Financial Highlight

(1) Financial statements

  The company paid 430,000 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 2005-2008 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

  ------------------------------------ ------------ -------- ------------- -------- ------------- -------- ------------ ------------- --------
                                       2005                  2006                   2007                                2008          

                                       Amount       %        Amount        %        Amount        %                     Amount        %

  ASSETS                                                                                                                              

  CURRENT ASSETS                                                                                                                      

  Cash in hand and at Bank             96,736       21.96    153,282       22.15    79,850        14.99                 8,710         1.84

  Current investment                   -            -        50,646        10.86    84,523        15.87                 126,865       26.77

  Short-term investment                                                                                                               

  Fixed deposit                                                                                                                       

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

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

  Other companies, net                 123,091      27.95    128,618       27.58    135,151       25.38                 92,870        19.60

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

  Inventories                          138,167      31.37    96,160        20.62    155,671       29.23                 176,529       37.25

  Other current assets                                                                                                                

  Vat receivable                       -            -        -             -        -             -                     -             -

  Others                               1,948        0.44     2,496         0.54     1,863         0.35                  1,869         0.39

  Total current assets                 359,942      81.72    381,202       81.75    457,058       85.83                 406,843       85.84

  Investment in subsidiary                                                                                                            

  Loan to Subsidiary                   -            -        -             -        -             -                     -             -

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

  Investment in subsidiary             -            -        -             -        -             -                     -             -

  Investment in related company        -            -        -             -        -             -                     -             -

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

  Property, Plant and Equipment Net    79,729       18.10    84,835        18.19    74,397        13.97                 66,704        14.07

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

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

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

  Deposits and guarantee               -            -        -             -        -             -                     -             -

  Land not used in operation           -            -        -             -        -             -                     -             -

  Deferred charge                      -            -        -             -        -             -                     -             -

  Other non-current assets             762          0.17     280           0.06     1,057         0.20                  395           0.08

  Total other assets                   80,491       18.28    85,115        18.25    75,454        14.17                 67,099        14.16

  Total assets                         440,433      100.00   466,317       100.00   532,512       100.00                473,942       100.00

  LIBILITIES AND SHAREHOLDERS’ EQUITY                                                                                                 

  Current Liabilities                                                                                                                 

  Short-term loan from financial       31,835       7.23     50,378        10.80    95,683        17.97                 22,838        4.82
  institutions                                                                                                                        

  Trade accounts and notes payable –   11,430       2.60     12,669        2.72     10,778        2.02                  10,444        2.20
  Related Company                                                                                                                     

  - Other Companies                    10,931       2.48     11,981        2.57     10,305        1.94                  5,647         1.19

  Current portion of hire-purchase     -            -        -             -        121           0.02                  126           0.03
  contracts payable                                                                                                                   

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

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

  Other current liabilities                                                                                                           

  Accrued income tax and accrued       18,167       4.12     9,544         2.05     27,171        5.10                  18,741        3.95
  expenses                                                                                                                            

  Others                               642          0.15     240           0.05     220           0.04                  23            0.00

  Total Other Current Liabilities      18,809       4.27     9,784         2.10     27,391        5.14                  18,764        3.96

  Total Current Liabilities            89,505       20.32    84,812        18.19    144,278       27.09                 57,819        12.20

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

  Hire-Purchase contracts payable-net  -            -        -             -        212           0.04                  87            0.02

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

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

  Total Liabilities                    89,505       20.32    124,367       26.65    162,752       30.56                 57,906        12.22

  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      31.79    140,000       30.02    140,000       26.29                 140,000       29.54
  capital 14,000,000 shares                                                                                                           

  Premium on share capital             135,000      30.65    135,000       28.95    135,000       25.35                 135,000       28.48

  Retained earning                                                                                                                    

  Appropriated for reserve fund        14,000       3.18     14,000        3.00     14,000        2.63                  14,000        2.95

  Unappropriate                        61,928       14.06    53,050        11.38    80,760        15.17                 127,036       26.80

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

  Total Shareholders' Equity           350,928      79.68    342,050       73.35    369,760       69.44                 416,036       87.78

  Total Liabilities and Shareholders'  440,433      100.00   466,317       100.00   532,512       100.00                473,942       100.00
  Equity                                                                                                                              

  Book value per share (baht)          25.07                 24.43                  26.41                               29.72         

  Par Value                            10                    10                     10                                  10            

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

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

                                       2005                  2006                   2007                   2008                       

                                       Amount       %        Amount        %        Amount        %        Amount                     %

