Financial Highlight

(1) Financial statements

  The company paid 400,000 baht to the auditor for audit fee. There was
  no non-audit fee.

  Auditor report

The auditor has reported the financial statements of Pato Chemical
Industry Public Co., Ltd. as of 31 December of 2004-2007 without any
conditions.

(2) Balance Sheet, Statement of Income, Statement of cash flows

Pato Chemical Industry Public Co., Ltd. Balance Sheet for the year ended
December 31

  ------------------------------------ ------------ -------- ------------ -------- ------------- -------- ------------ ------------- --------
                                       2004                  2005                  2006                                2007          

                                       Amount       %        Amount       %        Amount        %                     Amount        %

  ASSETS                                                                                                                             

  CURRENT ASSETS                                                                                                                     

  Cash in hand and at Bank             86,429       20.60    96,736       21.96    153,282       22.15                 79,850        14.99

  Current investment                   -            -        -            -        50,646        10.86                 84,523        15.87

  Short-term investment                                                                                                              

  Fixed deposit                                                                                                                      

  Investment in listed company         -            -        -            -        -             -                     -             -

  Accounts and Receivable – Related    -            -        -            -        -             -                     -             -
  Company                                                                                                                            

  Other companies, net                 128,614      30.66    123,091      27.95    128,618       27.58                 135,151       25.38

  Current portion of loan and          -            -        -            -        -             -                     -             -
  receivable – related company                                                                                                       

  Inventories                          119,781      28.55    138,167      31.37    96,160        20.62                 155,671       29.23

  Other current assets                                                                                                               

  Vat receivable                       -            -        -            -        -             -                     -             -

  Others                               2,231        0.53     1,948        0.44     2,496         0.54                  1,863         0.35

  Total current assets                 337,055      80.35    359,942      81.72    381,202       81.75                 457,058       85.83

  Investment in subsidiary                                                                                                           

  Loan to Subsidiary                   -            -        -            -        -             -                     -             -

  Loan to related company              -            -        -            -        -             -                     -             -

  Investment in subsidiary             -            -        -            -        -             -                     -             -

  Investment in related company        2,661        0.63     -            -        -             -                     -             -

  Long-term receivable and loan to     -            -        -            -        -             -                     -             -
  related company                                                                                                                    

  Property, Plant and Equipment Net    72,513       17.29    79,729       18.10    84,835        18.19                 74,397        13.97

  Restricted cash fixed deposits       -            -        -            -        -             -                     -             -

  Wothholding income tax for refund    -            -        -            -        -             -                     -             -

  Deposit with financial institutions  -            -        -            -        -             -                     -             -

  Deposits and guarantee               -            -        -            -        -             -                     -             -

  Land not used in operation           7,030        1.68     -            -        -             -                     -             -

  Deferred charge                      -            -        -            -        -             -                     -             -

  Other non-current assets             239          0.06     762          0.17     280           0.06                  1,057         0.20

  Total other assets                   82,443       19.65    80,491       18.28    85,115        18.25                 75,454        14.17

  Total assets                         419,498      100.00   440,433      100.00   466,317       100.00                532,512       100.00

  LIBILITIES AND SHAREHOLDERS’ EQUITY                                                                                                

  Current Liabilities                                                                                                                

  Short-term loan from financial       45,067       10.74    31,835       7.23     50,378        10.80                 95,683        17.97
  institutions                                                                                                                       

  Trade accounts and notes payable –   4,822        1.15     11,430       2.60     12,669        2.72                  10,778        2.02
  Related Company                                                                                                                    

  - Other Companies                    16,146       3.85     10,931       2.48     11,981        2.57                  10,305        1.94

  Current portion of hire-purchase     496          0.12     -            -        -             -                     121           0.02
  contracts payable                                                                                                                  

  Payable from Investment Acquistion   -            -        16,500       3.75     -             -                     -             -

  Payable from forward exchange        -            -        -            -        -             -                     -             -
  contracts                                                                                                                          

  Other current liabilities                                                                                                          

  Accrued income tax and accrued       22,414       5.34     18,167       4.12     9,544         2.05                  27,171        5.10
  expenses                                                                                                                           

  Others                               237          0.06     642          0.15     240           0.05                  220           0.04

  Total Other Current Liabilities      22,651       5.40     18,809       4.27     9,784         2.10                  27,391        5.14

  Total Current Liabilities            45,067       10.74    31,835       7.23     84,812        18.19                 144,278       27.09

  Loan from associate company          -            -        -            -        -             -                     -             -

  Hire-Purchase contracts payable-net  -            -        -            -        -             -                     212           0.04

  Provision for liabilities from       17,048       4.06     -            -        39,455        8.46                  18,262        3.43
  lawsuit                                                                                                                            

  Excess of book value over cost of    -            -        -            -        -             -                     -             -
  investment                                                                                                                         

  Total Liabilities                    106,230      25.32    89,505       20.32    124,367       26.65                 162,752       30.56

  Minority interest                    -            -        -            -        -             -                     -             -

  Shareholders' equity                                                                                                               

  Share capital-common share Bht. 10                                                                                                 
  par value                                                                                                                          

  Authorized share capital 14,000,000  140,000      -        140,000      -        140,000       -                     140,000       -
  shares                                                                                                                             

  Issued and fully paid-up share       140,000      33.37    140,000      31.79    140,000       30.02                 140,000       26.29
  capital 14,000,000 shares                                                                                                          

  Premium on share capital             135,000      32.18    135,000      30.65    135,000       28.95                 135,000       25.35

  Retained earning                                                                                                                   

  Appropriated for reserve fund        14,000       3.34     14,000       3.18     14,000        3.00                  14,000        2.63

  Unappropriate                        24,268       5.79     61,928       14.06    53,050        11.38                 80,760        15.17

  Unrealised gain on securities held   -            -        -            -        -             -                     -             -
  as available-for-sale                                                                                                              

  Total Shareholders' Equity           313,268      74.68    350,928      79.68    342,050       73.35                 369,760       69.44

  Total Liabilities and Shareholders'  419,498      100      440,433      100.00   466,317       100.00                532,512       100.00
  Equity                                                                                                                             

  Book value per share (baht)          22.38                 25.07                 24.43                               26.41         

  Par Value                            10                    10                    10                                  10            

  Common Share                         14,000,000            14,000,000            140,000,000                         140,000,000   

  Pato Chemical Industry Public                                                                                                      
  Co.,Ltd. Statement of Income for the                                                                                               
  year ended December 31                                                                                                             

                                       2004                  2005                  2006                   2007                       

                                       Amount       %        Amount       %        Amount        %        Amount                     %

  Revenues                                                                                                                           

  Sales                                558,963      99.30    535,019      99.30    600,728       99.12    620,541                    98.16

  Reversal of provision for doubtful   -            -        -            -        -             -        4,985                      0.79
  account from loan                                                                                                                  

  Gain on exchange rate                -            -        -            -        1,321         0.22     3,627                      0.57

  Other income                         3,967        0.70     3,774        0.70     4,021         0.66     3,016                      0.48

  Total Revenues                       562,930      100.00   538,793      100.00   606,070       100.00   632,169                    100.00

  Expenses                                                                                                                           

  Cost of sales                        425,246      75.54    402,686      74.74    454,674       75.02    459,557                    72.70

  Selling and administrative expenses                                                                                                
  expenses??????????????????????????                                                                                                 

  Bad debt and doubtful debt           32,879       5.84     61           0.01     39,455        6.51     -                          -

  Others                               42,150       7.49     44,198       8.20     52,801        8.71     54,015                     8.54

  Loss from exchange rate              2,471        0.44     4,522        0.84     -             -        -                          -

  Share of loss in subsidiary          -            -        -            -        -             -        -                          -

  Loss from Divestment                 -            -        -            -        -             -        -                          -

  Loss on Impairment of Investment     15,794       2.81     2,113        0.39     -             -        -                          -

