Part 2. Management and Corporate Governance

Share and Shareholders

Pato Chemical Industry has a registered and paid up capital of THB
142,372,000 (One Hundred Forty Two Million Three Hundred and Seventy Two
Thousand Baht). There are 142,372,000 shares, valued at THB 1 per share.
Pato Chemical Industry invests in a subsidiary company, Pato Crop Care
Co., Ltd. Investment record in Pato Crop Care Co., Ltd. is as follows:

+----------------------+---------+--------------------+---------------+
|   Date               | Nati    |                    |   Holding     |
|                      | onality | Investments(share) |   Ratio       |
+----------------------+---------+--------------------+---------------+
| 31 December          | Thai    |   5 Million Baht   |   99.99 %     |
| 2013-2017            |         |                    |               |
+----------------------+---------+--------------------+---------------+

Shareholders’ Equity of Pato Chemical Industry PCL, as of 31 December
2017

  ---------------------------------------- ------------------------------
                                           Unit : Thousand Baht

                                           Amount

  Registered Capital                       142,372

  Paid Up Capital                          142,372

  Retain Earning                           292,668

  Legal Reserve                            14,238

  Shareholder Equity                       615,928

  Book Value(Per Share)                    4.33

  Par Value (Per Share)                    1.00
  ---------------------------------------- ------------------------------

Issuance of other securities

None

Policy on Dividend Payment

Pato Chemical Industry PCL. and Pato Crop Care expects to pay dividend
to shareholders not less than 40% of net profit.

Dividend Payout Ratio for 2012-2017 Operational Result of Pato Chemical
Ind. PCL.

+---------+------------+--------------+--------------+---------------+
| Year    | Earnings   | Dividend per | Percentage   | Total         |
|         | Per Share  | Share        | of Net       | Dividend Paid |
|         |            |              | Profit       |               |
|         |            | Baht         |              | Mil. Baht     |
+---------+------------+--------------+--------------+---------------+
| 2012    | 0.61       | 0.60         | 98.36        | 84.00         |
|         |            |              |              |               |
| 2013    | 0.96       | 0.92         | 95.95        | 128.80        |
|         |            |              |              |               |
| 2014    | 0.92       | 0.92         | 99.79        | 128.80        |
|         |            |              |              |               |
| 2015    | 0.71       | 0.70         | 99.69        | 99.66         |
|         |            |              | 95.40        | 130.98        |
| 2016    | 0.96       | 0.92         |              |               |
|         |            |              | 89.94        | 175.12        |
| 2017    | 1.37       | 1.23         |              |               |
+---------+------------+--------------+--------------+---------------+

Dividend Payout Ratio for 2015-2017 Operational Result of Pato Crop Care
Co., Ltd.

+---------+------------+--------------+--------------+--------------+
| Year    | Earnings   | Dividend per | Percentage   | Total        |
|         | Per Share  | Share        | of Net       | Dividend     |
|         |            |              | Profit       | Paid         |
|         |            | Baht         |              |              |
|         |            |              |              | Mil. Baht    |
+---------+------------+--------------+--------------+--------------+
| 2015    | 2.86       | 2.80         | 98.00        | 2.80         |
|         | 5.76       | 5.70         | 98.96        | 5.70         |
| 2016    |            |              |              |              |
|         | 6.61       | 6.50         | 98.35        | 6.50         |
| 2017    |            |              |              |              |
+---------+------------+--------------+--------------+--------------+

Management Structure

  Organization Chart of Pato Chemical Industry Public Co., Ltd.

Office Manager Product Manager,
Mrs. Parichart Manuthasna Repacker Business
Mr. Wongtawan Duchanee

Assistant Factory Manager Research & Development
Mr. Thanut Topanurak Manager

Mr. Sayan Wan-Aree(Acting)

Principle 1:
Establish Clear Leadership Role and Responsibilities of the Board

Corporate Governance Policy

The company’s Board of Directors is aware of the importance of Corporate
Governance in increasing operational transparency and shareholder
confidence, creating thorough management and acting with caution for the
greatest benefit, and which can be subject to auditing. The company is
steadfast in its aim to undertake business for the satisfaction of
shareholders and provision of good return on a continuous and secure
basis.  The company has written Good Governance Policy approved by the
board of directors as follows:

1.  Accountability

2.  Responsibility

3.  Transparency

4.  Equitable Treatment to Stakeholders

5.  Vision to Create Sustainability

6.  Ethics and Moralities

7.  Anti-Corruption

Principle 1.1
The board should demonstrate a thorough understanding of its leadership
role, assume its
responsibilities in overseeing the company, and strengthen good
governance, including:
(1) defining visions;
“Supply good quality products with fair price to Thai farmers, secure in
the performance stability with the engagement of social and environment
responsibility”

(2) determining means to attain the objectives;
The company’s board of directors is the key to good governance. The
board of directors has important roles in the governance to achieve
maximum benefits for the company and is responsible for duties and
responsibilities of directors.

The structure of good governance and area of authority of the board of
directors which comprise of qualifications, appointment, position roles
as well as operations of directors and operators are clearly set
including policy, regulations, practices and working manuals which are
entirely in written documents in order to achieve mutual balance and
monitoring. At the same time, an independent internal auditor which has
roles and duties as approved by the audit committee will monitor the
operations to ensure that the company has effectively complied with the
guidelines of related laws and regulations.

(3) monitoring, evaluating, and reporting on performance.

  Board of Directors report

Responsibility of the Board of Directors over 2017 Financial Statements

The company’s Board of Directors is responsible for the balance sheet of
the company, and for financial information appearing in the annual
report. The said balance sheet is prepared under an accounting standard
certified throughout Thailand, with an appropriate accounting balance
that has been practiced on a regular basis chosen, and prepared with
utmost consideration and estimation. The disclosure of sufficient key
information, including the auditor's opinion on the internal control
system in the financial statements.

 The Board of Directors shall supervise the personnel involved in the
preparation of information disclosure on their knowledge, skills and
experience to be appropriate to the duties and responsibilities with
adequate number of such persons including top management, CFO,
accountants, Internal auditor, Company Secretary, and Investor
Relations.

The board of directors has prepared the evaluation form to evaluate the
board of directors’ operations in order to set guidelines to achieve
concrete effectiveness.  

The Board of Directors has seen to it that effective internal control
system is maintained, so that there is good reasonable confidence that
the recorded financial information is correct, complete and sufficient
enough to maintain assets and to be aware of weak spots in order to
prevent corrupt or dubious practices. The audit committee and managing
directors have done the evaluation test of sufficiency in internal
control and assigned an independent internal auditor to summarize the
evaluation in order to receive advices on necessary adjustments.

The Board of Directors promotes to arrange the Management Discussion and
Analysis for the quarterly financial statements disclosure, in order to
provide investors with better information and understanding of changes
in financial position and performance of each quarter.

For these reasons, the company’s Board of Directors has appointed an
Audit Committee which comprises Directors not dealing in management and
who are responsible for quality of financial reports and internal
control. The views of the Audit Committee on these matters appears in
the report by the Audit Committee, which is shown in the annual report.

The Board of Directors views that the company’s overall internal control
system is at a satisfactory level and is able to create good reasonable
confidence in the consolidated balance sheet for the company as at
December 31, 2017.

(Mr. Metha Trillit)

President

Principle 1.2
To achieve sustainable value creation, the board should exercise its
leadership role and
pursue the following governance outcomes:
(1) competitiveness and performance with long-term perspective;

The company has well managed to get good performance to win SET AWARDS
award for outstanding and best performance for many years.

(2) ethical and responsible business;

The Board of Directors perform as a good model to set the standard for
employees by strictly adhering to the Code of Business Conduct and
Corporate Governance Policy.

Work ethics

The company has come out with a written code of ethics for the Board of
Directors and employees, to serve as a guideline for those concerned in
executing their duties with honesty. The company also holds staff
meetings on a regular basis.

Code of conduct for Directors of Pato Chemical Industry PCL.

1.  Conduct their duties honestly and with integrity, comply with all
    laws, the objectives and the articles of association of the company,
    and the resolutions of any shareholder meetings in good faith, and
    with care to preserve the interests of the company.

2.  Implement and direct the company’s policies, as well as monitor and
    supervise its operations to maximize economic value and
    shareholders’ wealth.

3.  Ensure management’s accountability to shareholders: preserve their
    rights and interests, clearly and fully disclose information.

4.  Determine to carry on the business continuously.

5.  Continuously follow and monitor the business performance and
    operations of the company according to its law and regulations.

6.  Avoid any other positions or jobs that may lead to conflicts of
    interest.

Code of Conduct for Employees of Pato Chemical Industry PCL.

Managers and employees should demonstrate their commitment to this code
by maintaining a workplace environment that require compliance with the
code. The code of conduct is not possibly inclusive for all situations
which may arise. In the event that employees run into the situations
which have not been described herewith please rely on each employee’s
good sense of what is right and also seek guidance from supervisors for
appropriate course of conduct.

1.  Perform their duties with responsibility and honesty.

2.  Increase knowledge and experience to promote integrity and personal
    growth and ability to perform more effectively and efficiently.

3.  Must be polite, considerate and maintain good relationships with
    colleagues, must not conceal any information necessary for the
    colleague to execute his/her duties, and must try to become
    well-adjusted to work in harmonious relationship with others.

4.  Maintain and promote unity among colleagues and legitimately assist
    each other of the company operational benefit as a whole.

5.  Treat subordinate fairly and compassionately, groom and develop
    subordinates for their career advancement by imparting work related
    knowledge, training and providing them with opportunities to
    increase knowledge and experience.

6.  Listen to supervisor’s opinion and recommendations relating to work,
    and deliberate on applying them to benefit company’s operations.

7.  Refrain from unethically seeking position, merit or benefits from
    supervisors or others.

8.  Must not utilize company’s information or news which have not yet
    been disclosed to the public that may be material to the company’s
    share price, to seek profit or benefit from trading of company
    stock, directly and indirectly.

9.  Follow the Anti-Corruption Handbook. Avoid accepting materials,
    money or other benefits from individuals doing business with the
    company that may influence the business decisions they make on
    behalf of the company, except on traditional events or to maintain
    normal business relationship; however the cost must not be overly
    expensive or immoderate.

10. Keep company’s confidential information which may damageable the
    company by preventing any document or information from falling into
    the hands of outsiders.

11. Be very careful when expressing opinions to outsiders on issue that
    may detrimental to the company’s image and reputation.

12. Avoid disclosing other employees’ personal or work related
    information, and avoid any criticism that may be detrimental to the
    employee or to the company’s image and reputation.

13. Refrain from gambling, drugs, and any other behave that may damage
    personal and the company’s honor and reputation.

14. Protect the company’s property from loss, damage, misuse and
    cautiously use the company’s property in a way that maximizes
    company benefit, and must not use the property for personal benefit.

15. Perform their duties with concern about impact on health and safety
    of own self, others, and environment.

(3) Good corporate citizenship as per CSR report
(4) Corporate resilience.
Society has developed into globalization or the borderless society as a
result of progress and development. Information Technology impacts on
Thai society on social, economic and political aspects. The company has
to adjust itself to survive, which has been done during the past years
round. The style and method of adaptation reflect the policies and
methods of a visionary management team who understand the condition,
reality and implement a prudent policy to maintain or increase market
share and this leads to better performance.
Principle 1.3
The board ensures that all directors and executives perform their
responsibilities in
compliance with their fiduciary duties, and that the company operates in
accordance with applicable law and standards.

The company’s board of directors has fulfilled its duties with honesty,
transparency, caution, carefulness and understanding of their roles and
responsibilities on the basis of law, regulations, rules, the company’s
restrictions, consensus of shareholders’ meeting and good governance by
considering relevant regulations, such as The Securities and Exchange
Act BE 2535. Decisions are made with honesty and rationality to assume
that they are done for maximum benefits of the Company without conflict
of interest and are within the scope of power without any actions
against the company’s benefits in order to build confidence among
shareholders and investors.

Principle 1.4
The board demonstrates a thorough understanding of the division of board
and management responsibilities. The board should clearly define the
roles and responsibilities of management and monitor management’s proper
performance of its duties.

The Board of Directors approves a charter and the corporate governance
policy that defines the duties and responsibilities of the board and
they are regularly reviewed at least once a year to align with the
direction of the organization.

Power and Obligation of the Board of Directors

1.  To supervise and manage in order to make sure that the operations of
    the company are in accordance with the law, the objectives and
    Articles of Association of the company as well as the resolution of
    the Shareholders’ Meeting, and to protect the company’s interest
    based on good corporate governance.

2.  To establish the policy and operation direction of the company and
    to supervise the management to operate as approved plan.

3.  To be responsible for policy formulation and oversight of effective
    anti-corruption systems so as to make the management realize its
    importance and implant it as a corporate culture.

4.  To make the arrangement of the Shareholders’ Meeting as an Annual
    Ordinary Shareholders’ Meeting within 4 months as from the end of
    the fiscal year of the company and the arrangement of the
    Shareholders’ Meeting as an Extraordinary Shareholders’ Meeting when
    necessary.

5.  To hold the Board of Directors’ Meeting every three months and not
    less than half of the directors will attend the meeting. The
    resolutions of any meeting of directors are decided by the majority
    of votes, in case of an equality of votes, the chairman has a
    casting vote.

6.  To make an arrangement of the balance-sheet and the profit and loss
    statement as at the end of the fiscal year of the company in order
    to present to the General Ordinary Shareholder’s Meeting to
    scrutinize the balance-sheet and the profit and loss statement, and
    the Board of Directors shall have the auditor to finish the auditing
    prior to the presentation to the Shareholders’ Meeting.

7.  To assign the power of management to the Managing Director to carry
    out the business of the company including the power to appoint or
    remove the staff of the company as well as the fixing of the
    remuneration.

8.  To scrutinize and approve the annual budget for investment and for
    business operation of the company.

9.  To implement the internal control and internal audit including
    financial control system, operation and to supervise the performance
    as well as risk control risk management including corruption risk.

10. To make an arrangement of financial information report, information
    and general information important for the shareholders properly,
    completely and sufficiently together with the verification of the
    report.

11. A director must not, without the notification to the general meeting
    of shareholders prior to the appointment, undertake commercial
    transactions, nor he or she be a partner, an executive or a
    shareholder in another juristic person of the same nature as and
    compete with that of the company.

12. The director who has a special interest in the contract entered with
    the company or the increase or decrease of the shareholders or of
    the debentures of the company, must notify the company without
    delay.

13. The non-executive director, independent committee, auditor, as well
    as internal auditor hold joint meetings at least once a year to open
    up an opportunity for various consultancy with freedom and
    appropriateness. Then the results of the meeting shall be reported
    to the managing director in case there is any need to make amend
    regarding the management. It is set at the first Board of Directors’
    meeting and additional such meeting can be done by informing Company
    secretary.

Power and Obligations of Executive Directors 

1.  To establish the strategic directions and business operation with
    highest effectiveness and efficiency.

2.  To evaluate and to scrutinize the investment project and annual
    budget in order to be approved by the Board of Directors.

3.  To sign in the documents binding on the company as appointed by the
    Board of Directors.

4.  To consider and approve the executing of forward contract as risk
    management of currency and foreign exchange.

5.  To allot the resources and recruit the personnel of potential for
    the highest benefit of the company.

6.  To establish a system and promote anti-corruption policies and
    communicate to employees and all parties involved and to review the
    appropriateness of the system, measures to be in line with the
    business, regulation and law required.

Power and obligations of Managing Director

              1. To oversee and implement normal management and
operations of the company in accordance with regulations, policies, and
resolutions of the Board of Directors and / or the resolutions of the
shareholders' meeting.