  Revenues                                                                                                                            

  Sales                                535,019      99.30    600,728       99.12    620,541       98.16    758,032                    99.55

  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                         3,774        0.70     4,021         0.66     3,016         0.48     3,414                      0.45

  Total Revenues                       538,793      100.00   606,070       100.00   632,169       100.00   761,446                    100

  Expenses                                                                                                                            

  Cost of sales                        402,686      74.74    450,360       74.31    458,418       72.52    537,411                    70.58

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

  Bad debt and doubtful debt           61           0.01     39,455        6.51     -             -        -                          -

  Others                               44,198       8.20     52,801        8.71     -             -        -                          -

  Loss from exchange rate              4,522        0.84     -             -        -             -        -                          -

  Selling expenses                     -            -        -             -        24,409        3.86     26,363                     3.46

  Administrative expenses              -            -        -             -        21,940        3.47     24,630                     3.23

  Loss on Impairment of Investment     2,113        0.39     -             -        -             -        -                          -

  Interest Expenses                    2,508        0.47     2,546         0.42     4,402         0.70     6,218                      0.82

  Directors remuneration               850          0.16     870           0.14     9,676         1.53     15,197                     2.00

  Total Expenses                       456,938      84.81    546,032       90.09    518,845       82.07    609,819                    80.09

  Net Income(Loss) before Income Tax   81,855       15.19    60,038        9.91     113,324       17.93    151,627                    19.91
  and extraordinary                                                                                                                   

  Income Tax                           (20,395)     (3.79)   (12,916)      (2.13)   (33,114)      (5.24)   (38,851)                   (5.10)

  Net Income (Loss) from operation     61,460       11.41    47,122        7.78     80,210        12.69    112,776                    14.81

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

  Net income (loss)                    61,460       11.41    47,122        7.78     80,210        12.69    112,776                    14.81

  Earning per share (bath)             4.39                  3.37          -        5.73                   8.06                       

  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                    |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
|                                      | 2005  | 2006  | 2007  | 2008  |
+--------------------------------------+-------+-------+-------+-------+
| Cash Flows from Operating Activities |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Net Income                           | 6     | 4     | 11    | 15    |
|                                      | 1,460 | 7,122 | 3,324 | 1,627 |
+--------------------------------------+-------+-------+-------+-------+
| Adjustments to reconcile net income  |       |       |       |       |
| to net cash                          |       |       |       |       |
|                                      |       |       |       |       |
| provided by operating activities     |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Interest Expense Under Hire-Purchase | 30    | -     | -     | -     |
| Agreements                           |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized gain on exchange rate     | (148) | (133) | (67)  | 266   |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized gain from changes in      |       | (646) | (847) | (773) |
| value of investments                 |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of current          | -     | -     | (1    | (1    |
| investment                           |       |       | ,030) | ,569) |
+--------------------------------------+-------+-------+-------+-------+
| 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     | 2,113 | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Depreciation and amortization        | 1     | 1     | 1     | 1     |
|                                      | 1,006 | 1,447 | 3,540 | 2,458 |
+--------------------------------------+-------+-------+-------+-------+
| Provision for doubtful accounts      | 61    | 23    | 60    | 2,148 |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of fixed assets     | (2    | (2    | (350) | (546) |
|                                      | ,048) | ,017) |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Interest expenses                    | -     | -     | 4,527 | 6,218 |
+--------------------------------------+-------+-------+-------+-------+
| Income from operating before         | 7     | 9     | 12    | 16    |
| changing in operating assets and     | 2,474 | 5,240 | 4,172 | 9,829 |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| (Increase) decrease in operating     |       |       |       |       |
| assets                               |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Account and note receivables         | 5,462 | (5    | (6    | 4     |
|                                      |       | ,550) | ,593) | 0,133 |
+--------------------------------------+-------+-------+-------+-------+
| Inventories                          | (18   | 4     | (59   | (20   |
|                                      | ,386) | 2,007 | ,512) | ,858) |
+--------------------------------------+-------+-------+-------+-------+
| Other current assets                 | 282   | (548) | 50    | (6)   |
+--------------------------------------+-------+-------+-------+-------+
| Refundable Income Tax                | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Other assets                         | (524) | 483   | (194) | 662   |
+--------------------------------------+-------+-------+-------+-------+
| Increase(decrease) in operating      |       |       |       |       |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Notes and account payable            | 1,411 | 2,463 | (3    | (5    |
|                                      |       |       | ,494) | ,094) |
+--------------------------------------+-------+-------+-------+-------+
| Liability arising From Guarantee     | -     | -     | (16   | (18   |
|                                      |       |       | ,208) | ,262) |
+--------------------------------------+-------+-------+-------+-------+
| Accrued income tax and accrued       | (4    | (8    | 921   | 574   |
| expenses                             | ,247) | ,624) |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Other current liabilities            | 405   | (402) | (19)  | (197) |
+--------------------------------------+-------+-------+-------+-------+
| Cash flows received in operation     | 5     | 12    | 3     | 16    |
|                                      | 6,877 | 5,069 | 9,123 | 6,781 |
+--------------------------------------+-------+-------+-------+-------+
| Cash paid for interest expenses      | -     | -     | (4    | (6    |
|                                      |       |       | ,402) | ,218) |
+--------------------------------------+-------+-------+-------+-------+
| Cash paid for income tax             | -     | -     | (16   | (47   |
|                                      |       |       | ,408) | ,854) |
+--------------------------------------+-------+-------+-------+-------+
| Net cash provided by(use in)         | 5     | 12    | 1     | 11    |
| operating activities                 | 6,877 | 5,069 | 8,313 | 2,709 |
+--------------------------------------+-------+-------+-------+-------+