  Interest Expenses                    1,715        0.30     2,508        0.47     2,546         0.42     4,402                      0.70

  Directors remuneration               769          0.14     850          0.16     870           0.14     871                        0.14

  Total Expenses                       521,024      92.56    456,938      84.81    546,032       90.09    518,845                    82.07

  Net Income(Loss) before Income Tax   41,906       7.44     81,855       15.19    60,038        9.91     113,324                    17.93
  and extraordinary                                                                                                                  

  Income Tax                           (24,014)     (4.27)   (20,395)     (3.79)   (12,916)      (2.13)   (33,114)                   (5.24)

  Net Income (Loss) from operation     17,892       3.18     61,460       11.41    47,122        7.78     80,210                     12.69

  (Profit)Loss of minority equity in   -            -        -            -        -             -        -                          -
  subidiary company                                                                                                                  

  Net income (loss)                    17,892       318      61,460       11.41    47,122        7.78     80,210                     12.69

  Earning per share (bath)             1.28                  4.39                  3.37          -        5.73                       

  Par value (bath)                     10.00                 10.00                 10.00                  10.00                      

  Weight average (Share)               14,000,000            14,000,000            14,000,000    -        14,000,000                 

                                                                                                                                     
  ------------------------------------ ------------ -------- ------------ -------- ------------- -------- ------------ ------------- --------

+--------------------------------------+-------+-------+-------+-------+
| Pato Chemical Industry Public Co.,   |       |       |       |       |
| Ltd.                                 |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Statement of income for the Year     |       |       |       |       |
| Ended December 31                    |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
|                                      | 2004  | 2005  | 2006  | 2007  |
+--------------------------------------+-------+-------+-------+-------+
| Cash Flows from Operating Activities |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Net Income                           | 1     | 6     | 4     | 8     |
|                                      | 7,892 | 1,460 | 7,122 | 0,210 |
+--------------------------------------+-------+-------+-------+-------+
| Adjustments to reconcile net income  |       |       |       |       |
| to net cash                          |       |       |       |       |
|                                      |       |       |       |       |
| provided by operating activities     |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Interest Expense Under Hire-Purchase | 52    | 30    | -     | -     |
| Agreements                           |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized gain on exchange rate     | 861   | (148) | (133) | (67)  |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized gain from changes in      |       |       | (646) | (847) |
| value of investments                 |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of current          | -     | -     | -     | (1    |
| investment                           |       |       |       | ,030) |
+--------------------------------------+-------+-------+-------+-------+
| Gain of disposal of investment in    | -     | -     | (11)  | -     |
| related company                      |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| (Reversal of) Provision for doubtful | -     | -     | 3     | (4    |
| account from loan                    |       |       | 9,455 | ,985) |
+--------------------------------------+-------+-------+-------+-------+
| Loss on debt restructuring           | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Loss on Impairment of Investment     | 1     | 2,113 | -     | -     |
|                                      | 5,794 |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Depreciation and amortization        | 1     | 1     | 1     | 1     |
|                                      | 0,329 | 1,006 | 1,447 | 3,540 |
+--------------------------------------+-------+-------+-------+-------+
| Provision for doubtful accounts      | 3     | 61    | 23    | 60    |
|                                      | 2,879 |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of fixed assets     | (1    | (2    | (2    | (350) |
|                                      | ,722) | ,048) | ,017) |       |
+--------------------------------------+-------+-------+-------+-------+
| Income from operating before         | 7     | 7     | 9     | 8     |
| changing in operating assets and     | 6,085 | 2,474 | 5,240 | 6,531 |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| (Increase) decrease in operating     |       |       |       |       |
| assets                               |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Account and note receivables         | (28   | 5,462 | (5    | (6    |
|                                      | ,915) |       | ,550) | ,593) |
+--------------------------------------+-------+-------+-------+-------+
| Inventories                          | (33   | (18   | 4     | (59   |
|                                      | ,748) | ,386) | 2,007 | ,512) |
+--------------------------------------+-------+-------+-------+-------+
| Other current assets                 | 262   | 282   | (548) | 50    |
+--------------------------------------+-------+-------+-------+-------+
| Refundable Income Tax                | 6,489 | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Other assets                         | (120) | (524) | 483   | (194) |
+--------------------------------------+-------+-------+-------+-------+
| Increase(decrease) in operating      |       |       |       |       |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Notes and account payable            | 7,737 | 1,411 | 2,463 | (3    |
|                                      |       |       |       | ,494) |
+--------------------------------------+-------+-------+-------+-------+
| Liability arising From Guarantee     | -     | -     | -     | (16   |
|                                      |       |       |       | ,208) |
+--------------------------------------+-------+-------+-------+-------+
| Accrued income tax and accrued       | 7,235 | (4    | (8    | 1     |
| expenses                             |       | ,247) | ,624) | 7,627 |
+--------------------------------------+-------+-------+-------+-------+
| Other current liabilities            | 37    | 405   | (402) | (19)  |
+--------------------------------------+-------+-------+-------+-------+
| Net cash provided by(use in)         | 3     | 5     | 12    | 1     |
| operating activities                 | 5,062 | 6,877 | 5,069 | 8,188 |
+--------------------------------------+-------+-------+-------+-------+

  -------------------------------------- ---------- ---------- ---------- ----------
  Pato Chemical Industry Public Co.,Ltd.                                  

  Statement of Income for the year ended                                  
  December 31                                                             

                                         2004       2005       2006       2007

  Cash Flows from Investing Activities                                    

  Decrease(increase) in called and fixed -          -          -          -
  deposit                                                                 

  Decrease(increase) in current          -          -          (50,000)   (32,000)
  investment                                                              

  Proceeds from Disposal of Investment   -          -          11         -

  Proceeds from sale of fixed assets     1,722      2,048      2,017      350

  Acquisition of fixed assets            (8,601)    (11,191)   (16,553)   (2,769)

  Decrease (increase) in loans to        -          -          -          -
  subsidiary                                                              

  Decrease (increase) in Loan to related -          -          -          -
  company                                                                 

  Decrease(increase) in investment in    -          -          -          -
  subsidiary                                                              

  Decrease (increase) in investment in   -          -          (16,500)   -
  related company                                                         

  Decrease in long-term loan and         -          -          -          -
  receivable-related company                                              

  Decrease (increase) in restricted cash -          -          -          -
  fixed deposits                                                          

  Net cash provided by ( used in)        (6,879)    (9,143)    (81,025)   (34,419)
  investing activities                                                    

  Cash Flows from Financing Activities                                    

  Increase(decrease)in short-term loans  1,002      (13,164)   18,502     45,298
  from financial institutions                                             

  Repayment of hire purchase contract    (902)      (526)      -          -

  Repayment of long-term loan            -          -          -          -

  Dividend paid                          (39,200)   (23,800)   (56,000)   (52,500)

  Net cash provided by (used in)         (39,100)   (37,490)   (37,498)   (7,202)
  financing activities                                                    

  Increase(decrease) in cash and cash    (10,917)   10,244     6,546      (23,433)
  equivalents                                                             

  Unrealized loss on exchange rate on    (14)       63         -          -
  cash in bank in foreign currency                                        

  Net Increase(decrease) in Cash and     (10,931)   10,307     6,546      (23,433)
  Cash equivalents                                                        

  Cash and cash equivalents, beginning   97,360     86,429     96,736     103,283
  of period                                                               

  Cash and cash equivalents, end of      86,429     96,736     103,282    79,850
  period                                                                  
  -------------------------------------- ---------- ---------- ---------- ----------

(c) Financial Ratio

Pato Chemical Industry Public Co.,Ltd. Financial Ratio 2004-2007

  ------------------------------------- --------- --------- --------- --------
                                        2004      2005      2006      2007

