Financial Highlight

(1) Financial statements

  The company paid 370,000 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 2001-2004 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

  -------------------------------------- ------------ -------- ------------ -------- ------------ -------- ------------ ------------ --------
                                         2001                  2002                  2003                               2004         

                                         Amount       %        Amount       %        Amount       %                     Amount       %

  Assets                                                                                                                             

  CURRENT ASSETS                                                                                                                     

  Cash in hand and at Bank               12,894       3.63     31,143       8.73     97,360       23.88                 86,429       20.60

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

  Fixed deposit                          17,789       5.01     -            -        -            -                                  

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

  Investment in listed company           -            -        -            -                                           -            -

  Accounts and Receivable – Related      10,385       2.92     -            -        -            -                     -            -
  Company                                                                                                                            

  Other companies, net                   105,091      29.59    94,538       26.51    103,395      25.36                 128,614      30.66

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

  Inventories                            90,479       25.47    83,103       23.31    86,033       21.10                 119,781      28.55

  Other current assets                                                                                                               

  Vat receivable                         -            -        -            -        -            -                     -            -

  Others                                 6,446        1.81     5,683        1.59     2,493        0.61                  2,231        0.53

  Total current assets                   243,084      68.44    223,931      62.80    289,281      70.95                 337,055      80.35

  Investment in subsidiary                                                                                                           

  Loan to Subsidiary                     4,600        1.30     -            -        -            -                     -            -

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

  Investment in subsidiary               1,407        0.40     -            -        -            -                     -            -

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

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

  Property, Plant and Equipment Net      99,134       27.91    81,474       22.85    74,241       18.21                 72,513       17.29

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

  Refundable withholding income tax      6,489        92.99    6,489        4.89     6,489        5.48                  -            -

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

  Deposits and guarantee                 130          0.04     82           0.02     4            0.00                  -            -

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

  Deferred charge                        359          0.10     -            -        -            -                     -            -

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

  Total other assets                     6,978        1.96     132,635      37.20    118,470      29.05                 82,443       19.65

  Total assets                           355,203      100      356,566      100.00   407,751      100.00                419,498      100.00

  Liabilities and Shareholders' Equity                                                                                               

  Current Liabilities                                                                                                                

  Shortterm loan from financial          23,892       6.73     11,233       3.15     43,349       10.63                 45,067       10.74
  institutions                                                                                                                       

  Trade accounts and notes payable –     14,558       4.10     1,953        0.55     1,430        0.35                  4,822        1.15
  Related Company                                                                                                                    

  - Other Companies                      11,594       3.26     10,813       3.03     11,669       2.86                  16,146       3.85

  Current portion of hire-purchase       973          0.27     526          0.15     902          0.22                  496          0.12
  contracts payable                                                                                                                  

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

  Other current liabilities                                                                                                          

  Accrued income tax and accrued         5,906        1.66     12,136       3.40     15,180       3.72                  22,414       5.34
  expenses                                                                                                                           

  Others                                 148          0.04     174          0.05     200          0.05                  237          0.06

  Total Other Current Liabilities        6,054        1.70     12,310       3.45     15,380       3.77                  22,651       5.40

  Total Current Liabilities              570,71       16.07    36,849       10.33    72,730       17.84                 89,182       21.26

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

  Hire-Purchase contracts payable-net    526          0.15     -            -        496          0.12                  -            -

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

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

  Total Liabilities                      57,597       16.22    36,849       10.33    73,174       17.95                 106,230      25.32

  Minority interest                      -            -        -            -        -            -                     -            -

  Shareholders' equity                                                                                                               

  Share capital-common share Bht. 10 par                                                                                             
  value                                                                                                                              

  Authorized share capital 14,000,000    140,000      -        140,000      -        140,000      -                     140,000      -
  shares                                                                                                                             

  Issued and fully paid-up share capital 140,000      39.41    140,000      39.26    140,000      34.33                 140,000      33.37
  14,000,000 shares                                                                                                                  

  Premium on share capital               135,000      38.01    135,000      37.86    135,000      33.11                 135,000      32.18

  Retained earning                                                                                                                   

  Appropriated for reserve fund          140,000      3.94     14,000       3.93     14,000       3.43                  14,000       3.34

  Unappropriate                          8,606        2.42     30,717       8.61     45,577       11.18                 24,268       5.79

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

  Total Shareholders' Equity             297,606      83.78    319,717      89.67    334,577      82.05                 313,268      74.68