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

  Statement of Income for the year ended                                  
  December 31                                                             

                                         2005       2006       2007       2008

  Cash Flows from Investing Activities                                    

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

  Cash paid for purchase current         -          (50,000)   60,191     123,265
  investment                                                              

  Proceeds from Disposal of Investment   -          11         (92,191)   (163,265)

  Proceeds from sale of fixed assets     2,048      2,017      350        548

  Acquisition of fixed assets            (11,191)   (16,553)   (2,769)    (4,766)

  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)        (9,143)    (81,025)   (34,418)   (44,218)
  investing activities                                                    

  Cash Flows from Financing Activities                                    

  Increase(decrease)in short-term loans  (13,164)   18,502     45,172     (73,009)
  from financial institutions                                             

  Repayment of hire purchase contract    (526)      -          -          (121)

  Repayment of long-term loan            -          -          -          -

  Dividend paid                          (23,800)   (56,000)   (52,500)   (66,500)

  Net cash provided by (used in)         (37,490)   (37,498)   (7,328)    (139,630)
  financing activities                                                    

  Increase(decrease) in cash and cash    10,244     6,546      (23,433)   (71,139)
  equivalents                                                             

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

  Net Increase(decrease) in Cash and     10,307     6,546      (23,433)   (71,139)
  Cash equivalents                                                        

  Cash and cash equivalents, beginning   86,429     96,736     103,283    79,850
  of period                                                               

  Cash and cash equivalents, end of      96,736     103,282    79,850     8,711
  period                                                                  
  -------------------------------------- ---------- ---------- ---------- -----------

(c) Financial Ratio

Pato Chemical Industry Public Co.,Ltd. Financial Ratio 2005-2008

  ------------------------------------- --------- --------- -------- ---------
                                        2005      2006      2007     2008

  Liquidity Ratio                                                    

  Current Ratio (Time)                  4.02      3.70      2.81     7.04

  Quick Ratio (Time)                    2.46      2.27      1.84     3.95

  Cash Flow Ratio (Time)                0.64      1.17      0.13     1.02

  Receivable Turnover (Time)            4.25      4.77      4.71     6.65

  Collection Period (Day)               85        75        77       54

  Inventory Turnover (Time)             3.12      3.84      3.64     3.24

  Inventory T/Period (Day)              115       94        99       111

  Account Payable Turnover (Time)       6.70      6.97      4.78     6.90

  Payment Period (Day)                  54        52        75       52

  Cash Cycle (Day)                      146       117       100      113

  Profitability Ratio                                                

  Gross Profit Margin (%)               24.73     25.03     26.13    29.10

  Profit from operation (%)             15.06     9.53      17.10    20.37

  Other profit (%)                      0.23      0.46      1.14     (0.37)

  Cash (%)                              70.58     218.49    17.26    72.98

  Net Profit Margin (%)                 11.41     7.78      12.69    14.81

  Return on Equity (%)                  18.51     13.60     22.54    28.70

  Efficiency Ratio                                                   

  Return on Total Assets (%)            14.29     10.39     16.06    22.41

  Return on Fixed Assets (%)            91.00     71.18     117.75   177.51

  Assets Turnover (Time)                125.31    133.68    126.58   151.31

  Financial Ratio                                                    

  Debt to Equity (Time)                 0.26      0.36      0.44     0.14

  Interest Coverage (Time)              31.81     55.20     12.68    25.37

  Cash Basis (Time)                     1.60      1.72      0.33     1.58

  Payout Ratio (%)                      91.12     111.41    82.91    93.10

  Per Share (Baht)                                                   

