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 2002-2005 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

  ------------------------------------ ------------ -------- ------------ -------- ------------ -------- ------------ --------- --------
                                       2002                  2003                  2004                               2005      

                                       Amount       %        Amount       %        Amount       %                     Amount    %

  Assets                                                                                                                        

  CURRENT ASSETS                                                                                                                

  Cash in hand and at Bank             31,143       8.73     97,360       23.88    86,429       20.60                 96,736    21.96

  Short-term investment                464          0.13     -            -        -            -                     -         -

  Fixed deposit                        -            -        -            -                                                     

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

  Investment in listed company         -            -                              -            -                     -         -

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

  Other companies, net                 94,538       26.51    103,395      25.36    128,614      30.66                 123,091   27.95

  Current portion of loan and          9,000        2.52     -            -        -            -                     -         -
  receivable – related company                                                                                                  

  Inventories                          83,103       23.31    86,033       21.10    119,781      28.55                 138,167   31.37

  Other current assets                                                                                                          

  Vat receivable                       -            -        -            -        -            -                     -         -

  Others                               5,683        1.59     2,493        0.61     2,231        0.53                  1,948     0.44

  Total current assets                 223,931      62.80    289,281      70.95    337,055      80.35                 359,942   81.72

  Investment in subsidiary                                                                                                      

  Loan to Subsidiary                   -            -        -            -        -            -                     -         -

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

  Investment in subsidiary             -            -        -            -        -            -                     -         -

  Investment in related company        1,407        0.39     1,407        0.35     2,661        0.63                  -         -

  Account receivable and long term     28,813       8.08     29,183       7.16     -            -                     -         -
  loan to related company                                                                                                       

  Property, Plant and Equipment Net    81,474       22.85    74,241       18.21    72,513       17.29                 79,729    18.10

  Restricted cash fixed deposits       7,131        2.00     -            -        -            -                     -         -

  Refundable withholding income tax    6,489        4.89     6,489        5.48     -            -                     -         -

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

  Deposits and guarantee               82           0.02     4            0.00     -            -                     -         -

  Land not used in operation           7,030        1.97     7,030        1.71     7,030        1.68                  -         -

  Deferred charge                      -            -        -            -        -            -                     -         -

  Other non-current assets             209          0.06     116          0.03     239          0.06                  762       0.17

  Total other assets                   132,635      37.20    118,470      29.05    82,443       19.65                 80,491    18.28

  Total assets                         356,566      100.00   407,751      100.00   419,498      100.00                440,433   100.00

  Liabilities and Shareholders' Equity                                                                                          

  Current Liabilities                                                                                                           

  Shortterm loan from financial        11,233       3.15     43,349       10.63    45,067       10.74                 31,835    7.23
  institutions                                                                                                                  

  Trade accounts and notes payable –   1,953        0.55     1,430        0.35     4,822        1.15                  11,430    2.60
  Related Company                                                                                                               

  - Other Companies                    10,813       3.03     11,669       2.86     16,146       3.85                  10,931    2.48

  Current portion of hire-purchase     526          0.15     902          0.22     496          0.12                  -         -
  contracts payable                                                                                                             

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

  Payable from forward exchange        14           0.00     -            -        -            -                     -         -
  contracts                                                                                                                     

  Other current liabilities                                                                                                     

  Accrued income tax and accrued       12,136       3.40     15,180       3.72     22,414       5.34                  18,167    4.12
  expenses                                                                                                                      

  Others                               174          0.05     200          0.05     237          0.06                  642       0.15

  Total Other Current Liabilities      12,310       3.45     15,380       3.77     22,651       5.40                  18,809    4.27

  Total Current Liabilities            36,849       10.33    72,730       17.84    89,182       21.26                 89,505    20.32

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

  Hire-Purchase contracts payable-net  -            -        496          0.12     -            -                     -         -

  Provision for loss in a subsidiary   -            -        -            -        17,048       4.06                  -         -
  company                                                                                                                       

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

  Total Liabilities                    36,849       10.33    73,174       17.95    106,230      25.32                 89,505    20.32

  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      39.26    140,000      34.33    140,000      33.37                 140,000   31.79
  capital 14,000,000 shares                                                                                                     

  Premium on share capital             135,000      37.86    135,000      33.11    135,000      32.18                 135,000   30.65

  Retained earning                                                                                                              

  Appropriated for reserve fund        14,000       3.93     14,000       3.43     14,000       3.34                  14,000    3.18

  Unappropriate                        30,717       8.61     45,577       11.18    24,268       5.79                  61,928    14.06

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

  Total Shareholders' Equity           319,717      89.67    334,577      82.05    313,268      74.68                 350,928   79.68

  Total Liabilities and Shareholders'  356,566      100.00   407,751      100.00   419,498      100                   440,433   100.00
  Equity                                                                                                                        

  Book value per share(baht)           22.84                 23.90                 22.38                              25.07     

  Par Value                            10                    10                    10                                 10        