  Liquidity Ratio                                                     

  Current Ratio (Time)                  3.78      4.02      3.70      2.81

  Quick Ratio (Time)                    2.41      2.46      2.27      1.84

  Cash Flow Ratio (Time)                0.43      0.64      1.17      0.13

  Receivable Turnover (Time)            4.82      4.25      4.77      4.71

  Collection Period (Day)               75        85        75        77

  Inventory Turnover (Time)             4.13      3.12      3.84      3.65

  Inventory T/Period (Day)              87        115       94        99

  Account Payable Turnover (Time)       6.94      6.70      6.97      4.79

  Payment Period (Day)                  52        54        52        75

  Cash Cycle (Day)                      110       146       117       100

  Profitability Ratio                                                 

  Gross Profit Margin (%)               23.92     24.73     25.03     25.94

  Profit from operation (%)             7.09      15.06     9.53      17.10

  Other profit (%)                      0.40      0.23      0.46      0.35

  Cash (%)                              88.42     70.58     218.49    17.14

  Net Profit Margin (%)                 3.18      11.41     7.78      12.69

  Return on Equity (%)                  5.52      18.51     13.60     22.54

  Efficiency Ratio                                                    

  Return on Total Assets (%)            4.33      14.29     10.39     16.06

  Return on Fixed Assets (%)            35.10     91.00     71.18     117.75

  Assets Turnover (Time)                20.90     125.31    133.68    126.58

  Financial Ratio                                                     

  Debt to Equity (Time)                 0.34      0.26      0.36      0.44

  Interest Coverage (Time)              35.45     31.81     55.20     12.65

  Cash Basis (Time)                     0.72      1.60      1.72      0.33

  Payout Ratio (%)                      133.02    91.12     111.41    82.91

  Per Share (Baht)                                                    

  Book Value (Baht)                     22.38     25.07     24.43     26.41

  Earning per Share (Baht)              1.28      4.39      3.37      5.73

  Dividend per Share (Baht)             1.70      4.00      3.75      4.75

  Growth Rate                                                         

  Total Sale (%)                        2.88      4.99      5.88      14.20

  Cost of Goods Sold (%)                45.17     (15.74)   38.84     30.97

  Sales Revenue (%)                     5.71      (4.28)    12.28     3.30

  Selling & Admin Expense (%)           9.40      (12.49)   19.60     (5.34)

  Net Profit (%)                        (58.25)   243.51    (23.33)   70.22
  ------------------------------------- --------- --------- --------- --------

2) Management Discussion and Analysis

In the financial statement of Pato Chemical Industry Plc. indicated net
profit (loss) totaled 61.46, 47.12 and 80.21 million baht in 2005 – 2007
respectively. These figures represent an increase and reduction
percentage of 243.51, (23.33), and 70.22 respectively.

In 2005, Thailand’s economic situation was on a slow-down trend from the
previous year, with decreased expansion in both agricultural and
non-agricultural production, owing to factors such as the prolonged
drought from year-end 2004 to mid-2005, floods at year-end 2005, tsunami
disaster, continued rise in world oil prices, higher interest rates,
higher inflation rate, and the unrest in the 3 southern provinces. These
factors led to reduced buying consumption and decreased expansion in
private sector investment.

Although the agricultural sector was affected by many factors leading to
a Supply Shock with agricultural production greatly reduced in the first
half of the year, overall prices increased considerably from the
previous year and value of agricultural exports rose. Although in the
latter half of 2005, there was sufficient water for cultivation and even
flooding in some areas, the damage was not great. This led to increased
value in the agricultural production sector. However, in the overall
picture for economic expansion, the agricultural sector expanded less
than the last year.

In 2006, Thailand saw a slight economic improvement over 2005 with a
development in export and significant drop in import. The increase of
income from services and tourism industry led to a surplus of current
account. The decline in investment from private sectors parallelized
with the compression of import volume. The insurgency in the 3 southern
provinces , floods from August to December 2006, an ever-rising world
oil prices, and bird flu were obstacles to economic expansion. These
were major factors contributing to the changes in demand and supply in
the country reflecting sufficient economic situation.

Although the agricultural sector was affected by many factors mentioned
above, the weather was favorable enough for cultivation and the
agricultural produce prices were still as good as the previous year.
This pushed farmers to increase production in most crops. The flooding
problem in some area during the latter half of 2006 did not affect
overall picture of agricultural economy. The export of agricultural
product expanded by 19.6%, causing overall agricultural economy to rise
by 4.6% year-on-year.

In 2007, overall economic conditions expanded at quite a good rate
despite the fact that there were incidences and factors on many fronts
that affected both internal and external growth. These include politics,
rising oil prices, US economic problems and appreciation of the baht.

Oil prices in particular had a direct negative effect on various
production sectors, including production in the agricultural sector
which led to higher production costs and also affected consumption
expenditure, and led to a trend for reduced expansion in investment and
business. However, the overall export sector expanded by as much as 14%
in US dollar currency.

With regard to production in the agricultural sector for the year 2007,
weather conditions were conducive for agriculture. Although there was
drought and flooding in certain areas, the overall agricultural sector
was not greatly affected. As a result, this enabled the sector to expand
at about 4.3 %. Meanwhile, international demand for agricultural
products increased, leading to good agricultural prices and this became
an incentive for expansion in agricultural output.

Consequently, performance of the company during the past 3 year were as
follows :

Sales revenue during 2005 – 2007 was 535.02, 600.73, and 620.54 million
baht respectively, representing increases (reductions) of (4.28%),
12.28% , and 3.30% respectively.

Total revenue during 2005 – 2007 was 538.79, 606.07, and 632.17 million
baht, representing increases (reductions) of (4.29%), 12.49%, and 4.31%
respectively.

Cost of Sales in 2005 – 2007 was 402.68, 450.36, and 459.56 million
baht, representing increases (reductions) of (5.31%), 11.84%, and 2.04%
respectively.

The company adjusted some categories in 2006 financial statements to be
in line with that of 2007 and the adjustment did not affect net profit
or shareholders’ equity. (Amount before adjustment was 454.67 million
baht)

  In 2005, there was expansion in the overall economic situation, amid
factors slowing down the expansion such as the prolonged severe drought
from year end 2004 to September 2005. The led to irrigation problems,
lower than normal water level at dams and thus insufficient water for
cultivation. Agricultural areas and produce were damaged and farmers
faced a multitude of problems. Cultivation was not on schedule.
Although, the government sector provided assistance in all areas,
including His Majesty the King’s rain-making initiative to increase the
water level in dams, this could only ease the severe drought problem to
a certain level. The drought problem eased in September and then
agricultural areas were damaged by floodwaters. This resulted in a
Supply Shock with decreased agricultural output. Overall production
value for 2005 expanded less by a percentage of 2.72. However, this led
to overall agricultural prices to rise. For example, overall rice output
increased slightly by 0.4 % and the selling price for pre-milled rice
rose an average of 20.5- 23.6%, as a result of the government rice
mortgaging scheme.

The above factors caused total sales revenue to decrease by 23.94
million baht or 4.28%, while at the same time the company launched a new
product, as well as used marketing strategies with regard to prices and
stimulated total sales through sales promotion, in order to maintain
market share and supply market demand.

Consequently, in 2005 the total number of insecticide units sold rose by
10.14 per cent compared to the last year, which led total sales to
increase by 8.58%.

Total number of herbicide units sold decreased by 16.51% compared to the
last year, leading total sales to rise by 13.26 per cent.

Total number of fungicide units sold decreased by 3.93 % compared to the
last year. The number of liquid fungicide units sold rose by 28.18%,
while powder fungicide units sold decreased by 25.31%, causing total
overall sales to increase by 11.57%.

The number of acaricide units sold fell by 17.72 % compared to the last
year, leading to a rise of 5.25 % in total overall sales, as a result of
value-added product improvement.

With regard to production factors, raw material prices were on an upward
trend in line with world oil prices. Forward purchasing of raw materials
was very important, as this lessened the impact from high raw material
prices and exchange rate fluctuations, which saw the baht weaken
continually and thus caused average cost price for raw materials to
increase. Seeking quality raw materials with lower-cost price for
production, combined with company policy to efficiently manage and
economize on labor costs and production expenses, led to production
costs and sales costs to reduce by 4.41% and 5.31% respectively. This
caused initial profits to rise by 0.81% compared to the last year.

