10. RELATED PARTIES TRANSACTION

      The Company has significant transactions, in the ordinary course
      of business, 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,
      and/or as stipulated in the agreements. Selling prices to related
      companies are determined based on the cost of goods plus a margin
      of 2% to 6% (subsequently cancelled by the amendment letter, which
      is effective on April 1, 2000) and/or the basis stipulated in
      jointly prepared agreements. The significant related party
      transactions are as follows (excluding transactions between
      associated companies and other related companies):-

Revenues and Expenses

+-----------------------------------------+------------+---+------------+
|                                         | (Unit :    |   |            |
|                                         | Thousand   |   |            |
|                                         | Baht)      |   |            |
+-----------------------------------------+------------+---+------------+
|                                         | December   |   | December   |
|                                         | 31, 2003   |   | 31, 2002   |
+-----------------------------------------+------------+---+------------+
| - Sales                                 |            |   |            |
+-----------------------------------------+------------+---+------------+
| Capetronic Computer USA (HK) Limited    | 43,395     |   | 45,600     |
+-----------------------------------------+------------+---+------------+
| Nakamichi Corporation                   | -          |   | 37         |
+-----------------------------------------+------------+---+------------+
| Nakamichi Malaysia Sdn. Bhd.            | 583        |   | -          |
+-----------------------------------------+------------+---+------------+
| Capetronic Multimedia Development Pte   | 95         |   | -          |
| Ltd.                                    |            |   |            |
+-----------------------------------------+------------+---+------------+
| Nakamichi Research Institute (Taiwan)   | -          |   | 6          |
| Corporation                             |            |   |            |
+-----------------------------------------+------------+---+------------+
| The Grande Group Limited                | -          |   | (1)        |
+-----------------------------------------+------------+---+------------+
| Tomei Asia Limited                      | 3,467      |   | -          |
+-----------------------------------------+------------+---+------------+
| N.A.K.S Enterprise Limited              | -          |   | 13,151     |
+-----------------------------------------+------------+---+------------+
| Nakamichi Enterprise Limited            | 55         |   | 74         |
+-----------------------------------------+------------+---+------------+
| Nakamichi Sales Corporation             | 5,742      |   | 4,591      |
+-----------------------------------------+------------+---+------------+
| Sansui Electric Co., Ltd.               | -          |   | 29         |
+-----------------------------------------+------------+---+------------+
| Total                                   | 53,337     |   | 63,487     |
+-----------------------------------------+------------+---+------------+

+-----------------------------------------+------------+---+------------+
| - Sales Returns                         |            |   |            |
+-----------------------------------------+------------+---+------------+
| Maple Profit Ltd. (note 6.1.1)          | -          |   | 110,584    |
+-----------------------------------------+------------+---+------------+
| - Loss on restructuring                 |            |   |            |
+-----------------------------------------+------------+---+------------+
| Capetronic Computer USA (HK) Limited    | -          |   | 2,559,563  |
+-----------------------------------------+------------+---+------------+
| Nakamichi Corporation                   | -          |   | 2,463      |
+-----------------------------------------+------------+---+------------+
| Total                                   | -          |   | 2,562,026  |
+-----------------------------------------+------------+---+------------+
|                                         |            |   |            |
+-----------------------------------------+------------+---+------------+
| - Purchases                             |            |   |            |
+-----------------------------------------+------------+---+------------+
| Soshin Onkyo International Limited      | 146        |   | -          |
+-----------------------------------------+------------+---+------------+
| Nakamichi Malaysia Sdn. Bhd.            | 48         |   | 21         |
+-----------------------------------------+------------+---+------------+
| Nakamichi Corporation                   | -          |   | 16         |
+-----------------------------------------+------------+---+------------+
| Total                                   | 194        |   | 37         |
+-----------------------------------------+------------+---+------------+
|                                         |            |   |            |
+-----------------------------------------+------------+---+------------+
| - Reversal of accounts payable and      | -          |   | 18,210     |
| insurance payable                       |            |   |            |
+-----------------------------------------+------------+---+------------+

In 2001, the Company recorded sales of Baht 520 million, and cost of
sales of 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 sold and the goods were kept in
the Company’s warehouse. However, the ownership of the 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 registration was withdrawn on
November 1, 2002. Another associated 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
transferred the related goodwill and translation adjustments in the
amount of Baht 987.79 million and Baht 413.83 million respectively to
retained earnings.