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

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

                                       2002                  2003                  2004                  2005                   

                                       Amount       %        Amount       %        Amount       %        Amount                 %

  Revenues                                                                                                                      

  Sales                                484,690      98.33    528,755      98.76    558,963      99.30    535,019                99.30

  Share of profit(loss)in subsidiary   -            -        -            -        -            -        -                      -

  Profit from exchange rate            -            -        1,694        0.32     -            -        -                      -

  Other income                         8,231        1.67     4,936        0.92     3,967        0.70     3,774                  0.70

  Total Revenues                       492,921      100.00   535,385      100.00   562,930      100.00   538,793                100.00

  Expenses                                                                                                                      

  Cost of sales                        407,117      82.59    428,571      80.05    425,246      75.54    402,686                74.74

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

  Bad debt and doubtful debt           4,366        0.89     1,051        0.20     32,879       5.84     61                     0.01

  Others                               39,325       7.98     44,433       8.30     42,150       7.49     44,198                 8.20

  Loss from exchange rate              2,517        0.51     -            -        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                    1,774        0.36     1,084        0.20     1,715        0.30     2,508                  0.47

  Directors remuneration               982          0.20     618          0.12     769          0.14     850                    0.16

  Total Expenses                       456,081      92.53    475,757      88.86    521,024      92.56    456,938                84.81

  Net Income(Loss) before Income Tax   36,840       7.47     59,628       11.14    41,906       7.44     81,855                 15.19
  and extraordinary                                                                                                             

  Income Tax                           (7,029)      (1.43)   (16,768)     (3.13)   (24,014)     (4.27)   (20,395)               (3.79)

  Net Income (Loss) from operation     29,811       6.05     42,860       8.01     17,892       3.18     61,460                 11.41

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

  Net income (loss)                    29,811       6.05     42,860       8.01     17,892       318      61,460                 11.41

  Earning per share                    2.13                  3.06                  1.28                  4.39                   

  Par value                            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 Cash Flows for the Year |       |       |       |       |
| Ended December 31                    |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
|                                      | 2002  | 2003  | 2004  | 2005  |
+--------------------------------------+-------+-------+-------+-------+
| Cash Flows from Operating Activities |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Net Income                           | 2     | 4     | 1     | 6     |
|                                      | 9,811 | 2,860 | 7,892 | 1,460 |
+--------------------------------------+-------+-------+-------+-------+
| 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     | 129   | (353) | 861   | (148) |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized loss on exchange rate     | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of short-term       | -     | -     | -     | -     |
| investment                           |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Minority interest                    | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Share of profit (loss) in subsidiary | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Short-term Investment                | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Loss on debt restructuring           | -     | 2,381 | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Loss on Impairment of Investment     | -     | -     | 1     | 2,113 |
|                                      |       |       | 5,794 |       |
+--------------------------------------+-------+-------+-------+-------+
| Depreciation and amortization        | 1     | 1     | 1     | 1     |
|                                      | 1,977 | 1,194 | 0,329 | 1,006 |
+--------------------------------------+-------+-------+-------+-------+
| Allowance for doubtful accounts      | 4,366 | 1,050 | 3     | 61    |
|                                      |       |       | 2,879 |       |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of fixed assets     | (421) | (1    | (1    | (2    |
|                                      |       | ,754) | ,722) | ,048) |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of investment       | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Excess of investment over book value | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Income from operating before         | 4     | 5     | 7     | 7     |
| changing in operating assets and     | 5,862 | 5,378 | 6,085 | 2,474 |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| (Increase) decrease in operating     |       |       |       |       |
| assets                               |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Account and note receivables         | (9    | (9    | (28   | 5,462 |
|                                      | ,229) | ,908) | ,915) |       |
+--------------------------------------+-------+-------+-------+-------+
| Inventories                          | 7,376 | (2    | (33   | (18   |
|                                      |       | ,930) | ,748) | ,386) |
+--------------------------------------+-------+-------+-------+-------+
| Other current assets                 | (188) | 2,439 | 262   | 282   |
+--------------------------------------+-------+-------+-------+-------+
| Refundable Income Tax                | -     | -     | 6,489 | -     |
+--------------------------------------+-------+-------+-------+-------+
| Other assets                         | 198   | 90    | (120) | (524) |
+--------------------------------------+-------+-------+-------+-------+
| Increase(decrease) in operating      |       |       |       |       |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Notes and account payable            | (13   | 341   | 7,737 | 1,411 |
|                                      | ,427) |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Accrued income tax and accrued       | 6,230 | 3,044 | 7,235 | (4    |
| expenses                             |       |       |       | ,247) |
+--------------------------------------+-------+-------+-------+-------+
| Other current liabilities            | (933) | 12    | 37    | 405   |
+--------------------------------------+-------+-------+-------+-------+
| Net cash provided by(use in)         | 3     | 4     | 3     | 5     |
| operating activities                 | 5,889 | 8,466 | 5,062 | 6,877 |
+--------------------------------------+-------+-------+-------+-------+