Other income, not including profit (loss) from exchange rates, decreased
by 0.19 million baht or by 4.85% as a result of a fall in income from
rebate and interest receivable. This caused gross income to decrease
compared to the last year.

In 2006, there was an expansion in the gross agricultural product by
4.6% for the overall picture of agricultural economy. The favorable
weather for cultivation during the first half of the year and the
continuing good prices of agricultural produce from 2005 through 2006
contributed to an increase in production of all crops despite the unrest
in the 3 southern provinces , floods from August to December 2006, the
continued rise in world oil prices, and bird flu. The government sector
fully dealt with the problems by providing assistance in all areas
especially to rice which was severely damaged by floodwaters. Rice
production overall increased. Since the floods damaged some areas of the
central and lower north, while the northeast where jasmine rice was
cultivated, was slightly damaged in some low-land fields. The highland
and out of irrigation areas, instead, gave good yields from sufficient
water for cultivation. The selling price for pre-milled rice was good
for both season rice and off-season rice by 0.4% and 1.7% respectively,
as a result of the government rice mortgaging scheme.

The above factors led to an increase in sales revenue by 65.71 million
baht or 12.28%. Above 50% of total revenue of the company was from
herbicide and insecticide for rice field. The company used marketing
strategies and sales promotion to create demand. The appropriate selling
time also increased sales revenue.

Consequently, in 2006 the total number of herbicide units sold by
16.51%. The number of liquid herbicide unit sold increased by 24.88%,
granule herbicide unit sold increased by 13.98% and powder herbicide
unit sold increased by 12.26% which led total sales to increase by
17.83% year-on-year.

Total number of insecticide units sold increased by 11.40%. The number
of liquid insecticide unit sold increased by 1.66%, granule insecticide
unit sold increased by 13.89 while powder insecticide unit sold
decreased by (2.19%) leading total sales to rise by 2.29% year-on-year.

Total number of fungicide units sold increased by 1.28%. The number of
liquid fungicide units sold rose by 5.42%, while powder fungicide units
sold decreased by (3.45%), causing total overall sales to decrease by
2.14% year-on-year.

The number of acaricide units sold rose by 18.91 %, leading to a rise of
7.16 % in total overall sales.

With regard to production, raw material prices were on an upward trend
in line with world oil prices. Forward purchasing of raw materials was
very important. The sufficient inventories reduced storage cost and also
helped reducing the impact from high raw material prices. The weather
was another factor led to an adjustment of suitable plan for purchasing
of raw materials. The adjustment with current situation in 2006 led to a
decrease of inventories by 33.79% compared to last year. The slowdown US
economy led to a weak dollar. The Chinese RMB, on the contrary, was
strengthened. The baht became stronger as a result, cutting raw material
costs. The searching for sources of quality at lower cost of raw
materials attributed to the decrease of cost of raw materials. As a
result, the average cost of raw materials slightly increased. The
company managed to control expenses on labor and overhead to make it
most worth investing with current economic situation causing the labor
cost to rise by 7.53% and overhead cost to rise by 14.29% compare to
last year. The increase in labor cost contributed to salaries, wages,
and overtime expenses. While the increase in overhead cost contributed
to the rise in world oil prices causing higher expenses in
transportation, electricity, packaging and maintenance, the high
competitive market after floods caused production cost and sales cost to
rise by 12.35 and 12.91 respectively. The gross profit margin increased
by 10.37 compared to last year.

Other income, regardless of forex gain (loss) of 1.32 million baht or an
increase of 0.25 million baht compared to 2005, increased by 6.55% as a
result of selling old vehicle, a rise in income from interest receivable
and investment in debt instruments. This caused gross income to increase
by 12.24% compared to that of the last year.

In 2007, the overall economy registered a 4.3% growth in gross
production in the agricultural sector. Normal conditions were returning
to the overall agricultural sector due to more favourable weather
conditions in 2007 than in the year before. Although there was drought
and flooding in certain areas, domestic and international agricultural
prices were good. This became an incentive for farmers to expand
cultivation of farm goods such as rice, sugarcane, palm oil and cassava,
despite higher production costs caused by rising oil prices and which
adversely affected foreign trade balance. However, when considering the
value of agricultural exports during the period from January to October
2007, it was found that in terms of Thai currency, export value rose by
as much as 2.1%. And in terms of US dollar currency, export value rose
by as much as 17.7% compared to figures for the same period the year
before. The increased exports were in many farm goods such as rice,
cassava and palm oil products.

More than 50% of the company’s total products sold, is used in rice
cultivation. Thus overall volume of rice output in 2007 rose 5.7% from
the previous year and prices for pre-milled rice were good on average.

The above factors led total sales to increase by 19.81 million baht, or
by 3.30%. These comprised a 7.33% rise in sales of herbicides, with a
0.43% rise in liquid form herbicide, a 6.18% rise in granule herbicide
and a 41.91% rise in powder herbicide. This led overall total sales to
increase by 12.43%.

Total number of insecticide units sold fell by 3.12%, with the liquid
form, granule form and powder form dropping 5.53%, 2.57% and 7.58%
respectively, leading to overall sales to fall by 6.92%.

Total units of fungicides sold increased by 1.93%, with the liquid form
rising by 11.62% and powder form falling by 10.16%, causing total
overall sales to fall by 1.88%.

Total number of units sold for acaricides fell by 16.99% and total sales
fell by 9.25%.

The company is aware of the effects from many negative factors which
caused total sales to rise by only 3.30%. The company thus devised a
market strategy and placed emphasis on promoting sales on all fronts at
times appropriate to current conditions, in order to maintain market
share and stimulate customer demand. The problem of rising global oil
prices and the decrease in imports of needed raw materials resulting
from China’s move to solve the problem industrial factories unfriendly
towards the environment, led to higher raw material prices. Thus,
forward purchase of raw materials for future market demand was very
important, and could also reduce adverse effects from the rising raw
material prices, even though it increased the burden of storage costs.
Another factor is the appreciation of the baht, with the baht exchange
rate at 36 baht to the dollar in 2007 and which has now appreciated to
about 33 baht to the dollar. Even though raw material costs in dollar
value rose, the appreciated baht helped ease the serious adverse effect
from high raw material prices. Thus, average prices for raw material in
terms of the baht currency, did not rise too much and the value of raw
material purchase orders rose in the 4^(th) quarter by as much as 52.18%
compared to figures for the same period the previous year, and value of
overall raw material purchase orders rose by 30% compared to the
previous year. This led to an increase of 59.51 million baht in
inventory or a rise of 61.89%. With regard to labour and production cost
management, the company set a policy which emphasised utmost economic,
efficient and cost effective management in light of current economic
conditions. In 2007 there was a slight increase in the number of workers
in order to meet production process needs. This led to a rise of 10.16%
in production labour costs, and a 10.49% rise in production costs
compared to the previous year. The increased effects from rising oil
prices led to a rise in transport expenses, expenses for electricity
used in production, and higher expenses for packaging and machinery
repair . Also recorded was 1.22 million baht for adjusted depreciation
value of an unused factory in Min Buri . The rise in raw materials
costs, labour costs and production costs was the result of an increase
in total sales amid highly competitive market conditions. In light of
these conditions, the 4^(th) quarter post-flood period during which
normal conditions were returning to the agricultural sector, saw
production and sales costs rise by 1.51% and 2.04% respectively and
initial profits rose by 7.06% compared to the previous year.

Other income, regardless of forex gain (loss) and the reverse of bad
debt from loan, it was found that other income in 2007 decreased by 1.01
million baht or 25.01% as a result of a rise in income from interest
receivable and investment in debt instruments. Other income from selling
old vehicle decreased and led to the decrease in total income.