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

The Company reversed Baht 48.08 million accrued litigation fee as a
consequence of the settlement.

Assets and Liabilities

The outstanding balances on related party transactions have been
separately shown in the balance sheets. The details are as follows:-

Assets

+------------------------------------------+---+------------+---+---+---+------------+
|                                          |   | (U         |   |   |   |            |
|                                          |   | nit : Thou |   |   |   |            |
|                                          |   | sand Baht) |   |   |   |            |
+------------------------------------------+---+------------+---+---+---+------------+
|                                          |   | December   |   |   |   | December   |
|                                          |   | 31, 2003   |   |   |   | 31, 2002   |
+------------------------------------------+---+------------+---+---+---+------------+
| -                                        |   |            |   |   |   |            |
|  Accounts receivable - related companies |   |            |   |   |   |            |
+------------------------------------------+---+------------+---+---+---+------------+
| The Grande (Nominees) Limited            | 7 |            |   |   | 9 |            |
|                                          | 7 |            |   |   | 3 |            |
|                                          | 8 |            |   |   | 2 |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Nakamichi Corporation                    | 2 |            |   |   | - |            |
|                                          | 0 |            |   |   |   |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Tomei Component Limited                  | 2 |            |   |   | - |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Tomei Asia Limited                       | 7 |            |   |   | - |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Nakamichi Enterprise Limited             | 2 |            |   |   | - |            |
|                                          | 3 |            |   |   |   |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Nakamichi Research Institute (Singapore) | 1 |            |   |   | - |            |
| Corporation                              | 8 |            |   |   |   |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Nakamichi Malaysia Sdn. Bhd.             | 5 |            |   |   | 1 |            |
|                                          | 8 |            |   |   | 7 |            |
|                                          | 3 |            |   |   |   |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Nakamichi Sales Corporation              | 8 |            |   |   | 6 |            |
|                                          | 6 |            |   |   | , |            |
|                                          |   |            |   |   | 1 |            |
|                                          |   |            |   |   | 8 |            |
|                                          |   |            |   |   | 2 |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Sansui Electric Co., Ltd.                | 2 |            |   |   | 2 |            |
|                                          | 6 |            |   |   | 7 |            |
+------------------------------------------+---+------------+---+---+---+------------+
| Nakamichi Design Ltd.                    | - |            |   |   | 1 |            |
|                                          |   |            |   |   | , |            |
|                                          |   |            |   |   | 4 |            |
|                                          |   |            |   |   | 5 |            |
|                                          |   |            |   |   | 0 |            |
+------------------------------------------+---+------------+---+---+---+------------+
|                                          | 1 |            |   |   | 8 |            |
|                                          | , |            |   |   | , |            |
|                                          | 5 |            |   |   | 6 |            |
|                                          | 4 |            |   |   | 0 |            |
|                                          | 3 |            |   |   | 8 |            |
+------------------------------------------+---+------------+---+---+---+------------+

The balances as at December 31, 2003 and 2002, consist mainly of amounts
outstanding for approximately 12 months and 5 months respectively. They
include trade accounts receivable (net) from related parties in foreign
currencies of approximately USD 0.78 million and USD 0.20 million
respectively which were not hedged against foreign exchange rate risk.

+------------------------------------------+------------+---+------------+
|                                          | (U         |   |            |
|                                          | nit : Thou |   |            |
|                                          | sand Baht) |   |            |
+------------------------------------------+------------+---+------------+
|                                          | December   |   | December   |
|                                          | 31, 2003   |   | 31, 2002   |
+------------------------------------------+------------+---+------------+
| -                                        |            |   |            |
| Accounts receivable - associated company |            |   |            |
+------------------------------------------+------------+---+------------+
| Capetronic Computer USA (HK) Limited     | 30,706     |   | -          |
+------------------------------------------+------------+---+------------+
| Less Accounts payable - closure of       | (30,706)   |   | -          |
| overseas operation                       |            |   |            |
+------------------------------------------+------------+---+------------+
| Net                                      | -          |   | -          |
+------------------------------------------+------------+---+------------+

As disclosed in note 1, the Company has decided not to proceed with its
planned investment in a manufacturing facility in China. As a
consequence of this decision, the Company decided to discontinue the
operations of Capetronic Computer USA (HK) Limited (“CCUL”), a related
party for which it had the legal obligation to cover all expenses. The
liquidation of CCUL required the Company to write off a debt from CCUL
amounting to Baht 30.7 million as the remaining funds in CCUL were used
primarily to fund Baht 30.7 million of severance payments in respect of
CCUL employees. A portion of the Baht 30.7 million has been transferred
to other group companies to cover them for any future exposure in
respect of transferred employees.

