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 .

Important Changes and Developments.

  ------------ --- ------------- ------------- --------------------------------------------------------
  October 1993 :   PATO went                   
                   public, and                 
                   changed its                 
                   name to PATO                
                   CHEMICAL                    
                   INDUSTRY                    
                   PUBLIC                      
                   COMPANY                     
                   LIMITED.                    

  July 1995    :   PATO                        
                   continued to                
                   sell its                    
                   ordinary                    
                   stocks for                  
                   3,000,000                   
                   shares at Bt                
                   55 per share,               
                   valued at                   
                   Baht 10 per                 
                   share.                      

  August 1995  :   PATO                        
                   increased its               
                   capital to                  
                   Baht 140                    
                   million. The                
                   company has                 
                   been listed                 
                   in the Stock                
                   Exchange of                 
                   Thailand.                   

  February     :   The company                 
  1996             increased                   
                   capital in                  
                   its                         
                   subsidiary,                 
                   Acron Plastic               
                   Industry                    
                   Co.,Ltd. by                 
                   investing                   
                   additional in               
                   720,000                     
                   common shares               
                   at baht 10                  
                   per share. As               
                   a results,                  
                   Pato's stake                
                   in Acron was                
                   reduced from                
                   100% to 62%                 

  September    :   Pato entered                
  1996             in to a joint               
                   venture with                
                   Finansa thai                
                   Ltd. who                    
                   acquired                    
                   15.21% of                   
                   Pato' common                
                   shares.                     

  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. One   
                                 director from 
                                 Ancom was     
                                 appointed.    

  June 1997    :                               Acron Plastic Industry Co Ltd a company’s subsidiary,
                                               increased its registered capital by issuing 600,000
                                               shares at per value of Baht 10 totaling Baht 6 million.
                                               All of the new shares will be offered to Itochu Fine
                                               Chemical Corp Japan, and Itochu Asia Ltd Singapore in
                                               the amount of 306,000 and 294,000 shares, or 4.64% and
                                               4.45% of the new total paid up capital, respectively.
                                               This change in shareholder structure will reduce the
                                               company’s shareholding to 58.36% of its subsidiary’s
                                               paid up capital.

  July 1997    :                               Pato Chemical Industry Co Ltd has sold 600,000 shares of
                                               its subsidiary to Industrial Finance Corporation of
                                               Thailand on 28 July 1997. From this divestment, the
                                               company will have only 3,120,000 shares at 47.27%
                                               leaving its subsidiary to change the status to an
                                               affiliated company instead.

  April 1998   :                               Nissho Iwai Corporation, Japan took 10% stake of Pato or
                                               1,400,000 shares from minor shareholders. One director
                                               from Nissho Iwai was appointed.

  December     :                               Appointment of Audit Committee
  1999                                         

  April 2000   :                               Finansa Ltd. sold it stakes to minor shareholders.
                                               Director from Finansa resigned from the board.

  July 2000    :                               Acron increased its capital from 66 million baht to 126
                                               million baht by issuing another 6 million shares at par
                                               value of 10 baht. Pato invested another 20 million baht
                                               or 2 million shares in Acron. Pato’s stake in Acron
                                               becomes 40.63%.

  October 2000 :                               Nissho Iwai Corporation acquired 1.4 million shares from
                                               minor shareholders. Nissho’s stake in Pato becomes 20%.

  November     :                               Acron’s board passed the resolution to decrease it’s
  2000                                         registered capital from 126 million baht to 108 million
                                               baht, thus Pato’s stake in Acron becomes 47.41%
  ------------ --- ------------- ------------- --------------------------------------------------------

Development of major shareholders from December 1997 – 31 December 2000

[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 pproduct 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”.

Acron Plastic Industry Co Ltd

Acron Plastic Industry Co Ltd is a manufacturer and distributor of
semi-finished acrylic sheet, or Polymethyl Methacrylate (PMMA) in
chemical name, under the brand “APIC”. It is also known as Plexiglas,
Lucite, and Polyglass. The acrylic sheet is Thermo Plastic type of
smooth plastic. There are many colors, translucence or non-translucence,
and many sizes i.e. 2x4 feet, 4x6 feet, 4x8 feet, 4x10 feet, 6x6 feet,
and 6x10 feet and 1-50 millimeters thick.

A major characteristic of acrylic sheet is that it will soften, at
140-160 degree Celsius, for casting, It carries light weight that is
about half of the weight of the glass of the same size, but it has
higher resistance to shock that is about 15 times better than the glass.
Moreover, the surface is smooth, high resistance, and shiny.

Raw material used in the production of acrylic sheet is purified Methyl
Methacrylate (MMA) imported as it cannot be produced yet in Thailand.
Acron Plastic imports MMA solution from Japan, Taiwan and some obtained
locally from agents.