 Table showing rate of increases (reduction) during 2005 - 2007

+------+--------------------+-------------------------+--------------+
| Year | PATO               |                         |              |
+------+--------------------+-------------------------+--------------+
|      | Sales Revenue      | Consolidated revenue    | Cost of Sale |
+------+--------------------+-------------------------+--------------+
|      |                    |                         |              |
+------+--------------------+-------------------------+--------------+
| 2005 | (4.28)             | (4.29)                  | (5.31)       |
+------+--------------------+-------------------------+--------------+
| 2006 | 12.28              | 12.49                   | 11.84        |
+------+--------------------+-------------------------+--------------+
| 2007 | 3.30               | 4.31                    | 2.04         |
+------+--------------------+-------------------------+--------------+

Sales and General Administrative expenses during 2005-2007 totaled
51.74, 93.13, and 54.89 million baht, representing increases
(reductions) of (44.99%), 80.00%, and (41.06%) respectively, not
including interest payable.

Interest payable in 2005 – 2007 totaled 2.51, 2.55 and, 4.40 million
baht, representing increases (reductions) of 46.30%, 1.51%, and 72.86%
respectively.

The company adjusted some categories in 2006 financial statements to be
in line with that of 2007 and the adjustment did not affect net profit
or shareholders’ equity. (Amount before adjustment was 88.81 million
baht)

In 2005, sales and administrative expenses when taking into account bad
or doubtful debts amounting to 33.88 million baht and loss suffered from
impairment of investment amounting to 15.79 million baht in 2004, as
well as bad or doubtful debts totaling 0.06 million baht and loss on
impairment of investment of 1.88 million baht in 2005, led to sales and
management expenses in 2004 to be 94.06 million baht and to be 51.74
million baht in 2005, representing a reduction of 42.32 million baht or
a fall of 44.99 % from the last year.

If bad or doubtful debts and impairment from investment are not taken
into account when comparing operational results, net sales and
management expenses were found to total 45.39 million baht in 2004 and
total 49.57 million baht in 2005, representing an increase of 0.90
million baht or a rise of 1.85%. This was the result of natural
disasters throughout last year such as drought and flooding which
damaged produce and initially decreased agricultural purchasing power,
causing a Supply Shock in the agricultural sector. Agricultural output
fell, and although this caused overall agricultural prices to move
higher after farmers recovered, purchasing power did not return to
previous levels. The company therefore had to devise a policy to fully
help farmers in order to ease the severity of the agricultural problem
and to maintain sales and market share. As a result, there was an
increase in expenses for sales promotions, special allowances and
transportation costs, commission fees and foreign exchange loss.

Profit (loss) from foreign exchange rates came to (2.47) million baht in
2004 and totaled (4.52) million baht in 2005, representing an increase
of 2.05 million baht or 82.97%. This was caused by the continued
weakening of the baht, , which weakened particularly in the 4^(th)
quarter. In the first quarter of 2005, the average rate was 38-39 baht
to the Dollar, while in the last quarter, the baht weakened to an
average of 41.43 baht to the Dollar. This caused an increase in forex
loss.

Interest payable in 2004 totaled 1.71 million baht and came to 2.51
million baht in 2005, representing an increase of 0.80 million baht or
46.30%. This was the result of increased foreign raw material purchase
orders, and managing T/R creditors and foreign creditors in accordance
to financial status and value of the Baht at that time through expansion
of payment term. However, managing risks from the continuing
fluctuations in the foreign exchange rate, caused interest payable
burden to increase.

Corporate income tax for 2004 totaled 24.01 million baht and came to
20.39 million baht in 2005, representing a reduction of 3.62 million
baht or a fall of 15.07%. This was the result of writing off 4.75
million baht in bad debts following the end of a lawsuit, and an
adjustment in the account showing loss from impairment of investment
which was over booked. An agreement on debt reduction made with a
financial institution, entitled 3.08 million baht in future debt to tax
privileges, thus easing corporate income tax.

In 2006, selling and administrative expenses when taking into
consideration the doubtful debts and directors’ remuneration amounting
to 88.81 million baht and 51.74 million baht in 2005, the doubtful debts
and directors’ remuneration was 39.48 million baht and 0.87 million baht
respectively in 2005 while it was 0.06 million baht and 0.85 million
baht respectively in 2006. There was also loss suffered from impairment
of investment amounting to 2.11 million baht, as well as forex loss of
4.52 million baht in 2005. If the amount was not taken into
consideration, selling and administration expenses was 48.46 million
baht in 2006 and was 44.20 million baht in 2005, an increase of 4.26
million baht representing an increase of 9.64 % compared to last year.
As a result of this growth, there was an increase in expenses for sales
promotions, transportation costs, vehicles expenses and commission fees.
In the 4^(th) quarter, farmers started their cultivation after flood
waters receded. Sales revenue in December rose as a result.

Doubtful debts amounting to 39.48 million baht was from account
receivable in 2006 totaled 0.08 million baht. The Company also received
payment from customers to reverse a provision for bad debt of 0.06
million baht. The 39.47 million baht was loss from lawsuit which was
booked and affected the performance of the company and thus causing the
net profit to fall compared to last year.

Profit (loss) from foreign exchange rates came to (4.52) million baht in
2005 and totaled 1.32 million baht in 2006, representing an increase of
5.84 million baht or 129.21%. This was caused by the continued
strengthening of the baht. In the 1^(st) to 3^(rd) quarter, the average
rate was 37-39 baht to the dollar while in the 4^(th) quarter, the baht
was stronger to an average of 35-36 baht to the dollar. To cope with the
fluctuation of the baht in the future, the company executed forward
contract to cushion the impact for T/R payable.

Interest payable in 2005 totaled 2.51 million baht and came to 2.55
million baht in 2006, representing an increase of 0.04 million baht or
1.59%. The managing of T/R payable and foreign account payable to be in
accordance with financial status and value of the baht at that time
through expansion of payment term and caused interest payable burden to
increase.

Corporate income tax for 2005 totaled 20.39 million baht and came to
12.92 million baht in 2006, representing a reduction of 7.48 million
baht or a fall of 36.68%. This was the result of writing off 31.56
million baht doubtful debts from account receivables and loan to Plastic
Precision Industry Co., Ltd. who had entered into a compromise agreement
in court to pay debts by installments with interest but later default.
Pato consequently entered the execution procedure with the court to
finalize the case amounting 31.56 million baht. The Company also
received payment from customers to reverse a provision for bad debt of
0.06 million baht. These two transactions led to a decrease in income
tax payable in the 4^(th) quarter by 7.91 million baht. In addition, the
Company sold off investment in Plastic Precision Industry Co.,Ltd. for
1,130,923 shares at the selling price of Baht 0.01 per share. The
Company recognized gain from disposal of investment amounting to
11,309.23 baht. The adjustment in the account showing realized loss from
impairment of investment and entitled the Company to tax privileges. The
income tax for 2006 was over paid by 0.58 million baht as a result.

In 2007, sales and management expenses totaled 54.01 million baht,
representing a decrease of 38.24 million baht or a drop of 41.45%
compared to the previous year. In 2006, the company recorded 39.45
million baht in damages from a lawsuit as doubtful debt. However, if
this doubtful debt is not taken into consideration, sales and management
expenses in 2006 would total 52.80 million baht, and when compared to
the year 2007, this would represent an increase of 1.21 million baht or
2.30%. As a result of the increase in total sales, the was a rise in
various costs particularly those involving transport vehicles, fuel and
goods transport, as well as costs for stimulating sales in order to
maintain market share, including commission fees, product permit fees
and expenses for sales promotion.

With regard to doubtful debts from trade debtors, it was found that in
2007, this totaled 0.06 million baht compared to 0.08 million baht in
2006. This represents a reduction of 0.02 million baht or 25% and
reflects the company’s cautious policy in consideration of each new
client and on credit control, leading to a reduction in the fraction of
doubtful debts and thus a very low ratio to trade debtors.

