9.Management

(1) Management Structure Organization Chart of Pato Chemical Industry
    Public Co.,Ltd.

Marketing Manager Mr.Chawut Kooniyapantu

Accounting Manager Finance Manager Office Manager Research & Development
Manager Area Sales Manager

Mr.Visut Vanijcharoenkarn Mr.Joseph Ng Mrs. Parichart Manuthasna
Mr.Kawinharn Polaharn Mr.Rapin Theingthum

  The company comprises of :

  - Board of Directors

-   Audit Committee

- Management

Board of Directors and Management as of December 31, 2003 are as follows
:

+------------------------+---------------------------------------------+
| Name                   | Position                                    |
+------------------------+---------------------------------------------+
| 1. Mr.Metha Trillit    | Chairman/President                          |
+------------------------+---------------------------------------------+
| 2. Mr.Chaovuth         | Director                                    |
| Pojanalai              |                                             |
+------------------------+---------------------------------------------+
| 3. Dr.Viwat Trillit    | Director/Executive Vice President /Acting   |
|                        | Administration Manager                      |
+------------------------+---------------------------------------------+
| 4. Mr.Suvit            | Director                                    |
| Wesaratchawest         |                                             |
+------------------------+---------------------------------------------+
| 5. Mr.Lertchai         | Director / Chairman of Audit Committee      |
| Leelayonkul            |                                             |
+------------------------+---------------------------------------------+
| 6. Mr.Chaiwat          | Director / Audit Committee Member           |
| Chandarasrivongs       |                                             |
+------------------------+---------------------------------------------+
| 7. Dr.Chongrak         | Director / Audit Committee Member           |
| Prichanont             |                                             |
+------------------------+---------------------------------------------+
| 8.Mr.Surachai          | Director                                    |
| Choengvivatkit         |                                             |
+------------------------+---------------------------------------------+
| 9. Dato Siew Ka Wei    | Director                                    |
+------------------------+---------------------------------------------+
| 10. Mr.Michifumi       | Director                                    |
| Watanabe               |                                             |
+------------------------+---------------------------------------------+
| 11. Mr.Masayuki        | Director                                    |
| Hashimoto              |                                             |
+------------------------+---------------------------------------------+
| 12. Mr.Chanwut         | Marketing Manager                           |
| Kooniyapantu           |                                             |
+------------------------+---------------------------------------------+
| 13. Mr.Sumet           | Marketing Advisor                           |
| Choengvivatkit         |                                             |
+------------------------+---------------------------------------------+
| 14. Mr.Warat           | Factory Manager                             |
| Lapserisakul           |                                             |
+------------------------+---------------------------------------------+
| 15. Mr.Visut           | Accounting Manager                          |
| Vanijcharoenkarn       |                                             |
+------------------------+---------------------------------------------+
| 16. Mr Joseph Ng       | Finance Manager                             |
+------------------------+---------------------------------------------+
| 17.Mr.Kawinharn        | Research and Development Manager            |
| Polaharn               |                                             |
+------------------------+---------------------------------------------+
| 18. Mr.Rapin           | Area Sales Manager                          |
| Theingthum             |                                             |
+------------------------+---------------------------------------------+
| 19. Mrs.Parichart      | Office Manager/Company Secretary            |
| Manuthasna             |                                             |
+------------------------+---------------------------------------------+
| Mr.                    |                                             |
| Metha Trillit is to co |                                             |
| -sign with Mr.Chaovuth |                                             |
|  Pojanalai with compan |                                             |
| y seal affixed to affe |                                             |
| ct company documents.  |                                             |
+------------------------+---------------------------------------------+

Powers and Obligations of the Board of Directors

-   The board of directors shall elect one of the directors to be the
    chairman of the board.

In case the board of directors deems it appropriate, the board may elect
one or several directors to be vice-chairman or vice-chairmen. The
vice-chairman shall have duties stipulated in the articles of
association in the businesses assigned by the chairman of the board.