+------------------------------------------+------------+---+------------+
|                                          | (U         |   |            |
|                                          | nit : Thou |   |            |
|                                          | sand Baht) |   |            |
+------------------------------------------+------------+---+------------+
|                                          | December   |   | December   |
|                                          | 31, 2003   |   | 31, 2002   |
+------------------------------------------+------------+---+------------+
| - Short - term loan to a local           |            |   |            |
| subsidiary company-net                   |            |   |            |
+------------------------------------------+------------+---+------------+
| Capetronic (Thailand) Limited            | 123,223    |   | 123,930    |
+------------------------------------------+------------+---+------------+
| Less Allowance for doubtful account      | (123,079)  |   | (122,919)  |
+------------------------------------------+------------+---+------------+
| Net                                      | 144        |   | 1,011      |
+------------------------------------------+------------+---+------------+

The Alpha Capital Group Limited, a subsidiary of The Grande Holdings
Limited, has security over the machinery, inventories, cash at bank
(balance as at December 31, 2003 and 2002 of approximately Baht 39,000)
and receivables of the Company.

Liabilities

+------------------------------------------+------------+---+------------+
|                                          | (U         |   |            |
|                                          | nit : Thou |   |            |
|                                          | sand Baht) |   |            |
+------------------------------------------+------------+---+------------+
|                                          | December   |   | December   |
|                                          | 31, 2003   |   | 31, 2002   |
+------------------------------------------+------------+---+------------+
| - Accounts payable - related companies   |            |   |            |
+------------------------------------------+------------+---+------------+
| Capetronic Displays Limited              | 1,192      |   | -          |
+------------------------------------------+------------+---+------------+
| Nakamichi Design Ltd.                    | 65         |   | -          |
+------------------------------------------+------------+---+------------+
| N.A.K.S. Taiwan Corporation              | 60         |   | -          |
+------------------------------------------+------------+---+------------+
| Capetronic USA Manufacturing             | -          |   | 4,028      |
+------------------------------------------+------------+---+------------+
| Soshin Onkyo International Ltd.          | 155        |   | 21         |
+------------------------------------------+------------+---+------------+
| Nakamichi Enterprise Limited.            | -          |   | 6,736      |
+------------------------------------------+------------+---+------------+
|                                          | 1,472      |   | 10,785     |
+------------------------------------------+------------+---+------------+
| - Loan from related parties              |            |   |            |
+------------------------------------------+------------+---+------------+
| Related company                          |            |   |            |
+------------------------------------------+------------+---+------------+
| Lafe International Holding Ltd.          | 123,507    |   | 22,345     |
+------------------------------------------+------------+---+------------+

Movement of loan from related company

  ------------------------------------------------------- ---------------
                                                          (Unit :
                                                          Thousand Baht)

  Balance as at December 31, 2002                         22,345

  Increase during the year                                267,912

  Decrease during the year                                (166,750)

  Balance as at December 31, 2003                         123,507
  ------------------------------------------------------- ---------------

In 2003, the Company received an advance covering the cost of goods
amounting to US$ 885,000 from Capetronic Computer USA (HK) Ltd. which
sold the goods to Nakamichi Malaysia Sdn.Bhd. The Company has paid back
the advance of USD 885,000 through Lafe International Holding Ltd.

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
Computer USA (HK) Ltd. (“CCUL”) 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 CCUL 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,
CCUL, Lafe International Holding Ltd. (“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 CCUL,
    thus transferring the loan to CCUL.

-   ACGL further agreed that CCUL could offset the assigned loan at
    approximately US Dollar 73 million with amounts owed to it by LIHL.
    A further approximately Baht 114.72 million (approximately US Dollar
    3 million) of net payables to related companies was also offset
    against the receivable from CCUL as follows:

  -------------------------------------------------------- --------------
                                                           (Unit :
                                                           Million Baht)

  Payable - related companies                              

  Lafe International Holding Ltd                           11.71

  Hi - Tech Precision Product Limited                      -

  Maple Profit Limited                                     102.96

  T.W.D Industrial Company Limited                         0.13

                                                           

  Receivable - related companies                           

  The Grande Group Limited                                 (0.02)

  N.A.K.S. Inc.                                            (0.02)

  Nakamichi Enterprises Ltd.                               (0.03)

  Sansui Electric Co., Ltd.                                -

  T.W.D Asia Limited.                                      (0.01)

                                                           

  Net payable                                              114.72
  -------------------------------------------------------- --------------

-   ACGL would retain its lien on the assets of the Company in the
    amount of Baht 3,216.7 million (approximately USD 73 million) or
    such amount which remains outstanding and has not been reimbursed
    through this arrangement.

