11. Inter-company transactions

11.1 Related transactions

The Company had inter-company transactions with other related persons
who may have conflicts of interest, details of which are contained in
Notes 5 of the consolidated financial statements for the year ended
2004, which can be summarised as follows:

+-------+--------+-----+----+-----------+-----------+---------------+
| Co    | De     | Dur | O  | De        | Plan      | Notes         |
| mpany | script | ing | ut | scription | Admini    |               |
|       | ion of | 2   | st | of        | strator’s |               |
|       |  trans | 004 | an | rel       | opinion   |               |
|       | action | Tr  | di | ationship |           |               |
|       |        | ans | ng | and       |           |               |
|       |        | act | T  | be        |           |               |
|       |        | ion | ra | neficiary |           |               |
|       |        | Va  | ns |           |           |               |
|       |        | lue | ac |           |           |               |
|       |        | (m  | ti |           |           |               |
|       |        | ill | on |           |           |               |
|       |        | ion | V  |           |           |               |
|       |        | Ba  | al |           |           |               |
|       |        | ht) | ue |           |           |               |
|       |        |     | (m |           |           |               |
|       |        |     | il |           |           |               |
|       |        |     | li |           |           |               |
|       |        |     | on |           |           |               |
|       |        |     | B  |           |           |               |
|       |        |     | ah |           |           |               |
|       |        |     | t) |           |           |               |
+=======+========+=====+====+===========+===========+===============+
| Su    | -      |     | 22 | The       | This      | Co. hires     |
| ntech | A      |     | 8. | Hor       | tr        | Suntech Scrap |
| Scrap | ccount |     | 21 | rungruang | ansaction | Co.,Ltd for   |
| Co.,  | p      |     |    | through   | was in    | collection,   |
| Ltd.  | ayable |     |    | Suntech   | normal    | supply and    |
|       |        |     |    | Group     | course of | processing of |
|       |        |     |    | holds     | business  | domestic      |
|       |        |     |    | shares at | of the    | scrap as      |
|       |        |     |    | 99.99     | Company   | requirement.  |
|       |        |     |    | percent.  |           | However, Co.  |
|       |        |     |    | Mr.       |           | did not enter |
|       |        |     |    | Sawasdi   |           | into any      |
|       |        |     |    | Hor       |           | long-term     |
|       |        |     |    | rungruang |           | contract with |
|       |        |     |    | is the    |           | Suntech Scrap |
|       |        |     |    | director. |           | Co.,Ltd. The  |
|       |        |     |    |           |           | contracts     |
|       |        |     |    |           |           | were made     |
|       |        |     |    |           |           | separately.   |
|       |        |     |    |           |           | The price is  |
|       |        |     |    |           |           | negotiated by |
|       |        |     |    |           |           | transaction   |
|       |        |     |    |           |           | to            |
|       |        |     |    |           |           | transaction   |
|       |        |     |    |           |           | basis based   |
|       |        |     |    |           |           | on market     |
|       |        |     |    |           |           | price.        |
+-------+--------+-----+----+-----------+-----------+---------------+
|       | - Raw  | 1,  |    |           |           |               |
|       | ma     | 454 |    |           |           |               |
|       | terial | .47 |    |           |           |               |
|       | pur    |     |    |           |           |               |
|       | chases |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
| Sri   | -      |     | 2  |   The     | This      | 1 Advance     |
| racha | A      |     | 2. |   Hor     | tr        | payment for   |
| Ha    | dvance |     | 88 | rungruang | ansaction | Value Added   |
| rbour | p      |     |    |   holds   | was in    | Tax and       |
| Plc.  | ayment |     | 3  |   shares  | normal    | Import Duty   |
|       | ^(1/)  |     | 3. |   at      | course of |               |
|       |        |     | 87 |   35.52   | business  | 2 Accrued     |
|       | -      |     |    |   percent | of the    | expenses are  |
|       | A      |     |    |   and is  | Company   | the expense   |
|       | ccrued |     |    |   a       |           | for using     |
|       | ex     |     |    | uthorized |           | harbour and   |
|       | penses |     |    |           |           | equipment for |
|       | ^(/2/) |     |    | directors |           | scrap import  |
|       |        |     |    |   of      |           | and steel     |
|       |        |     |    |           |           | coil export.  |
|       |        |     |    |  Sriracha |           |               |
|       |        |     |    |   Harbour |           | 3 This is the |