  --------------------- ---------- -------------- ----------- -------------
  Characteristics       Acrylic    Wood           Glass       Polystyrene

  Light penetration     Clear      None           Clear       Clear

  Flexibility           Flexible   Less Flexible  None        None

  Coloring              Good       None           None        Good

  Heat resistance       Good       Good           Good        Not Good

  Resilience            Good       Good           Brittle     Brittle

  Weight (Same Size))   Light      Heavy          Heavy       Light

  Water, Sunlight       Good       Good           Good        No
  resistance                                                  
  --------------------- ---------- -------------- ----------- -------------

Shareholders' Structure

a) Trillit

  b) Finansa Asia Mineral Processing Co.,Ltd.

c) Ancom Berhad

d) Nissho Iwai Corp.

e) Pojanalai

f) Pratarnpornsak

g) Choengwiwatkit

h) Wesaratchawest

a) 7.23% a) 26.74% a) 39.30% a) 32%

b) - b) - b) - b) -

c) - c) 10.50% c) - c) -

d) - d) 20% d) - d) -

e) 5.56% e) 10.84% e) 12.70% e) 46%

f) - f) 7.60% f) 12.70% f) -

g) 2.77% g) 6.35% g) 15.70% g) -

h) - h) 7.57% h) 19.60% h) -

15.56% 89.60% 100% 78%

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

Registered Capital Baht 140 Million (Office Space Rental)

47.41%

Acron Plastic 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   | 1   |    | 1   |    | 2   |    |
|                 | rated | rcen | 998 |    | 999 |    | 000 |    |
|                 | By    | tage |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
|                 |       | Of   | Mil | %  | Mil | %  | Mil | %  |
|                 |       | Sh   | B   |    | B   |    | B   |    |
|                 |       | ares | aht |    | aht |    | aht |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Local Sales by  |       |      |     |    |     |    |     |    |
| Products        |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | 224 | 3  | 223 | 2  | 128 | 1  |
|                 |       |      | .89 | 2. | .14 | 9. | .90 | 6. |
|                 |       |      |     | 14 |     | 24 |     | 79 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | 219 | 3  | 235 | 3  | 310 | 4  |
|                 |       |      | .76 | 1. | .87 | 0. | .25 | 0. |
|                 |       |      |     | 40 |     | 91 |     | 42 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | 8   | 1. | 19  | 2. | 12  | 1. |
|                 |       |      | .35 | 19 | .10 | 50 | .88 | 68 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | 10  | 1. | 12  | 1. | 13  | 1. |
|                 |       |      | .72 | 53 | .89 | 69 | .29 | 73 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 2  | ACRON | 4    |     |    |     |    |     |    |
|                 |       | 7.41 |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acrylic Sheet   |       |      | 169 | 2  | 218 | 2  | 243 | 3  |
|                 |       |      | .02 | 4. | .87 | 8. | .92 | 1. |
|                 |       |      |     | 15 |     | 69 |     | 78 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | 67  | 9. | 53  | 6. | 58  | 7. |
|                 |       |      | .10 | 59 | .18 | 97 | .33 | 60 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Local     |       |      | 699 | 10 | 763 | 10 | 767 | 10 |
| Sales           |       |      | .84 | 0. | .05 | 0. | .57 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Export Sales by |       |      |     |    |     |    |     |    |
| Products        |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 2  | ACRON | 4    |     |    |     |    |     |    |
|                 |       | 7.41 |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acrylic Sheet   |       |      | 136 | 1  | 143 | 10 | 221 | 1  |
|                 |       |      | .59 | 00 | .68 | 0. | .84 | 00 |
|                 |       |      |     |    |     | 00 |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Export    |       |      | 136 | 10 | 143 | 10 | 221 | 10 |
| sales           |       |      | .59 | 0. | .68 | 0. | .84 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Local & Export  |       |      |     |    |     |    |     |    |
| Sales           |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | 224 | 2  | 223 | 2  | 128 | 1  |
|                 |       |      | .89 | 6. | .14 | 4. | .90 | 3. |
|                 |       |      |     | 89 |     | 61 |     | 03 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | 219 | 2  | 235 | 2  | 310 | 3  |
|                 |       |      | .76 | 6. | .87 | 6. | .25 | 1. |
|                 |       |      |     | 27 |     | 01 |     | 36 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | 8   | 1. | 19  | 2. | 12  | 1. |
|                 |       |      | .35 | 00 | .10 | 11 | .88 | 30 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | 10  | 1. | 12  | 1. | 13  | 1. |
|                 |       |      | .72 | 28 | .89 | 42 | .29 | 34 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 2  | ACRON | 4    |     |    |     |    |     |    |
|                 |       | 7.41 |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acrylic Sheet   |       |      | 305 | 3  | 362 | 3  | 465 | 4  |
|                 |       |      | .61 | 6. | .55 | 9. | .76 | 7. |
|                 |       |      |     | 54 |     | 98 |     | 07 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | 67  | 8. | 53  | 5. | 58  | 5. |
|                 |       |      | .10 | 02 | .18 | 87 | .33 | 90 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Local &   |       |      | 836 | 10 | 906 | 10 | 989 | 1  |
| Export sales    |       |      | .43 | 0. | .73 | 0. | .41 | 00 |
|                 |       |      |     | 00 |     | 00 |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Less returned & |       |      | 19  | 2. | 29  | 3. | 27  | 2. |
| Discount        |       |      | .09 | 28 | .21 | 22 | .40 | 77 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Net Sales       |       |      | 817 | 8  | 877 | 9  | 962 | 9  |
|                 |       |      | .34 | 7. | .52 | 8. | .01 | 8. |
| Contractor      |       |      |     | 62 |     | 30 |     | 44 |
|                 |       |      | 7   |    | 5   |    | 2   |    |
| Other Income    |       |      | .79 | 0. | .25 | 0. | .37 | 0. |
|                 |       |      |     | 84 |     | 59 |     | 24 |
|                 |       |      | 107 |    | 9   |    | 12  |    |
|                 |       |      | .70 | 1  | .93 | 1. | .90 | 1. |
|                 |       |      |     | 1. |     | 11 |     | 32 |
|                 |       |      |     | 54 |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Revenue   |       |      | 932 | 10 | 892 | 10 | 977 | 10 |
|                 |       |      | .83 | 0. | .70 | 0. | .28 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+