2. To prepare business policy, business strategy and planning, and
budget funding for various projects to the Board of Directors for
approval and report on progress.

                3. To supervise, consider and approve the appointment,
dismissal and disciplinary action against employees in accordance with
the company regulations.

                 4. To sign the contract, orders, or documents on behalf
of the company.

5. To authorize other person to act on behalf for specific operations
under the scope of the mandate or orders prescribed by the Board.

6. To approve the appointment of consultants required by any project
through the Board of Directors.

7. To be a leader and a role model for ethical conduct, business ethics,
and anti-corruption example.

8. To follow up the anti-corruption measures taken from the Internal
Auditor and report to the Audit Committee and the Board regularly.

9. To hold positions of managing director of no more than two companies
and the other company must not be a business rival to the company in
order to ensure maximum administrative efficiency.

Power and Obligations of Audit Committee 

An audit committee has the duties as delegated by the Company’s board of
directors, as follows:

(1) to review the Company’s financial reporting process to ensure that
it is accurate and adequate;

(2) to review the Company’s internal control system and internal audit
system to ensure that they are suitable and efficient, to determine an
internal audit unit’s independence, as well as to approve the
appointment, transfer and dismissal of the chief of an internal audit
unit or any other unit in charge of an internal audit. This includes
appropriateness and adequacy of potential corruption risks.

(3) to review the Company’s compliance with the law on securities and
exchange, the Exchange’s regulations, and the laws relating to the
Company’s business;

(4) to consider, select, nominate or terminate an independent person to
be the Company’s auditor, and to propose such person’s remuneration, as
well as to attend a non-management meeting with an auditor at least once
a year;

(5) to attend a meeting with the external auditors without participation
of management at least once a year.

(6) to review the Connected Transactions, or the transactions that may
lead to conflicts of interests, to ensure that they are in compliance
with the laws and the Exchange’s regulations, and are reasonable and for
the highest benefit of the Company;

(7) to prepare, and to disclose in the Company’s annual report, an audit
committee’s report which must be signed by the audit committee’s
chairman and consist of at least the following information:

(7.1) an opinion on the accuracy, completeness and creditability of the
Company’s financial report,

(7.2) an opinion on the adequacy of the Company’s internal control
system, and propose to the Board of Directors for the appointment and
removal of the Chief Internal Auditor,

(7.3) an opinion on the compliance with the law on securities and
exchange, the Exchange’s regulations, or the laws relating to the
Company’s business,

(7.4) an opinion on the suitability of an auditor,

(7.5) an opinion on the transactions that may lead to conflicts of
interests,

(7.6) the number of the audit committee meetings, and the attendance of
such meetings by each committee member,

(7.7) an opinion or overview comment received by the audit committee
from its performance of duties in accordance with the charter, and

(7.8) other transactions which, according to the audit committee’s
opinion, should be known to the shareholders and general investors,
subject to the scope of duties and responsibilities assigned by the
Company’s board of directors

(8) to perform any other act as assigned by the Company’s board of
directors, with the approval of the audit committee.

Principle 2:
Define Objectives that Promote Sustainable Value Creation
Principle 2.1
The board defines objectives that promote sustainable value creation and
governance outcomes as a framework for the operation of the company as
follows :
Leadership and Vision

The board is engaged in the business plan, budget of the company and
monitor the implementation of the management and set guidelines to
achieve concrete effectiveness with honesty, fairness and
responsibility, creativity and ability to work as a team. The Board has
established the internal control system and internal audit for the
company. The company's vision, mission and strategy have been reviewed
and sought for approval every year. By this way, the company will be
able to adapt to the change through various risks analyzation, impact
findings in order to make decisions, to operate in the same direction,
to make the business growth, and to create value for the business along
with all stakeholders and the society as a whole.

Objective

“Supply good quality products with fair price to Thai farmers, secure in
the performance stability with the engagement of social and environment
responsibility”

Principle 2.2
The board should ensure that the company’s annual and medium-term
objectives, goals,
strategies, and plans are consistent with the long-term objectives,
while utilising innovation and technology effectively.

Long-Term Achievements:
The company has set long-term achievements are as follows:

-   Become a quality manufacturer and distributor of chemical
    agricultural products in an international level with appropriate
    innovation and technology that is harmless to the environment and
    fair to the buyers.

-   Maintain the leadership of manufacturing and merchandising chemical
    agricultural products related to rice fields and minimize the
    business risk through diversification to capture other chemical
    agriculture market covering farm crops, fruits, ornamental plants,
    and vegetables.

-   Sustain the growth rate of no less than 8% per annum with every-year
    higher dividend yield given than other average companies listed in
    the stock market.

Principle 3:
Strengthen Board Effectiveness
Principle 3.1
The board should be responsible for determining and reviewing the board
structure, in terms of size, composition, and the proportion of
independent directors so as to ensure its leadership role in achieving
the company’s objectives. The Board of Directors consists of a number of
qualified directors in the area of skills experience, expertise, gender
and age to achieve the organization's goals. At least one non-executive
director has experience in the business.

The Board of Directors as of December 31, 2017 are as follows:

  ----------------------- ------------------------------- ---------------
  Name                    Position                        Holding office
                                                          from

  1. Mr. Metha Trillit    Chairman/President              April 22, 2015

  2. Dr. Viwat Trillit    Managing Director /Chairman of  April 25, 2017
                          Risk Committee                  

  3. Mrs. Wantana         Director                        April 22, 2015
  Pojanalai                                               

  4. Mr. Chaovut          Director                        April 25, 2017
  Pojanalai                                               

  5. Mr. Suvit            Director                        April 22, 2015
  Wesaratchawest                                          

  6. Mr. Surachai         Director                        April 25, 2017
  Choengvivatkit                                          

  7. Ms. Ratchanee        Director                        April 25, 2017
  Trillit                                                 

  8. Mr. Sahai            Independent Director            April 22, 2016
  Supsoontornkul                                          

  9. Mr. Lertchai         Independent Director / Chairman April 22, 2016
  Leelayonkul             of Audit Committee/Risk         
                          Committee                       

  10. Mr. Chaiwat         Independent Director / Audit    April 22, 2016
  Chandarasrivongs        Committee Member /Risk          
                          Committee                       

  11. Dr. Chongrak        Independent Director / Audit    April 22, 2016
  Prichanont              Committee Member/ Risk          
                          Committee                       
  ----------------------- ------------------------------- ---------------

Directors authorized to bind the company as per the Company Affidavit:
Mr. Metha Trillit or Dr. Viwat Trillit is to co-sign with Mrs. Wantana
Pojanalai or Mr. Suvit Wesaratchawest with company seal affixed to
affect company documents.

Mr. Lertchai Leelayonkul, Chaiman of the Audit Committee has strong
knowledge and experiences to review and ensure the reliability of
financial statements.

Managements as of December 31, 2017 are as follows

+----------------------+-----------------------------------------------+
| Name                 | Position                                      |
+----------------------+-----------------------------------------------+
| 1. Mr. Metha Trillit | President/ Acting Factory Manager             |
+----------------------+-----------------------------------------------+
| 2. Dr. Viwat Trillit | Managing Director /Acting Finance Manager/    |
|                      |                                               |
|                      | Chairman of Risk Committee                    |
+----------------------+-----------------------------------------------+
| 3. Mr. Visut         | CFO/ Risk Committee                           |
| Vanijcharoenkarn     |                                               |
+----------------------+-----------------------------------------------+
| 4. Mr. Sayan         | Marketing Manager/Acting R&D Manager/Risk     |
| Wan-Aree             | Committee                                     |
+----------------------+-----------------------------------------------+
| 5. Mr.Wongtawan      | Product Manager-Repacker Business             |
| Duchanee             |                                               |
+----------------------+-----------------------------------------------+
| 6. Mrs. Parichart    | Office Manager/Company Secretary/Risk         |
| Manuthasna           | Committee                                     |
+----------------------+-----------------------------------------------+

Principle 3.2
The board selects an appropriate person as the chairman and ensure that
the board
composition serves the best interest of the company, enabling the board
to make its decisions as a result of exercising independent judgement on
corporate affairs.
The Chairman of the Board of Directors comes from the major shareholder
group which holds 35.18% of total shares. He has been in this business
for quite a long time with beneficial experiences to the company. The
Chairman and the managing director are not the same person. All work and
administration must have the approval from the board which comprises
representatives of various major shareholder groups and includes the
auditing committee which helps to re-examine and provide a
counter-balance. The chairman of the Audit committee who is the
independent director also requested to consider board agenda.

The Power and Obligations of the Chairman.

        1. To be Chairman of the Board of Directors and control such meeting to go smoothly.

        2. To oversee, monitor, and ensure that the board efficiently carries out its duties to achieve the company’s objective.

3. To ensure that all directors contribute to the company’s ethical
culture and good corporate governance.

4. To set the meeting agenda by discussing with managing director which
important matter should be included.

5. To allocate sufficient time for management to propose topics and for
directors to debate important matters should be included.

6. To promote culture of openness and debate through ensuring
constructive relations between executive and non- executive directors,
and between the board and management.

         7. To sign the document in accordance with the regulations and company’s requirements.

         8. To perform any other act designated by the Board under the laws and regulations of the Association and / or the resolutions of the Board of Directors or resolutions of the shareholders' meeting.

  Balanced composition of Directors who are not management

  The company’s Board consists of 11 directors

2 Executive Directors namely;

-   Mr. Metha Trillit

-   Dr. Viwat Trillit

 6 Non-Executive Directors namely;

-   Mrs. Wantana Pojanalai

-   Mr. Suvit Wesaratchawest

-   Mr. Chaovut Pojanalai

-   Mr. Surachai Cheongwiwatkit

-   Ms. Ratchanee Trillit

-   Mr. Sahai Supsoontornkul (Independent Director)

  3 Members of Audit Committee namely;

1. Mr. Lertchai Leelayonkul: A qualified audit committee with accounting experiences to perform review of financial statements of the company. 

2.  Mr. Chaiwat Chandarasirvongs

3.  Dr. Chongrak Prichanont

The Company has not yet been able to set term of independent director
for up to 9 years, since the agro-chemical industry needs people who
actually understand the company's business, which is quite complicated.
The company is a formulator of various and seasonal agricultural
chemicals for a variety of crops. The raw materials are hazardous
substances that must be registered, produced, imported and sold under
licenses from the Department of Agriculture, Department of Livestock,
Commissioner of Food and Drug. Though the Independent directors hold
their position for many terms, they still perform and make decision
independently for the utmost benefits of the Company and shareholders.

Moreover, the agrochemical business is viewed by the general public as
the one of the causes for destroying environment and harming farmers. In
fact, agrochemicals are comparable to medicines for plants, which same
as medicines to heal human beings from various life threatening
diseases. In the case of incorrect administration of drugs to patients
such as misuse or overuse medicines would result in negative impacts as
well as agrochemicals. The proper use of agrochemicals according to the
methods, doses and time period with plants and diseases will help to
protect the plants from insects, pests and this will increase the
quality of the crops and leave no toxic residue to the environment.
Therefore, independent committee of the company, in addition to having
to understand the business, must have a positive attitude toward the
agrochemical business.

Even though, the Independent Committee has hold the position for a long
time, they strongly believe in independent decision making for the
maximum benefits of the Company and its shareholders.

The Board of Directors oversees the disclosure the roles and duties of
the Board of Directors and subcommittees in accordance with Principle
1.4. The number of meetings and the number of times of each director
attended the meeting are shown in Principle 3.5.

Principle 3.3
The board should ensure that the policy and procedures for the selection
and nomination of directors are clear and transparent resulting in the
desired composition of the board.

Appointment of Directors

-   The selection of director has not been undertaken by the nominating
    committee but the board of directors or shareholders holding more
    than 5 % of shares desires to nominate such through the process of
    joint consideration of the board of directors. The board should have
    come from a variety of professions, gender, age, and experiences
    (Board Diversity) to empower the organization with their various
    knowledge. List of nominees will then be proposed to shareholders
    for consideration and appointment in the annual general meeting of
    shareholders.

-   Shareholder(s) collectively holding shares amounting to at least 5%
    of total shares may submit their names to nominate a qualified
    director to the board of directors and propose to general
    shareholders meeting for consideration. Presently, seven directors
    represent major shareholders.

-   The company shall have a board of directors comprising of at least 5
    directors to conduct the business of the company, not less than half
    of whom shall reside within the Kingdom.

-   The directors shall be elected at the shareholder meeting in
    accordance with the following rules and procedures:

  - Each shareholder shall have a number of votes equal to the number of
  shares held.

- Each shareholder may exercise all the votes he or she has under (1) to
elect one or several persons as director or directors but the
shareholder shall not allot his or her votes to any person in any
number.

- After the vote, the candidates shall be ranked in order descending
from the highest number of votes received to the lowest, and shall be
appointed as directors in that order until all of the director positions
are filled. Where the votes cast for candidates in descending order are
tied, which would otherwise cause the number of directors to be
exceeded, the chairman shall make the decision for the remaining
appointment.

Vacancy of Directors

-   At every annual general meeting, one-third of the directors shall
    retire. If the number of directors is not a multiple of three, the
    number of directors closest to one-third shall retire for the first
    year. For the second year after the registration of the company, the
    retirement shall be selected by drawing lots. In subsequent years,
    the director who has held office longest shall retire.

-   Apart from vacation upon the expiry of his or her term, a director
    shall vacate office upon:

1)  death;

2)  resignation;

3)  lack of qualifications or possession of prohibited characteristics
    under Section 68; of Public Limited Companies Act BE.2535

4)  Removal by a resolution of the shareholder meeting of not less than
    three quarters of the number shareholders attending the meeting who
    have the right to vote and who have shares totaling not less than
    half of the number of shares held by the shareholders attending the
    meeting and having the right to vote.

5)  Removal by a court order.

-   In the case of a vacancy in the board of directors for reasons other
    than the expiration of the director's term of office, the board of
    directors shall elect a person who has the qualifications and who
    possesses no prohibited characteristics under Section 68 as the
    substitute director at the next meeting of the board of directors,
    unless the remaining term of office of the said director is less
    than two months. The substitute director shall hold office only for
    the remaining term of office of the director whom he or she
    replaces. The resolution of the board of directors shall be by a
    vote of not less than three-quarters of the number of directors
    remaining.

Principle 3.4
When proposing director remuneration to the shareholders’ meeting for
approval, the board
should consider whether the remuneration structure is appropriate for
the directors’ respective roles and responsibilities, linked to their
individual and company performance, and provide incentives for the board
to lead the company in meeting its objectives, both in the short and
long term.

Executives’ Remuneration

Remuneration for directors: There is no remuneration committee. The
remuneration of directors was considered by the board of directors and
was approved in 2017 shareholders’ meeting as follows:

Financial remuneration :

-   The Board of directors of 11 persons received meeting allowances at
    9,000 Baht/meeting.

  Chairman of audit committee’ remuneration 29,000 Baht/month totaling
  348,000 baht.

  Member of audit committee’s remuneration 13,000 Baht/month totaling
  156,000 baht per person.