  Book Value (Baht)                     25.07     24.43     26.41    29.72

  Earning per Share (Baht)              4.39      3.37      5.73     8.06

  Dividend per Share (Baht)             4.00      3.75      4.75     7.50

  Growth Rate                                                        

  Total Sale (%)                        4.99      5.88      14.20    (11.00)

  Cost of Goods Sold (%)                (15.74)   38.84     30.97    (64.42)

  Sales Revenue (%)                     (4.28)    12.28     3.30     22.16

  Selling & Admin Expense (%)           (12.49)   19.60     (5.34)   17.33

  Net Profit (%)                        243.51    (23.33)   70.22    40.60
  ------------------------------------- --------- --------- -------- ---------

2) Management Discussion and Analysis

In the financial statement of Pato Chemical Industry Plc. indicated net
profit (loss) totaled 47.12, 80.21 and 112.78 million baht in 2006 –
2008 respectively. These figures represent an increase and reduction
percentage of (23.33), 70.22 and 40.60 respectively.

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.

In the year 2008, overall economic growth was good during the first half
of the year, despite incidences and factors on many fronts, both from
within the country and from outside the country which affected the
country’s economic system. These included domestic political problems,
higher oil prices, the US financial crisis and the appreciation of the
baht. However, the effects were not severe and proved a positive factor
in spurring economic expansion through increased exports as a result of
higher demand for agricultural products. Prices for agricultural
products were thus mostly higher, leading to an expansion in the
production sector.

However in the second half of the year, the world economy and US economy
fell into a recession as a result of a financial crisis. This led
consumers in foreign markets to have reduced purchasing power, and there
was less demand for oil. As a result, crude oil prices on the world
market fell steeply, leading to a contraction in the export sector,
adversely affecting the production sector and causing lower agricultural
product prices. In addition, continuous flooding lasting until the end
of the 4^(th) quarter, caused a decrease in domestic consumer demand.
However, in the overall picture, the agricultural production sector in
2008 expanded by 4.4% because of favorable weather conditions. Although
there was some drought and flooding in certain areas, this did not
greatly affect the agricultural sector as a whole. And even though
foreign markets had reduced demand for agricultural products,
agricultural product prices were good during the beginning of the year,
leading the price index for farm goods to expand by as much as 23.90%
from the previous year, and thus became an incentive for farmers to
continue expanding production.

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

Sales revenue during 2006 – 2008 was 600.73, 620.54, and 758.03 million
baht respectively, representing increases of 12.28% , 3.30%, and 22.16
respectively.

Total revenue during 2006 – 2008 was 606.07, 632.17, 761.44 million
baht, representing increases of 12.49%, 4.31%, and 20.45% respectively.

Cost of Sales in 2006 – 2008 was 450.36, 458.42, and 537.41 million
baht, representing increases of 11.84%, 1.79%, and 17.23% respectively.

The company adjusted some categories in 2007 financial statements to be
in line with that of 2008 and the adjustment did not affect net profit
or shareholders’ equity. (Amount before adjustment was 459.56 million
baht)

  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 favorable 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 labor and production cost
management, the company set a policy which emphasised utmost economic,
efficient and cost effective management in light of current economic
conditions. There was a slight increase in the number of workers in 2007
in order to meet production process needs. This led to a rise of 10.16%
in production labor 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, labor 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.

In 2008, the world economic recession had a severe effect on Thailand’s
economy during the 3^(rd) and 4^(th) quarters. In addition, domestic
factors such as political problems and effects from flooding led to less
demand in foreign markets and thus a contraction in the export sector.
Product prices, which were once good, were on such a downward trend that
there was no incentive for expanding production in the agricultural
sector. Other production sectors were also affected as seen by increased
unemployment resulting from industrial workers being laid off. As a
consequence, the gross domestic product (GDP) in the first half of the
year did not increase greatly as had been expected. The financial crisis
in the second half of the year caused the GDP to expand by a mere 2.26%.

Agricultural product prices during the period January to June 2008, rose
greatly due to the continued increase in demand for agricultural
products. This was because many countries encountered natural disasters
leading to a shortfall in many agricultural products, particularly a
shortfall in rice on the global market. At the same time, alternative
energy agricultural products such as palm oil, cassava and animal feed
corn, were in high demand in foreign markets because of rising crude oil
prices on global markets. These above factors led total sales in the
first half of the year to rise by 189.61 million bah or increased by
57.56% compared to the same period in the previous year.