|       |        |     |    |   Plc.    |           | expense for   |
|       |        |     |    |           |           | bulk cargo    |
|       |        |     |    |           |           | handling      |
|       |        |     |    |           |           | (both import  |
|       |        |     |    |           |           | and export).  |
|       |        |     |    |           |           | However, Co.  |
|       |        |     |    |           |           | did not enter |
|       |        |     |    |           |           | into any      |
|       |        |     |    |           |           | long-term     |
|       |        |     |    |           |           | contract with |
|       |        |     |    |           |           | Sriracha      |
|       |        |     |    |           |           | Harbour. The  |
|       |        |     |    |           |           | price is      |
|       |        |     |    |           |           | negotiated by |
|       |        |     |    |           |           | transaction   |
|       |        |     |    |           |           | to            |
|       |        |     |    |           |           | transaction   |
|       |        |     |    |           |           | basis based   |
|       |        |     |    |           |           | on market     |
|       |        |     |    |           |           | price.        |
+-------+--------+-----+----+-----------+-----------+---------------+
|       | - Port | 50  |    |           |           |               |
|       | ha     | .60 |    |           |           |               |
|       | ndling |     |    |           |           |               |
|       | ex     |     |    |           |           |               |
|       | penses |     |    |           |           |               |
|       | ^(3/)  |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
| He    | -      | 6   | 6. | 1.        | This      | This is the   |
| maraj | A      | .03 | 90 | Hemaraj   | tr        | expense for   |
| Land  | ccrued |     |    | Land and  | ansaction | raw water and |
| and   | ex     |     |    | Deve      | was in    | i             |
| D     | penses |     |    | lopment’s | normal    | nfrastructure |
| evelo |        |     |    | sha       | course of | maintenance   |
| pment | -      |     |    | reholding | business  | fee.          |
| Plc.  | Other  |     |    | in NSM is | of the    |               |
|       | ex     |     |    | 0.11 per  | Company.  |               |
|       | penses |     |    | cent.     | Hemaraj   |               |
|       |        |     |    |           | also      |               |
|       |        |     |    | 2. The    | provides  |               |
|       |        |     |    | Hor       | service   |               |
|       |        |     |    | rungruang | to other  |               |
|       |        |     |    | holds     | companies |               |
|       |        |     |    | shares at | in Bowin  |               |
|       |        |     |    | 13.45     | I         |               |
|       |        |     |    | percent.  | ndustrial |               |
|       |        |     |    | Mr.       | Estate.   |               |
|       |        |     |    | Sawasdi   |           |               |
|       |        |     |    | Hor       |           |               |
|       |        |     |    | rungruang |           |               |
|       |        |     |    | is the    |           |               |
|       |        |     |    | a         |           |               |
|       |        |     |    | uthorized |           |               |
|       |        |     |    | director. |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           | This      |               |
|       |        |     |    |           | expense   |               |
|       |        |     |    |           | is        |               |
|       |        |     |    |           | r         |               |
|       |        |     |    |           | easonable |               |
|       |        |     |    |           | and same  |               |
|       |        |     |    |           | as those  |               |
|       |        |     |    |           | charged   |               |
|       |        |     |    |           | to other  |               |
|       |        |     |    |           | companies |               |
|       |        |     |    |           | in Bowin  |               |
|       |        |     |    |           | I         |               |
|       |        |     |    |           | ndustrial |               |
|       |        |     |    |           | Estate.   |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
| Su    | -      |     | 1. | 1.        | This      | These are the |
| ntech | A      |     | 92 | Suntech   | tr        | expenses for  |
| Group | ccount |     |    | Group’s   | ansaction | material      |
| Plc.  | p      |     | 2. | sha       | was in    | purchasing    |
|       | ayable |     | 33 | reholding | normal    | and temporary |
|       |        |     |    | in NSM is | course of | land rental   |
|       | -      |     |    | 0.56 per  | business  | for           |
|       | A      |     |    | cent.     | of the    | construction  |
|       | ccrued |     |    |           | Company   | workers.      |
|       | ex     |     |    | 2. The    |           |               |
|       | penses |     |    | Ho        |           | Suntech Group |