-   At a meeting of the board of directors, at least one half of the
    total number of directors present shall form a quorum. In case the
    chairman of the board is not present at the meeting or cannot
    perform his or her duty, and if there is vice-chairman, the
    vice-chairman present at the meeting shall be the chairman of the
    meeting. If there is no vice-chairman or if there is a vice-chairman
    who is not present at the meeting or cannot perform his or her duty,
    the directors present at the meeting shall elect one of the
    directors to be the chairman of the meeting. Decisions at the
    meeting shall be made by majority vote. Each director is entitled to
    one vote, but a director who has interests in any matter shall not
    be entitled to vote on such matter. In the event of a tie vote, the
    chairman of the meeting shall have a casting vote.

-   No director shall operate any business which has the same nature as
    and is in competition with the business of the company or become a
    partner in an ordinary partnership or become a partner with
    unlimited liability in a limited partnership or become a director of
    a private company or any other company operating business which has
    the same nature as and is in competition with the business of the
    company, unless he or she notifies the shareholder meeting prior to
    the resolution for his or her appointment.

-   A director shall notify the company without delay when the following
    events occur:

  - He or she has a direct or indirect interest in any contract which is
  made by the company with the other company or shareholders during a
  fiscal year (if any)

- He or she holds shares or debentures of the company or an affiliated
company, and shall indicate the total number of shares increasing or
decreasing during a fiscal year (if any).

-   The chairman is authorized to cosign with one of the other 2
    directors with company's seal to affect company documents or the
    board of directors shall appoint authorized directors to cosign with
    company's seal.

(2) Appointment of Directors

-   Directors of the company have not do been appointed by the
    nominating committee.

-   At present, eight directors represent major shareholders.

-   The company shall have a board of directors comprising of at least 5
    directors to conduct the business of the company, not less than half
    of whom shall reside within the Kingdom.

-   The directors shall be elected at the shareholder meeting in
    accordance with the following rules and procedures:

  - Each shareholder shall have a number of votes equal to the number of
  shares held.

- Each shareholder may exercise all the votes he or she has under (1) to
elect one or several persons as director or directors but the
shareholder shall not allot his or her votes to any person in any
number.

- After the vote, the candidates shall be ranked in order descending
from the highest number of votes received to the lowest, and shall be
appointed as directors in that order until all of the director positions
are filled. Where the votes cast for candidates in descending order are
tied, which would otherwise cause the number of directors to be
exceeded, the chairman shall make the decision for the remaining
appointment.

Vacancy of Directors

-   At every annual general meeting, one-third of the directors shall
    retire. If the number of directors is not a multiple of three, the
    number of directors closest to one-third shall retire for the first
    year. For the second year after the registration of the company, the
    retirement shall be selected by drawing lots. In subsequent years,
    the director who has held office longest shall retire.

-   Apart from vacation upon the expiry of his or her term, a director
    shall vacate office upon:

1)  death;

2)  resignation;

3)  lack of qualifications or possession of prohibited characteristics
    under Section 68; of Public Limited Companies Act BE.2535

4)  Removal by a resolution of the shareholder meeting of not less than
    three quarters of the number shareholders attending the meeting who
    have the right to vote and who have shares totaling not less than
    half of the number of shares held by the shareholders attending the
    meeting and having the right to vote.

5)  Removal by a court order.

-   In the case of a vacancy in the board of directors for reasons other
    than the expiration of the director's term of office, the board of
    directors shall elect a person who has the qualifications and who
    possesses no prohibited characteristics under Section 68 as the
    substitute director at the next meeting of the board of directors,
    unless the remaining term of office of the said director is less
    than two months. The substitute director shall hold office only for
    the remaining term of office of the director whom he or she
    replaces. The resolution of the board of directors shall be by a
    vote of not less than three-quarters of the number of directors
    remaining.

Corporate Governance

Report on Corporate Governance adherence

1.  Corporate Governance Policy

  The company’s Board of Directors is aware of the importance of
  Corporate Governance in increasing operational transparency and
  shareholder confidence, creating thorough management and acting with
  caution for the greatest benefit, and which can be subject to
  auditing.