Meanwhile, the financial crisis in the second half of the year led to an
economic recession, causing a reduction in total sales in the second
half of the year when compared to the previous year. However, overall
total sales for the entire year still rose by 137.49 million baht or by
22.16% as a result of an average increase of 15.70% in the sale of all
types of chemical pesticides. However, as the effects of the economic
crisis continued to be felt, it became necessary to lay down a marketing
strategy and emphasize on sales promotion in all areas as was suitable
to current conditions, in order to stimulate product demand and maintain
market share.

Because of the problem of oil prices fluctuating to their highest level
and lowest level on the world market, raw material orders had to be
managed to ensure sufficient level and ability to accommodate market
demand which was on a downward trend. Moreover, economic problems caused
fluctuation in the value of the baht, leading to higher raw material
prices in the first half of the year and lower raw material prices in
the second half of the year.

Therefore, the value of raw material purchase orders was higher for the
first half of the year than for the second half of the year. A slow-down
in market demand led to a slow-down in raw material procurement, in line
with the current market conditions at the time at the time at the time
and avoid excessive inventory. As a result, raw material purchase orders
in 2008 rose by 36 million baht or by 7.32% compared to the previous
year. The total value of raw materials purchase orders rose by 6.60%
compared to the previous year and the value of inventory rose by 20.86
million baht from the previous year, or by 13.40%. As for labor cost
management and other production expenses or income, the company set a
policy that emphasized the most economic, cost-effective and efficient
management under the current economic conditions at the time. As a
result, in 2008 there was only a slight increase in the number of
workers to meet production process needs. Thus, labor costs for
production rose by 19.91% and other production expenses rose by 2.45%
compared to the previous year. This increase came from labor costs,
overtime costs and worker rewards as well as employee benefits. As for
the increase in other production costs, this came from higher transport
expenses, higher electricity expenses for production, material waste
expenses and expenses for various other services. The increase in the
expenses for raw materials, labor and other production expenses was the
result of higher total sales, amid high competition on the market
coupled with a slow-down in demand on the market, making it necessary to
maintain market share. Thus, production and sales costs rose by 20.64%
and 17.23% respectively. The rate of this rise however, was still lower
than the rise in total sales with initial profits rising by 36.08%,
compared to the previous year.

As for other income apart from foreign exchange income, income from bad
debt reversal and loans, it was found that in 2008 there was 3.41
million baht in other income, representing an increase of 0.40 million
baht or 13.22%. This came from increased investment in debt instruments,
increase in interest receivable, income from sale of old vehicles and
miscellaneous.

 Table showing rate of increases (reduction) during 2006 – 2008

+-----------+-------------------+------------------+------------------+
|           |  PATO             |                  |                  |
+-----------+-------------------+------------------+------------------+
| Year      | Sales Revenue     | Total revenue    | Cost of Sale     |
+-----------+-------------------+------------------+------------------+
| 2006      | 12.28             | 12.49            | 11.84            |
+-----------+-------------------+------------------+------------------+
| 2007      | 3.30              | 4.31             | 1.79             |
+-----------+-------------------+------------------+------------------+
| 2008      | 22.16             | 20.45            | 17.23            |
+-----------+-------------------+------------------+------------------+

Sales and General Administrative expenses during 2006-2008 totaled
93.13, 56.02 ,and 66.19 million baht, representing increases
(reductions) of 80.00%, (39.85%), and 18.15 respectively, not including
interest payable or finance cost.

Interest payable or finance cost in 2006 – 2008 totaled 2.55, 4.40, and
6.22 million baht, representing increases of 1.51%, 72.86%, and 41.27
respectively.

The company adjusted some categories in 2007 financial statements to be
in line with that of 2008 and the adjustment did not affect net profit
or shareholders’ equity. (Amount before adjustment was 54.89 million
baht)

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 totaling 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 payables left at year end.

Interest payable in 2007 totaled 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 payables 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 totaled 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.

In 2008, expenses for sales and services are shown in the 2007 financial
statement corresponding with the 2008 financial statement, with sales
and services expenses listed in the following separate categories.