  Meeting Allowance for audit committee members at 5,000 Baht/meeting

  Signatory Director, Mr. Wantana Pojanalai’s remuneration 19,000
  Baht/month totaling 228,000 Baht. Total remuneration for 11 directors
  in 2017 was 1,486,000 Baht

  ------------------------- -------------------------- ------------------
  Name                      Position                   Remuneration in
                                                       2017

  1. Mr. Metha Trillit      Chairman                   36,000 Baht

  2. Dr. Viwat Trillit      Managing Director/Chairman 36,000 Baht
                            of Risk Management         
                            Committee                  

  3. Mrs. Wantana Pojanalai Director                   264,000 Baht

  4. Mr. Chaovut Pojanalai  Director                   36,000 Baht

  5. Mr. Suvit              Director                   36,000 Baht
  Wesarachawest                                        

  6. Mr. Surachai           Director                   27,000 Baht
  Choengvivatkit                                       

  7. Ms. Ratchanee Trillit  Director                   36,000 Baht

  8. Mr. Sahai              Independent Director       192,000 Baht
  Supsoontornkul                                       

  9. Mr. Lertchai           Independent Director/      404,000 Baht
  Leelayonkul               Chairman of Audit          
                            Committee/Risk Committee   

  10. Mr. Chaiwat           Independent Director/Audit 207,000 Baht
  Chandarasrivongs          Committee /Risk Committee  

  11. Dr. Chongrak          Independent Director/Audit 212,000 Baht
  Prichanont                Committee /Risk Committee  
  ------------------------- -------------------------- ------------------

Principle 3.5
The board should ensure that all directors are properly accountable for
their duties, responsibilities and (in-) actions, and allocate
sufficient time to discharge their duties and responsibilities
effectively.

The company has set a rule for directors to be appointed as director of
other listed company for a maximum of 5 companies. However, no directors
have been appointed as director of other listed companies currently.

Directors are required to report to Company Secretary for any
information concerning directorship or executive in other company.

The board ensures that the company’s policy prohibit and prevent
director from creating conflict of interest with the company, including
by using the company’s asset, information or opportunities for his or
her own benefit as a result of having or taking a director or management
position, or having or creating vested interests, both directly and
indirectly, in other companies. Information about a directors’ other
directorship should be reported to shareholders as appropriate.

Each director shall attend the meeting of not less than 75% of total
meetings annually.

The Board of Directors meeting

+------------------------+------------+----------+---------+----------+
| Name                   | Regular    | A/C      | Risk Co | AGM      |
|                        | Board      | Meeting  | mmittee |          |
|                        | Meeting    |          |         |          |
+------------------------+------------+----------+---------+----------+
| 1. Mr. Metha Trillit   | 4/4        | -        | -       | 1/1      |
|                        |            |          |         |          |
| 2. Dr. Viwat Trillit   | 4/4        | -        | 1/1     | 1/1      |
|                        |            |          |         |          |
| 3. Mrs. Wantana        | 4/4        | -        | -       | 1/1      |
| Pojanalai              |            |          |         |          |
|                        | 4/4        | -        | -       | -/1      |
| 4. Mr. Chaovut         |            |          |         |          |
| Pojanalai              | 4/4        | -        | -       | 1/1      |
|                        |            |          |         |          |
| 5. Mr. Suvit           | 3/4        | -        | -       | 1/1      |
| Wesaratchawest         |            |          |         |          |
|                        | 4/4        | -        | -       | 1/1      |
| 6. Mr. Surachai        |            |          |         |          |
| Choengvivatkit         | 4/4        | 4/4      | 1/1     | 1/1      |
|                        |            |          |         |          |
| 7. Ms. Ratchanee       | 4/4        | 3/4      | 1/1     | 1/1      |
| Trillit                |            |          |         |          |
|                        | 4/4        | 4/4      | 1/1     | 1/1      |
| 8. Mr. Lertchai        |            |          | -       |          |
| Leelayonkul            | 4/4        | -        |         | -/1      |
|                        |            |          |         |          |
| 9. Mr. Chaiwat         |            |          |         |          |
| Chandarasrivongs       |            |          |         |          |
|                        |            |          |         |          |
| 10. Dr. Chongrak       |            |          |         |          |
| Prichanont             |            |          |         |          |
|                        |            |          |         |          |
| 11. Mr. Sahai          |            |          |         |          |
| Supsoontornkul         |            |          |         |          |
+------------------------+------------+----------+---------+----------+

Principle 3.6
The board ensures that the company’s governance framework and policies
extend to and are accepted by subsidiaries and other businesses in which
it has a significant investment as appropriate.

The governance of the subsidiary’s operations

Pato Chemical Industry Public Company Limited holds 99.99% stake of its
subsidiary, Pato Crop Care Company Limited, directors and management of
both companies are entirely the same. Same guideline, principles, scope
of practice, policies and responsibilities are all applied in equal
manner.

Principle 3.7
The board conducts a formal annual performance evaluation of the board,
its committees, and each individual director. The evaluation results
should be used to strengthen the effectiveness of the board.

Board of Directors Self-Assessment

The Board of Directors has been evaluated as a collective body and
individually once a year to review the sufficiency and effectiveness of
good governance in order to set guidelines to achieve concrete
effectiveness. The result will be used as information supporting the
management to revise their works and duties as appropriate.
The Board’s, committee’s and individual directors’ performance
evaluation have been conducted once a year to facilitate consideration
and improvement of the board’s performance and effectiveness and
resolution of any problems.
The company used a board self-assessment (brief) to self-evaluate the
sub-committees and the self-assessment questionnaire for individual
evaluation following SET’s guideline. The assessment criteria comes with
percentile scales where :

Scoring over 90% means excellent.
over 80% means very good.

over 70% means good.

over 50% means average.

and below 50% means it needs improvement.

The company’s secretary collected the assessment for analysis then
reported the result to the board. The result indicated that in 2016, the
assessment score came over 80% in all dimensions which means very good.

Principle 3.8
The board ensures that the board and each individual director understand
their roles and responsibilities, the nature of the business, the
company’s operations, relevant law and standards and other applicable
obligations. The board should support all directors in updating and
refreshing their skills and knowledge necessary to carry out their roles
on the board and board committees.

Orientation of new directors
The Company is aware of the importance of the performances of directors,
an orientation has been arranged to introduce them to the Company’s
overall operations, the organization structures in order to provide them
with insights into working procedures. Essential information necessary
for their performances as the directors such as the internal work flow,
related laws, the format of the financial statements and notes to the
financial statements are also provided.

Board of Directors Development

The company sponsors the board of directors to join trainings related to
roles and responsibility awareness in accordance with good governance
principle. During the year of 2017, the following board members have
been trained :

- All directors are trained to understand the basics of Corruption and
Fraud by Speakers from the Office of the National Counter Corruption
Commission (NCC) on April 7, 2017.

- All directors have studied, understood, and approved a handbook for
directors, executives, and employees on Anti-Corruption Measures on
November 9, 2017.

-   Mr. Lertchai Leelayonkul and Mr. Chaiwat Chandarasrivongs
    participated in
    “AC Update for CG”
    “The Audit Committee’s Role in Compliance and Ethical Culture Over
    Sight 2017”

-   Currently, there are nine board members who are enrolling in
    Director Accreditation Program (DAP) and two additional board
    members are pursuing the Director Certification Program (DCP).  

Principle 3.9
The board ensures that it can perform its duties effectively and have
access to accurate, relevant and timely information. The board should
appoint a company secretary with necessary qualifications, knowledge,
skills and experience to support the board in performing its duties.

The Board of Directors generally holds a meeting on a quarterly basis
with advanced schedule set every year. Special additional sessions can
be hold when necessary with a clear agenda set in advance. The company’s
secretary is the person to prepare invitations to meetings and related
documents 7 days before the meeting takes place. This is so that the
Directors have time to consider and study information. Each meeting
takes about two and a half hours. In 2017, the Board of Directors held 4
regular meetings, 4 A/C meeting, 1 risk committee meeting and 1 AGM.

While there is no meeting, directors can contact the management for a
report of the company performance so that it can monitor management and
company performance continuously and promptly.

The company has set a policy of minimum quorum and number of committee
of at least two third of the entire board present for voting procedure .

At the first Board Meeting and Audit Committee meeting of the year, the
non-executive directors shall conduct the meetings without the executive
directors or management attend the meeting. So they can consult and find
guidelines independently and transparently. They shall also evaluate the
work of the Managing Director and report to the Company Secretary before
going to the full board or committee meeting. The non-executive
directors and the Audit Committee may ask for an increase in number of
meetings without the executive directors or management by informing
their requirement to the Company Secretary.
The minutes of the meeting have been record and endorsed by directors,
so they can be checked related parties.

Company Secretary

The Board of Directors’ Meeting No.6/2007 dated November 12, 2007
appointed Mrs. Parichart Manuthasna to be the Company’s secretary for
the responsibility of monitoring the compliance to the rules and the
Company’s regulations and also in line with principles of Good Corporate
Governance to allow effective management.

Scope of Duties of Company’s Secretary

  1. To give initial recommendations to the Board concerning the issues
  of legality, the Articles of Association to ensure that all
  regulations properly adhered, including to report to the Board
  concerning changes which are deemed significant.

  2. To organize shareholders’ meetings and the Board of Directors’
  meeting in accordance with the Articles of Association.

3. To record and file the minutes of the shareholders’ and the Board of
Directors’ meeting, and
also follow up activities that have been approved at the meetings.

  4. To disclose information in accordance with the Securities and
  Exchange Commission, the Stock Exchange of Thailand, and other
  regulatory authorities concerned.

  5. To communicate with the shareholders, investors and regulatory
  authorities, including to provide information to interested persons
  and stakeholders.

  6. To perform any other duties assigned by the Board or Directors.

The Company’s Secretary has the experiences in the company since 1987
and completed a training course “Corporate Secretary Development
Program” arranged by Thai Listed Companies Association with The Faculty
of Commerce and Accountancy Chulalongkon University, sponsored by Stock
Exchange of Thailand and Thai Company Secretary Club. Besides, the
company’s Secretary has been attending various trainings to develop her
knowledge for the programs related consistently and regularly. In 2017,
company secretary attended following seminars and workshops ;

 - Understanding of Fraud and Corruption by speaker from The National
Anti-Corruption Committee
- Preparation of CAC Certificate
- The Use of Securities Reporting System for Directors, Executives and
Auditors
- Determination of Responsibility of CFO
- Sustainability Strategy : Key Blueprint for Business Growth
- Anti- Corruption : The Practical Guide (ACPG)
- New Issuer Portal

-   Tutoring for AGM 100 scores

-   Understand of Anti-Corruption Handbook

Principle 4:
Ensure Effective CEO and People Management
Principle 4.1
The board should ensure that a proper mechanism is in place for the
nomination and
development of the chief executive officer and key executives to ensure
that they possess the knowledge, skills, experience, and characteristics
necessary for the company to achieve its objectives.
Senior Executive Recruitment

1. Set qualification for candidates on experiences, knowledge and skills
that benefit the company and being honest, committing to anti-corruption
policy and having qualification that do not conflict with the laws and
regulations of the company.

2. Promote continuous development and education of the key executives
with beneficial knowledges for the company

  3. Select potential staff to be promoted and support with appropriate
  curriculum in preparation for higher level executive development.

  4. Nominate qualified and potential candidates to the board of the
  directors for consideration and approval.

3. Propose a succession plan of a managing director to the board of
directors for approval.

Succession plans

The company has prepared a plan of succession for key managements to
accommodate the expansion and replacement of retirees to ensure
continuity in the administration. The company also develop staff to be
ready for such succession by considering from knowledge, ability,
experience, and vision.

Principle 4.2
The board should ensure that an appropriate compensation structure and
performance
evaluation are in place.

In 2012, the company issued ESOP to management and employees as
motivation to work with the company during crisis.

Managing Director Performance Evaluation

Board members who are not holding executive positions and the
independent committee evaluate the managing director’s performance at
the first Board Meeting of every year. Each quarter, the managing
director proposes a management strategy, announces the performance of
previous quarter, reports successes, problems, and obstacles, analyzes
financial ratio, reports financial status, elaborate his vision, project
future planning, as well as provides update on strategic planning
modification to encountering problems and obstacles to ensure company’s
mission accomplishments. From the past, Dr. Viwat Trillit has always
been trusted by the board for his services to extend the term of the
managing director position.

Remuneration for managements: The remuneration was set in line with the
industry and in accordance with the policy set by directors based on
company and individual performance.

6 executives received 8,583,167.84 baht which includes salary,
commission, bonus, car expense, social security expense, life, accident
and health insurance, and provident fund.

From the above amount, Managing Director received 1,911,456.40 baht.
Other remuneration

-   Provident Fund

The company has established a Provident Fund to the executives paid at
the rate of 5 % of salary. In 2017, the company has contributed funds
for the 6 executives totaled 255,000 baht.

Personnel

There are 167 employees in 2017, the company paid compensation to
employees totaled 66,957,702.- baht, which include salary, overtime,
bonuses, insurance, social security welfare and provident fund. The
subsidiary company has paid the same types of compensation to employees.

  ---------------------- --------------- -------------- ------------ -----------
  Year                   2016                           2017         

                         PATO            PCC            PATO         PCC

  Operations (People)    107             8              99           6

  Head Office Employees  46              -              43           -
  (People)                                                           

  Managements (People)   6               -              6            -

  Total                  159             8              148          6

  Remuneration           65,953,258.00   1,004,444.00   69,177,736   1,205,005
  ---------------------- --------------- -------------- ------------ -----------

Principle 4.3
The board considers its responsibilities in the context of the company’s
shareholder
structure and relationships, which may impact the management and
operation of the company.

All directors understand that the company has grown from family
business. The directors come from family representatives according to
the principle that the shareholder has the rights of ownership by
controlling the company through the appointment of the board of
directors to act on their behalf and the rights to make a decision
regarding to the major changes in the company. However, the company has
the independent committee that can monitor the performance of its
directors as well as ensure that the disclosed information is
transparent and complete. The company also encourages its shareholders
to exercise their rights to attend the meetings and to allow the
shareholders to propose the agenda and the list of directors for
consideration at the annual general meeting.

Principle 4.4
The board should ensure the company has effective human resources
management and
development programmes to ensure that the company has adequate staffing
and appropriately knowledgeable, skilled, and experienced employees and
staff.

The Board takes care of the use of human resources consistent with
direction and strategy. Employees are knowledgeable and are treated
fairly. They get appropriate and right payment. Provident Funds have
been set up to provide adequate savings for retirees.

Staff Development

The company sees the staff at the heart of its entrepreneurship;
therefore, the employees are allocated opportunity to participate in
self-development so they can make use of the knowledge and ability to
make progress for both themselves and the organization. Currently, the
company is organizing and/or sending the employees to trainings suitable
for their responsible scopes. Moreover, according to the policy, each
employee is required to participate in training sessions of no less than
12 hours/person/year by joining the annual trainings provided by IOD,
Stock Exchange of Thailand or SET, the Office of the Securities and
Exchange Commission, Thailand Securities Depository, Thai Investors
Association, Thai Listed Companies Association, Federation of Accounting
Professions, Thai Agro Business Association, Council of Science And
Technology Professionals, Social Security Office, and etc. The following
details were past examples of 2017 training topics, which the company
saw the importance of, thus organized in-house trainings and also sent
the employees to external trainings such as:

-   The company has announced its intention to join the Thai private
    sector's anti-corruption campaign. The human resource department
    provide training for directors, executives and employees on topics
    related to such measures.

Examples of training and sending staff to attend training in the year
2017, such as

-   Safety at work

-   Basic Fire Extinguisher training and Fire Emergency Evacuation

-   Safety Officer at Management level

-   Control of dangerous Chemical Substances

-   Draft TFRS 15 Revenues from Contract with Customers

-   Guidelines for use of E-tax invoices. E-receipt, Debit Note, Credit
    Note, Input and Output Tax

-   Basic training on Anti-Corruption by speaker form National
    Anti-Corruption Committee.

-   Understanding of The Anti-Corruption Handbook in Luang Prabang

Principle 5:
Nurture Innovation and Responsible Business
Principle 5.1
The board priorities and promote innovation that creates value for the
company
and its shareholders together with benefits for its customers, other
stakeholders, society, and the environment, in support of sustainable
growth of the company.

