2. Nature of Business

(1) Company profile

Pato Chemical Industry Plc. was established on 6 October 1973 to import,
formulate, and distribute pesticide in Thailand. Its initial registered
capital was 1 million baht with 1,000 ordinary shares at par value of
1,000 baht per share. PATO CHEMICAL INDUSTRY PUBLIC COMPANY LIMITED in
October 1993 then continued to sell its ordinary stocks for 3,000,000
shares at Bt 55 per share, valued at Baht 10 per share in July 1995,
PATO increased its capital to Baht 140 million. The company has been
listed in the Stock Exchange of Thailand in August 1995.

Major Changes and Development in 2007

+-----------+---+--------------------------------------------------------+
| January   | : | The company appealed to the court to suspend the       |
| 2007      |   | execution for the case sued by Itochu as alleged       |
|           |   | guarantor.                                             |
+-----------+---+--------------------------------------------------------+
| April     | : | 2007 Annual General Meeting of Shareholders where the  |
| 2007      |   | meeting appointed Mr.Pradit Rodloytook or Ms.Nongram   |
|           | : | Laoha-areedilok to be 2007 auditor.                    |
|           |   |                                                        |
|           |   | Dividend payment of 3.75 baht per share for 2006       |
|           |   | performance                                            |
+-----------+---+--------------------------------------------------------+
| September | : | The Company had entered into a compromise agreement in |
| 2007      |   | appeal court with Itochu as per details in lawsuit     |
|           | : | declaration page 28.                                   |
|           |   |                                                        |
|           |   | Licensed to be formulator and distributor of Captan    |
|           |   | (Captan 50% WP                                         |
+-----------+---+--------------------------------------------------------+
| October   | : | Licensed to be formulator and distributor of Pacco     |
| 2007      |   | (Paclobutrazol 15% WP)                                 |
+-----------+---+--------------------------------------------------------+
| November  | : | Licensed to be formulator and distributor of Tea Seed  |
| 2007      |   | Meal (Saponin 10% DP)                                  |
+-----------+---+--------------------------------------------------------+

Development of major shareholders from 31 December 2004 – 31 December
2007

[TABLE]

(2) Pato Chemical Industry Public Company Limited

The company is the importer, formulator, and distributor of pesticide.

Major Type of Imports

1. Technical Grade (TG): is a concentrated chemicals which are used in
formulations to produce final products according to the specified
formulas

2. Finished Product (FP): is the product ready for use. Most of the
imported FD is in liquid and solid form in bulk sizes. Therefore,
repackaging is needed before distribution.

About 80% of the company's imported products are TG for formulation at
the factory before distribution resulted in lower cost of raw material
as compared with other competitors who import finished product for
repackaging. TG has longer shelf-life than FP and can be formulated
according to the requirements which is more suitable for the
environment. Chemical pesticide in the market can be in many forms e.g.
liquid, power, and granule for safety in moving and storing. In the
production process, there are 2 main ingredients in chemical pesticide;
active and inert ingredients. “Active Ingredients” are chemical
substance called by its chemical names for different uses of purposes.
“Inert Ingredients” are substance to combine with the active chemical to
make it in the forms suitable for different types for uses such as
solvents, carriers, surfactants, emulsifiers, or any other substance
which are added for special purpose called “Special Additives”.

Shareholders’Structure

a) Trillit Asia Mineral Processing Co.,Ltd.

  b) Sojitz Chemical Corp

c) Pojanalai

d) Wesaratchawest

e) Choengwiwatkit

a) 0.54% a )35.79% a) 39.30% a) -

b) - b)15.00% b) - b) -

c) 0.54% c) 11.93% c) 12.70% c) 94 %

d) - d) 7.94% d) 19.60% d) -

e) 0.27% e) 6.08% e) 15.70% e) -

1.35% 76.74% 87.30% 94%

Pato Chemical Industry Plc Kentex Properties Co.,Ltd

Registered Capital Baht 140 Million (Office Space Rental)

0.01%

Plastic Precision Industry Co.,Ltd

Registered Capital Baht 115 Million Connected transaction such as loan,
bank guarantee, office space rental