As for profit (loss) from exchange rates in 2007 totalling 3.63 million
baht, this showed an increase of 2.31 million baht or 174.35% compared
to the previous year. This resulted from the appreciation of the baht
during 2007 which saw the baht trading at 36-33 baht to the dollar and
with the baht still continuing to appreciate. The company perceived the
effects from the baht fluctuation and undertook a risk prevention policy
by undertaking T/R to prolong payment of foreign debts. This resulted in
actual profit of 3.69 million baht from exchange rates and (0.07)
million in unrealized exchange rate loss resulting from exchange rate
adjustment by T/R creditors left at year end.

Interest payable in 2007 totalled 4.40 million baht, reflecting an
increase of 1.86 million baht or 72.86% compared to the previous year.
This came from appropriate management of T/R creditors in light of the
financial situation and baht value at the time, by extending payment
term and thus leading to increased interest payable burden.

Corporate tax in 2007 totalled 33.12 million baht , reflecting an
increase of 20.20 million baht or 156.36%. There was no record of
doubtful debts from lawsuit damages this year, which had caused net
profit to fall in 2006. And the change in corporate tax rate from 25% to
30% of net profit , led to an increase in corporate taxes for the year
2007.

The above operational results led to gross profit during 2005-2007 to
total 132.33, 150.37, and 160.98 million baht respectively, representing
a percentage of 24.73, 25.03, and 25.94 respectively.

Operational profits in 2005–2007 came to 80.59, 57.24, and 106.10
million baht respectively, representing percentage of 15.06, 9.53, and
17.10 respectively.

Net profits in 2005 – 2007 came to 61.46, 47.12, and 80.21 million baht,
or a percentage of 11.41, 7.78, and 12.69 respectively.

Return on equity during 2005 – 2007 were 18.51%, 13.60%, and 22.54%
respectively.

In 2005, total sales fell by 4.28% amid an economic slow-down from the
last year. Many factors were responsible for the reduced expansion in
both agricultural and non-agricultural output, such as the problem of
drought and flooding at year-end 2005, effects from the tsunami
disaster, continued rise in world oil prices, higher interest rates and
increased rate of inflation. The government sector gave farmers
assistance in all areas, including production, marketing and finances in
order to ease the effects from these various problems.

Although the agricultural sector was affected by many factors which
caused a Supply Shock, with agricultural output greatly reduced, overall
prices rose considerably from the previous year, with increased
expansion in export value of agricultural products. In the second half
of 2005, there was sufficient water for cultivation and even though
there was flooding in some areas, the damage was not great. Thus the
agricultural sector saw increased expansion in its value. However, in
the overall picture, the economic expansion in the agricultural sector
was still less than the last year.

Because of these above factors, the company was aware of their effect on
total sales and thus launched a new product as well as used marketing
strategies on prices and boosted sales through promotion campaigns, in
order to maintain market share and meet market needs. While at the same
time, raw material prices rose with world oil prices, and effects were
felt from the continual weakening of the baht. This was the reason for
raw material costs to rise on average. Thus quality raw materials at
lower cost were instead sought for production and the company devised a
policy to efficiently manage and economize on labor costs and production
costs in line with the current economic situation. This resulted in
production costs and sales costs to fall by 4.41% and 5.31%
respectively, and initial profits to increase by 0.81% compared to the
last year.

Sales and management expenses, when taking into consideration bad or
doubtful debts and impairment from investment in 2004 and 2005, totaled
94.06 million baht in 2004 and 51.74 million baht in 2005, representing
a reduction of 42.32 million baht or a fall of 44.99% when compared to
the last year.

And when comparing operational results, without taking into account bad
or doubtful debts and impairment from investment, net sales and
management expenses in 2004 can be seen at 45.39 million baht and 49.57
million baht in 2005, representing an increase of 0.90 million baht or
an increase of 1.85%. This was because of effects from the above
mentioned problems on the company’s total sales and operational results.
While the company devised a marketing policy to maintain sales and
market share, it also had a policy to manage and control expenses to
rise at the minimum rate, in order to make the most of investment and
most efficiently create income. Although certain expenses increased,
they were necessary to reach set targets and were used effectively. Such
expenses include sales promotions, special allowances, commission fees
and increased loss from foreign exchange rates. The company also
carefully managed trade debtors to reduce risk of non-payment. Because
of the company’s efficient management and control, initial profits rose
by 0.81% compared to the last year and operational profit rates
increased by 7.97% (compared including bad or doubtful debts and
impairment from investment in 2004).

Interest payable in 2005 increased by 0.80 million baht or by 46.30% as
a result of managing T/R creditors and foreign creditors in accordance
with financial status and value of the baht at that time by expanding
payment term and thus increased interest payable burden.

Corporate income tax in 2005 totaled 20.39 million baht, representing a
decrease of 3.62 million baht or a fall of 15.07%. This resulted from
the writing off of bad or doubtful debts following the end of a lawsuit
and an adjustment of an over-written account showing impairment of
investment, in line with a debt reduction agreement with a financial
institution under which future debt was entitled to tax privileges, thus
enabling the company to save on corporate income tax. Thus the company’s
net profit rate was11.41%, up by 243.51% from 2004, and shareholder
dividend rate also rose by 18.51% from the last year.

In 2006, total sales rose by 12.28% amid slightly expanded economic
situation compared to last year including agricultural sector. With
regards to many problems, the insurgency in the south, the continued
rise in world oil prices, bird flu and the floods that damaged many
agricultural output such as rice, the government sector gave farmers
assistance in all areas, including production, marketing and finances in
order to ease the effects from these various problems. The overall
agricultural produce prices in 2006 maintained as good as 2005. In the
first half of 2006, the favorable weather contributed to cultivation.
Thus the agricultural sector saw increased expansion in its value. The
purchasing power of farmers rose, despite the fact that the agricultural
output during the second half of the year from August to November was
damaged from floods. In the overall picture, the economic expansion in
the agricultural sector still improved. These factors contributed to
changing in supply and demand of the country. The floods gave sufficient
water for cultivation. Agricultural product improved, for instance,
rice. Rice was severely damaged by floods but still showed better
product yield in 2006 by 0.85% compared to last year. Although rice
fields in the central part were damaged, the significant rice field in
the northeast at the higher area and out of irrigation area had
sufficient water for cultivation. Major sales of the company was from
rice field. The sales of herbicide and insecticide representing 80% of
gross sales improved by 11.52% compared to last year.

The price of raw materials rose in line with world oil price. This was
outside factor directly affected production cost. In addition to this,
the national monetary policy resulted in fluctuation of the bath causing
risk management burden to the company, such as interest and led to an
increase in cost of raw materials. The company devised a policy to
efficiently manage and economize on labor costs and production costs in
line with the current economic situation. This resulted in production
costs and sales costs to slightly increase by 12.35% and 12.91%
respectively. Gross profit representing 24.31% of total sales showed a
slightly drop from last year.

Selling and administrative expenses, when not taking into consideration
doubtful debts, directors’ remuneration and impairment from investment
in 2005, increased by 9.64 % compared to last year resulted from the
increase in sales. The selling and administrative expenses were deemed
to be an investment to generate worthwhile and efficiency income. The
company consequently devised a policy to efficiently manage economic
investment. The increase of expenses were for sales promotion,
transportation, vehicles and sales commission etc. to encourage sales
revenue especially during the flooding period in the 4^(th) quarter of
2006. The total sales in December improved accordingly.

When comparing operational results, taking into account doubtful debts,
directors’ remuneration and loss from investment in 2005, doubtful debts
of 39.48 million baht in 2006 occurred from loss from lawsuit causing
operational profit to drop. The transaction did not account for expenses
for income tax privileges.

Profit (loss) from exchange rate increased resulting from a weak dollar
against baht. The decline economic situation in the US led to the
weakened dollar. The Chinese RMB continued to be strengthening led to a
stronger baht during the 4^(th) quarter of 2006. Forex gain amounting to
5.84 million baht represented 129.21% increased causing the profit rate
from operation to drop by 9.53% from that of the last year.