|       |        |     |    | rungruang |           | is in the     |
|       |        |     |    | hold      |           | process of    |
|       |        |     |    | shares at |           | i             |
|       |        |     |    | 39.5      |           | mplementation |
|       |        |     |    | percent.  |           | of its        |
|       |        |     |    | Mr.       |           | business      |
|       |        |     |    | Sawasdi   |           | r             |
|       |        |     |    | Ho        |           | eorganisation |
|       |        |     |    | rungruang |           | plan with     |
|       |        |     |    | is        |           | Srisongkram   |
|       |        |     |    | executive |           | Planner being |
|       |        |     |    | director  |           | the Plan      |
|       |        |     |    | of        |           | A             |
|       |        |     |    | Suntech   |           | dministrator. |
|       |        |     |    | Group.    |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       | -      | 0   |    |           |           |               |
|       | Other  | .68 |    |           |           |               |
|       | ex     |     |    |           |           |               |
|       | penses |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
| Metal | -      |     | 43 | The       | This      | Two loans     |
| Star  | Loans  |     | 7. | Hor       | tr        | were granted  |
| Co.,  | and    |     | 56 | rungruang | ansaction | to Metal Star |
| Ltd.  | a      |     |    | holds     | is the    | consisting of |
|       | ccrued |     |    | shares at | Baht 350  | Baht 350      |
|       | in     |     |    | 50        | million   | million and   |
|       | terest |     |    | percent   | loan for  | Baht 70       |
|       | rece   |     |    |           | business  | Million. The  |
|       | ivable |     |    |           | operation | Company has   |
|       |        |     |    |           | of the    | set allowance |
|       |        |     |    |           | Company   | for doubtful  |
|       |        |     |    |           | and was   | for the total |
|       |        |     |    |           | approved  | amount of     |
|       |        |     |    |           | by the    | these two     |
|       |        |     |    |           | meeting   | loans         |
|       |        |     |    |           | of the    | covering both |
|       |        |     |    |           | Company’s | principal and |
|       |        |     |    |           | shar      | accrued       |
|       |        |     |    |           | eholders. | interest.     |
|       |        |     |    |           | The Baht  |               |
|       |        |     |    |           | 70        |               |
|       |        |     |    |           | million   |               |
|       |        |     |    |           | loan are  |               |
|       |        |     |    |           | ratified  |               |
|       |        |     |    |           | by the    |               |
|       |        |     |    |           | Plan      |               |
|       |        |     |    |           | Admi      |               |
|       |        |     |    |           | nistrator |               |
|       |        |     |    |           | on the    |               |
|       |        |     |    |           | Effective |               |
|       |        |     |    |           | Date.     |               |
+-------+--------+-----+----+-----------+-----------+---------------+
| Steel | -      |     | 0. | At        | This      | 1. Advance    |
| Top   | A      |     | 27 | present,  | tr        | receivable    |
| Co.,  | dvance |     |    | the       | ansaction | for apartment |
| Ltd.  | rece   |     |    | Hor       | was in    | rental        |
|       | ivable |     |    | rungruang | normal    |               |
|       | ^(1/)  |     |    | through   | course of | 2. Accrued    |
|       |        |     |    | Suntech   | business  | expenses are  |
|       |        |     |    | Group     | of the    | salary and    |
|       |        |     |    | holds     | Company   | expense       |
|       |        |     |    | shares at |           |               |
|       |        |     |    | 58.64     |           |               |
|       |        |     |    | percent.  |           |               |
|       |        |     |    | Mr.       |           |               |
|       |        |     |    | Sawasdi   |           |               |
|       |        |     |    | Hor       |           |               |
|       |        |     |    | rungruang |           |               |
|       |        |     |    | is the    |           |               |
|       |        |     |    | joint     |           |               |
|       |        |     |    | director. |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       | -      |     | 0. |           |           |               |
|       | A      |     | 30 |           |           |               |
|       | ccrued |     |    |           |           |               |
|       | ex     |     |    |           |           |               |
|       | penses |     |    |           |           |               |
|       | ^(2/)  |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+
|       |        |     |    |           |           |               |
+-------+--------+-----+----+-----------+-----------+---------------+