2.  Right of Shareholders

  The company is steadfast in its aim to undertake business for the
  satisfaction of shareholders and provision of good return on a
  continuous and secure basis.  The company holds a general shareholders
  meeting in which there is a quorum and participants take part
  in considering various agendas and acknowledge operational results.
  The company realizes the right of shareholders to receive correct,
  sufficient, immediate and equal information. Therefore, the
  company prepares documents and details which shareholders should have
  knowledge of, and gives these to shareholders for their consideration
  before the meeting. In the event the shareholder cannot attend the
  meeting, the company includes a documentary consent of representation
  together with the invitation to the meeting. With this documentary
  consent of representation, the shareholder can give power of attorney
  to another person or a member of the audit committee, to attend the
  meeting and exercise right to vote according to the wishes of
  the shareholder. In addition, the company makes a complete and correct
  record of the meeting, which can be checked by shareholders.

 

3.  Rights of those with interests

 

  The company attaches importance to all affected groups, including
  employees, customers, competitors, commercial creditors and the
  environment.

 

  Employees:  The company emphasizes unity among employees, working
  together in a peaceful and facilitating atmosphere, and gives
  employees the opportunity to develop their potential and to utilize
  their knowledge and ability to help in creating progress for
  themselves and the company.

  Customers:  The company manufactures quality and standard products
with a fair price. In this regard, the company joined a core group to
help push for the Project for Manufacturing of Quality Products under
the Thai Crop Protection Association, including research efforts for
more products suited to geographic conditions, climate, and which
were disease-controllable with regard to insects and weeds, so as to
increase production for farmers. At the same time, through the help of a
work team with high knowledge and experience, the company also
emphasizes providing knowledge and correct product type usage and
correct and method of usage, for the safety of both farmers and
consumers.

    Environment:  As all sides attach importance to the environment, the
  production base has thus been moved to the Bangpoo Industrial Estate,
  with cooperation given to all sides of government and private sectors.
  Cooperation is given by strictly adhering to related conditions and
  regulations. Moreover, the company realizes the danger of incorrect
  usage of chemical substances and types, and has thus always undertaken
  to provide knowledge to all sides. It has also undertaken research to
  find products that least affect the environment while at the same time
  effectively increase production for farmers.

 

4.  Shareholders meeting

    The company holds a general shareholders meeting at a location where
  it is convenient for directors, executives, and shareholders. Before
  each meeting, the company prepares documents and these are assigned
  to Thailand securities depository company limited which then
  undertakes to send the meeting agenda and documents for prior
  consideration, as is stipulated by stock exchange regulations.
  Directors and the Audit Committee attended the general shareholders’
  meeting held in 2003 in full force. The Chairman of the meeting gave
  shareholders equal rights and freedom to ask questions and express
  views.

5.  Leadership and Vision

  The Board of Directors participates in setting policy, business plan
  and company budget, and in seeing that the Management implements the
  set plan.

The Board of Directors has set a system for internal control, auditing
and monitoring.

Powers and Obligations of the Board of Directors

-   The board of directors shall elect one of the directors to be the
    chairman of the board.

In case the board of directors deems it appropriate, the board may elect
one or several directors to be vice- chairman or vice-chairmen. The
vice-chairman shall have duties stipulated in the articles of
association in the businesses assigned by the chairman of the board.

-   At a meeting of the board of directors, at least one half of the
    total number of directors present shall form a quorum. In case the
    chairman of the board is not present at the meeting or cannot
    perform his or her duty, and if there is vice-chairman, the
    vice-chairman present at the meeting shall be the chairman of the
    meeting. If there is no vice-chairman or if there is a vice-chairman
    who is not present at the meeting or cannot perform his or her duty,
    the directors present at the meeting shall elect one of the
    directors to be the chairman of the meeting. Decisions at the
    meeting shall be made by majority vote. Each director is entitled to
    one vote, but a director who has interests in any matter shall not
    be entitled to vote on such matter. In the event of a tie vote, the
    chairman of the meeting shall have a casting vote.

-   No director shall operate any business which has the same nature as
    and is in competition with the business of the company or become a
    partner in an ordinary partnership or become a partner with
    unlimited liability in a limited partnership or become a director of
    a private company or any other company operating business which has
    the same nature as and is in competition with the business of the
    company, unless he or she notifies the shareholder meeting prior to
    the resolution for his or her appointment.

-   A director shall notify the company without delay when the following
    events occur:

  - He or she has a direct or indirect interest in any contract which is
  made by the company with the other company or shareholders during a
  fiscal year (if any)

- He or she holds shares or debentures of the company or an affiliated
company, and shall indicate the total number of shares increasing or
decreasing during a fiscal year (if any).