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

  Statement of Income for the year ended                                  
  December 31                                                             

                                         2002       2003       2004       2005

  Cash Flows from Investing Activities                                    

  Decrease(increase) in called and fixed 209        464        -          -
  deposit                                                                 

  Decrease(increase) in short-term       -          -          -          -
  investment                                                              

  Decrease(increase) in deposit with     -          -          -          -
  financial institution                                                   

  Proceeds from sale of fixed assets     421        2,229      1,722      2,048

  Acquisition of fixed assets            (1,348)    (3,158)    (8,601)    (11,191)

  Decrease (increase) in loans           -          -          -          -

  Decrease (increase) in Loan to related (7,151)    -          -          -
  company                                                                 

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

  Decrease (increase) in investment in   -          -          -          -
  related company                                                         

  Decrease in long-term loan and         690        7,000      -          -
  receivable-related company                                              

  Decrease (increase) in restricted cash 9,986      7,131      -          -
  fixed deposits                                                          

  Net cash provided by ( used in)        2,807      13,666     (6,879)    (9,143)
  investing activities                                                    

  Cash Flows from Financing Activities                                    

  Increase(decrease)I in bank overdrafts (12,695)   32,558     1,002      (13,164)
  and loan                                                                

  Repayment of leasing payable           -          (376)      (902)      (526)

  Repayment of long-term loan            -          -          -          -

  Dividend paid                          (7,700)    (28,000)   (39,200)   (23,800)

  Net cash provided by (used in)         (20,395)   4,182      (39,100)   (37,490)
  financing activities                                                    

  Increase(decrease) in cash and cash    18,301     66,314     (10,917)   10,244
  equivalents                                                             

  Unrealized loss on exchange rate on    (51)       (97)       (14)       63
  cash in bank in foreign currency                                        

  Net cash and cash equivalents          18,250     66,217     (10,931)   10,307
  increase(decrease)                                                      

  Cash and cash equivalents, beginning   12,893     31,143     97,360     86,429
  of year                                                                 

  Cash and cash equivalents, end of year 31,143     97,360     86,429     96,736
  -------------------------------------- ---------- ---------- ---------- ----------

(c) Financial Ratio

Pato Chemical Industry Public Co.,Ltd. Financial Ratio 2001-2004

  ------------------------------------- --------- -------- --------- ---------
                                        2002      2003     2004      2005

  Liquidity Ratio                                                    

  Current Ratio (Time)                  6.08      3.98     3.78      4.02

  Quick Ratio (Time)                    3.67      2.76     2.41      2.46

  Cash Flow Ratio (Time)                0.76      0.88     0.43      0.64

  Receivable Turnover (Time)            4.40      5.11     4.82      4.25

  Collection Period (Day)               81        71       75        85

  Inventory Turnover (Time)             4.69      5.07     4.13      2.91

  Inventory T/Period (Day)              77        71       87        124

  Account Payable Turnover (Time)       20.92     33.14    11.19     9.64

  Payment Period (Day)                  17        11       32        37

  Cash Cycle (Day)                      144       131      130       171

  Profitability Ratio                                                

  Gross Profit Margin (%)               16.00     18.95    23.92     24.73

  Profit from operation (%)             6.27      10.55    7.09      15.06

  Other profit (%)                      1.31      0.72     0.40      0.23

  Cash (%)                              118.12    86.89    88.42     70.58

  Net Profit Margin (%)                 6.05      8.01     3.18      11.41

  Return on Equity (%)                  9.66      13.10    5.52      18.51

  Efficiency Ratio                                                   

  Return on Total Assets (%)            8.38      11.22    4.33      14.29

  Return on Fixed Assets (%)            44.54     63.68    35.10     91.00

  Assets Turnover (Time)                1.39      1.40     136.10    125.31

  Financial Ratio                                                    

  Debt to Equity (Time)                 0.12      0.22     0.34      0.26

  Interest Coverage (Time)              25.19     61.18    35.45     31.81

  Cash Basis (Time)                     3.97      1.54     (0.72)    (1.60)

  Payout Ratio (%)                      93.93     91.46    117.37    91.12

  Per Share (Baht)                                                   

  Book Value (Baht)                     22.84     23.90    22.38     25.07

  Earning per Share (Baht)              2.13      3.06     1.28      4.39

  Dividend per Share (Baht)             2.00      2.80     1.50      4.00

  Growth Rate                                                        

  Total Sale (%)                        0.38      14.35    2.88      4.99

  Cost of Goods Sold (%)                (36.02)   98.58    45.17     (15.74)

  Sales Revenue (%)                     11.28     9.09     5.71      (4.28)

  Selling & Admin Expense (%)           7.20      4.48     9.40      (12.49)

  Net Profit (%)                        279.95    43.77    (58.25)   243.51
  ------------------------------------- --------- -------- --------- ---------

2) Management Discussion and Analysis

In the financial statement of Pato Chemical Industry Public Co. Ltd.
indicated net profit (loss) totaled 42.86, 17.89 and 61.46 million baht
in 2003 – 2005 respectively. These figures represent an increase and
reduction of 43.77, (58.26), and 243.51 respectively.