The Board values ​​and promotes innovation that contributes to business
value, along with creating benefits for customers, stakeholders and with
social and environmental responsibility. The management brings it as
part of strategy review and plan to improve operations to add value to
the business in a changing environment. New products have been developed
to suit the environment with rapid degradation and leave no toxic
residues in crops and the environment.

Principle 5.2
The board encourages management to adopt responsible operations, and
incorporate them into the company’s operations plan. This is to ensure
that every department and function in the company adopts the company’s
objectives, goals, and strategies, applying high ethical, environmental
and social standards, and contributes to the sustainable growth of the
company.

Role of Stakeholders

Regulations have been set in the business ethics and employee ethics,
and focus on every stakeholders’ rights and parties concerned. They are
Internal Stakeholders which are shareholders, board of the directors,
executives, and employees and External Stakeholders which are customers,
consumers, partners or supplier, competitors, commercial creditors,
communities, environment, and social. Participation of all stakeholders
are promoted so as to know their requirements and the company will be
able to response correctly as below:

Shareholders: The Company is steadfast in its aim to undertake business
for the satisfaction of shareholders and provision of good return on a
continuous and secure basis.  The company holds a general shareholders
meeting in which there is a quorum and participants take part
in considering various agendas and acknowledge operational results. The
company realizes the right of shareholders to receive correct,
sufficient, immediate and equal information.

Employees:  The Company emphasizes unity among employees, working
together in a peaceful and facilitating atmosphere, and gives employees
the opportunity to develop their potential and to utilize their
knowledge and ability to help in creating progress for themselves and
the company. The company provides reasonable and fair compensation and
fringe benefits to the employee for example annual checkup, health and
life insurance, transportation, hygienic canteen with fair price and
free rice, sport facilities, bonus, hardship allowance, annual party and
excursion, and provident fund. For security reason, the company has
established Safety, Occupational Health and Environment Committee to
regularly control safety such as heat, light, and sound including
machineries survey and maintenance.

Partners or Suppliers: The Company has treated their partners and
suppliers equally and kept in mind on the mutual fair interests for both
parties. They have stringently followed the agreement terms and
conditions. In case that any questions on the agreement have been
raised, the Company would mutually find the solution based on fair and
rational treatment i.e. never calling for or accepting other benefits or
interests which caused unfair business against their partners or
suppliers, and also strengthening a sustainable relation with the
partners and suppliers to maintain mutual trusts. The Company has
imposed strict measures to select and inspect their partners and
suppliers, especially ones manufactures for raw materials. Owning to the
current Hazardous Substance Act, in case that the Company decides to
register chemical products which are manufactured by partner, they are
required to import the partners’ products. Nevertheless, the Company has
set out a strategy to register each single category of chemical products
with more than one manufacturer. Therefore, the Company has laid down
policies to select the partners or suppliers who have manufactured
quality products and never had problem on delivery services with fair
price. If the products supplied do not meet the
requirements/specification, the partners or suppliers eagerly shows
their spirits and responsibilities to deliver a new lot of shipment,
take back the non-quality shipment, and pay compensation fairly on case
by case basis.

Customers:  The Company manufactures quality and standard products with
a fair price. In this regard, the company joined a core group to help
push for the Project for Manufacturing of Quality Products under the
Thai Crop Protection Association. The products must pass standard of the
Office of Agricultural Regulation, Ministry of Agriculture and
Cooperatives. Product prices are controlled by the Department of
Internal Trade, Ministry of Commerce.

Consumers: Farmers are our consumers. Apart from high quality and fair
price, the company researches for more products to suite geographic
conditions, climate, and which are disease-controllable with regard to
insects and weeds, so as to increase production for farmers. At the same
time, through the help of a work team with high knowledge and
experience, the company also emphasizes providing knowledge
and correct product type usage and correct and method of usage, for the
safety of both farmers. The team will also report any complaint from
customers every month.

Competitors: The Company treats competitor as per normal practice and
follow frameworks according to law. The company has never got into any
legal case with competitors.

Commercial Creditors: The Company complies with all trade agreements
made with creditors and also makes on time payment. We treat creditors
fairly with accountability and transparency to maintain a sustainable
relationship with trust to each other.

Environment: The Company’s environmental policies comply with
environmental management regulations, as follows:

1. Promoting the development of technology that reduces negative impacts
on environment in the process of production, packaging, distribution and
waste elimination.

2. Promoting the reduction of negative impacts on environment by ways of
“Reduce”, “Reuse” and “Recycle” in the procurement and production
process.

3. Promoting the conservation of energy and natural resources.

4. Promoting the compliance with other relevant environmental laws and
regulations.

5. Providing training to raise environmental awareness amongst employees
at all levels as well as involved parties.

In order to formulate and distribute chemical products, the Company has
to be registered according to Hazard Substances Act B.E. 2551 (2008),
which has been in effect since 25 February 2008. In addition, the
Company has to be registered as agricultural chemical by three
government offices, comprising:

1. Department of Agriculture

The Company is required to submit information about the toxicity of its
Technical Grade and finished products. This information must come from a
laboratory, which has been certified with Good Laboratory Practice (GLP)
standards. In addition, the Company must have clear study plan,
standardized and testable operations as well as systematic and reliable
report, in accordance with Organization for Economic Co-operation and
Development (OECD). After that, the Company has to operate the field
trial to test the effectiveness of its agricultural chemical to each
crop and to find residues as well as the toxicity to the environment, in
order to ensure its efficiency and safety to users and the environment.

2. Department of Livestock, Ministry of Agriculture and Cooperatives

3. Food and Drug Administration, Ministry of Public Health

For organizations in number 2 and 3, the Company is required to submit
its hazard substances to be tested for the amount of Active Ingredient
(AI) at the Bureau of Chemicals and Hazardous Substances, Department of
Medical Sciences, and the efficiency to flying and crawling insects at
the National Institute of Health, Department of Medical Sciences, with
the reference to WHO (Pesticides and their application for the control
of vectors and pest of public health importance), to ensure that its
products are effective and have no negative impacts on consumers. After
that, the Company can be registered with Food and Drug Administration or
Department of Livestock.

The importance to the environment concern, the production base is then
in the Bangpoo Industrial Estate, with cooperation given to all sides
of government and private sectors by strictly adhering to related
conditions and regulations regarding Safety, Occupational Health and
Environment including the waste collection and segregation. The company
hires a professional company to handle wastes and pollutants as per
types of wastes. Official from division of public health and environment
sign his name as witness before wastes are sent for being treated or
eliminated. In order not to pollute the environment, for waste water, a
water treatment tank was built. Waste water will be treated to the
standards set by the Industrial Estate, then let the treated water flow
into the sewer of the Industrial Estate for further treatment.

Government Agencies: The Company focus on the government agencies by
follow and abide by rules and regulations as they are considered factors
supporting smooth businesses in accordance with policy, guidance, rules
and regulations. The company has coordinated to exchange information
with officers concerned regularly on an appropriate and transparent
basis in order to build good relationships with government agencies.

Social: The Company is attentive to social activities on a regular basis
by shifting the distribution of assistance and supports as appropriate
to build a good relationships with the community we are part of.

The company is focusing on school aid and children. We believe that
society will improve when children learn and are cultivate about
goodness and righteousness.

Intellectual Property: The Company recognizes the importance of
intellectual property and copyrights of those who have put effort into
creating innovations. Therefore, the Company has set up policies to
prevent the breaking of intellectual property rights, as follows:

1. Employees must comply with laws, regulations and agreements about
intellectual property rights including patent, copyrights and trade
secrets.

2. Outside information must be carefully checked before being used to
ensure that it will not break intellectual property rights.

3. The Company uses only legal software and fonts from copyright
holders.

4. Upon termination of employment, employees must hand in information
about trade secrets in all forms back to the Company.

5. The employees who deal with trade secrets should use appropriate
measures to keep trade secrets, such as

-   Names of customers and distributors

-   Working procedure

-   Manufacturing process, Technic and Know-how

-   Document tracking process

-   Production formula

-   Business strategy, business plan, marketing plan and information
    about the Company’s Research and Development (R&D)

Fair competition

The company adheres to the free trade regime with fair competition
between competitors, business partners and customers. The Company's
products’ prices are controlled by the Department of Internal Trade.
Refrain from performing the following actions.

1. Determine or maintain the level of purchase / sale price of goods
unfairly.

2. Set the conditions for conducting business that restrict the business
alternatives of other business operators.

3. Use superior bargaining power to exploit others, force or induce
customers to engage in business with them or make any claim without
reason and cause damage to other business operators.

4. Doing anything to obtain the trade secret information or technology
of other business operators.

6. Acting on anything other than a normal commercial practice or intend
to damage, impede, discourage or restrict the conduct of business. Do
not allow others to do business or to abandon the business.

Anti-Corruption
Anti-Corruption

In 2016, the company took part in a declaration of intent with
Collective Action Coalition against corruption.

The company implements policy not paying to government officials, not
involving and opposing related parties over corruptions. The risk
assessment of the Company or its subsidiaries are done to identify the
risk that involve with corruption. Communication and employee training
to provide knowledge about policies and regulation in term of
anti-corruption to ensure the implementation are provided. The policy is
revised for appropriateness by the board of directors annually.

The company encourages staff at all levels of awareness on
anti-corruption and fraud of all types and has set policies to prevent
corruption or bribery within corporate governance policy which comply
with laws and regulations both organization and society level as
follows:

1. Help reduce the corruption problems from Thai society through good
governance and internal audit. Do not provide opportunity for anyone to
take advantage of.

2. The values of hard working, honesty, and the greater good are
cultivated among the employees. The training sessions have also been
organized to inform the employees of the company’s policies and
guidelines against corruptions. The aims not only to pass on the
knowledge but also the conscience at the same time. However, the
administrative section believes that if high level executive members
demonstrate appropriate behavior worth respecting to be role models,
this would much help inspiring and motivating the employees to follow
the same path, which is considerably as valuable as sending them to
trainings. When the chairman/president and the managing director
preserve their dignity of becoming role models to the employees
especially on honesty, discipline, value of hard working, and justice,
the employees would become more loyal which eventually help reduce the
risk of corruption in the organization to a certain level of extent.

3. Avoid taking part in any activities that will lead to private and
public corruptions.

In December of 2017, the company submited file for certification from the Thailand's Private Sector CollectiveAction Coalition Against Corruption (CAC) and was endorsed on February 12, 2018.

The company provides complain channels for stakeholders through audit
committee by mail to Audit Committee, Pato Chemical Industry PCL. Pato
Building, 3388 New Petchburi Rd. Bangkapi, Huaykwang, Bangkok 10310, and
Fax: 02 3180367 or e-mail: auditcom.pato@gmail.com

Principle 5.3
The board ensures that management allocates and manages resources
efficiently and effectively throughout all aspects of the value chain to
enable the company to meet its objectives by

1. Being aware of the necessity of the resource.

2. Maintaining and improving the efficiency and effectiveness of the use
of resources.

3. Improving efficiency.

4. Recycling.

Principle 5.4
The board establishes a framework for governance of enterprise IT that
is aligned with
the company’s business needs and priorities, stimulates business
opportunities and performance, strengthens risk management, and supports
the company’s objectives by:

1. Providing computer systems and personnel sufficient to support
business operations and providing training for personnel to understand
the program required in each area.

2. Hiring a skillful outsource company monitor equipment and programs to
be used effectively at all time.

3. Managing the risk that may arise from the use of information
technology. There are safe and sufficient measures to ensure that
persons with no relevant authority access the information or misuse the
information for personal benefits.

Principle 6:
Strengthen Effective Risk Management and Internal Control
Principle 6.1
The board ensures that the company has effective and appropriate risk
management and internal control systems that are aligned with the
company’s objectives, goals and strategies and comply with applicable
law and standards.

Risk Management Committee

Board of Directors’ meeting in 2014 approved the setting up of Risk
management Committee. In 2016, executive who were risk committee
resigned and the board of directors appointed new executives to be
replace committee who resigned. Risk committee consist of directors
and/or executives of the company and the internal auditor namely;

1.  Dr. Viwat Trillit                              Managing Director/
    Chairman of Risk management Committee

1.  Mr. Lertchai Leelayonkul Chairman of Audit committee

2.  Mr. Chaiwat Chandarasriwongs    Audit Committee

3.  Dr. Chongrak Prichanont                 Audit Committee

4.  Mr. Visut Vanitcharoenkarn             Accounting Manager

5.  Mr. Sayan Wan-Aree Marketing Manager

6.  Mrs. Parichart Manuthasna               Company Secretary

7.  Ms. Navaporn Phothai                      Internal Auditor

Risk management committee's duties and responsibilities
 1.       To consider company’s policy and overall risk management
guidelines that including significant types of risk including corruption
risk and present to audit committee for making a report for company
board of Directors.

2.       To define company’s strategy and guideline process for risk
management by evaluating, tracing, and controlling the company’s risk to
be in an appropriate level.

3.       To lay down measures for risk management that suite with
situation and risk appetite.

4.       To follow up on the risk management policy under the risk
management guidelines along with the policies set forth.

5.       Review the adequacy of policies and risk management systems,
including the effectiveness of the system.

The Risk Management Committee report 2016

The Risk Management Committee appointed by the resolution of the Board
of Directors’ meeting to serve on the oversight of risk management.

In 2017, The Risk Management Committee is responsible for overseeing the
risk management of the company by considering the risk management policy
that to be in line with company's objectives, strategies, and risk
appetite. The committee regularly review the risk management policy. The
report reviewed the results of the risk assessment in 2016 and set the
internal audit plan for 2016 by taking into account the significant risk
factors of company in order to reduce the opportunities, potential risk,
and minimize the impact to a minimum. Risk management guidance is
proposed to the Board of Directors including problems and obstacles for
acknowledgment.

Fraud and Corruption Risk is another factor that the Board is taking
into concern by considering the appropriateness of the company's
anti-corruption policies and monitor the risk management in the company
closely.

The Risk Management Committee has reviewed the results of the internal
audit in quarterly basis in 2017. This is to evaluate the impact that
might occur from significant risk factors of the company in order to
ensure that the risk management has been processed each quarter
according to guidelines specified and also prepare for the uncertain
situation that might happen and affect the company in the future.

  Sincerely,

(Dr. Viwat Trillit)

Chairman of Risk Management Committee

The Company has realized the importance of the effective internal
control system at the levels of both executive and operation. Therefore,
they have supervised the utilization of the company resources and
separated the internal control work from other functions. The external
internal auditor has been engaged in order to independently inspect the
operations with the balance of monitoring and supervision. In addition,
the financial internal control has been established to supervise the
financial issues. The concerned issues shall be reported to the
in-charge executives and the regulations in writing have been given to
be used as operational guidelines. The internal auditing team shall
report the audit result directly to the Board of Auditing Committee.

In the meeting of Board of Auditing Committee No. 1/2017 on February 18,
2017, Miss Navaporn Phothai has been designated as the Company’s
internal auditor for 2017. The Board of Auditing Committee has
considered that Miss Navaporn has suitable qualification for this
responsibility as she has worked independently in the auditing field,
and joined in Pato Chemical Industry PCL for 7 years. The designation,
dismissal and transfer of the chief internal auditor shall be considered
and approved by the Board of Auditing Committee. The qualification of
the internal auditor has been shown in the Attachment No. 3.