Corporate income tax in 2006 decreased resulting from the writing off
bad debts of account receivables, loan and realized loss from investment
totaled 49.50 million baht, representing a fall of 36.68%. The company
was entitled to tax privileges for the second half of 2006 enabling the
company to save on corporate income tax. Thus the company’s net profit
rate was 7.78% which was lower than 2005, and shareholder rate of return
also dropped by 13.60% from the last year.

In 2007, the overall economic situation improved amid various conditions
affecting economic expansion. However, there was increased expansion in
the agricultural sector due to more favourable weather conditions
compared to the year before. Domestic and export prices for agricultural
produce were good particularly for rice, cassava, palm oil products,
sugarcane and rubber. This increased farmers’ purchasing power and led
to an 3.30% increase in total sales for 2007.

Meanwhile, factors causing higher production costs such as rising oil
prices in the global market and the problem of decreased volume of raw
materials resulting from China’s move to solve the problem industrial
factories unfriendly towards the environment, led to higher raw material
prices. Forward purchase of raw materials for future market demand was
also still necessary, and thus the company could not avoid the burden of
storage costs. The appreciation of the baht was thus a positive factor
helping to lessen the effect of higher raw material prices. Meanwhile,
the average increase of 10% for labour and production costs amid
slightly improved economic conditions, led the company to set a policy
for highest economic, efficient and cost-effective management, in order
to be competitive cost-wise and to effectively maintain market share.
Production and sales costs saw a rise of 1.51% and 2.04% respectively,
but this reflected a lower rate of increase than the rise in total
sales, leading to initial profit rate to be 25.94%, an increase from the
previous year. Sales and management expenses in 2007 rose by 1.21
million baht or 2.30%, not taking into account doubtful debts that arose
from lawsuit damages incurred in 2006. The rise in total sales led the
company to set an investment management policy for sales expenses, to
ensure economy and cost-effectiveness. Company strategy and sales
promotion were aimed as an incentive for clients, leading to a rise in
total sales for the 4^(th) quarter. The increase in expenses came from
an increase in sales and management expenses and which rose at a lower
rate than the rate of increase for total sales. This led operational
profit to rise to 17.10% from last year.

Profit (loss) from exchange rate rose to a very high level due to
economic conditions in the US which strengthened the baht. And in 2007
when the exchange rate of the dollar to the Baht was 36-33 baht to the
dollar, this became a factor creating exchange profits.

Interest payable was affected by baht exchange rate fluctuations,
through managing T/R creditors and exchange risk management by extending
payment term in line with the situation of the baht at the time. In
addition, raw material purchase orders rose considerably in 2007 and
this resulted in the burden of increased interest payable.

Corporate tax in 2007 rose by 156.36% as a result of company operations.
Through effective production, sales and management and no doubtful debts
from lawsuit damages, total sales rose, while production and sales costs
including other expenses, enabled income to increase. As a result, the
company’s net profit came to 12.69% of total income, an increase from
the previous year. This also created increased corporate taxes. Also in
2007, the corporate tax rate was adjusted from 25% of net profit to 30%,
thus creating higher corporate taxes. With a rise in the company’s net
profit, shareholder return rate was at 22.54%, an increase from the year
before.

Total assets in 2005-2007 amounting to 440.43, 466.32, and 532.51
million baht respectively, marked an increase (decrease) at a percentage
of 4.99, 5.88, and 14.20 respectively.

Total liabilities in 2005-2007 amounting to 89.50, 124.27, and 162.75
million baht, marked an increase (decrease) of (15.74%), 38.84%, and
30.97% respectively.

Shareholder equity in 2005-2007 amounting to 350.93, 342.05, and 369.76
million baht, marked an increase (decrease) of 12.02%, (2.52%), and
8.10% respectively.

In 2005, total revenue from sales fell by 4.28% while operational cash
flow rose by 62.22%, liquidity ratio increased from 3.78 in 2004 to 4.02
in 2005. Quick ratio increased from 2.41 in 2004 to 2.46 in 2005. Cash
liquidity ratio rose from 0.43 in 2004 to 0.64 in 2005. Because of a
reduction in total sales in the 3^(rd) and 4^(th) quarters, inventory
increased in comparison to the last year, while trade debtors fell at
the same rate of 4.29% as total sales, compared to the last year.
Short-term loans from financial institutions and trade creditors also
fell 32.82% as a result of raw material purchase orders in 2005 falling
by 41.54 million baht or 9.68%.

The average debt collection period was extended from 75 days in 2004 to
85 days in 2005. Product selling period was longer on average from 87
days in 2004 to 124 days in 2005. Debt payment period was on average
longer from 32 days in 2004 to 37 days in 2005, causing Cash Cycle to
increase to 171 days.

From an analysis of the rising trend in the liquidity ratio resulting
from reduced total sales as affected by natural disaster problems in
2005, as well as higher raw material costs seen as a consequence of
world oil prices and baht fluctuation, the company undertook proper
management of raw material purchasing orders to coincide with market
demand and thus avoid the problem of excess inventory and storage costs.
However, the effects of natural disaster problems are factors that are
difficult to anticipate, the company’s total sales therefore did not go
as expected and thus there was still excess inventory, which will be
utilised for future market needs. Trade debtors decreased at the same
rate as total sales compared to the last year, with only a slight number
of them being trade debtors from sales in 4^(th) and 3^(rd) quarters.
Thus the debt collection period and product selling period rose on
average. The decrease in short-term loans from financial institutions
and trade creditors by 32.82 % as a result of a decrease in raw material
purchase orders by 41.54 million baht or 9.68%, combined with managing
T/R creditors and foreign creditors in accordance with financial
situation and baht value through extension of payment term, these
increased debt payment period. Thus the company’s financial liquidity
increased, and there was more cash flow from operations.

Cash flow from investment activities decreased by 32.92% compared to the
last year as a result of the company buying additional cars and
machinery to replace those which were worn out and thus sold off.

Cash flow from financial procurement activities rose by 4.11% compared
to the last year as a result of reduced raw material purchase orders
from 2004. This reduced short –term loans from financial institutions.
Cash flow from financial procurement activities also rose from a reduced
dividend payout of 23.80 million, down by 15.40 million baht from 2004.
This caused cash and entries equivalent to cash, to rise by 10.31
million baht or by 11.93%.

With regard to capital structure, the ratio of debt to shareholders was
equivalent to 0.26 times in 2005, which showed a reduction from the
previous year. This came from a reduction in short-term loans from
financial institutions and trade creditors of 21.67 million baht or a
fall of 32.82%, and also from a reduction of creditors through
investment purchase following a debt reduction agreement with a
financial institution. This is considered a very low ratio. The ratio
for interest payment ability was 31.81 times in 2005, with the company
undertaking the most careful and efficient financial management as
possible taking into consideration resulting interest burden.
Furthermore, the company had a policy to use rotating liabilities to
invest in assets in order to gain the highest return. The company also
endeavored not to create excessive financial costs and was able to give
shareholders the highest return, with the company also keeping the ratio
from becoming too high in order to prevent the company from financial
risk.

In 2006, total sales revenue rose by 12.28% while operational cash flow
rose by 121.02%, liquidity ratio increased from 4.02 in 2005 to 4.49 in
2006. Quick ratio increased from 2.46 in 2005 to 3.33 in 2006. Cash
liquidity ratio rose from 0.64 in 2005 to 1.44 in 2006. The average debt
collection period fell from 85 days in 2005 to 75 days in 2006. Product
selling period was shorter from an average of 115 days in 2005 to 93
days in 2006. Debt payment period was on average shorter from 54 days in
2005 to 51 days in 2006, causing Cash Cycle to decrease to 117 days.