-   The chairman is authorized to cosign with one of the other 2
    directors with company's seal to affect company documents or the
    board of directors shall appoint authorized directors to cosign with
    company's seal.

6.  Conflict of interest

  - The Board of Directors has received knowledge of items with conflict
  of interest, and related items. These have come under careful
  consideration. Besides, stock market regulations concerning the
  revelation of such items have been adhered to.

- Protecting against the use of insider information

  The company has a policy and method to prevent company executives from
  using the company’s inside information for personal gain or for the
  purchase of securities before the company’s financial statement is
  disclosed to public. Anyone with no responsibility with compiling the
  financial statement will have no access to information in the
  financial statement until that financial statement is officially
  released to the public. Moreover, all executives and personnel must
  immediately report to the company secretary of any changes or
  additions to the securities they hold, so that this information is
  each time reported to the Chairman of the Board.

7.  Work ethics

  The company has come out with a written code of ethics for the Board
  of Directors and employees, to serve as a guideline for those
  concerned in executing their duties with honesty. The company also
  holds staff meetings on a regular basis.

8.  Balanced composition of Directors who are not management

  The company’s Board of Directors consists of 11 people

Directors in management 3

Directors representing major shareholders 5

Independent Directors (Audit committee) 3

9.  Combining or separating positions

  The Chairman of the Board of Directors comes from the major
  shareholder group which holds 27.24% of total shares.

  Although the Chairman and the managing director are the same person,
  work administration must have the approval of the board which
  comprises representatives of various major shareholder groups and
  includes the auditing committee which helps to re-examine and provide
  a counter-balance

10. Executives’ Remuneration

Total remuneration for the management of company from ranking “Manager”
up for the period of 1 year are as follows: Cash remuneration

- The Board of directors of 12 persons received meeting allowances total
618,056.00 Baht

Directors receive only meeting allowance. Salary has not been paid.

- Managers received 7,068,755.00 Baht which includes salary, commission,
bonus, car expense, social security expense, accident insurance,
provident fund.

Other remuneration

- None

11. Board of Directors meeting

The Board of Directors generally holds a meeting on a quarterly basis
and holds special additional sessions when necessary. For 2003, there
were 4 regular meetings and 5 special sessions with a clear agenda set
in advance. The company’s secretary is the person to prepare invitations
to meetings and related documents 7 days before the meeting takes place.
This is so that the Directors have time to consider and study
information. Each meeting takes about two and a half hours. Last year,
the Board of Directors held 4 regular meetings and had 5 special
sessions as follows :

+------------------------------+--------------+------------+-----------+
| Name                         | Regular      | Special    | Total     |
|                              | Meeting      | Session    |           |
+------------------------------+--------------+------------+-----------+
| 1.Mr.Metha Trillit           | 4/4          | 5/5        | 9/9       |
|                              |              |            |           |
| 2.Dr.Viwat Trillit           | 4/4          | 5/5        | 9/9       |
|                              |              |            |           |
| 3.Mr.Chaovuth Pojanalai      | 4/4          | 5/5        | 9/9       |
|                              |              |            |           |
| 4.Mr.Suvit Wesaratchawest    | 2/4          | 5/5        | 7/9       |
|                              |              |            |           |
| 5.Dato Siew Ka Wei           | 3/4          | 5/5        | 8/9       |
|                              |              |            |           |
| 6.Mr.Masayuki Hashimoto      | 2/4          | 5/5        | 7/9       |
|                              |              |            |           |
| 7.Mr.Michifumi Watanabe      | 2/4          | 5/5        | 7/9       |
|                              |              |            |           |
| 8.Mr.Surachai Choengvivatkit | 3/4          | 5/5        | 8/9       |
|                              |              |            |           |
| 9.Mr.Chaiwat                 | 4/4          | 5/5        | 9/9       |
| Chandarasrivongse            |              |            |           |
|                              | 4/4          | 5/5        | 9/9       |
| 10.Dr.Chongrak Prichanont    |              |            |           |
|                              | 3/4          | 5/5        | 8/9       |
| 11.Mr.Lertchai Leelayonkul   |              |            |           |
+------------------------------+--------------+------------+-----------+

  Minutes of the meetings have been recorded and endorsed by directors,
  so that they can be checked by related parties.