Revenue Structure

+-------------------+------+------+-----+----+-----+---+-----+----+
|                   | Oper | Per  | 2   |    | 2   |   | 2   |    |
|                   | ated | cent | 005 |    | 006 |   | 007 |    |
|                   |      | agee |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
|                   |      | Of   | Mil | %  | Mil | % | Mil | %  |
|                   |      | Sh   | B   |    | B   |   | B   |    |
|                   |      | ares | aht |    | aht |   | aht |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Local Sales by    |      |      |     |    |     |   |     |    |
| Products          |      |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Product Line 1    | PATO |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Insecticide       |      |      | 178 | 3  | 182 | 2 | 169 | 2  |
|                   |      |      | .21 | 2. | .29 | 9 | .68 | 7. |
|                   |      |      |     | 01 |     | . |     | 10 |
|                   |      |      |     |    |     | 7 |     |    |
|                   |      |      |     |    |     | 9 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Herbicide         |      |      | 261 | 4  | 307 | 5 | 346 | 5  |
|                   |      |      | .32 | 6. | .90 | 0 | .16 | 5. |
|                   |      |      |     | 94 |     | . |     | 29 |
|                   |      |      |     |    |     | 3 |     |    |
|                   |      |      |     |    |     | 1 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Fungicide         |      |      | 42  | 7. | 41  | 6 | 42  | 6. |
|                   |      |      | .31 | 60 | .41 | . | .18 | 74 |
|                   |      |      |     |    |     | 7 |     |    |
|                   |      |      |     |    |     | 7 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Acaricide         |      |      | 22  | 3. | 23  | 3 | 21  | 3. |
|                   |      |      | .07 | 97 | .65 | . | .47 | 43 |
|                   |      |      |     |    |     | 8 |     |    |
|                   |      |      |     |    |     | 6 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Other             |      |      | 52  | 9. | 56  | 9 | 46  | 7. |
|                   |      |      | .77 | 48 | .74 | . | .63 | 44 |
|                   |      |      |     |    |     | 2 |     |    |
|                   |      |      |     |    |     | 7 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Total Local Sale  |      |      | 556 | 1  | 611 | 1 | 626 | 1  |
|                   |      |      | .68 | 00 | .99 | 0 | .12 | 00 |
|                   |      |      |     |    |     | 0 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Export Sales by   |      |      |     |    |     |   |     |    |
| Products          |      |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Product Line 1    | PATO |      |     |    |     |   | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Insecticide       |      |      | -   | -  | -   | - | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Herbicide         |      |      | -   | -  | -   | - | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Fungicide         |      |      | -   | -  | -   | - | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Acaricide         |      |      | -   | -  | -   | - | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Other             |      |      | -   | -  | -   | - | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Total Export      |      |      | -   | -  | -   | - | -   | -  |
| sales             |      |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Local & Export    |      |      |     |    |     |   |     |    |
| Sales             |      |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Product Line 1    | PATO |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Insecticide       |      |      | 178 | 3  | 182 | 2 | 169 | 2  |
|                   |      |      | .21 | 2. | .29 | 9 | .68 | 7. |
|                   |      |      |     | 01 |     | . |     | 10 |
|                   |      |      |     |    |     | 7 |     |    |
|                   |      |      |     |    |     | 9 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Herbicide         |      |      | 261 | 4  | 307 | 5 | 346 | 5  |
|                   |      |      | .32 | 6. | .90 | 0 | .16 | 5. |
|                   |      |      |     | 94 |     | . |     | 29 |
|                   |      |      |     |    |     | 3 |     |    |
|                   |      |      |     |    |     | 1 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Fungicide         |      |      | 42  | 7. | 41  | 6 | 42  | 6. |
|                   |      |      | .31 | 60 | .41 | . | .18 | 74 |
|                   |      |      |     |    |     | 7 |     |    |
|                   |      |      |     |    |     | 7 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Acaricide         |      |      | 22  | 3. | 23  | 3 | 21  | 3. |
|                   |      |      | .07 | 97 | .65 | . | .47 | 43 |
|                   |      |      |     |    |     | 8 |     |    |
|                   |      |      |     |    |     | 6 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Other             |      |      | 52  | 9. | 56  | 9 | 46  | 7. |
|                   |      |      | .77 | 48 | .74 | . | .63 | 44 |
|                   |      |      |     |    |     | 2 |     |    |
|                   |      |      |     |    |     | 7 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Total Local &     |      |      | 556 | 1  | 611 | 1 | 626 | 1  |
| Export sales      |      |      | .68 | 00 | .99 | 0 | .12 | 00 |
|                   |      |      |     |    |     | 0 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Less returned &   |      |      | 21  | 3. | 11  | 1 | 5   | 0. |
| Discount          |      |      | .66 | 89 | .26 | . | .58 | 89 |
|                   |      |      |     |    |     | 8 |     |    |
|                   |      |      |     |    |     | 4 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Net Sales         |      |      | 535 | 9  | 600 | 9 | 620 | 9  |
|                   |      |      | .02 | 9. | .73 | 9 | .54 | 8. |
| มูลค่าก             |      |      |     | 30 |     | . |     | 94 |
| ารรับจ้างผลิตหรือบรรจุ |      |      |     |    |     | 1 |     |    |
|                   |      |      |     |    |     | 2 |     |    |
| รายได้อื่นๆ          |      |      |     |    |     |   |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Contractor        |      |      | -   | -  | -   | - | -   | -  |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Other Income      |      |      | 3   | 0. | 5   | 0 | 6   | 1. |
|                   |      |      | .77 | 70 | .34 | . | .64 | 06 |
|                   |      |      |     |    |     | 8 |     |    |
|                   |      |      |     |    |     | 8 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+
| Total Revenue     |      |      | 538 | 1  | 606 | 1 | 627 | 1  |
|                   |      |      | .79 | 00 | .07 | 0 | .18 | 00 |
|                   |      |      |     |    |     | 0 |     |    |
+-------------------+------+------+-----+----+-----+---+-----+----+