | AsPa            | Sin                   | Sintana Holdi    |
| of     | c Construction  | o Pac Development (Th | ngs Limited (SH) |
| C      | Limited (ASPAC) | ailand) Limited (SPD) |                  |
| ompany |                 |                       |                  |
+--------+-----------------+-----------------------+------------------+
| Terms  | 1) The facility | When THL no longer    | In terms of the  |
| and    | was made        | needs the Baht 14     | loan, interest   |
| Cond   | exclusively for | million OD facility   | charged between  |
| itions | THL and its     | detailed in column 1, | each party is at |
| of     | controlled      | the Baht 12 million   | the rate charged |
| Trans  | entities for    | secondary             | by the bank. For |
| action | working capital | registration will be  | advances, there  |
|        |                 | released.             | is no interest   |
|        | 2) THL pays the |                       | charged between  |
|        | monthly         |                       | each party.      |
|        | 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      | connected as SH  |
| Con    | to the extent   | extent that Mr. R.    | is one of the    |
| nected | that Mr. R. Ng  | Ng, the late Mr. W.   | major            |
| Pe     | and the late    | Sukasem, and Dr. J.P. | shareholders in  |
| rsons/ | Mr. W. Sukasem  | Mills were directors  | THL.             |
| Rel    | were directors  | of both THL and SPD   |                  |
| ation- | of both THL and | at the time of the    |                  |
|        | AsPac at the    | transaction. As per   |                  |
| ships  | time of the     | THL policy, these     |                  |
|        | transaction.    | persons abstained     |                  |
|        | Per THL policy, | from voting in        |                  |
|        | these persons   | connection with these |                  |
|        | abstained from  | transactions.         |                  |
|        | voting in       |                       |                  |
|        | connection with |                       |                  |
|        | this            |                       |                  |
|        | transaction.    |                       |                  |
+--------+-----------------+-----------------------+------------------+
| Trans  | This            | This transaction was  | This transaction |
| action | transaction was | reported in THL’s     | was reported in  |
| T      | reported in     | financial statements, | THL’s financial  |
| ranspa | THL’s financial | annual and quarterly  | statements,      |
| ren-cy | statements,     | reports, and          | annual and       |
|        | annual and      | submitted quarterly   | quarterly        |
|        | quarterly       | to the SET, THL       | reports, and     |
|        | reports, and    | shareholders, and the | submitted        |
|        | submitted       | public.               | quarterly to the |
|        | quarterly to    |                       | SET, THL         |
|        | the SET, THL    |                       | shareholders,    |
|        | shareholders,   |                       | and the public.  |
|        | and the public. |                       |                  |
+--------+-----------------+-----------------------+------------------+
| Trans  | This            | This transaction was  | This transaction |
| action | transaction was | reviewed by an        | was reviewed by  |
| Ap     | reviewed by an  | external auditor,     | an external      |
| proval | external        | legal counsel, and    | auditor, THL’s   |
| P      | auditor, legal  | the THL’s Audit       | Audit Committee, |
| rocess | counsel, THL’s  | Committee and Board   | and Board of     |
|        | Audit Committee | of Directors who      | Directors who    |
|        | and Board of    | deemed said           | deemed said      |
|        | Directors who   | transactions to be    | transactions to  |
|        | deemed said     | fair, reasonable and  | be fair,         |
|        | transaction to  | in compliance with    | reasonable, and  |
|        | be fair,        | generally acceptable  | in compliance    |
|        | reasonable and  | accounting            | with generally   |
|        | in compliance   | procedures.           | acceptable       |
|        | with generally  |                       | accounting       |
|        | acceptable      |                       | procedures.      |
|        | accounting      |                       |                  |
|        | procedures.     |                       |                  |
+--------+-----------------+-----------------------+------------------+

2.11.2 Necessary and Reason of Transaction

The connected transactions were financial assistance for the Company’s
working capital because of low of 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

2.11.3.1 The Board of Directors’ Meeting No. 4/2002 held 27 August 2002
approved that the Company’s connected transactions of less than 500,000
Baht can be approved by the Managing Director or by any two directors;
transactions in the amount from 500,000 Baht to 2,000,000 Baht must be
approved by the Managing Director; and all transactions above 2,000,000
Baht must be approved by the Company’s Board of Directors. The related
person(s) or parties must abstain from voting in connection with the
transaction.

2.11.3.2 The Audit Committee has extended its involvement into reviewing
financial transactions and connected transactions involving a related
companies which must be reported to SET under SET’s 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.