  Total Liabilities and Shareholders'    355,203      100.00   356,566      100.00   407,751      100.00                419,498      100
  Equity                                                                                                                             

  Book value per share(baht)             21.26                 22.84                 23.90                              22.38        

  Par Value                              10                    10                    10                                 10           

  Common 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                                                                                                                        

                                         2001                  2002                  2003                  2004                      

                                         Amount       %        Amount       %        Amount       %        Amount                    %

  Revenues                                                                                                                           

  Sales                                  435,576      97.94    484,690      98.33    528,755      98.76    558,963                   99.30

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

  Profit from exchange rate              1,804        0.41     -            -        1,694        0.32     -                         -

  Other income                           7,357        1.65     8,231        1.67     4,936        0.92     3,967                     0.70

  Total Revenues                         444,737      100.00   492,921      100.00   535,385      100.00   562,930                   100.00

  Expenses                                                                                                                           

  Cost of sales                          371,492      83.53    407,117      82.59    428,571      80.05    425,246                   75.54

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

  Bad debt and doubtful debt             1,889        0.42     4,366        0.89     1,051        0.20     32,879                    5.84

  Diminution in value of Short term      -            -        -            -        -            -        -                         -
  investment                                                                                                                         
  of??????????????????????????????????                                                                                               

  Others                                 41,277       9.28     39,325       7.98     44,433       8.30     42,150                    7.49

  Loss from exchange rate                -            -        2,517        0.51     -            -        2,471                     0.44

  Share of loss in subsidiary            9,018        2.03     -            -        -            -        -                         -

  Loss from Divestment                   12,086       2.72     -            -        -            -        15,794                    2.81

  Interest Expenses                      270          0.06     1,774        0.36     1,084        0.20     1,715                     0.30

  Directors remuneration                 859          0.19     982          0.20     618          0.12     769                       0.14

  Total Expenses                         436,891      98.24    456,081      92.53    475,757      88.86    521,024                   92.56

  Net Income(Loss) before Income Tax and 7,846        1.76     36,840       7.47     59,628       11.14    41,906                    7.44
  extraordinary                                                                                                                      

  Income Tax                             -            -        (7,029)      (1.43)   (16,768)     (3.13)   (24,014)                  (4.27)

  Net Income (Loss) from operation       7,846        1.76     29,811       6.05     42,860       8.01     17,892                    3.18

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

  Net income (loss)                      7,846        1.76     29,811       6.05     42,860       8.01     17,892                    318

  Earning per share                      0.56                  2.13                  3.06                  1.28                      

  Par value                              10.00                 10.00                 10.00                 10.00                     

  Weight average (Share)                 14,000,000            14,000,000            14,000,000            14,000,000                

                                                                                                                                     
  -------------------------------------- ------------ -------- ------------ -------- ------------ -------- ------------ ------------ --------

