11. TRANSACTIONS AND CONNECTED PARTIES

 11.1 Connected Party: Sino Pac Development (Thailand) Ltd

11.1.1 Assistance Rendered: An Overdraft (OD) Facility of Baht 14
Million

In 1999, the Company accepted financial assistance from a related
company of one of THL’s shareholders- Sino Pac Development (Thailand)
Ltd, because of severe cash flow restraints brought on by the
impenetrably tight liquidity market. The assistance consisted of an
overdraft (OD) facility of Baht 14 million and was used primarily to
support its in its high strength aggregate quarrying operations. The
facility is for the exclusive use of THL and its group of companies as
working capital.

11.1.2 Assistance Rendered: A Second Mortgage Registration of Baht 12
million

 In further working capital support for the THL Group, the Sino Pac Group obtained, from its existing banker, an OD of Baht 10 million with THL considered as part of its group operations, As security for the credit line, THL used its land title deed No 2191 at Damrong Road, Amphur Muang, Phuket Province. The land consists of 8 rai 2 ngan 11 square wah (13,645 sq m). 

The facility was approved for an OD of Baht 10 million. However, as the
Sino Pac Group had provided its own assets to secure part of the initial
credit line of Baht 14 million mentioned above that it had granted to
THL (in addition to cash advances and outstanding debts of about Baht 4
million), THL was accordingly requested to provide a secondary land
mortgage registration with the Bank for another Baht 15 million on
behalf of Sino Pac. Key terms and conditions were as follows:

  1. The facility is for the exclusive use of the THL Group.

  2. THL is the account owner and draws the money directly.

  3. THL pays the monthly interest charge directly to the bank.

  4. Introducing the THL Group to the bank for the facility is free of
  charge.

  5. Sino Pac’s secondary mortgage registration was subsequently reduced
  to Baht 12 million when THL was granted an extension of the OD from
  Baht 10 million to Baht 15 million.

  6. When THL does no longer needs the Baht 14 million OD facility, and
  has repaid all outstanding sums owing to Sino Pac, the current Baht 12
  million secondary mortgage registration of will be released.

The above transactions have been reported in THL’s financial statements,
reviewed by an external auditor and THL’s audit committee, and submitted
quarterly to the Stock Exchange of Thailand (SET), shareholders, and the
public.

11.1.3 Assistance Rendered: Cash Advance of Baht eight million

The Sino Pac Group has allocated a further eight million baht to THL as
working capital to meet immediate financial needs. The proposed advance
was reviewed and accepted as appropriate by the audit committee prior to
the Board’s approval on 27 November meeting. The terms and conditions
are as follows:

  1. Interest is the same as that paid by THL to the Siam Commercial
  Bank PCL ( MOR + 0% - as at October 31 2000, MOR is 8.50%) for its own
  facilities. Interest payment is monthly, after THL services the
  interest of its existing banking facilities.

  2. Repayment will be made when THL completes its restructuring
  program.

  3. Collateral is not required by Sino Pac.

11.2 Scope of Interests of Connected Persons

The above financial assistance facilities are connected transactions.
THL and Sino Pac are connected to the extent that Mr. Ng Wai Choi is the
Managing Director of THL and a director of Sino Pac. Mr. Ng is also a
“Controlling Shareholder” for the purposes of the Disclosure Rules of
Paron Resources Inc. (formerly Sino Pac International Investments Inc.)
which beneficially controls 30% of THL.

Dr. J.P. Mills, Mr. Watchara Sukasem are directors of THL Sino Pac. Mr.
Justin Chow kim Lim and Ms. Tarpthi Hansavesa are directors of sino Pac.
Mr. Sidhi Suddhibongse and Mr. Suchart Rithiwathanapong resigned as
directors of Sino Pac in September 2000. In Addition Ms. Tarpthip
Hansavesa, is a shareholder in THL.

The transaction value represents less than 3% of the latest audited net
tangible assets of THL pursuant to the SET’s regulation (ref: Bor Jor:
52-2-01, Clause 9 (1) and (2), page 122.

11.3 Criterion on Net Tangible Assets of THL

The value of the connected transaction (bank overdraft using the land of
THL as collateral to a related company) divided by Net Tangible Assets
of THL is indicated following and has been reported to the SET,
shareholders, and public as of 28 December 1998.

12,000,000/569,440,734 = 2.11%