  -------------------------- -------------------- ------------------------
                             2008                 2007

  Sales expenses             26,362,818           20,563,922

  Management expenses        24,629,541           20,834,020

  Management remuneration    15,197,250           14,626,699

  Total expenses             66,189,609           56,024,641
  -------------------------- -------------------- ------------------------

When these expenses are considered as separate items, sales expenses
rose by 5.80 million baht or by 28.20% compared to the previous year. It
was found that the big increase in total sales led to higher expenses
for marketing such as higher commission costs, increased travel and
transport expenses and higher expenses for sales promotion in order to
stimulate and create incentives for market demand. Management costs,
meanwhile rose by 3.80 million baht or by 18.22% compared to the
previous year. This came mainly from bad debts of trade debtors in 2008
totaling 2.15 million, whereas in 2007, such bad debts totaled only 0.06
million baht. This was caused by economic problems which led to poor
liquidity. The company thus was very careful in releasing credit and
considered each customer’s suitability. Anyhow, the bad debt ratio was
still very low.

Profit (loss) from exchange rate in 2008 totaling (0.73) million baht
and totaling 3.63 million baht in 2007, is shown as income. When these
figures are compared against each other, it shows a fall of 4.36 million
baht or a fall of 120.21%. This came from adverse effects from the
sub-prime economic crisis which caused extreme fluctuations in the
exchange rate during the year. In addition, there were effects from a
loss of confidence in business and internal political problems. This
caused the baht to weaken and the exchange loss in the 3^(rd) and 4^(th)
quarters. Anyhow, the company perceived the effects from the fluctuation
in the value of the baht and therefore, undertook a risk prevention
policy by making T/R to extend payment term of foreign debts and making
in advance Forward Contracts in order to minimize future exchange rate
risks. As a result, there was 0.53 million baht registered as loss that
had not yet been incurred following an adjustment in the exchange rate
as at the end of the year for remaining T/R payables.

As for expenses for CSR in 2008, the company had a policy to give back
to society by giving a total of 0.51 million baht in the 4^(th) quarter
for 5 schools in need in Bangkok. The money was used to support the
purchase of educational equipment which included computers, audio-visual
equipment, education equipment and playground equipment, thus increasing
donation expenses by 0.62 million compared to the previous year.

Legal expenses rose by 0.66 million baht or by 291.24% due to a lawsuit
undertaken by the company which was exercising its right as guarantor
for 34.22 million baht, against the Plastic Precision Industry Co. Ltd.

In 2007 and 2008, management remuneration was re-categorized in the
account books, with management remuneration expenses rising 0.57 million
baht or 3.90% due to an increase in meeting allowance and management
remuneration.

Finance costs or interest payable in 2008 totaled 6.22 million baht and
in 2007 totaled 4.40 million baht, showing an increase of 1.82 million
baht or a rise of 41.27% compared to the previous year. This was due to
management of foreign creditors by making T/R suitable to the financial
situation and baht value at that time. In 2008, the number of T/R
creditor payments totaled 14.82 million dollars. This extended term of
payment increased interest payable burden.

Corporate tax in 2008 totaled 38.85 million baht and in 2007 totaled
33.11 million baht, representing an increase of 5.74 million baht or a
rise of 17.32%, with an increase in total net profit before taxes in
2008. It was government policy to help the private sector and thus the
government announced a reduction in corporate tax rate from 30% to 25%
of net profit. This became a positive factor for corporate income in
2008. In addition in 2007 a contingent liability was reversed and added
back And as the company had already set aside full reserves for
contingent liabilities, this was a positive factor for corporate income
in 2007. Thus these above factors helped corporate taxes to rise only
slightly.

The above operational results led to gross profit during 2006-2008 to
total 150.37, 162.12, and 220.62 million baht respectively, representing
a percentage of 25.03, 26.13, and 29.10 respectively.

The company adjusted some categories in 2007 financial statements to be
in line with that of 2008 and the adjustment did not affect net profit
or shareholders’ equity. (Amount before adjustment was 160.98 million
baht)

Operational profits in 2006–2008 came to 57.24, 106.10, and 154.43
million baht respectively, representing percentage of 9.53, 17.10, and
20.37 respectively.

Net profits in 2006 – 2008 came to 47.21, 80.21, and 112.78 million
baht, or a percentage of 7.78, 12.69, and 14.81 respectively.

Return on equity during 2006 – 2008 were 13.60%, 22.54%, and 28.70
respectively.

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 favorable 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 labor 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 payables 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.