In 2003, The overall economy improved as well as the expansion of Gross
Domestic Product. The agricultural production, food production and
agricultural processed goods rose at a rate of 4.39%. The situation
after the big floods in 2002 improved. The fine weather contributed to
cultivation even though there were still some floods in the northeast
and the south leading to damages of some agricultural produces. The
government realized the problems and gave all form of supports on
production, marketing, and finances. Complete cycle of agriculture
processing sector resulted in the success of One Tambon One Product
Project. The OTOP project has the potential for developing export
products The above mentioned policy led to the increase of value of
agricultural produce which also supported the expansion of agricultural
sector. The strengthen of the baht and a policy of efficient management
by searching for sources of quality at lower price led to the decrease
of cost of raw materials.

In 2004, the overall economic stability is good, though the economic
growth rate is lower compared to last year. The inflation rate was low
by a slight economic situation slowdown in the second half of the year
resulting from the insurgency in the South, tsunami disaster, bird flu
and the drought in various areas. As a result most of quantity of the
agricultural product decreased, for instance, rice, palm oil and
sugarcane. Despite the drought, the production of para rubber increased.
The prices of agricultural products such as rice, rose by the average
percentage of 6-17. The farmers earned more income from the sales of the
main agricultural produces. The government fully dealt with the problems
and gave all forms of agricultural support by providing assistances for
production , marketing and finances as well as developing the complete
processing agricultural goods to compete on the world market. As a
result, the prices of agricultural products were higher. The policy to
control the prices of diesel oil made the cost of imported material
decreased as well.

Thailand’s economic situation for 2005 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.

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

Sales revenue during 2003 – 2005 was 528.76, 558.96, and 535.02 million
baht respectively, representing increases (reductions) of 9.09%, 5.71%,
and (4.28%) respectively.

Total revenue during 2003 – 2005 was 535.39, 562.93, and 538.79 million
baht, representing increases (reductions) of 8.61%, 5.14%, and (4.29%)
respectively.

Cost of Sales in 2003 – 2005 was 428.57, 425.25, and 402.68 million
baht, representing increases (reductions) of 5.27%, (0.78%) and (5.31%)
respectively.

In 2003, The overall economy expanded. Gross Domestic Product expanded
by 5.61 %, with expansion in agricultural production, food production
and agricultural processed goods rising at a rate of 4.39%. This was the
result of various favorable production factors, particularly government
policy fully supporting the agricultural sector, such as solving farm
problems and providing assistance to farmers after flooding, and
provision of financial support for farmers to develop quality production
efficiency. This would inevitably lead to development in processing
agricultural goods and to competing on the world market. An example is
support for the One Tambon, One Product project that has the potential
for developing export products.

  The above factors led to an expansion of 4.64% and 4.66% respectively
for plants and processed agricultural goods. Because of higher
agricultural prices, and at the same time government measures and policy
to increase the value of agricultural produce which also supported
expansion in the output of agricultural processing sector, farmers were
able to enjoy a better financial position and higher purchasing power.

  Total sales rose by 44.06 million baht or 9.09% compared to the year
2002. This is due to the spread of plant pests, a major problem for
farmers beginning their planting after the floods. This led to an
increase of 62.63% in the sales of pesticides compared to 2002, with a
97.06% rise seen in the sale of granule pesticide and 78.25% rise in the
sale of powder pesticide compared to 2002. This led to initial total
sales to rise by 36.68 million baht or an increase of 28.09%. At the
same time, total sales of herbicides rose by 0.92% compared to 2002.
Under this increase, liquid herbicide increased by 21.27%, while granule
and powder herbicide fell by 5.55% and 7.37% respectively compared to
2002. This caused initial total sales to rise by 7.95 million baht or
2.72%. Sales of liquid fungicide rose by 60.18%, ca using initial sales
to rise by 7.51 million baht, representing an increase of 62.46%.
However at the same time, there was a slight fall in total sales and
retailing of powder fungicide.

  Thus, the rise in total sales and rise in earnings from the increase
in sales, was due to the outbreak of plant pests and the beginning of
planting following the floods, which led to increased use of pesticides.
The company devised a marketing strategy in accordance with the
prevailing situation. In addition, the company also introduced many new
products and product types to suit market demand during the time.
Another outside factor helping to increase sales is the suppression and
strict supervision by both government and private sectors over
sub-standard products. This prevented sub-standard products from being
sold on the market.

  Production factors had an effect on operations. The company set a
policy for efficient management of production by searching for sources
of quality and lower cost raw materials. Raw material prices on average
decreased by about 8.25%, leading production costs and sales costs to
rise by 7.78% and 5.27% respectively compared to 2002. The rate of
increase for production and sales costs was smaller than the rate of
increase for total sales income which amounted to 9.09%. Production
costs in utilization of raw materials rose by 7.76%, labor costs rose by
14.27% and other costs rose by 1.68%. This resulted from higher market
demand, which in turn raised production output and retail, giving the
company initial profits of 18.95%, representing a rise of 18.44% from
2002.