From an analysis of the rising trend in the liquidity ratio resulted
from continuously improved sales from 2005 by favorable weather during
the first half of the year, reflected that the flood problems slightly
affected agricultural produce in 2006. Trade account receivable and
short-term loan from financial institutions were higher because payment
had not yet been due. Inventory turn over was at the higher rate as the
company undertook proper management of raw material purchasing orders to
coincide with market demand in 2006. Thus, the company enjoyed better
financial liquidity, and there was more cash flow from operations.

Cash flow from investment activities increased by 239.32% compared to
last year, were from the buying of additional machinery and vehicles to
replace those which were worn out and thus sold off. In addition, the
disposal of investment causing realized loss from investment. Cash flow
from financial procurement activities slightly rose as a result of
reduced raw material purchase orders during the second half of 2006.
Inventories increased compared to that of the last year. Dividend payout
amounting to 56 million baht resulted in cash and cash equivalents to
rise by 46.88 million baht or by 454.88%.

With regard to capital structure, the ratio of debt to shareholders was
equivalent to 0.36 times in 2006, which showed a reduction from 0.26
times in the previous year. This came from debt moratorium from lawsuit
amounting to 39.45 million baht. The increase of account payables and
short-term loan from financial institution totaling 20.83 million baht
was considered a very low ratio. The ratio for interest payment ability
was 55.45 times in 2006 compared to 31.81 times in 2005. Assets turnover
and fixed assets turnover was 10.39% and 71.17% respectively compared to
2005. Current asset ratio was 133.68 times in 2006 showed an increase
from 2005 as the company undertook the most careful and efficient
financial management especially interest burden in the future.
Furthermore, the company had a policy to use rotating liabilities to
invest in assets in order to gain the highest return. The company also
endeavored not to create excessive financial costs and was able to give
shareholders the highest return, with the company also keeping the ratio
from becoming too high in order to prevent the company from financial
risk as shown in 2006 performance.

In 2007, with total sales revenue increasing 3.30% in 2007, this led to
a decrease of 85.46% in cash flow from operations. Liquidity ratio fell
from 3.70 in 2006 to 2.81 in 2007. Quick ratio fell from 2.27 in 2006 to
1.84 in 2007. Cash liquidity ratio fell from 1.17 in 2006 to 0.13 in
2007. Average debt collection period increased from 75 days in 2006 to
77 days in 2007. Product sales time increased from 94 days in 2006 to 99
days in 2007. Debt payment period increased from 52 days in 2006 to 75
days in 2007, making the cash cycle equal to 100 days.

An analysis showed a downward trend in the liquidity ratio due to a rise
in total sales in the 4^(th) quarter of 2007. This caused an increase of
5.08% in the number of remaining trade debtors. And due to factors
affecting raw material procurement, the company had to import raw
materials in order to sufficiently meet market demand. Thus there was an
increase in raw material purchase orders in the 4^(th) quarter leading
to an increase of 61.85% in inventory. At the same time, the number of
trade creditors and T/R creditors rose by 55.63%. Also, there was a rise
in rotating debts comprising income tax and unpaid expenses which rose
by 184.70%. Due to the above reasons, rotating assets increased by
20.08% while rotating debts were up by 30.80% compared to the previous
year. This thus reflects a downward trend in overall liquidity ratio
including an increase in the average debt collection period, product
sales period and debt payment period. This led to a decrease in cash
flow from operations.

Cash flow from investment activities fell by 57.52% compared to the
previous year. Because the company invested 32 million baht in temporary
financial investment purchasing a small number of additional machinery
equipment, cash flow from sale of financial investments decreased.

Cash flow from financial procurement activities fell by 80.79% as a
result of purchase orders of raw materials from abroad in the 4^(th)
quarter. This led to a rise in inventory from last year. This and a
dividend payout of 52.5 million baht which was lower than last year,
caused net cash and cash-equivalent items to decrease from the previous
year by 29.98 million baht or 457.96%.

Consideration of investment structure showed debt to shareholder ratio
to be 0.44 times in 2007 from 0.36 times in 2006. Because of the
increase in T/R creditors and the rise in income tax and unpaid
expenses, total debts increased by 30.97%, while shareholders rose by
8.10%, thus increasing the said ratio. However, this is still considered
a very low ratio. Interest payment ability ratio fell to 12.65 times in
2007 from 55.20 times in 2006. The ratio of return from assets and fixed
assets were 16.06 and 117.75 in 2007, up from 10.39 and 71.18 in 2006.
And rotating assets ratio equaled 126.58 times, down from 133.68 times
in 2006.

The company set a policy for the most careful and effective financial
management taking into account economy and cost effectiveness, and also
reducing risks from currency exchange and burden of interest payable
that would come from extending future debt payment term and to ensure
that exchange rate and payment period is appropriate in order to derive
the most benefit. Shareholder return was also taken into consideration
and thus temporary financial investments with low risk were made. The
company also set a policy of bringing rotating debts for more investment
in rotating assets in order to attain highest return and reduce
financial costs, while at the same time providing the highest overall
return to shareholders. Also to maintain the various key ratios in order
to reduce financial risks to the minimum and ensure the company’s
highest stability. Thus, the operational results for 2007 has been shown
as above.

The key factor that is important and will have an effect on operations
in 2008.

The overall economy is expected to still expand slightly from the year
2007. Seen are effects from the continued economic expansion, favourable
weather conditions, sufficient water for cultivation, including
continued good prices for overall agricultural products. As for effects
from external factors, these include oil prices on the global market, US
economic problems and problems concerning raw material volume which
pushes up raw material costs. Also the country’s financial and treasury
policy could, at any time, have both a positive and negative impact on
cost of raw material imports. There is also a trend for interest burden
and inflation rate to rise . The company is aware of the various factors
affecting operations on all fronts in 2008, including natural disaster
conditions that could affect changing domestic demand and supply. The
agricultural sector is still the country’s main economic sector. The
government gives importance to this sector and provides assistance and
support in all areas in order to increase agricultural output. The
government also has a policy to protect, and to maintain as well as
boost agricultural prices.

In agricultural sector production, the Government will continue to
provide its full support in all areas such as:

  1.       Technology development - Developing production technology by
educating farmers and providing good plant breeds in order to further
develop quality of output and create competitive capability.

  2.       Marketing - Helping to sustain agricultural prices by
  providing farmers with loans using their agricultural goods as
  collateral. This will keep agricultural prices from falling too low
  and let market forces operate on their own.

  3.       Finances – Providing loan support which might be in the form
  of a village fund, low-interest loans and loans derived from
  transforming assets into capital, so as to create opportunity for
  farmers.

4.       Promote agricultural processing – This is done by creating
added value to products which would develop product quality and enable
to export.

Government support on production and its strategy to restructure
agricultural products to make it in line with market needs and create
competitiveness for the country, will improve farmers’ situation and
living standards. On the part of the private sector, the Thai Crop
Protection Association is joining hands with the government sector to
control and check against sub-standard products. This is important in
order to create good quality agricultural products meeting market needs.
This will increase company sales.

Raw material prices rising higher with world market conditions are a
risk factor, making the cost price of products higher. Higher oil
prices, baht fluctuation and weakening, drought and flooding, are also
external factors which are beyond control. However, the company has
devised a policy to ease the effects from these risk factors.

1. Company policy to manage forex on raw material imports, for example,
with an extension of account payable to reduce risks and the
consideration of favorable exchange rate.

2.  Practicing more caution when ordering raw materials, seeing that it
    concords with needs. This will reduce damage from excessive
    inventory. However, lead Time is considered to avoid short of
    inventory.

3.  Making careful consideration before opening new trade accounts and
    expanding credit lines to prevent damage from bad debts and strictly
    performing in accordance with collection policy.

4.  Disseminate knowledge on technology and correct usage of product to
    increase yields, promote safety, with no environmental effects.

These above factors affect the company’s operations and financial
position. Therefore, it is the policy of the company to try and reduce
the adverse effects from these various factors through the above
mentioned measures. Although, these are outside factors that cannot be
controlled, it is expected that this policy will reflect in better
operations for the company.