12. Sub-committee

The company’s Board of Directors has appointed a sub-committee to help
oversee the following operations of the company. The auditing committee
was set up on December 17, 1999.

1. Names of members of the Audit Committee are as follows :

Chairman of the Audit Committee Mr.Lertchai Leelayonkul

Member of the Audit Committee Dr.Chongrak Prichanont

Member of the Audit Committee Mr.Chaiwat Chandarasrivongs

Secretary to the Audit Committee Mr.Visut Vanijcharoenkarn

2. The Audit Committee of the Company has the scope of duties and
responsibilities, and shall report to the company's board of directors
as follows :

2.1 To review the sufficiency, credibility and objectivity of the
financial report

2.2 To review the adequacy and effectiveness of internal control systems
and internal audit functions.

2.3 To review compliance with the Securities and Exchange Acts,
Regulations of the SET, and any other relevant laws.

2.4 To consider and advise the appointment of the external auditors
including the audit fee.

2.5 To consider compliance with all connected transaction disclosures of
the conflict of interests disclosure.

2.6 To report the activities of the audit committee in the company's
annual report, which must be signed by the chairman of the audit
committee.

2.7 To take care of any other matters assigned to it by the board of
directors.

3. Terms for holding office : 3 Years

13. Internal control and auditing system

The company places importance on efficient control at both the
management level and operational level. There is supervision to ensure
that company assets are used for to bring in benefit and there is
separation of duties for work executors, monitoring people and those
undertaking evaluation. This is to ensure that a balance is created and
there is appropriate check and control. In addition, there is also
internal control concerning finances, and the company has set a system
whereby a financial report is presented to administrators in each
responsible department.

In the past, the company had its own internal auditors. However as of
2004, in order for the  internal auditing group to be independent and
fully undertake auditing and counter-balancing, the company has hired
an auditing company that is separate from the company auditing its
financial statement, to undertake its internal auditing. This is to
increase confidence that the company's main work and major financial
activities are being undertaken according to set guidelines and with
efficiency. This includes checking that laws and conditions related to
the company are adhered to. The internal auditing division must report
their findings directly to the audit committee.

 

14. Board of Directors report

The company’s Board of Directors is responsible for the consolidated
balance sheet of the company, and for financial information appearing in
the annual report. The said balance sheet is prepared under an
accounting standard certified throughout Thailand, with an appropriate
accounting balance that has been practiced on a regular basis chosen,
and prepared with utmost consideration and estimation. Sufficient key
financial information is also provided in remarks included in the
balance sheet.

The Board of Directors has seen to it that effective internal control
system is maintained, so that there is good reasonable confidence that
the recorded financial information is correct, complete and sufficient
enough to maintain assets and to be aware of weak spots in order to
prevent corrupt or dubious practices.

For this reason, the company’s Board of Directors has appointed an Audit
Committee which comprises Directors not dealing in management and who
are responsible for quality of financial reports and internal control.
The views of the Audit Committee on these matters appears in the report
by the Audit Committee, which is shown in the annual report.

The Board of Directors views that the company’s overall internal control
system is at a satisfactory level and is able to create good reasonable
confidence in the consolidated balance sheet for the company as at
December 31, 2003.

15. Investor Relations

The Board of Directors places importance on presenting correct,
complete, transparent and thorough information in financial reports and
in the presentation of general information, as well as vital information
concerning company assets. The various information is disseminated via
stock market channels and communications. The company has not yet
established an investor relations work unit , but has assigned Mrs
Parichart Manuthasna, the Office Manager, to undertake contacts with
institutional investors, shareholders and as well as analysts and
related government sectors. Investors can contact for more information
at Tel 0-2318-0360-9 ext 118 or e-mail : pato2@cscoms.com

The Board of the company adheres to the Code of Best Practices as
exercised by the Board of listed companies strictly following the
guidelines set by the Stock Exchange.

(6) Personnel

Total Number of Employee as of 31 December 2003 is 170.

There has been no significant change of number of employees.

Total remuneration for all employees

Remuneration includes salary, bonus, commission, car allowance, provident fund, social security welfare,

Insurance and social security welfare for 2003 is 47,209,927.92 baht.

Employees develop their efficiency with regular participation in
seminars.