In 2008, the country’s overall economy experienced a slow-down with GDP
growth rate at 2.26% as a result of the various factors on many fronts
mentioned above. In the first half of the year, the various crises that
took place such as the US financial crisis which turned into a global
economic crisis, rising crude oil prices on the global market, and
natural disasters in foreign countries, caused a reduction in
agricultural products. This instead proved positive for Thailand by
increasing foreign demand for Thai agricultural products and thus higher
prices for the farm goods. Alternative energy farm goods were also in
higher demand as oil prices rose. Total sales in the first half thus
increased by as much as 57.50% compared to the same period in the
previous year.

In the second half of the year, the overall global economy was affected
by the various crises mentioned above, leading to a severe reduction in
global demand. World oil prices tumbled because of a drop in actual
consumption. This also caused a continued contraction in exports.
Production in the country’s agricultural sector also dropped. Prices for
agricultural products which were once good in the beginning, fell
sharply. There were also other domestic factors. These included
political factors, flooding and economic factors, leading total sales to
fall by as much as 17.90% compared to the same period of the previous
year.

Despite this, operational results for the entire 12 months were still
good, with total sales increasing by as much as 22.16%, and from the
above-mentioned factors, average raw material costs rose by 6.60%
compared to the previous year. At the same time, demand on the market
continued to fall and competition on the market was very high. Thus
pricing strategy was necessary and unavoidable in order to maintain as
much market share as possible. Efficient cost management enabled the
company to compete with its rivals on the market. The company undertook
a policy for economic and cost-effective management in the current
situation, leading labor costs to rise by 19.91% and other production
expenses rose by only 2.45% compared to the previous year. Production
costs and sales costs rose by 20.64% and 17.23% respectively, but which
was still a lower rate than the rise in total sales. This caused initial
profits to be equal to 29.10% of net total sales, representing an
increase from the previous year.

Selling and administrative expenses in 2008 were reclassified in the
financial statements, so that it would correspond with 2007 and a
comparison could be made, including with management remuneration which
it can be concluded that in 2008, there was an increase of 10.16million
baht or a rise of 18.14%, not including the reversal of loan bad-debts
and foreign exchange profits shown under income in 2007. With the rise
in total sales amid the economic slow-own, the company adjusted its
strategy for management of investments in sales expenses in order to
ensure utmost efficiency, emphasizing on sales promotion to stimulate
the most incentives in customers, particularly in the 3^(rd) and 4^(th)
quarters. However, the increase in expenses for sales and management,
including management remuneration was still at a lower rate than the
rise in total sales. This made operational profit rate in 2008 to be
equal to 20.37%, reflecting an increase from the previous year.

Profit (loss) from exchange rate meanwhile rose sharply due to the US
sub-prime crisis. This severely affected the Thai economy. There were
fluctuations in the baht, with the baht strengthening in the first half
of the year and weakening in he second half of the year as a result of
lack of business confidence. Foreign investors thus sold off a lot of
stocks and this was thus the factor for the exchange rate loss.

As a result of the fluctuation in the baht exchange rate, the company
undertook a policy to management damage risk from the baht’s value.
Thus, making it necessary to continually monitor the value of the baht.
There was management of payment to foreign creditors by expanding
payment term to correspond with the baht value situation at the time and
also in 2008, there was an increase in raw material purchase orders.
These were factors increasing interest payable thus increased, which in
this case, means financial expenses.

Corporate tax meanwhile rose only slightly compared to net income before
tax. This was because in 2008, there was a change in the corporate tax
rate from 30% of net profit to 25%. Also in 2007 there was a reversal of
loan bad-debts which the company had already set aside reserves for,
leading to an increase of 17.32% in corporate taxes.

As a result of these main factors, the company had good operational
results leading to a shareholder return of 28.70, an increase from the
previous year.

Total assets in 2006-2008 amounting to 446.32, 532.51, and 473.94
million baht respectively, marked an increase (decrease) at a percentage
of 5.88, 14.20, and (11.00) respectively.

Total liabilities in 2006-2008 amounting to 124.27, 162.75, and 57.91
million baht, marked an increase (decrease) of 38.84%, 30.97%, and
(64.42) respectively.

Shareholder equity in 2006-2008 amounting to 342.05, 369.76, and 416.04
million baht, marked an increase (decrease) of (2.52%), 8.10%, and
12.52% respectively.

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
account payables and T/R payables 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 payables 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.

In 2008, as sales revenue rose by 22.16%, operational cash flow thus
increased by 515.46%, with liquidity ratio up from 2.81 times in 2007 to
7.04 times in 2008. Quick ratio rose from 1.84 times in 2007 to 3.95
times in 2008. Cash liquidity ratio rose from 0.13 times to 1.02 times
in 2008. Average debt collection period decreased from 77 days to 54
days in 2008. Average sales duration period rose from 99 days to 111
days in 2008. Average debt payment period decreased from 75 days to 52
days in 2008, thus making cash cycle equal to 113 days.