  In 2004, the overall economic situation was good despite the decrease
of agricultural produces. This was due to severe drought which was the
worst in 30 years, and led to lack of water for cultivation. As a result
agricultural produces were damaged. The farmers faced many problems and
at the same time. The government set a policy to support and help the
agricultural sector in general and thereby strengthening the prices of
agricultural produce, such as para rubber and rice which are the main
economic crops. The prices of exporting rice rose by 6-17%. The
increasing prices of the rice contributed to the policy of the
government to help supporting the prices of the paddy in the country as
well as the policy to push Thailand to be the first rice exporting
country. The export quotas were above the target and they were higher
than many competing countries of potential productivity such as China,
Vietnam, and United States. These countries suffered from natural
disaster of heat wave resulting in lower production while the demand was
higher.

As for the marketing and financial assistance, the government offered
low interest loans to support the agricultural sector and processed
agricultural products so as to get value-added agricultural products
with low cost for competition. From the said policy and assistance
resulted in better financial situation and increased purchasing power of
farmers and the development of their products.

From the above mentioned factors, the sales revenue increased by 30.21
million Baht or 5.71%. Such increase was in the lower rate compared to
2003. The severe draught led to lack of water for cultivation in many
areas. As a result, agricultural produces were reduced. With the policy
of the government to support and help agricultural sector in general and
thereby strengthening the price of agricultural produces. At the same
time, the company launched many new products to meet demand of the
farmers.

Thus in 2004, the total sales of insecticides increased by 4.47 per unit
compared to last year. This was a reduction in the part of liquid and
powder form of insecticides by 23.93% and 18.47% per unit. The granule
insecticides increased by 18.38 % per unit. This led the overall sales
of insecticides dropped by 3.19 million baht or 1.91%.

The sales of granule herbicides increased by 9.68% per unit compared to
last year. This was a drop of liquid herbicides by 11.76% per unit. The
granule and powder herbicides increased by 19.49 % and 14.19%
respectively. This led to an increase of overall sales of herbicides by
0.81 million baht or 0.27%.

The sales of fungicides increased by 0.80% per unit compared to last
year. This was an increase of liquid fungicide by 40.57% per unit and a
drop of powder fungicides by 15.18% per unit. This led to an increase of
overall sales of fungicides by 4.73 million baht or 14.24%.

The sales of acaricides increased by 25.48% per unit or increased 3.94
million Baht or 23.15%. The overall sales of other products increased by
24.26 million Baht or 71.67%.

Despite the draught and the drop of the quantity of agricultural
produces, the sales were satisfactorily increased. This was because the
marketing strategy was in line with the situation and the launch of new
products at appropriate time.

  Production factors had an effect on operations. The company set a
policy for efficient management of production by searching for sources
of quality and lower cost raw materials in 2004. The price of the world
oil market rose much higher and led to an increase of price of raw
materials by about 18% at the end of the 4^(th) quarter. As a result,
production costs and sales costs rose. The company managed the
procurement appropriate to the market demand so as to cushion the impact
of the rising prices of raw material and to minimize the impact against
the production and sales cost as much as possible. Moreover, the
strengthen of the baht value at the end of 2004 helped minimize the
effect of the price rise of the raw materials. The weighted average
method was applied for inventories, then there were no impact from the
price rise of raw materials in 2004 but it was anticipated of the impact
in 2005. As for the labor cost and overhead cost, the company set an
efficient administrative management policy and led to a decrease of 1%.
Production cost and sales cost decreased by 0.95% and 0.78%
respectively. Gross profit rose by 33.53 million Baht or 33.47% compared
to last year. Other income excluding forex gain (loss) dropped by 0.97
million Baht or 19.64% due to the reduction of rebate and interest
receivable and led to a drop of total income compared to last year.

Year 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
economise on labour 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.

Table showing rate of increases (reduction) during 2003 - 2005

+------+--------------------+-------------------------+--------------+
| Year | PATO               |                         |              |
+------+--------------------+-------------------------+--------------+
|      | Sales Revenue      | Consolidated revenue    | Cost of Sale |
+------+--------------------+-------------------------+--------------+
|      |                    |                         |              |
+------+--------------------+-------------------------+--------------+
| 2003 | 9.09               | 8.61                    | 5.27         |
+------+--------------------+-------------------------+--------------+
| 2004 | 5.71               | 5.14                    | 0.78         |
+------+--------------------+-------------------------+--------------+
| 2005 | (4.28)             | (4.29)                  | (5.31)       |
+------+--------------------+-------------------------+--------------+

Sales and General Administrative expenses during 2003-2005 totaled
46.10, 94.06 and 5.74 million baht, representing increases (reductions)
of (2.39%), (104.03%) and (44.99%) respectively, not including interest
payable.