Audit Committee of the company has independently evaluated and reviewed
regarding the efficiency of the internal control system of the company
to ensure that it conforms to Good Governance including the review of
the investigation result from Internal Audit Department on issues and
suggestions for the department to rectify or improve the internal
control system. From the evaluation results of the Audit Committee, the
internal control of the company is efficient, suitable, effective, and
efficiency conform to the Good Governance. The conclusion can be shown
as the following;

Organization and Environment

The current organizational structure is suitable and can facilitate the
business of the company. The company has issued the policy to require
board of directors, executives, and employees prioritize ethics as the
first priority in the work and avoid the behavior which creates the
conflict between the company benefit and person interest or any
corruption. Moreover, the company expects all transactions whether it is
conducted between employees, suppliers, clients, and other parties shall
be in fair market conduct manner.

Risk Management

The company has the process to evaluate the risk which can affect the
company including the setting of the measure to eliminate or limit the
severity from that effect by considering both the internal and external
factors as well as having the ongoing monitoring process to minimize the
risk.

Control Activity

The company provides the effective internal control system which shows
the clear process for sales, procurement, and production. The
responsibilities are separated and evaluated between departments by the
internal control as a part of the work to ensure that the work is
conformed to the policy and measure. Moreover, the work is evaluated and
investigated officially by the independent internal auditor and
certified public accountant. This verification covers the review and the
efficiency of internal control for both of financial and the operation.

Information and Data Communication

The company has the communication channel from the managers to the
staffs via email and announcements to provide news and information
effectively. To present any issues to Board of Directors, the agendas
will be recorded in the meeting and provide the required information for
the benefit of the consideration. The company records the opinions and
notice of committees in the minute of the meeting which stored for
authorized personnel to review the suitability of the committee
operation. Moreover, the Financial Information and documentations are
also maintained and stored in effective software programs.

Monitoring and Evaluation

The company has the internal auditors who independently evaluate and
monitor each department to ensure that each department follow the
policies and measures strictly, the significant deflect in the control
system, abnormalities, and operation problems which may oppose the
business standard; and are corrected then reported to the administrative
section and to review by the audit committee. The responsible person of
each department has to monitor the progress of the correction according
to the suggestion from the evaluation report of internal audit until the
problems are completely solved. The audit committee also has evaluated
and reviewed by the term regarding the efficiency of problem-solving of
the administrative section.

The internal auditor has full independence under the supervision of the
Audit Committee has conducted a risk assessment and has done an internal
audit report on the fraud submitted to the Audit Committee for the year
2017 as follows:

The Internal Audit Report on Fraud

The internal audit report on fraud has objective to consider risks from
fraud and proper risk management. In considering risks from fraud, these
factors are taken into account:

1. Need and motivation – to consider whether the company has a policy or
factor to create need or motivation for the fraud.

2. Opportunity – to consider whether the company has structure or
process to encourage the fraud.

3. Reason and honesty – to consider factors which affect the reason and
honesty of the company’s personnel.

The consideration of risk management aims to ensure that the company has
three important processes:

1. Preventive – the company has policy or system for internal control to
prevent the risk of fraud

2. Detective – the company has channel or process to detect the
abnormality in the organization

3. Responsive – the company has clear and strict penalties for those who
broke the agreement

The company has an internal audit on fraud by considering the risk of
fraud as follows.

1. Needs and Motivations - Considering company's policy whether they
create needs or motivation of fraud.

2. Opportunities – Considering organizational structure or work
procedures whether they create opportunity for corruption.

3. Rationality and honesty – Considering factors that affect the
validity and integrity of company’s personnel.
From the audit of the company’s structure, policy and internal control,
it is found that:

1. The company has structure that clearly separates duties for each
department.

2. The company has efficient internal control system for each department
to check each other’s work. For example, Sales Department is responsible
for sales order while Operation Department is responsible for warehouse
control, operation and delivery. When the Sales Department receives the
money from customers, the payment will be delivered and monitored by the
Accounting Department.

3. The management has a clear anti-corruption policy to help reduce
fraud in Thai

society by avoiding to get involved with any activities that can lead to
corruption both government and private sector.

  4. The company is careful in preparing any promotional plans that may
  lead to any corruption.

5. The management is personally close to employees so they will know if
something is likely to go wrong in the company.

6. So far, there has been no fraud incident in the company.

  (Ms. Navaporn Pohthai)

Independent Internal Auditor

Principle 6.2
The board establishes an audit committee that can act effectively and
independently.
The company’s Board of Directors has appointed a sub-committee to help
oversee the following operations of the company. The auditing committee
was set up on December 17, 1999.

Names of members of the Audit Committee are as follows:

Chairman of the Audit Committee Mr. Lertchai Leelayonkul

Member of the Audit Committee Dr. Chongrak Prichanont

Member of the Audit Committee Mr. Chaiwat Chandarasrivongs

Secretary to the Audit Committee Ms. Navaporn Pohthai (Internal Audit)

Terms for holding office: 3 Years

Latest renewal of terms for holding office is 2016. Mr.Lertchai
Leelayonul is a qualified audit committee with accounting experiences to
perform review of financial statements of the company.

Definition of Independent Directors is indistinguishable to the
qualifications prescribed by the SEC and SET;

1.Holding shares not more than 1% of total voting shares of the company,
the affiliated company, the associated companies or person who may have
the conflict of interests (counting of the person concerned according to
Section 258 of Securities and Exchange Act).

2.No participation in management including employee, staff, business
consultant who receives permanent salary or the person who has the power
to control the company, parent company, subsidiary company, associated
company or subsidiary companies in the same level or juristic person
which may have the conflict of interests (at present and 2 years prior
periods to an appointment).

3.No blood relations, nor by way of registration in the manner of father
or mother, spouses, brothers and sisters of full blood and legitimate
child including spouse of legitimate child and executive, major
shareholders or person who has power to control or person who is
supposed to be nominated as an executive or person who has power to
control the company or subsidiary companies.

4.Business relation with the company

a.  Nature of relation

-   Relation in the manner of professional service

    -   Nature of relation: Auditor, person who renders professional
        service, such as legal consultant, financial consultant,
        properties appraiser etc.

    -   Key definition included in the meaning of dependence

  - In case of auditor: Not allowed in all respects.

  - In case of person who renders professional service: Value of
  transaction more than 2 million baht per year.

-   Commercial/business relations

-   Nature of relation: Extending to all kinds of business transactions,
    i.e. normal transactions, transaction of letting/renting,
    transaction relating to asset/service and transaction of giving or
    receiving financial assistance.

-   Key definition included in the meaning of dependence: value of
    transaction ≥ 20 million Baht or ≥ 3% of NTA of the company
    whichever is lower. In this matter, to consider the value of
    transactions, it is to include transactions during 6 months prior to
    the day of doing this transaction.

    a.  In case of nature of relation under (a) with juristic person,
        person deemed to be dependent i.e. major shareholders, director
        (except independent directors/audit committee) and executive or
        partners of such juristic person.

    b.  In case of nature of relation under (a) and (b): at present and
        2-years prior periods to appointment.

    c.  Exception: In case of necessity or suitability which rarely
        happens, independent directors/audit committee may have relation
        more than level of key definition prescribed during in office
        with prior approval of the board of directors and such
        resolution must be unanimous.

5.Not a director appointed as proxy of the company, major shareholders
or shareholder related to major shareholders of the company.

6.No any qualifications not be able to give an opinion independently.

7. Independent director who has the qualifications according to 1-6 may
be appointed by the board of directors to make decision in the business
of the company, parent company, subsidiary company, and associated
company, subsidiary company of the same level or juristic person which
may have conflict of interests by collective decision.

Qualifications of Audit Committee

1.  Appointed by the board of directors or shareholders

2.  All Audit Committee must be independent director.

3.  Not a director appointed by the board of directors to make decision
    in the business of the company, parent company, subsidiary company,
    associated company of the same level or the person who may have the
    conflict of interests.

4.  Not a director of the parent company, affiliated companies or
    affiliated companies of the same level.

5.  Having duties prescribed by the Securities Exchange.

6.  At least 1 Audit Committee shall have knowledge and experience
    sufficient to perform his duties to review the reliability of
    financial statement.

Report of the Audit Committee

The Audit Committee of Pato Chemical Industry Public Company Limited
compose of 3 Independent Directors and Internal Auditor serves as
secretary to the Committee.

The duties and responsibilities of the Audit Committee are to review the
financial statements to be conformed to the generally accepted
accounting principles, to review the effectiveness and adequacy of
internal control system, to review the Company’s activities to abide by
the rules and laws concerned, to give recommendation to the Board of
Directors to propose external auditor to the shareholders’ meeting for
appointment, and to execute any other duties as assigned by the Board of
Directors. The Board of Directors by the audit committee appoints the
Chief Internal Auditor, Ms. Nopporn Phothai who has appropriate
education and adequate training experience to perform such duties and
evaluate risks of all business units of the company and reviewed the
internal control relatively with the significant risk level evaluated.

During 2017, the Audit Committee convened 4 meetings with the external
auditors, internal auditor, and the managements to review the Company’s
risk evaluation result, annual audit plan, and the result of internal
control to be in compliance with standard set for the mentioned
objectives. It also reviewed the Company’s financial statements prior to
its publication. At the Board Meeting 1/2017, the managements did not
attend the first part of meeting in order that the audit committee, the
external auditors, and the internal auditor will be able to discuss
freely and appropriately. The Audit Committee has come to the opinion
that fiscal year ended December 31, 2017, the Company has an adequate
and appropriate system of internal control covering operational risk.
The preparation and disclosures of the financial statements of the
Company is also adequate and reliable.

The board of directors acknowledges the connected transactions from the
management that review by the internal and external auditors on a
quarterly basis. This is to ensure that all transactions are carefully
approved with transparent process by honest and responsible directors
and executives. In addition, the related parties will not participate in
any decision making process. Currently, there are only rental properties
transaction between PATO and its subsidiaries and the management fees
form its subsidiaries.

The Audit Committee has presented its recommendation to the Board of
Directors to nominate Mr. Pradit Rodloytook or Ms. Nongram
Laoha-areedilok from AST Master Co., Ltd. to be the Company’s auditor
for approval by the shareholders’ meeting. The auditors proposed are
independent and has no relations or interest with any managements or
major shareholders. Annual auditing fee will be 650,000 baht, and
increase of 30,000 baht over previous year with no other charges in
2017.

…………………………………

 (Mr.Lertchai Leelaryonkul)

Chairman of Audit Committee

February 20, 2017

Principle 6.3
The board manages and monitors conflicts of interest that might occur
between the company, management, directors, and shareholders. The board
also prevents the inappropriate use of corporate assets, information,
and opportunities, including preventing inappropriate transactions with
related parties.

 The company has a policy and method to prevent company executives from using the company’s inside information for personal gain or for the purchase of securities before the company’s financial statement is disclosed to public. 

1. The company has set a policy for the directors and the executives to
inform the board of the directors or an authorized person about the
execution of shares, 1 day prior to the trading date.

2. The company has kept its directors, management and staff informed
about relevant announcements from Securities and Exchange Commission
(SEC). The company’s directors, management and staff are required to
report their changes in security holding to SEC in accordance with
section 59 of the Securities and Exchange Act B.E. 2535 within 3 days
from the date of changes in their security holding. At the same time,
they have to inform the company’s secretary to record the changes and
update the amount of security of each director and management in order
to present to the company’s board of directors. The company’s directors,
management and staff are also informed about their punishments in case
of violation or failure to abide by the aforementioned regulations.

3. The company has regulations to prohibit its staff to reveal its
financial information and other information that may affect the price of
its security to the public. The company’s staff are also forbidden to
sell their securities within one month prior to the disclosure of the
company’s security prices to the public. Those who fail to comply with
the aforementioned regulations will be considered violently breaking the
company’s discipline and shall receive penalties ranging from warning,
wage reduction, suspension without pay to termination of employment.

Connected Transaction.

  The company relies on the following principles when executing a
  transaction:

-   A transaction must be approved through a transparent process by the
    board or executive with responsible, cautious, and honest
    consideration while the stakeholders are not part of the decision
    making.

-   A transaction must be executed in the purpose of making highest
    profit to the company as if making a transaction with other external
    bodies under normal business condition according to the market
    pricing and details specified in the agreement.

-   There must be a tracking and inspecting measure in place to ensure
    the executed transaction is in consistent with the right procedure.

The managing director may hold positions in no more than two companies
and the other company must not be a business rival to the company in
order to ensure maximum administrative efficiency.

Space Rent

  ---------------------- ------------------------ ------------------------
  Company                Company                  Connected Transaction

  Pato Chemical Industry Kentex Properties Co,Ltd Pato rents office space
  PCL.                                            in Pato Building, which
                                                  belongs to Kentex
                                                  Properties Co.,Ltd.
  ---------------------- ------------------------ ------------------------

Pato rents office space in Pato Building as per following details:

+--------------+---+----------------------------------------------------+
| Location     | : | Pato Building, 3388 New Petchburi Road Bangkapi,   |
|              |   | Huay Kwang, Bangkok 10310                          |
+--------------+---+----------------------------------------------------+
| Building     | : | Kentex Properties Co Ltd (a related company)       |
| ownership    |   |                                                    |
+--------------+---+----------------------------------------------------+
| Significant  | : | Pato Chemical Industry PCL. rents the 1st-3rd      |
| Content of   |   | floor of the building with usable space of 745.82  |
| the rent     |   | square meters. The rental fee has been adjusted to |
| contract     |   | 70,000 baht per month and the duration of the      |
|              |   | contract is from 1 June 1991 to 31 May 2021.       |
|              |   | Rental fee is adjustable every 2 years. Each       |
|              |   | adjustment shall not exceed 25% of the prevailing  |
|              |   | rental rate.                                       |
|              |   |                                                    |
|              |   | The contract stipulates that the lessor is         |
|              |   | responsible for the property tax and land tax.     |
|              |   | Other out-of-pocket expense, including tax on      |
|              |   | electricity, water and other utility services are  |
|              |   | for the lessee. At present, there have not been    |
|              |   | any adjustments for the rental fee so far.         |
+--------------+---+----------------------------------------------------+

(2)

  ---------------------- ----------------------- -------------------------
  Company                Company                 RPT

  Pato Chemical Industry Pato Crop Care Co.,     Pato Crop Care Co., Ltd.
  Public Co., Ltd.       Ltd.                    rents space owned by Pato
                                                 Chemical Industry PCL. as
                                                 office, manufacturing
                                                 plant, and warehouse.
  ---------------------- ----------------------- -------------------------

Pato Crop Care rent space at the factory of Pato Chemical Industry PCL.
as office, manufacturing plant and warehouse
as per following details:

  ----------------- --- ---------------------------------------------------
  Location          :   569/1 Bangpoo Industrial Estate, Soi 12, Patana 13
                        Road, Praksa, Muang Samutprakarn

  Building          :   Pato Chemical Industry PCL.
  Ownership             

  Significant       :   Pato Crop Care Co., Ltd. rents building no. 5 and 6
  Content of the        for the total area of 1,080 sq. meter with
  rent contract         machinery of Pato Chemical Industry PCL. as office,
                        manufacturing plant and warehouse. Monthly rental
                        fee is 50,000 baht. The contract is renewed for
                        another 5 years’ rent, from November 25, 2014-
                        December 31, 2019.
  ----------------- --- ---------------------------------------------------

Service Fee

+------------------+---------------------------------------------------+
| Summary of       | - Pato Crop Care Ltd. has been hiring Pato        |
| Service          | Chemical Industry PCL. to recruit management team |
| Contracts on     | or personnel to do the organization               |
| Administration   | administration and product sales management.      |
| and Sales        |                                                   |
| Management       | - Fee will be calculated equally for              |
|                  | administration and sales management on quarterly  |
|                  | net sales basis as follows:                       |
|                  |                                                   |
|                  | 1. Net sales from 1 baht up to 50 million baht    |
|                  | subject to 1.5% each for administration and sales |
|                  | management. (1.5%+1.5%)                           |
|                  |                                                   |
|                  | 2. Net sales exceeding 50 million baht subject to |
|                  | 1.0% each for administration and sales            |
|                  | management. (1.0%+1.0%)                           |
+------------------+---------------------------------------------------+

The Hazard Substances Act B.E. 2551 (2008) allows only 3 trade names to
be registered under one product. So, Pato Crop care has been established
to solve the problem of insufficient trade names for formulation to
customers’ order under customers’ trade names.