11.2 Necessity and reasonableness of related transactions

Trading

  The above inter-company transactions were undertaken for the maximum
  benefit of the Company and were subject to the normal terms and
  conditions of business relationships and purchase of goods and
  services in general. From the outset, the Management of the Company
  established the procedures for the above transactions to be the same
  as for transactions with general customers. All inter-company
  transactions reflect applicable market prices.

  Financial support

  The financial support for Metal Star Company Limited, Nakornthai
  Integrated Company Limited and Tak Ka-Pon Company Limited was the
  loan, which incurred in the normal course of business and was for the
  best benefit of the Company.

  The loan granted to Metal Star in the amount of Baht 350 million was
  approved by the Extraordinary Meeting of Shareholders of the Company
  No. 1/2540 held on October 22, 1997. However, for another loan granted
  to Metal Star in the amount of Baht 70million, to Nakornthai
  Integrated in the amount of Baht 70,000,000 and to Tak Ka-Pon in the
  amount of Baht 60million, the Plan Administrator, with approval of the
  Creditors’ Committee, is of the opinion that by the power of the Plan
  Administrator, these transactions are ratified upon achieving the
  Effective Date.

  The Company has set allowance for doubtful for these loans covering
  both principal and accrued interest. With this, there should be no
  material affect on the Company’s financial status and operation. The
  Company expects that it will not receive repayment under these loans.

  Advance Payment

  Advance Payment are the normal transactions of the Company which are
  Advance for Value Added Tax and Import Duty to Sriracha Harbour Public
  Company Limited to clear material from Custom Duty for the Company.

  Accrued Expenditure

  The accrued expenditures are the normal transactions of the Company
  such as service and maintenance provided by Hemaraj Land Development
  Public Company Limited and fee for using the harbour of Sriracha
  Harbour Public Company Limited for the export of steel coil.

11.3 Measures or procedures to approve related Transactions

  Since the Company is a listed company, its practice regarding related
  transactions is conducted according to the rules and regulations of
  the SET. Management is highly aware of the sensitivity of this issue
  and closely monitors any situation in which a potential related
  transaction could occur. Directors of the Company who are not deemed
  to be connected parties to a transaction are responsible for making
  decisions in regard to the said connected transaction; however, this
  does not apply to connected transactions that are normal business
  transactions.

  Upon the termination of the reorganization of the Company and the
  resuming trading of the Company’s shares, the process for the approval
  of connected transactions will follow the Company’s rule to obtain
  Board approval and/or shareholders' approval and/or an opinion from
  independent directors (dependent on the necessity and transaction
  value), which complies with the SET’s regulations.

11.4 Potential future related transactions

  Normal Course of Business

  The Company is expected to continue its business transactions with
  subsidiaries, affiliated companies, and related companies with regard
  to the sale and purchase of products and raw materials in the normal
  course of business.

  Inter-company Loan

  The Company will not provide loan to its related companies for
  conducting of the Company’s business. If necessary, the Company will
  do it by itself and comply with the procedure and guidelines for
  obtaining approval of related transactions. The Board of Directors
  shall not approve any transactions in which they have interest or any
  persons have conflict of interest with the Company as per the scope of
  specified power of the Board of Directors.