Interest payable in 2003 – 2005 totaled 1.08, 1.71, and 2.51 million
baht, representing increases (reductions) of (38.90%), 58.19%, and
46.30% respectively.

In 2003, sales and management costs fell by 1.13 million baht or 2.39%
compared to 2002. However, if bad and doubtful debts, and foreign
exchange profits are not taken into consideration, it can be seen that
sales and management costs amounting to 40.31 million baht in 2002 and
45.05 million baht in 2003, represent a rise of 4.74 million baht or
11.76%. This was the result of a policy to manage and control various
costs to rise at only the minimum and make investment worthwhile so as
to generate income with the highest efficiency.

  However, there were certain rising costs which could not be controlled
and which came from debtor management. Loss from debt restructuring was
acknowledged in the form of Net Present Value (NPV) which came from
extending payment contracts worth 2.38 million baht or 0.44% of total
income. At the same time, salary costs and various benefits, including
commission, rose by 1.89 million baht or 0.35% of total income. Other
costs rose by 0.47 million baht or 0.09% of total income.

  Bad debts and doubtful debts fell by 3.32 million baht or 75.93% due
to the company’s policy to protect against and reduce risks involving
bad debtors, through efficient debtor management and exercising caution
in selecting good customers to extend commercial credit. This was able
to control and reduce bad debts.

  As for profits (loss) from foreign exchange in 2002, there was a loss
of 2.52 million baht and in 2003, foreign exchange profits amounted to
1.69 million baht, a rise of 4.21 million baht or 167.30%. This was the
result of a continually stronger baht, with an average exchange rate
from the beginning of 2003 to the end of 2003 that was 3 baht less to
the dollar. Efficient risk management also pushed foreign exchange
profits higher.

Corporate income tax in 2002 amounted to 7.03 million baht and in 2003
amounted to 16.77 million baht. This represented an increase of 9.74
million baht or 138.55%. These came as a result of company loss in 2002
from the sale of tax investment money amounting to 15 million baht that
crossed over from 2001, which then led to a decrease in corporate income
tax. In 2003, net profits rose, causing corporate taxes to increase from
that of the previous year.

In 2004, the sales and management expenses increased by 47.96 million
baht or 104.03% compared to last year. However, if bad or doubtful debts
of 32.88 million baht comprising of the doubtful debt from account
receivable amounting to 3.70 million baht, the doubtful debt from the
long term loan to affiliated companies amounting to 29.18 million baht,
the impairment from investment amounting to 15.79 million baht which was
the special particulars and the forex loss amounting to 2.47 million
baht were not taken in to cosideration, it can be seen that the sales
and management expenses in 2004 amounting to 42.92 million baht and in
2003 amounting to 45.05 million baht decreased by 2.13 million Baht or
4.73%. This was the result of a policy to manage and control various
cost to be lessened and worthwhile in order to generate income with
highest efficiency, especially the policy through efficient debtor
management and exercising caution in selecting good customers to extend
appropriate credit to reduce the risk of bad debt. In 2004, the company
booked a provision for bad debts of 3.70 million Baht or 2.87% of total
debtors. This represented 0.66% of total revenue of 2004. As for the
doubtful debt of long term loan to affiliated companies, the company
considered the potential risk of nonperformance of the contract and in
order to prevent against damage to the company in the future, the
company booked provision for bad debt amounting to 29.18 million baht.
In addition, in 2004, the company anticipated to buy back 600,000 shares
under the contract with IFCT (currently called Thai Military Bank PLC)
at the price of 17.05 million Baht and impairment from investment of
15.79 million Baht was booked.

As for forex gain (loss) in 2004, there was a loss of 2.47 million Baht
and in 2004 while it was a forex gain of 1.69 million baht in 2003. This
represented a decrease of 4.16 million Baht or 245.86% resulting from
the fluctuation of the baht during the year. The average exchange rate
was at 39 baht per one dollar while in the 2^(nd) and 3^(rd) , the bath
was weaken to the average exchange rate of 41.71 Baht per one dollar and
led to forex loss in the 2^(nd) and 3^(rd) quarter amounting to 4.12
million Baht. As for another quarters, the baht strengthened and it led
to forex gain of 1.65 million baht. The company set up the policy to
reduce the risk from exchange rate by appropriately and with efficiency
executing forward contract when the fluctuation of the baht happened.

Interest payments of 1.71 million baht or 0.63 million baht increased or
an increase of 57.19% compared to last year was due to payment policy to
T/R creditors and foreign creditors in line with finance situation and
the exchage rate. The extension of T/R credit led to an increase in
interest payments.

Income tax in 2004 came to 24.01 million baht, whereas in 2003 it was
16.77. The increase of 7.24 million baht or an increase of 43.21%
resulting from less income tax of 0.90 million baht paid for divestment
of shares in 2002. The company booked provision for bad debts of 32.88
million baht and impairment from investment of 15.79 million baht thus
increased burden of income tax.

