Lawsuit

1) Accounts receivable and loan to Plastic Precision Co., Ltd. arosed
from the debt restructuring agreement made on December 30, 2003, The
condition in the agreement stated that the PPIC will repay to the
Company by monthly installment at Baht 1,000,000 totaling 30
installments and the final installments at Baht 564,069 starting on
January 5, 2005 with no interest charged. The Company recorded the
present value of debts of Baht 29,183,370 (Discounted by interest at
3.53% per annum - effective interest rate of former agreement). In
addition, the Company has an option to convert up to Baht 15 million of
the outstanding debt into ordinary shares with a conversion price at the
par value (presently at Baht 10 per share) within two years from the
signing of the agreement. If PPIC default on its payment the total
outstanding debt shall become immediately due and shall pay in full with
default interest at the rate 7.5% per annum.

PPIC failed to make a payment under the condition in the agreement,
therefore, the Company set up a full provision for doubtful account
against the Long - term receivable and loan to related Company.

In 2005, the Company hired a private law firm to file a lawsuit against
Plastic Precision Industry Co., Ltd. (PPIC) with the civil court on
November 25, 2005. On September 12, 2006, PPIC has entered into a
compromise agreement with PATO in court to pay Baht 34,922,589 debt by
monthly installments. The amount of 300,000 baht is to be made within
the 5th of every month. The first installment starts in October 5, 2006
and to be paid until the total debt is paid off. Default on any
installment will be regarded as default of the entire debt payment and
lead to the execution procedure where the interest rate of 7.5% per
annum will be applied.  Plastic Precision Industry Co., Ltd. was in
default for its first installment. The Company has consequently entered
the execution procedure with the court and appointed an execution
official on November 28, 2006.The Company has written off the debt of
Plastic Precision Industry Co., Ltd. as bad debt since the execution of
the case has been completed and finalized.

2) On June 10, 2004, the Company was sued by Itochu (Thailand) Co., Ltd.
as an alleged guarantor of Plastic Precision Industry Co., Ltd. for the
outstanding debt totaling Baht 37,527,303, the Company recorded under
“Liability arising from guarantee”. As at December 31, 2007, the Company
recorded liabilities arising from guarantee amounting of Baht 39,454,784
which calculated from outstanding debt totaling Baht 32,493,511 plus
interest amounting of Baht 6,961,273 (interest rate 7.5% per annum). On
September 21, 2007, the Company had entered into a compromise agreement
in appeal court to pay the principal debt amounting of Baht 32,493,511
including some expenses in court amounting of Baht 1,725,000, totaling
Baht 34,218,511. The Company has recorded the difference amount between
forecasted guarantee burden and the actual payment of Baht 4,985,133.
The Company agreed to pay amounted to Baht 5,000,000 on the date
entering into the agreement. The balance of Baht 29,218,511 will be paid
in 8 installments at Baht 3,652,314 each month. The first installment
will be paid within October 30, 2007. Total payment will be completed on
May 30, 2008. PATO has already exercised the right of recourse against
Plastic Precision Industry Co., Ltd and recorded such company as debtor
with outstanding balance of Baht 34,469,651. However, the
Company expected that the amount due from PPIC would not be recoverable
therefore, the Company set up a full provision for the outstanding
balance.