Analysis of the liquidity ratio showed an upward trend, as total sales
rose and debt collection was still at a good level. Bad debt ratio was
very low and thus the number of remaining debtors reduced by 31.28%
compared to last year.

Meanwhile, the economic crisis caused the second half of the year to
affect inventory goods which increased. Thus, the rotating ratio for
inventory rose higher. However this increase was not great and lasted
only a short period of time as demand in the 4^(th) quarter continued to
fall as a result of quicker debt collection. Thus the company had
considerable cash liquidity. As a consequence, during the period of the
baht fluctuation, payment was made to T/R payables in order to reduce
risk from the baht’s value. Because of this, loans from financial
institutions during that period fell by 76.13% and account payables
reduced by 23.67%. Income tax and expenses decreased by 31.02% compared
to the previous year. All these were the main factors causing rotating
assets in 2008 to increase and rotating debts in 2008 to fall. Because
of this, the liquidity ratio trend was good and operational cash flow
increased.

Cash flow from investment activities rose by 28.47% compared to the
previous year, with the company making a temporary financial investment
of 40 million baht from 2007 and a 2.00 million baht purchase of
additional equipment machinery, or representing a rise of 72.18% and
thus increased cash flow from investment activities.

Cash flow from financial procurement activities rose by 1805.43% due to
the fact that in 2008 raw material procurement orders from abroad rose
by 7.32%. As a result, there was more payment to foreign creditors. In
addition, there was a 66.50 million baht increase in dividend payout
from the previous year. This caused cash and cash-equivalent item to
fall by 28.80 million baht, or by 17.52%.

The investment structure consisted a debt to equity ratio equal to 0.14
times in 2008, from 0.44 times in 2007. This came from a reduction in
rotating debts composing mainly of short-term loans from financial
institutions and account payables, including a reduction in income tax
and outstanding expenses. This caused total debts to drop by 64.42%,
while the company saw a 40.60% increase in net profits. This increased
stockholders’ share by 12.52% compared to the previous year. The said
ratio is considered to be very low.

The ratio for interest payment capability rose to 25.37 times in 2008
from 12.68 times in 2007. This shows the company’s very high financial
stability. Moreover, returns on assets and fixed assets was equal to
22.41 times and 177.51 times in 2008, up from 16.06 times and 117.75
times in 2007. The rotating assets ratio was 151.31 times in 2008, an
increase from 126.58 times in 2007. This led the company to lay down a
policy for the most cautious and efficient financial management, bearing
in mind low risk and the most worthwhile returns. For temporary
investments, emphasis was on low risk and best returns. The company also
bore in mind risks from exchange rates amid the economic crisis and the
burden of payable interest resulting from the extension of debt payments
in. Thus Forward Contracts were made so that the effects from the
exchange rate would be low, with appropriate payment period for the most
benefit. The company still had the policy of bringing rotating debts for
investment in rotating assets in order to achieve the highest return and
reduce financial costs, while shareholders were still given the highest
return. Key financial ratios were also maintained to their best,
enabling the company to be the most stable and secure. Thus operational
results in 2008 were achieved as mentioned above.

It is expected that the most important factor to affect operations in
2009 would be the continued slump in the overall economy. The rate of
expansion will still be at a low level or there may be no expansion at
all. The slow-down in product purchase and consumption in foreign
markets will cause a downward trend in the agricultural products export
sector. Oil prices will still be fluctuating. This will affect demand
for alternative energy farm goods, with a fall in both volume and
prices. The US financial crisis also will affect the vale of the baht
which may push up raw material costs. Moreover, the country’s economic
and treasury policy may have both positive and negative effects. The
same can be said for interest rate conditions and the inflation rate.
Thus the company is aware of these factors which will affect operations
on all fronts in 2009. Natural disasters will also affect the changing
supply and demand in the country. In spite of this, there is a factor
that is very important and that will be good for the agricultural
sector, both production-wise and price-wise. This is government policy
and measures to support agricultural production, which include the rice
mortgaging scheme and guarantee for rubber prices. These are aimed at
maintaining prices from sliding down and promoting development of
processed farm goods to meet the needs of both domestic and foreign
consumers. This will lead to increased expansion in agricultural output
and accommodate labor from economic resources back to the agricultural
sector. Thus it is expected that Thailand’s agricultural GDP will expand
further.

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 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.