-   In consideration of the above the Company would waive approximately
    Baht 2,559.56 million (approximately US Dollar 59 million) of the
    receivable from CCUL.

    As at December 31, 2002 the Company had a loan of Baht 22 million
    from a related party, LIHL. The loan is repayable on demand and bore
    interest at Hong Kong Prime + 2%.

    As at December 31, 2001 the Company had a loan from ACGL of Baht 949
    million. This loan was repayable on demand. ACGL, a subsidiary of
    The Grande Holdings Limited, has security over the machinery,
    inventories, cash at bank and receivables of the Company under the
    USD 80 million revolving loan agreement. In November 2002 the loan
    was assigned to a related party as described above.

    The interest expense during 2001 and the first half of 2002 was paid
    by a subsidiary of an associated company. The interest expense since
    July 2002 has been paid by the Company after the loan was approved
    by the Shareholders’ Meeting. Effective December 1, 2002 ACGL agreed
    to stop charging interest on the loan.

    The above transactions have been reflected in the financial
    statements as of December 31, 2002. They were approved at the Board
    of Directors meeting held on February 28, 2003. At the Shareholders
    Meeting held on April 25, 2003, it was resolved to approve the above
    transactions and the terms in respect of the Executive Committee
    memorandum and the waiver of debt to Capetronic Computer USA (HK)
    Limited.

    The Company, its subsidiary and associated companies' transactions
    comprise substantially related party transactions. In order to avoid
    any conflict of interest that might occur, the Company’s has, since
    August 1996, arranged for contracts to be signed with its related
    parties for purchases/sales, technical assistance, financial and
    other business support, and certain other transactions.

    All related party transactions are executed in compliance with the
    said contracts, the conditions of which are equivalent to or better
    than those of transactions conducted with non-related parties on an
    arm’s length basis. The Board of Directors of the Company has
    confirmed this to the Stock Exchange of Thailand in writing. The
    contracts can be summarized as follows:-

a)  On January 1, 1998, the Company entered into contracts with
    associated companies for them to undertake certain treasury
    functions on behalf of the Company.

b)  On April 1, 1998, the Company entered into contracts with associated
    and related companies for the purchase of raw materials, the
    provision of financial services/support and certain other
    transactions.

c)  On June 1, 1999, the Company signed a contract with an associated
    company for the provision of after-sales service support in foreign
    countries.

d)  On October 1, 1999, the Company signed a contract with its
    subsidiary for financial services/support and certain other
    transactions.

e)  On January 1, 2000, the Company entered into contracts with
    associated and related companies for the purchase/sale of goods,
    provision of financial services/support, provision of after-sales
    service support in foreign countries and certain other transactions
    (there was a subsequent amendment of a part of a contract by a
    letter dated August 2, 2000). It is included that the Company shall
    indemnify Capetronic Computer USA (HK) Limited for any loss,
    liability, cost, claim, action, demand or expense (including, but
    not limited to, all cost, charges and expenses paid or incurred in
    disputing or defending the foregoing) which either of them may incur
    or which may be levied against them as a result of or in connection
    with their appointment or exercise of their powers and performance
    of their duties as paying agent or application agent, except for
    such as may result from the breach of the terms of the Agreement or
    from their own willful default, negligence, or bad faith or that of
    their officers, employees or agents.

    At the Ordinary Shareholders Meetings held on April 26, 2002 and May
    10, 2002 resolutions were passed which:

    - Authorized a USD 80 million Revolving Loan Agreement with The
    Alpha Capital Group Ltd. and letter of guarantee with effect on
    December 31, 2001.

    - Authorised the Company to indemnify USD 40.45 million to The Alpha
    Capital Group Ltd. for Capetronic Computer Peripherals Holdings
    Limited.

    - Authorized the Company to novate the USD 40.45 million
    indemnifications to be a part of the USD 80 million revolving loan.