For the year 2005, sales and management 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.

The above operational results led to gross profit during 2003- 2005 to
total 100.18, 133.72, and 132.33 million baht respectively, representing
a percentage of 18.95, 33.47, and (1.03%) respectively.

Operational profits in 2003 – 2005 came to 55.78, 39.65 and 80.59
million baht respectively, representing percentage of 10.55, 7.09 and
15.06 respectively.

Net profits in 2003 – 2005 came to 42.86, 17.89, and 61.46 million baht,
or a percentage of 8.01, 3.18, and 11.41 respectively.

Return on equity during 2003 – 2005 were 13.10%, 5.52%, and 18.51%
respectively.

In 2003, total sales rose by 9.09%, due to government policy to support
and assist farmers in production, marketing and finances. This led to
higher agricultural prices and improved the financial position of
farmers. At the same time, suppression and control of sub-standard
products led to less market competition. Marketing and pricing
strategies were devised in accordance with market conditions in which
raw material prices were lower because of new sources of cheaper and
good quality raw materials. The stability of the baht also reduced raw
material costs. The company was thus able to set suitable prices and
gain a greater share of the market. The company also had efficient
production management an d this made production costs and sales costs to
rise at a lower rate than total sales. As a result, the company saw
initial profits rise by 18.95%.

  Overall sales and management costs fell, as already stated, with the
company’s policy to manage and control costs to rise at only the minimum
rate and make investment most worthwhile, so as to make the most
efficient income generation. There was also a policy for careful debtor
management so as to reduce risk of bad debts, with a great reduction bad
debts and doubtful debts seen in 2003. This resulted in the company
seeing operational profit in 2003 increase by 55%. 

At the same time, the increased stability of the baht and company policy
for efficient management of foreign exchange risks, led to higher
foreign exchange profits in 2003. The company’s net profits thus rose by
8.03% and return of equity in 2003 rose by 13.10%.

In 2004, total sales increased by 5.71%, the increase at the rate of
diminishing compared to last year. Due to the problem of natural
disaster but the government’s assistance extended to the farmers both
the production, marketing and financing made the prices of agricultural
produce high, though the quantity of produce was low. The farmers had
good financial status. The company set up production and marketing
strategies to suit the situation and the effort to reduce the cost of
production as much as possible. While the oil prices in the world market
rose higher, by seeking raw material sources with good quality but low
cost to replace, and the realization of the value of the baht in order
to prevent the impact of exchange rate to push the cost of raw material
higher, as well as to control and lower the production and labor
expenses compared to last year. As for the marketing, the company
launched various kinds of new products to the market causing the gross
profit of the company increased by 33.47%.

As for the increase of sales and management costs, since the company
anticipated the bad debt amounting to 32.88 million Baht and the loss of
impairment of investment amounting to 15.79 million Baht in order to
reduce the risk of doubtful debt and the loss of impairment of the
capital, the company acknowledged these impacts in this year. As for the
sales and management expenses apart from this, the company had the
policy to manage and control the expenses to be increased as less as
possible in order to make it worth investing and to generate income with
the highest efficiency, including the policy of cautious and careful
account receivable management in order to reduce the risk of
uncollectible debt, as well as the policy of risk management and risk
protection from foreign exchange rate with efficiency in the situation
of fluctuation by executing forward contract to cushion the impact made
the company to have profit from the operation in 2004 lower at 7.09%.

The interest payable in 2004 increased from the extension of the
performance of T/R creditors and foreign creditors. It made the increase
of the burden of interests. The corporate income tax increased from the
doubtful debt entry and the loss of impairment of capital which made the
net profit of taxation higher. It made the company to have the profit
decreased by 3.18% and return of equity in 2004 decreased by 5.52%.

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 economise on labour 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.

Total assets in 2003-2005 amounting to 407.75, 419.50, and 440.43
million baht respectively, marked an increase (decrease) at a percentage
of 14.35, 2.88, and 4.99 respectively.

Total liabilities in 2003-2005 amounting to 73.17, 106.23 and 89.50
million baht, marked an increase (decrease) of 98.59%, 45.18%, and
(15.74%) respectively.

Shareholder equity in 2003-2005 amounting to 334.58, 313.27 and 350.93
million baht, marked an increase (decrease) of 4.65%, (6.37%), and
12.02% respectively.

In 2003, company sales income rose by 9.09% while cash flow from
operations rose by 35.04%, with liquidity ratio falling from 6.08 in
2002 to 3.98 in 2003. Fast liquidity fell from 3.67 in 2002 to 2.76 in
2003. Current ratio rose from 0.76 in 2002 to 0.88 in 2003. Higher sales
led to an increase in stocks and commercial debtors. Also overdrawing
and loans from financial institutions rose by 285.91% as a result of raw
material purchase orders to meet higher market needs. This thus caused a
downward trend in the ratio. 