Principle 6.4
The board establishes a clear anti-corruption policy and practices,
including communication and staff training, and strive to extend its
anti-corruption efforts to stakeholders.

In 2016, the company set an anti-corruption policies and took part in a
declaration of intent with Collective Action Coalition against
corruption (CAC). Communication and employee training to provide
knowledge in term of anti-corruption were arranged. The risk assessment
of the Company was done to identify the risk that involve with
corruption and led to Anti-Corruption handbook for directors, management
and employees. Trainings were done again to ensure the practical
implementation. Stakeholders will be able to study the Anti-Corruption
handbook in details at
http://www.patochemical.com/wp-content/uploads/pdf/Anti-Corruption%20Handbook.pdf.

The company was Anti-Corruption certified by the CAC in February 2018.

Principle 6.5
The board should establish a mechanism for handling complaints and
whistleblowing.

An employee may report an illegal action in the organization by filing
an anonymous complaint with clues of violation enclosed (if any), and
submit to the suggestion box where the managing director is the only one
with the access key, otherwise, an employee may send an email directly
to the audit committee at auditcom.pato@gmail.com and/or company
secretary at pato2@cscoms.com so that the company bring up the issue
during an executive meeting to open up a further investigation or fact
finding. However, in 2017, the firm received no filed complaint.

Principle 7:
Ensure Disclosure and Financial Integrity
Principle 7.1
The board ensures the integrity of the company’s financial reporting
system and that timely and accurate disclosure of all material
information regarding the company is made consistent with applicable
requirements.

- The board ensured that chief financial officer, accountant, internal
auditor, company secretary, Investors Relation officer involved in the
preparation and disclosure of any information of the company has
relevant knowledge, skills and experience, and that sufficient
resources, including staffing, are allocated.

- When approving information disclosures, the board considers all
relevant factors, including for periodic financial disclosures:

(1) The evaluation results of the adequacy of the internal control
system.

(2) The external auditor’s opinions on financial reporting, observations
on the internal control system, and any other observations through other
channels.

(3) The audit committee’s opinions.

(4) Consistency with objectives, strategies and policies.

The board ensures that information disclosures (including financial
statements, annual reports, and Form 56-1) reflect the company’s
financial status and performance accurately and fairly. The board
promotes the inclusion of the Management Discussion and Analysis (MD&A)
in quarterly financial reports in order to provide to investors more
complete and accurate information about the company’s true financial
status, performance and circumstances.

For disclosures related to any individual director, that director should
ensure the accuracy and completeness of the information disclosed by the
company, including of shareholders’ information and any shareholders’
agreement.

Shareholders Structure

+--------------------------------+------------------+------------------+
| Name of Shareholders           | Number of Shares | Percent          |
|                                |                  |                  |
|                                | As of 31/01/17   |                  |
+--------------------------------+------------------+------------------+
| 1. Trillit                     | 50,100,000       | 35.18            |
|                                |                  |                  |
| Mr. Metha Trillit              |                  |                  |
|                                |                  |                  |
| Mrs. Viphanee Trillit          |                  |                  |
|                                |                  |                  |
| Dr. Viwat Trillit              |                  |                  |
|                                |                  |                  |
| Ms. Ratchanee Trillit          |                  |                  |
+--------------------------------+------------------+------------------+
| 2. Pojanalai                   | 16,500,000       | 11.59            |
|                                |                  |                  |
| Mr. Chaovut Pojanalai          |                  |                  |
|                                |                  |                  |
| Mrs. Wantana Pojanalai         |                  |                  |
|                                |                  |                  |
| Ms. Charina Pojanalai          |                  |                  |
|                                |                  |                  |
| Mr. Churat Pojanalai           |                  |                  |
+--------------------------------+------------------+------------------+
| 3. Wesaratchawest              | 5,645,165        | 3.96             |
|                                |                  |                  |
| Mr. Suvit Wesaratchawest       |                  |                  |
|                                |                  |                  |
|   Ms. Pornpring Wesaratchawest |                  |                  |
|                                |                  |                  |
| Ms. Sutaree Wesaratchawest     |                  |                  |
|                                |                  |                  |
|   Mr. Thapanee Wesaratchawest  |                  |                  |
|   Mrs.Wasana Wesaratchawest    |                  |                  |
|                                |                  |                  |
| Ms. Warunee Wesaratchawest     |                  |                  |
| Mr. Karn Wesaratchawest        |                  |                  |
|                                |                  |                  |
| Mr. Boonsak Wesaratchawest     |                  |                  |
+--------------------------------+------------------+------------------+
| 4. Choengvivatkit              | 9,061,850        | 6.36             |
|                                |                  |                  |
| Mr. Surachai Choengvivatkit    |                  |                  |
|                                |                  |                  |
| Mr. Suwat Choengvivatkit       |                  |                  |
|                                |                  |                  |
| Ms. Waraporn Choengvivatkit    |                  |                  |
|                                |                  |                  |
| Ms. Ratchanee Choengvivatkit   |                  |                  |
+--------------------------------+------------------+------------------+
| 5. Free Float                  | 61,064,985       | 42.89            |
+--------------------------------+------------------+------------------+
| Total                          | 142,372,000      | 100.00           |
+--------------------------------+------------------+------------------+

Note: Grouping by family name including spouse, sons and daughters, and
siblings.

Principle 7.2
The board monitors the company’s financial liquidity and solvency.

-   The CFO is responsible for monitoring the financial position of the
    Company and reporting to the Board of Directors on financial ratios
    and financial liquidity at the Board of Directors meeting quarterly.

-   The board has set significant transaction level as follows :

Summary of Significant Transaction Approved

+-------------------------------------+---------------+---------------+
| Transaction approved                | Board of      | President and |
|                                     | Directors     |               |
|                                     |               | Managing      |
|                                     |               | Director      |
+-------------------------------------+---------------+---------------+
| 1. Approval for purchasing and      | Above 40      | Less than 40  |
| procurement per transaction         | Million Baht  | million baht  |
+-------------------------------------+---------------+---------------+
| 2. Approval for sale of             | Above 40      | Less than 40  |
| inventories, and fix assets per     | Million Baht  | million baht  |
| transaction                         |               |               |
+-------------------------------------+---------------+---------------+

-   The board ensures that it does not consciously approve any
    transactions or propose any transactions for shareholder approval
    which could negatively affect business continuity, financial
    liquidity, and solvency.

Principle 7.3
The board ensures that risks to the financial position of the company or
financial difficulties are promptly identified, managed and mitigated,
and that the company’s governance framework provides for the
consideration of stakeholder rights.

-   The board monitors liquidity, solvency, and financial problems of
    the company closely to ensure that the business operates with
    caution and comply with the disclosure requirements from CFO report
    at the Board of Directors meeting for the approval of the financial
    statements on a quarterly basis. The Managing Director reports
    problems encountered and the solutions. The board follows up the
    case to ensure fairness to stakeholders and the sensible of
    solutions are taken.

Principle 7.4
The board should ensure sustainability reporting, as appropriate.

Corporate Social Responsibility and Sustainability Report

Thailand is recognized as an agricultural country, despite the fact that
the agricultural sector does not take the major role to generate incomes
to the country. However the agricultural sector has still played an
important role to feed the nation, and also yield the national incomes
through export. Over the past, several countries worldwide have been
trying to increase their farming areas in order to cultivate more. Even
the countries which were unable to farm have also tried to lease
cultivated lands of other countries for this purpose. Consequently, it
can be said that the farming sector is significantly important role.

Food Security is a modern problem faced by many countries, especially
developing countries, where such problem is increasingly severe due to
the change of climate and limited area of agriculture. Therefore, each
country has to come up with measures to cope with this problem.

For Thailand, we are capable of producing sufficient food crops for
domestic consumption and exporting to other countries. However, the
government should pay attention to the following factors in order to
avoid future problems.

1.  Agricultural areas have been used for producing alternative energy
    such as solar farm, which has gained increasing popularity,
    especially in Northeastern area.

2.  Agricultural labor force has continuously decreased as new
    generations prefer to work in industrial sector. Therefore,
    agricultural sector has lacked of labor force due to its high demand
    in labor.

3.  More foreigners have used legal loopholes to occupy agricultural
    areas causing some Thai people to lose the possessory right of their
    land and unable to use their land for agricultural purpose.

4.  Factors of production such as chemical fertilizer and pesticide
    chemicals must be imported from other countries causing high
    manufacturing cost.

Weed Science Association of Thailand conducted a research and it was
found that weeds are the number one enemy of farmers. Labor for
agricultural sector is scarce and more costly than the use of
herbicides. Due to the aforementioned factors, Thai farmers have to find
the way to “produce more without expanding the area while making the
efficient use of their existing labor”. Pato Chemical Public Company
Limited was, therefore, established to answer the needs of Thai farmers
for quality, increasing productivity, and rely on less labor by
providing high-quality and effective pesticides at reasonable price
while multinational companies focus on importing finished products,
which are more expensive.

Pato Chemical Industry PCL. has imported both finished products and
Technical Grade chemicals and laid down the policy to focus on import
the Technical Grade materials as much as possible as having considered
that the Technical Grade chemicals can be formulated for their own
manufacturing process and this would cut down the production cost and
help promote the domestic income distribution since other chemical
elements, including packaging materials can be supplied domestically.
The most important thing is that the Company can monitor and control the
quality of the products better than the imported finished ones.
Definitely, this will bring about big advantages to Thai farmers and
agriculturists as they can access to the good quality agricultural
products with the lower price and cut down the farming cost.
Consequently, the past 30-year history of the company’s operation have
been secured by the reliability and trust of Thai agriculturists until
today.

Corporate Social Responsibility Policy

Pato Chemical Industry Co., Ltd. (Thailand) is a part of society, thus
the importance of doing business with social, community and
environmental awareness is to be concerned for sustainable growth and
achievement of recognition. To encourage the directors, managements and
employees to the same directions, the company takes into consideration,
the Corporate Social Responsibility and set the policies as follows:

1. To raise awareness of all employees the realization of social
responsibility and take into account the promotion of social
responsibility through corporate governance and internal control, as
well as create enterprise value focusing on activities that are correct
and honest.

2. To consider the meaningful existence of the company, moreover, the
company emphasizes the rights of all stakeholders including employees,
customers, competitors, commercial creditors, environment and society at
the well-balanced and prioritized appropriately, so all parties are
satisfied and contribute to the sustainability.

Preparation of CSR Report

The Company has prepared the CSR report in line with the framework of
CSR guidelines outlined by SET. The report will be included in the
Company’s annual report and reflect what they have planned and actually
performed. Pato Chemical Industry PCL. has committed themselves on the
vision “Supply good quality products with fair price to Thai farmers,
secure in the performance stability with the engagement of social and
environment responsibility”. Consequently, the Company has set out the
business guidance to observe the following 8 principles of social
responsibility:

+----------------------+-----------------------------------------------+
| 1. Doing business    | Board of Directors has a policy to treat      |
| with fairness        | their business partners with fairness and     |
|                      | honesty. The goal of sustainability is to     |
|                      | minimize customer complaints. and therefore   |
|                      | establishes the principles below:             |
|                      |                                               |
|                      | - Avoid any business or operations which may  |
|                      | lead to the conflict of interest.             |
|                      |                                               |
|                      | - Promote the freedom of fair competition and |
|                      | avoid favoritism treatment.                   |
|                      |                                               |
|                      | - Support the protection of intellectual      |
|                      | property or patents.                          |
|                      |                                               |
|                      | - Establish the preventive measures to ward   |
|                      | off bribery and corruption, by setting up the |
|                      | rectification process, as well as the         |
|                      | monitoring function and penalty.              |
|                      |                                               |
|                      | - Promote the anti-corruption campaign among  |
|                      | the executives and staff.                     |
|                      |                                               |
|                      | - The company has remained the political      |
|                      | neutrality and never taken a part or          |
|                      | contributed funds to any political party      |
|                      | directly or indirectly, as they have          |
|                      | considered that the political stances are     |
|                      | individual and not involved corporate         |
|                      | responsibility.                               |
+----------------------+-----------------------------------------------+
| 2. Anti - Corruption | Corruption in Thailand is recognized          |
|                      | throughout the world and Thailand is ranked   |
|                      | for corruption problem in the primary. The    |
|                      | problem affects the image and standard of     |
|                      | living of Thai people as a whole for          |
|                      | instance:                                     |
|                      |                                               |
|                      | 1. Public resources may turn to someone own   |
|                      | illegally and unethically.                    |
|                      |                                               |
|                      | 2. Distortion of resources use and as a       |
|                      | result, public do not receive full benefits   |
|                      | from funds spent on the project such as poor  |
|                      | quality road or constructions which lead to a |
|                      | shorter working life than it seems, or people |
|                      | receive poor service.                         |
|                      |                                               |
|                      | 3. Politicians may take opportunity to        |
|                      | monopolize, not promoting effective and fair  |
|                      | competition and result in weak and            |
|                      | unprogressive organization.                   |
|                      |                                               |
|                      | 4. The youth and public will value wealth     |
|                      | achieved by the fraud. Small mistake,         |
|                      | privilege for own benefit will become common  |
|                      | and done by everyone. People will not believe |
|                      | in morals and ethics and lead to              |
|                      | exploitation, rules and disciplines breaking, |
|                      | and the lack of common sense to do for        |
|                      | public.                                       |
|                      |                                               |
|                      | The company gives importance to good business |
|                      | management under the framework of good        |
|                      | ethics, transparency, and being able to be    |
|                      | investigated, especially processes related to |
|                      | or risking corruption within the company,     |
|                      | with regulations as follows:                  |
|                      |                                               |
|                      | (1) The committee, directors, and employees   |
|                      |     are prohibited from engaging in           |
|                      |     corruption in all forms, whether directly |
|                      |     or indirectly;                            |
|                      |                                               |
|                      | (2) Promoting values of honesty, integrity,   |
|                      |     and responsibility towards conducting     |
|                      |     duties;                                   |
|                      |                                               |
|                      | (3) Promoting awareness to stakeholder to     |
|                      |     understand, realize, and cooperate for    |
|                      |     fighting corruption;                      |
|                      |                                               |
|                      | (4) Aiming to be a transparent organization,  |
|                      |     free from corruption, as well as not      |
|                      |     involving in any form of corruption;      |
+----------------------+-----------------------------------------------+
|                      | (5) Treating employees fairly, conduct review |
|                      |     process to penalize those who engaging in |
|                      |     corruption, violating, or failing to      |
|                      |     comply with the standards. Each case will |
|                      |     be proceeded under protocol and           |
|                      |     regulations in consideration of the       |
|                      |     penalization;                             |
|                      |                                               |
|                      | (6) Providing the measures to protect         |
|                      |     whistleblowers who inform details of      |
|                      |     corruption in the organization; and       |
|                      |                                               |
|                      | (7) Providing review of compliance according  |
|                      |     to anti-corruption policies in line with  |
|                      |     changes in businesses, regulations,       |
|                      |     rules, and legal requirements.            |
+----------------------+-----------------------------------------------+
| 3. Respect on human  | The Company has supported and respected a     |
| right                | human right protection and honor individual   |
|                      | dignity. The company has put against the      |
|                      | coercive and child labor by promoting the     |
|                      | observance of the international human right   |
|                      | codes and morality in order to secure the     |
|                      | social tranquility.                           |
|                      |                                               |
|                      | In addition, the employee recruitment has not |
|                      | been decided by inborn and physical character |
|                      | traits i.e. race, gender and religion, but    |
|                      | judged on the real competency and virtue.     |
+----------------------+-----------------------------------------------+
| 4. Attainment to the | The Company has secured the protection of     |
| goal of fair         | employment by observing the fair employment   |
| treatment to         | codes of conducts with sustainable goal of    |
| laborers             | low rate of turnover as follows:              |
|                      |                                               |
|                      | 1. Put the priority on the safety and         |
|                      | sanitation by arranging appropriate           |
|                      | occupational health and safety on working.    |
|                      |                                               |
|                      | 2. Provide skills and training to enhance the |
|                      | employee’s competency and render career       |
|                      | opportunity. There are clear policies and     |
|                      | concrete guidelines.                          |
|                      |                                               |
|                      | 3. Return appropriate remuneration to reflect |
|                      | the workloads and job entity.                 |
|                      |                                               |
|                      | 4. Set out the pledge and complaint process   |
|                      | appropriately.                                |
|                      |                                               |
|                      | 5. Provide appropriate benefit welfare. The   |
|                      | company's minimum wage applies to new         |
|                      | unskilled workers. The wage applied is higher |
|                      | than that announced by the government and the |
|                      | daily worker wage is adjusted annually.       |
|                      |                                               |
|                      | 6. Create balance of working life and family  |
|                      | well-being.                                   |
|                      |                                               |
|                      | 7. Prevent from unfair treatment or           |
|                      | disciplinary punishment to the employees who  |
|                      | honestly work.                                |
|                      |                                               |
|                      | 8. Seek for discussions/cooperation between   |
|                      | employer and employee for solutions and       |
|                      | respect employees’ opinions.                  |
|                      |                                               |
|                      | 9. Develop and instill morals and ethics.     |
|                      |                                               |
|                      | 10. Offer employment to the disabled to       |
|                      | return the benefits to the society.           |
+----------------------+-----------------------------------------------+
| 5. Responsibility    | The following principles are observed:        |
| for customers        |                                               |
|                      | 1. Manufacture the good quality products      |
|                      | which have been trusted by Thai farmers over  |
|                      | 30 years. The products will give an efficient |
|                      | and safe result, when the consumers follow    |
|                      | the safety directions given on the label.     |
|                      |                                               |
|                      | 2. Provide correct and sufficient information |
|                      | to the consumers without propaganda by        |
|                      | navigating easily-understood instructions     |
|                      | which include the safety handling with the    |
|                      | users who are affected by the toxic chemical, |
|                      | and how to manage the storage and disposal.   |
|                      |                                               |
|                      | 3. Raise awareness among the consumers and    |
|                      | manufacturers to recognize the importance of  |
|                      | using the products with the least harm to the |
|                      | environment.                                  |
|                      |                                               |
|                      | 4. Develop the products to give the optimum   |
|                      | benefits in an environmentally responsible    |
|                      | way i.e. supplying environmental-friendly     |
|                      | products with least toxic residues.           |
+----------------------+-----------------------------------------------+
| 6. Responsibility    | 1 Deploy the standard technology and          |
| for environment      | manufacturing process by keeping in mind to   |
|                      | minimize the waste amount which has been      |
|                      | undergone the treatment.                      |
|                      |                                               |
|                      | 2. Consume the resources in an efficient way  |
|                      | by setting out energy-saving and recycling    |
|                      | policies.                                     |
|                      |                                               |
|                      | 3. Develop more lines of                      |
|                      | environmental-friendly products.              |
|                      |                                               |
|                      | 4. Prepare for a contingency plan to handle   |
|                      | the environmental rehabilitation.             |
+----------------------+-----------------------------------------------+
| 7. Cooperation with  | 1. Arrange social responsibility activities   |
| society and          | to fulfill the society and community          |
| community            | development.                                  |
|                      |                                               |
|                      | 2. Maintain the pleasant surrounding          |
|                      | environments in communities.                  |
|                      |                                               |
|                      | 3. Render supports to the society and         |
|                      | communities to access to the fundamental      |
|                      | infrastructure i.e. building schools through  |
|                      | the functions of universities’ volunteer      |
|                      | rural development camps.                      |
+----------------------+-----------------------------------------------+
| 8. Use and Sharing   | The Company plan to increase product lines    |
| of Innovation        | with low residues in the environment. Having  |
|                      | started from the registration of the          |
|                      | hazardous chemical for agricultural use, the  |
|                      | Company has to prepare for the academic       |
|                      | information/data about the products and       |
|                      | submit them to the Department of Agriculture. |
|                      | In the meantime, the standard laboratory test |
|                      | is required carrying out to find out the      |
|                      | level of chemical residues. For this process, |
|                      | the Company dispatches the sample of the      |
|                      | products to the international laboratory in   |
|                      | U.K. to ensure the lab result, and submit it  |
|                      | to the Department of Agriculture. Then the    |
|                      | expertise will conduct a test use of the      |
|                      | product on the variety of plants to recognize |
|                      | the efficiency of the products and            |
|                      | appropriate doze of use which is the best for |
|                      | Thai plants. This process shall take more     |
|                      | than 1 year to fulfill.                       |
+----------------------+-----------------------------------------------+

Business Operation and CSR Impact

The Company and its subsidiary have never been investigated or under
investigation significantly by the authority to have violated the rules
regarding the above 8 principles.

CSR in Process

The Company’s Risk Management Committee has studied the impacts of the
company’s business operations on stakeholders by taking into accounts
the importance of all groups of stakeholders to ensure that its
operations are appropriate, fair and complete on the basis of economy,
society and environment in order to achieve sustainable development.
After that, the committee has selected the relevant topics of risk,
which are relevant to the Company by taking the Company’s financial
report into consideration.

In 2017, demand of agrochemical came to normal due to sufficient rain
for cultivation. However, there were floods in some area such as the
southern and northeastern part of Thailand. Thai farmers still suffered
from a slump of prices especially, Para rubber and palm oil. The
government was unable to solve this problem in sustainable way.

The Company’s management recognizes that under the circumstances lead to
the materiality topics that should be done to achieve the
sustainability. The company select appropriate activities or projects to
meet the need as follows:

+-----------------------+----------------------------------------------+
| Needs                 | Activities or Projects to respond            |
+-----------------------+----------------------------------------------+
| Relieve the suffering | The relief project for flood victim          |
| retailers affected by | retailers                                    |
| the floods in the     |                                              |
| Southern,             | Due to the massive flooding in the south,    |
| Northeastern and      | north eastern and the upper central region   |
| Upper Central part of | of Thailand, many retailers were             |
| Thailand.             | experiencing problems. The company provided  |
|                       | helps to support these retailer affected     |
|                       | from the flood by:                           |
|                       |                                              |
|                       | 1. Receiving back the products to clean,     |
|                       | change and re-label the bottle, tank or      |
|                       | gallon containers without charge; and        |
|                       |                                              |
|                       | 2. Extending the repayment terms without     |
|                       | interest to flood victim retailers.          |
+-----------------------+----------------------------------------------+
| - Provide directors,  | Understanding of Anti-Corruption Manual      |
| executives and        | The management agreed to organize            |
| employees with annual | educational excursion for all level of       |
| vacation.             | staff, housekeeper to manager. They will be  |
|                       | able to enjoy new experience with            |
| - Provide directors,  | disciplinary practice, team-working          |
| executives and        | practice, generosity practice, and get the   |
| employees             | feeling of familiness in Luang Prabang on    |
| understanding about   | weekdays as follows:                         |
| Anti-corruption       |                                              |
| manual approved by    | 1. The participants will be separated into 2 |
| the Board and to      | groups since they are working days. The      |
| cultivate it as a     | company operates business as usual. Staff    |
| corporate culture.    | who do not travel will be able to do routine |
|                       | work on behalf of those who are travelling.  |
| - Provide all         | This way, staff will be able to learn the    |
| employees with new    | work of each other. All tasks will be        |
| year greeting, rice   | smoothly done without interruption.          |
| offering to the       | Convenient communication services making it  |
| monks, traditional    | possible to solve any problems more easily.  |
| ceremony to pay       |                                              |
| homage in Luang       | 2. The travelling group should buy some      |
| Prabang, Laos         | souvenirs for the staff who are still        |
|                       | working on the company’s expenses for        |
|                       | generosity practice                          |
|                       |                                              |
|                       | 3. The chairman of the company gave pocket   |
|                       | money on his private budget to all           |
|                       | participants to experience a famous café and |
|                       | to taste the drink and bakery.               |
+-----------------------+----------------------------------------------+
|                       | The main reasons of choosing Taiwan are:     |
|                       |                                              |
|                       | 1.  Apart from its beautiful scenery and     |
|                       |     places of interest, the company mainly   |
|                       |     considered for staff’s convenience and   |
|                       |     safety reasons. People of both countries |
|                       |     share the same religious and culture.    |
|                       |     Thai is understandable and Thai baht can |
|                       |     be used.                                 |
|                       |                                              |
|                       | 2. National airline helps serve in our       |
|                       | language. Our staff can communicate with the |
|                       | onboard crew conveniently.                   |
|                       |                                              |
|                       | 3. Visa exempted.                            |
+-----------------------+----------------------------------------------+
| Raise awareness for   | Cleansing after exposure or use of chemicals |
| farmers to clean      | project                                      |
| their bodies every    |                                              |
| time they touch or    | The market research from the company was     |
| use agrochemicals.    | found that soap bar was popular with farmer  |
|                       | and the additional researches have studied   |
|                       | more about the scent and brand favorite      |
|                       | among them. The respective results were used |
|                       | for selection of the soap bar brand in order |
|                       | to distribute in the gift box to the         |
|                       | customers. This is to raise the awareness of |
|                       | cleansing the body after the use or exposure |
|                       | of pesticides. The outcome has been          |
|                       | successful and well accepted.                |
+-----------------------+----------------------------------------------+
| - Reduce electricity  | The transparent roof, reducing the use of    |
| consumption.          | electricity project                          |
|                       |                                              |
| - Reduce the risk of  | Due to dangerous substances stored in the    |
| accidents caused by   | warehouses, some of which are flammable. The |
| short circuit.        | company has a policy to reduce the use of    |
|                       | electricity in warehouses that stored        |
|                       | flammable materials for safety and to use    |
|                       | natural light as substitutes. The roofs have |
|                       | been changed to a clear transparent roof for |
|                       | natural sunlight so that no use of           |
|                       | electricity in warehouses where flammable    |
|                       | materials are stored as well as eliminate    |
|                       | risks that could lead to accidents.          |
+-----------------------+----------------------------------------------+
| Increase work         | 15 minute nap to have healthy brain project  |
| performance           |                                              |
|                       | Researches show that sleeping during midday  |
|                       | about 10-20 minutes is the time that your    |
|                       | body stays in the Non-Rapid Eye Movement     |
|                       | (NREM) period. When you wake up, you will    |
|                       | feel refreshed and rejuvenated and your      |
|                       | brain gets full rest which helps increase    |
|                       | work performance. This is called “Power      |
|                       | Nap”. This is the reason why the company     |
|                       | encourages management and staff to take      |
|                       | 15-20 minute nap after lunch. The project    |
|                       | receives good cooperation from employees.    |
|                       | Turn out the light after lunch break, not    |
|                       | only help the company to save energy, but    |
|                       | the employees also can get some rest and     |
|                       | wake up with freshness.                      |
+-----------------------+----------------------------------------------+

CSR Activities in Process (ongoing)

Project of Low Toxic Residue Products to Farmers and Environment

DOA has approved products of low toxic residue to farmers and
environment as follows:

- Isoprothiolane 41.76% w/v EC. (Fuji-One), from Japan, which can be
used as an element for herbicide to destroy plant diseases i.e.; Rice
Blast Disease

- Bispyribac-Sodium 20% WP, from China, used for controlling narrowleaf
weeds in paddy fields i.e. jungle rice, birds rice, wrinkle duck-beak,
Broadleaf weeds i.e.; gooseweed, Sedge i.e.: umbrella sedge, small
flower umbrella sedge, and tall fringe rush. 

- Fenpyroximate5% w/v EC. (Ortus), from Japan, used for killing mites in
plantation of orange, papaya, durian, rambutan, longan, chili, lime, and
cassava and Kansawai spider mite in rose gardens and orchid farms.

- Buprofezin 40% w/v SC. (Applaud 40 SC) from Japan, used to control
brown plant hoppers in rice field and cotton leafhopper.

- Difenoconazole + Propiconazole 15% +15% w/v EC (Patore 300), used for
protecting Dirty Pannicle and Sheath Blight in paddy field.

- Fenoxaprop-P-ethyl 6.9% EW (Patoweed 6.9) used to control weeds in wet
seeding rice field (apply as post emergence) to control narrow leaf weed
such as jungle rice and little ironweed.

- Azoxystrobin 25% W/V SC used to control and get rid of Black anther in
orchid caused by Colletotrichum.

Safe and Proper Use of Pesticides Project

Currently, pesticides are recognized worldwide as an important
production factor in creating food security. If they are used correctly,
it can produce safe food for consumers. On the contrary, incorrectly or
excessively usage, it may cause side effects like overdose using of
medicines in human.

             One of the reason behind Thailand success in producing
enough food for domestic consumption and ranking 1 among 10 countries
who can feed the world’s population is the use of production factors
including fertilizers and pesticides. The data showed that the US has an
area of ​​1,015 million hectares of cultivated area. The use of
agrochemicals around 3.9 million tons per year is five times higher when
compared with Thailand. The usage rate of 0.38 kg per hectares is
two-fold higher than Thailand which is only 0.176 kg per hectare. China
is the country of the highest usage rate of agrochemicals. It is 0.70 kg
per hectare or four times higher than the rate of Thailand. Meanwhile,
Japan has cultivated area of 27 million hectares. Agrochemicals usage
rate is 2.3 kilograms per hectare or about 13 times higher than
Thailand. Most of which are used in paddy fields.

           Currently, Thailand has passed one of the most restrictive
law to control the import of agrochemicals, the Hazard Substances Act
B.E. 2551. More than 100 types of hazardous agrochemicals of high
environmental impacts were banned. Agrochemicals that are allowed for
import and sell in Thailand have passed screening process from
manufacturers of over 10-year experiences. The products have been tested
by the environmental agencies; Food and Agriculture Organization of the
United Nations and have been gone through efficiency field trials in
Thailand before being allowed to be sold.

         Prior to the adoption of the Hazard Substances Act B.E. 2551,
there were more than 25,000 hazardous products registered. Presently,
only 9,000 products have been registered. However, there is no country
in the world abolishes the use of pesticides decisively, but they launch
a campaign of usage reduction. In Thailand, it can reduce the use of
agrochemicals by 20-30%. Consequently, if farmers use pesticides wisely
and have enough knowledge to diagnose problems and identify pests
correctly as well as be able to know the features of the products, they
can use it economically and safely in the right time and at an
appropriate rate. (Source: Dr. Weerawut Katanyukul, Ex-President Thai
Agro Business Association).

Consequently, the Company organizes the agriculturist meetings so as to
give them lectures about self-defense by wearing a protective clothing,
proper use and appropriate dosage of chemicals for each crop, and
correct harvesting period as per details prescribed on the label.
Besides, there are a follow up program to ensure if the agriculturists
follow our instructions, in order to instill understanding, reduce the
of using wrong types and overuse of agrochemicals. The overuse may cause
some impact to agriculturists themselves on toxic overdose, pest
resistance, residues in plants and environmental contamination and
adversely affect consumers. In addition, it may cause the losing of
opportunities to export vegetables and fruits.

