2. Nature of Business

(1) Company profile

Pato Chemical Industry Plc was established on 6 October 1973 to import,
formulate, and distribute pesticide in Thailand. Its registered capital
was at first 1 million baht with total ordinary shares of 1,000 at par
value of 1,000 baht . PATO went public, and changed its name to PATO
CHEMICAL INDUSTRY PUBLIC COMPANY LIMITED in October 1993 then continued
to sell its ordinary stocks for 3,000,000 shares at Bt 55 per share,
valued at Baht 10 per share in July 1995. PATO increased its capital to
Baht 140 million. The company has been listed in the Stock Exchange of
Thailand in August 1995. In April 1997, ANCOM BERHAD Co Ltd a listed
company in Malaysia, has become a major shareholder of 10.50% of the
company’s total ordinary shares. In April 1998 Nissho Iwai Corporation,
Japan took 10% stake of Pato or 1,400,000 shares from minor shareholders
and became 20% or 2,800,000 shares in 2000. Audit committee was
appointed in December 1999.

  ----------- --- ---------------------------------------------------------
  February    :   License to be formulator and distributor of Serconil
  2001            (Chlorothalonil) was approved

  May 2001    :   License to be formulator and distributor of Cartap 4 G.
                  was approved

  September   :   Pato has disposed its stake in affiliated company, Acron
  2001            Plastic Industry Co.,Ltd. . The common shares of
                  4,588,077 were sold and transferred to a new investor and
                  left with 531,923 shares which represent 4.93%. Acron has
                  now changed its name to Plastic Precision Industry
                  Co.,Ltd.

  November    :   License to be formulator and distributor of Dehyde Slug
  2001            3.5 G. (Metaldehyde) was approved

  January     :   License to be formulator and distributor of Hexcel
  2002            (Hexaclonazole) was approved

  February    :   License to be formulator and distributor of Campus
  2002            (Fenobucarb) was approved

  October     :   License to be formulator and distributor of M-D 7.76 G.
  2002            (Butachlor + 2,4-D) was approved

  November    :   License to be formulator and distributor of Napta (NAA)
  2002            was approved
  ----------- --- ---------------------------------------------------------

Development of major shareholders from December 1999 – 31 December 2002

[TABLE]

(2) Pato Chemical Industry Public Co.,Ltd.

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

Major Types of Imports

1. Technical Grade (TG): is a concentrated substance with needs
formulation in final product according to the specified formulas.

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

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

Shareholders' Structure

a) Trillit

  b) Ancom Berhad Asia Mineral Processing Co.,Ltd.

c) Nissho Iwai Corp.

d) Pojanalai

e) Wesaratchawest

f) ) Choengwiwatkit

a) 0.92% a) 27.17% a) 39.30% a) 32%

b) - b) 10.50% b) - b) -

c) - c) 20% c) - c) -

d) 0.58% d) 10.76% d) 12.70% d) 46%

e) - e) 7.94% e) 19.60% e) -

f) 0.29% f) 6.33% f) 15.70% f) -

1.79% 82.70% 87.30% 78%

Pato Chemical Industry Plc. Kentex Properties Co.,Ltd.

Registered Capital Baht 140 Million (Office Space Rental)

4.93%

Plastic Precision Industry Co.,Ltd.

Registered Capital Baht 108 Million Connected transaction such as loan,
bank guarantee, office space rental

(3) Revenue Structure Sales Revenue

+-----------------+-------+------+-----+----+-----+----+-----+----+
|                 | Ope   | Pe   | 2   |    | 2   |    | 2   |    |
|                 | rated | rcen | 000 |    | 001 |    | 002 |    |
|                 | By    | tage |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
|                 |       | Of   | Mil | %  | Mil | %  | Mil | %  |
|                 |       | Sh   | B   |    | B   |    | B   |    |
|                 |       | ares | aht |    | aht |    | aht |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Local Sales by  |       |      |     |    |     |    |     |    |
| Products        |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | 128 | 2  | 120 | 2  | 130 | 2  |
|                 |       |      | .90 | 4. | .76 | 6. | .63 | 5. |
|                 |       |      |     | 16 |     | 45 |     | 95 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | 310 | 5  | 267 | 5  | 292 | 5  |
|                 |       |      | .25 | 8. | .35 | 8. | .51 | 8. |
|                 |       |      |     | 15 |     | 55 |     | 10 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | 12  | 2. | 21  | 4. | 30  | 6. |
|                 |       |      | .88 | 48 | .26 | 66 | .17 | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | 13  | 2. | 13  | 3. | 15  | 3. |
|                 |       |      | .29 | 49 | .87 | 04 | .10 | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | 68  | 1  | 33  | 7. | 35  | 6. |
|                 |       |      | .20 | 2. | .31 | 30 | .01 | 95 |
|                 |       |      |     | 78 |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Local     |       |      | 533 | 10 | 456 | 10 | 503 | 10 |
| Sales           |       |      | .52 | 0. | .55 | 0. | .42 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Export Sales by |       |      |     |    |     |    |     |    |
| Products        |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Export    |       |      | -   | -  | -   | -  | -   | -  |
| sales           |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Local & Export  |       |      |     |    |     |    |     |    |
| Sales           |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | 128 | 2  | 120 | 2  | 130 | 2  |
|                 |       |      | .90 | 4. | .76 | 6. | .63 | 5. |
|                 |       |      |     | 16 |     | 45 |     | 95 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | 310 | 5  | 267 | 5  | 292 | 5  |
|                 |       |      | .25 | 8. | .35 | 8. | .51 | 8. |
|                 |       |      |     | 15 |     | 55 |     | 10 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | 12  | 2. | 21  | 4. | 30  | 6. |
|                 |       |      | .88 | 42 | .26 | 66 | .17 | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | 13  | 2. | 13  | 3. | 15  | 3. |
|                 |       |      | .29 | 49 | .87 | 04 | .10 | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | 68  | 1  | 33  | 7. | 35  | 6. |
|                 |       |      | .20 | 2. | .31 | 30 | .01 | 95 |
|                 |       |      |     | 78 |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Local &   |       |      | 533 | 1  | 456 | 10 | 503 | 10 |
| Export sales    |       |      | .52 | 00 | .27 | 0. | .42 | 0. |
|                 |       |      |     |    |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Less returned & |       |      | 27  | 5. | 21  | 4. | 19  | 3. |
| Discount        |       |      | .40 | 14 | .30 | 67 |     | 77 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Net Sales       |       |      | 506 | 9  | 435 | 9  | 484 | 9  |
|                 |       |      | .12 | 6. | .25 | 7. | .42 | 8. |
| Contractor      |       |      |     | 84 |     | 87 |     | 28 |
|                 |       |      | 2   |    | 0   |    | 0   |    |
| Other Income    |       |      | .37 | 0. | .33 | 0. | .27 | 0. |
|                 |       |      |     | 45 |     | 07 |     | 05 |
|                 |       |      | 14  |    | 9   |    | 8   |    |
|                 |       |      | .16 | 2. | .16 | 2. | .23 | 1. |
|                 |       |      |     | 71 |     | 06 |     | 67 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Revenue   |       |      | 522 | 10 | 444 | 10 | 492 | 10 |
|                 |       |      | .65 | 0. | .74 | 0. | .92 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+