Meanwhile, debt collection was faster. From 81 days in 2002, it dropped
to 71 days in 2003. Sales duration on average was also faster from 77
days in 2002 to 71 days in 2003 and debt payments were also faster, from
17 days in 2002 to 11 days in 2003, thus reducing the cash cycle to 131
days.

  Analysis results show a downward trend in the liquidity ratio due to
increased total sales and inventory management policy. As a result,
inventory were found to have risen by only 3.53% from the year 2002,
while total sales rose by 9.09%. Thus it can be seen that the company
managed to keep inventory within market demand so as to reduce inventory
costs and avoid the problem of deteriorated goods. The company also made
purchase orders according to market demand periods, taking into
consideration lead time. This led to efficient management of inventory.

The company laid down a cautious policy and management of debtors, which
did not include debtors of related companies. This led to faster
collection and enabled the company to make faster payments to T/R and
commercial creditors. Thus with this improved liquidity, there was
increased operational cash flow.

Cash flow from investment activities rose by 386.85% due to the
relieving of guarantee funds and payment of loans from related
companies, including the sale of worn-out company cars which totaled
16.82 million baht. Meanwhile, the company spent only 3.16 million on
car purchases, using hire-purchase to replace the old lot. This led to
increased cash flow from investment activities compared to the previous
year.

  Cash flow from financial procurement activities rose by 120.51%
because of raw material purchase orders to meet increased market demand.
This led to increased loans from financial institutions, while the
company enjoyed good liquidity. The company paid out 28 million baht in
dividends and paid car hire-purchase creditors a total of 0.38 million.

  In 2004, total revenue rose by 5.71%, while cash flow from operation
decreased by 27.66%, with liquidity ratio decreased from 3.98 in 2003 to
3.78 in 2004. Quick ratio decreased from 2.76 in 2003 to 2.41 in 2004.
Cash liquidity ratio decreased from 0.89 in 2003 to 0.43 in 2004. The
increase in total sales during the 3^(rd) and 4^(th) quarters led to an
increase of inventory and account receivables at the end of the year.
Overdrawing and short term loans from financial institutions rose by
3.96%, and account payables rose by 60.07% as a result of raw material
purchased during the 3^(rd) and 4^(th) quarters prevailing the price of
raw materials to rise and to meet higher market demand. This thus caused
a downward trend in the ratio.

Meanwhile, debt collection was extended from 71 days in 2003 to 75 days
in 2004. Sales duration on average was longer from 71 days in 2003 to 87
days in 2004, and debt payment was also longer from 11 days in 2003 to
32 days in 2004, thus reducing the cash cycle to 130 days.

Analysis results showed a downward in the liquidity ratio due to lower
increase of total sales compared to last year. Total sales during the
3^(rd) and 4^(th) rose by 27.88% and 36.61% respectively compared to
last year. The situation of raw material prices tended to rise resulting
from oil prices. Thus it can be seen that raw material purchased was
higher in the 3^(rd) quarter to avoid the increase of raw material
prices. As a result, the inventory increased by 39.23% compared to last
year so as to meet the increasing demand in the said quarter. Total
sales in the 3^(rd) and 4^(th) quarters were 51.06% of total sales of
the year. Total account receivables increased by 24.39% consequently.
This also led to longer collection and selling period. As sales and the
purchasing of raw materials, T/R creditors, and account payables were
all in the second half of 2004, resulting in longer payment period. The
decrease in financial liquidity of the company led to the decrease in
operational cash flow.

Cash flow from investment activities decreased by 250.35% due to the
hire- purchase of cars and machines to replace the worn-out ones and
sold out the old lot.

Cash flow for procurement activities decreased by 1,034.94 %, because of
raw material purchase orders to meet market demand and thus increasing
short-term loans from financial institutions. The company paid out 39.20
million baht in dividends.

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.

A key factor and one which will bear effect on operational results in
2006, it is expected that overall economy will still expand further from
2005, as a result of the continued expansion in the world economy,
management administration, imports and exports. Other risk factors
affecting economic conditions are the trend for higher interest rates,
increased inflation rate and world oil prices.

  The agricultural sector is expected to expand from 2005 as overall
  agricultural prices rose in 2005. This is an incentive for farmers to
  expand cultivation areas and look after their crops well. In addition,
  the government sector has a strategy policy to restructure
  agricultural products into three groups of :

1.  Those creating income from exports such as rice, para rubber,
    prawns, chicken.

2.  Products with potential and energy-source products such as palm oil,
    sugarcane, cassava.

3.  Production restructuring products such as vegetables and fruits.

These are undertaken with the aim to increase the country’s production
capacity and its competitiveness, as well as solving the problem of
poverty among farmers, managing imports and exports, developing quality
and creating value-added agricultural products.

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.

  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 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, such as through the One Tambon One Product Project (OTOP) .
Products under this project have now become products going onto world
markets.

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 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 cannot be controlled. However, the company has
devised a policy to ease the effects from these risk factors.

1. Company policy to undertake Forward Rate purchase on foreign exchange
for raw material imports to reduce risks with 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.