Project of Excellent Performance, Dividend Shares for Investors

The Company has recognized the importance of a good governance and
transparent management with professionalism to secure the stability of
business. As a result of continuous efforts, the Company has been
selected by the Stock Exchange of Thailand as the Outstanding
Performance Award in 2010 and 2011. However, as the consequence of the
new Hazardous Chemical Act, the Company sustained some operational
impacts as they were required to start the registration process of the
hazardous chemicals, as the existing registration of import,
manufacturing and possession had been annulled under the new Act. At
present, the company can apply more registrations of hazardous
substances. Moreover, the company has focused on the liquidity
management by investing in general fixed income fund, bond, and equity
fund of listed company with regular high performance and dividends paid
to investors to enjoy tax privilege.

According to the performance, the company has been awarded with its
third year of SET Awards for Outstanding Company Performance and the
first year for Best Company Performance Awards for a small company which
incomes under 2 billion baht. The company has provided shareholders with
regular good dividend as per afore mentioned Dividend Policy topic.

Even, in 2015 earnings decreased because of the drought, but the company
was able to manage a profit and was able to give dividend to
shareholders consistently and continuously.

Renewal of Retiree Project.

Presently, the elderly people is approximately 14.9% of all population.
It is expected that people aged 60 and above will be around 13 million
people or 20% of all population by 2020. (Information from Department of
Older Persons) That means Thailand is moving towards aging society, but
in fact, the elder people in Thailand still have healthy body and mind.
They can work efficiently from the experiences gain. The company has
policy for retired employees who still have the capability and have
directed experience, healthy, and still want to help company. The
renewal project will be considered annually from accomplishment,
capability and willingness. This is a morale support for those who
dedicate to the company and willing to work to avoid being burden of
families.

Proper dress code for safety

The Company had studied until the conclusions appeared that Thai farmers
have preferred the check shirt than anything. Therefore, the Company had
a shirt vendor supplied good quality check shirts which were used as
premium freebies for the company products to boost sales volume. At
present, around 300,000 shirts have

been distributed to Thai farmers nationwide and it was pleased that the
shirts were well used by the farmers; moreover, some of the farmers were
wearing in daily life. Furthermore, the company has launched a campaign
of gloves wearing while applying, mixing, or spraying agrochemicals. The
company has attached a pair of rubber gloves together with granule
agrochemicals for farmers to use while sowing the chemicals into the

field.

Project of Efficient Use of Resources

The Company has promoted the recycling process i.e. re-using paper,
turning off air-conditioning system and lighting during the lunch breaks
or unoccupied office space, taking stairs, taking car pools, etc. Though
the project did not give much quantitative result, but helped instill
the recycling mindset and behaviors in the employees who would treat the
same at their home and such behaviors descend from generation to
generation.

Project of Low Accident in Work Place

The company operate to reduce accidents at work by;

1. Finding risk place where accidents may occur in work place.

2. Preparing plans against conflagration, chemicals spilled/leaked
together with practice, evaluation, and review of the plans once a year.

3. Providing protector devices and arranging emergency response that
suit the situations.

4. Training with understanding on how to; safety perform, control,
solve, retrain, and mitigate hazards that may occur during operation,
however, ones must follow MSDS (Material Safety Data Sheets). The
operation will be controlled by staff who have a Qualification
Certificate of safety or Safety officer.

According to the plan, numbers of accident in the work place is low and
no serious accidents reported so far. Report submitted to the Department
of Labor Protection and Welfare on quarterly basis for 2015-2017 is as
follows:

Accident in work place from 2015 - 2017

  ------ ----------------------------------------------------------------
  Year   Numbers of accident

  2015   1 accident, 1 employee slightly injured

  2016   0 accident.

  2017   1 accident, 1 employee slightly injured
  ------ ----------------------------------------------------------------

Project of Profit Rebates to Customers

The Company has set out the policy to strengthen relations with the
customers by implementing the following conducts:

1. Communicate with customers honestly and sincerely.

  2. Provide speedy delivery service.

  3. Facilitate easy access to the sales staff and welcome negotiation
  and bargaining with special business promotion.

  4. Recognize the importance of representative customers and focus on
  the retail business instead of the wholesale one in order to eliminate
  the problem of “big fish hunt small fish”

  5. The Company has realized the importance on honoring the promise
  which they have given to the customers.

What’s more is that the Company has availed themselves for the profit
rebates given to the customer at the year end. It is found that the
customers have preferred the profit rebates. This project has been
successful and made the customers place their royalty to the Company for
more than 30 years.

15 minute nap to have healthy brain project

Researches show that sleeping during midday about 10-20 minutes is the
time that your body stays in the Non-Rapid Eye Movement (NREM) period.
When you wake up, you will feel refreshed and rejuvenated and your brain
gets full rest which helps increase work performance. This is called
“Power Nap”. This is the reason why the company encourages management
and staff to take 15-20 minute nap after lunch. The project receives
good cooperation from employees. Turn out the light after lunch break,
not only help the company to save energy, but the employees also can get
some rest and wake up with freshness

Project of Same Family

The Company has committed themselves to create and enhance the
affections and unity in the workplace to strengthen the teamwork spirits
among the employees and management team. The company parties and trips
have been arranged by including the employees’ family members without
cost. The company regulations become flexible as appropriate where
everyone accepts. The examples of these successful activities included:

- When the schools are closed, the employees’ siblings, nephews or
nieces are allowed to work on internship program to support their
families, explore the new working experiences and spend their time in
more creative and useful way.

- Earlier, the Company was affected by termination of registration of
import, manufacture and possession of the chemical under the new
Hazardous Chemical Act. Some staff was discouraged by the situation.
Therefore, the Company issued ESOP warrants for the employees in order
to raise their spirits as detailed below:

- Communication, questions and answers, complaints, and beneficial
information to quality work of life among employees are done via Social
Network Application for the same and equal understanding and practice.

People with disabilities work at home Project.

The government aid measure ask private sector to support people with
disabilities to have the opportunity to work, earn money with welfare
and get self-esteem not feeling to be family’s or society’s burden.

The company employ these people with disabilities by allowing them to
work at home so as to save expenses and increase safety. Public
transportation or devices to facilitate people with disabilities are not
completely ready in Thailand.

Project of Health Promotion

The annual medical check-up has been provided to all employees,
moreover, employees’ family can attend this program at special discount
price from hospital that join the company’s project. The health and
personal accident insurance schemes have been applied for everyone,
apart from the social security insurance. Use of drugs has been
prohibited in the workplace. The annual blood test for employees and
workers at factory in searching for residue in blood is provided and
residue report has never been founded.

Child Safe Room Project
At the factory, hazardous chemicals, flammable substances are kept apart
form that, big trucks moves in and out occasionally. Unforeseen
accidents could happen at any time. It is not a place where employees
could bring their children, or any person into the factory. However, the
company takes into account the circumstances that sometimes, it is
inevitable for employees to take children inside the factory as no one
can take care of their children. The management decides to build an air
conditioned room equipped with enough facilities for children at the
office building which is far from production site. Children can spend
their free time doing homework while waiting for their parents. In order
to bring safety for everyone in the plants, the rules for bringing
children into the factory area are set as follows:

1.  Permission from the factory manager must be granted in advance.

2.  Limited number of times to use the room per week.

For safety and health reason of other children and staff, sick children
are not allowed to come into this children room.

Project of Community Caretaking for Safety

It was found that the public Soi next to the Head Office has poor light
and the pilferage have often taken place. The Company has arranged
lighting installation and coordinated with Bangkok Metropolitan
Administration to install CCTV to strengthen daily- life security of the
commuters. Bangkok Metropolitan Administration set up CCTV and led to
lower crimes report significantly.

CSR after Process 2017
Flowers for Dad.

            The company sees the importance of volunteerism and wants to
cultivate employees with good social conscience. Materials for
sandalwood flowers were arranged for employees to spend their free time
after lunch to craft the flowers for our final tribute to His Majesty
King Bhumibol Adulyadej. The sandalwood flowers done were sent to the
monastery assigned to be the place for Royal Cremation Ceremony to
commemorate the gracious and merciful of the Late King.

CSR after Process (On Going)

Projects of Development of Dream Schools

In the past, the Company had surveyed small schools surrounding the H.O.
and found that most of them were supported by Bangkok Metropolitan
Administration and received sufficient funds for school development.
However, it was found that Wat Uthaitaram Primary School was under the
Office of Basic Education Commission, and offered the Grade 1 – 6
educations. The school were supported the funds from the government by
headcount of students. At the time of survey, there were only 120
students; therefore, the school was rendered insufficient financial
supports for development. Most of students were from poor families.
Consequently, the Company had an opportunity to extend financial
supports and co-work with the school’s Development Committee Team by
procuring educational/sport equipment, providing school meals,
renovating the audio-visual education room which had been closed for
more than 10 years, supplying computers and offering education funds for
the students in need every year.

As the Company piloted the school development program, more volunteers
have joined in activities, for example, renovating the first-aid room,
and library, refurbishing computer room, sport field and rebuilding the
boundary walls. After that the school requested the development funds
from the government to renovate the school building. At present, there
are 300 students at this school.

In the past, there was no English teacher who graduated from the
directly related to field of studies. Therefore, none of grade 6
students could pass the basic national test or o-net in English
language. According to the test in 2010, a maximum score was 32 out of
100 and the minimum was 0. The Company’s employees volunteered to teach
English to the students during the lunch time which was a studying
period. Sometimes, English tutoring classes were arranged on Saturdays
to help the students from grade 5 and 6 to improve the score result.
Moreover, the Company also supported and provided o-net’s exam for grade
6 students. The results have always been satisfactory. Presently, there
is an English teacher in the school, the purpose of coaching students
have changed and focused on students to be fun with English, to be more
assertive, and to learn about culture and tradition of other countries.

Every year, the Company coordinates with many parties to get sponsors
for a beach trip or a farewell party for students grade 6, depends on
convenience, in order to broaden their view of life experiences.

From such developments, the school has been chosen to be the one of a
Dreamed School Project and in 2014, the school has been selected to
receive royal award school for small school types in Bangkok. Awards
provide the school with fund to further improve the school on academic
performance.
Employee who has devoted her time to serve as school English teacher for
eight years received honorary award in 2015 academic year.

In 2017, Wat Uthaitharam School sent students for English Speech
Contest. Company employee trained the students and the students receive
2 gold medals.

Scholarships of Rajprachasamasia Foundation for orphans whose parents
died from AIDS. The children will be taken care off and given
opportunity to study in 4 sections; elementary school, secondary school
or vocational education, and university. This project has supported as
many as 300 orphans for university graduation so far.

Donations in 2017

Helping flood victims in Southern Thailand through the Emergency Aid
Fund of the Office of the Prime Minister.

             Helping flood victims through the Department of Internal
Trade. Ministry of Commerce.
Purchasing computer for education CAMILO FOUNDATION OF THAILAND

Lunch Fund for Mool Mang School, Luang Pu Chob Tan Samo.
Budget for Children Day activities at Jamjun Vitaya School
Education Fund and Budget for Children Day activities at Wat Uthai
Tharam School

Scholarships to Alumni of Postgraduate, Mahidol University.

Sponsorship of social activities provided under the cooperation with The
Federation of Samutprakarn Industry.

Sponsorship of social activities provided under the cooperation with
Sub-district Administrative Organization, Praksa Samutprakarn.

Education Fund Praksa Vittaya School.
Donation to Vajiravej Witayalai Foundation under the King’s Patronage.

In addition, The Company has participated in the religious ceremonies as
appropriate.

Principle 7.5
The board ensures the establishment of a dedicated Investor Relations
function responsible for regular, effective and fair communication with
shareholders and other stakeholders such as analysts and potential
investors.

Investor Relations

The Board of Directors places importance on presenting correct,
complete, transparent and thorough information in financial reports and
in the presentation of general information, as well as vital information
concerning company assets. The various information is disseminated via
stock market channels and communications. The company has not yet
established an investor relations work unit due to small number of
shareholders so far, but has assigned Mrs. Parichart Manuthasna, the
Office Manager and Company Secretary, to undertake contacts with
institutional investors, shareholders and as well as analysts and
related government sectors. Investors can contact for more information
at Tel 0-2318-0360-9 ext. 118 or e-mail: pato2@cscoms.com

The company allows an opportunity for analysts or investors to schedule
telephone interview directly with the managing director or other related
administrative members as well as responding to enquiries via email. In
2017, 2 analysts from local and overseas financial institution also
scheduled meetings with the managing director.

Principle 7.6
The board ensures the effective use by the company of information
technology in disseminating information.
All stakeholders can reach www.patochemical.com for more information.

Principle 8:
Ensure Engagement and Communication with Shareholders
Principle 8.1
The board ensures that shareholders have the opportunity to participate
effectively in decision-making involving significant corporate matters.

The Company is committed to operating its business to satisfy
shareholders by creating good and continuous return. The Company
arranges shareholders meeting for shareholders to consider various
agendas and acknowledge the performance. The Company takes into account
that attendees should receive accurate, adequate and timely information.
Shareholders will be able to propose any agendas to the board for
consideration before 16 February 2018 by mail, fax or e-mail:
auditcom.pato@gmail.com. The company has made an announcement to
shareholders to propose agendas or nominate director through website of
the SET on January 8, 2018
Principle 8.2
The board ensures that the shareholders’ meetings are held as scheduled,
and conducted properly, with transparency and efficiency, and ensure
inclusive and equitable treatment of all shareholders and their ability
to exercise their rights.

The Company holds a general shareholders meeting at a location where it
is convenient for directors, executives, and shareholders. Before each
meeting, the company prepares documents and these are assigned
to Thailand securities Depository Company limited which then undertakes
to send the meeting agenda and documents for prior consideration, as is
stipulated by stock exchange regulations. The company post invitation
letter published on the company's Website at least 30 days before the
meeting. To facilitate shareholders, stamp duty is also provided for
proxy authorized to attend the meeting without charge.

In 2017, the company arranged Annual General Meeting of Shareholders on
April 25, 2017 at The Royal Golden Jubilee Building. The registration
desk was opened 2 hours ahead of the meeting. The company prepares
documents and details which shareholders should have knowledge of, and
gives these to shareholders for their consideration at least 14 day
before the meeting. In the event the shareholder cannot attend the
meeting, the company includes a documentary consent of representation
together with the invitation to the meeting. With this documentary
consent of representation, the shareholder can give power of attorney
to another person or a member of the audit committee, to attend the
meeting and exercise right to vote according to the wishes of
the shareholder.

In voting, one share is equally entitled to one vote. For any connected
transaction agendas, interested shareholders will be informed to abstain
from voting.

In addition, the company makes a complete and correct record of the
meeting, which can be checked by shareholders. Directors, Audit
Committee members, Executives attended the meeting in full force. The
representative from Thai Investors Association observed the meeting,
moreover, auditors and legal advisor are appointed to verify the votes.

The Chairman of the meeting gave shareholders equal rights and freedom
to ask questions and express views and voting procedure was clearly
explained. The chairman also announced number of votes; approve,
disapprove and abstain from voting. Software and Barcode were used for
registration and vote count for fast and correct outcome.

Principle 8.3
The board ensures accurate, timely and complete disclosure of
shareholder resolutions and preparation of the minutes of the
shareholders’ meetings.

The Company has published minutes of the meeting on the Website of the
Company within 14 days after the meeting by recording key questions from
shareholders and explanation from directors and managements and the
result of the vote on each agenda and submitted such to the Stock
Exchange of Thailand, and the Ministry of Commerce.

In 2017, the company passed the meeting quality evaluation with the
total score of 91.62.

Evaluation result on Corporate Governance Report of PATO in 2017 was
84%.