+--------------------------------------+-------+-------+-------+-------+
| Pato Chemical Industry Public        |       |       |       |       |
| Co.,Ltd.                             |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Statement of Cash Flows for the Year |       |       |       |       |
| Ended December 31                    |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
|                                      | 2001  | 2002  | 2003  | 2004  |
+--------------------------------------+-------+-------+-------+-------+
| Cash Flows from Operating Activities |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Net Income                           | 7,846 | 2     | 4     | 1     |
|                                      |       | 9,811 | 2,860 | 7,892 |
+--------------------------------------+-------+-------+-------+-------+
| Adjustments to reconcile net income  |       |       |       |       |
| to net cash                          |       |       |       |       |
|                                      |       |       |       |       |
| provided by operating activities     |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Interest Expense Under Hire-Purchase | -     | -     | -     | 52    |
| Agreements                           |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized gain on exchange rate     | 187   | 129   | (353) | 861   |
+--------------------------------------+-------+-------+-------+-------+
| Unrealized loss on exchange rate     | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of short-term       | -     | -     | -     | -     |
| investment                           |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Minority interest                    | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Share of profit (loss) in subsidiary | 9,018 | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Short-term Investment                | 1     | -     | -     | -     |
|                                      | 2,086 |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Loss on debt restructuring           | -     | -     | 2,381 | -     |
+--------------------------------------+-------+-------+-------+-------+
| Loss on Impairment of Investment     | -     | -     | -     | 1     |
|                                      |       |       |       | 5,794 |
+--------------------------------------+-------+-------+-------+-------+
| Depreciation and amortization        | 1     | 1     | 1     | 1     |
|                                      | 2,432 | 1,977 | 1,194 | 0,329 |
+--------------------------------------+-------+-------+-------+-------+
| Allowance for doubtful accounts      | 1,889 | 4,366 | 1,050 | 3     |
|                                      |       |       |       | 2,879 |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of fixed assets     | (557) | (421) | (1    | (1    |
|                                      |       |       | ,754) | ,722) |
+--------------------------------------+-------+-------+-------+-------+
| Gain on disposal of investment       | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Excess of investment over book value | -     | -     | -     | -     |
+--------------------------------------+-------+-------+-------+-------+
| Income from operating before         | 4     | 4     | 5     | 7     |
| changing in operating assets and     | 2,901 | 5,862 | 5,378 | 6,085 |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| (Increase) decrease in operating     |       |       |       |       |
| assets                               |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Account and note receivables         | 2     | (9    | (9    | (28   |
|                                      | 2,053 | ,229) | ,908) | ,915) |
+--------------------------------------+-------+-------+-------+-------+
| Inventories                          | (2    | 7,376 | (2    | (33   |
|                                      | ,212) |       | ,930) | ,748) |
+--------------------------------------+-------+-------+-------+-------+
| Other current assets                 | (51)  | (188) | 2,439 | 262   |
+--------------------------------------+-------+-------+-------+-------+
| Refundable Income Tax                | (6    | -     | -     | 6,489 |
|                                      | ,489) |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Other assets                         | (196) | 198   | 90    | (120) |
+--------------------------------------+-------+-------+-------+-------+
| Increase(decrease) in operating      |       |       |       |       |
| liabilities                          |       |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Notes and account payable            | (54   | (13   | 341   | 7,737 |
|                                      | ,975) | ,427) |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Accrued income tax and accrued       | (2    | 6,230 | 3,044 | 7,235 |
| expenses                             | ,100) |       |       |       |
+--------------------------------------+-------+-------+-------+-------+
| Other current liabilities            | (116) | (933) | 12    | 37    |
+--------------------------------------+-------+-------+-------+-------+
| Net cash provided by(use in)         | (1    | 3     | 4     | 3     |
| operating activities                 | ,185) | 5,889 | 8,466 | 5,062 |
+--------------------------------------+-------+-------+-------+-------+

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

  Statement of Income for the year ended                                  
  December 31                                                             

                                         2001       2002       2003       2004

  Cash Flows from Investing Activities                                    

  Decrease(increase) in called and fixed (12,130)   209        464        -
  deposit                                                                 

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

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

  Proceeds from sale of fixed assets     896        421        2,229      1,722

  Acquisition of fixed assets            (3,939)    (1,348)    (3,158)    (8,601)

  Decrease (increase) in loans           9,262      -          -          -

  Decrease (increase) in Loan to related (4,600)    (7,151)    -          -
  company                                                                 

  Decrease(increase) in investment in    1,406      -          -          -
  subsidiary                                                              

  Decrease (increase) in investment in   (1,406)    -          -          -
  related company                                                         

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

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

  Net cash provided by ( used in)        (10,511)   2,807      13,666     (6,879)
  investing activities                                                    

  Cash Flows from Financing Activities                                    

  Increase(decrease)I in bank overdrafts 22,110     (12,695)   32,558     1,002
  and loan                                                                

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

  Repayment of long-term loan            1,204      -          -          -

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

  Net cash provided by (used in)         (4,686)    (20,395)   4,182      (39,100)
  financing activities                                                    

  Increase(decrease) in cash and cash    (16,382)   18,301     66,314     (10,917)
  equivalents                                                             

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

  Net cash and cash equivalents          (16,382)   18,250     66,217     (10,931)
  increase(decrease)                                                      

  Cash and cash equivalents, beginning   34,935     12,893     31,143     97,360
  of year                                                                 

  Cash and cash equivalents, end of year 18,553     31,143     97,360     86,429

                                                                          
  -------------------------------------- ---------- ---------- ---------- ----------

(c) Financial Ratio

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

  ------------------------------------- --------- --------- -------- ---------
                                        2001      2002      2003     2004

  Liquidity Ratio                                                    

  Current Ratio (Time)                  4.26      6.08      3.98     3.78

  Quick Ratio (Time)                    2.56      3.67      2.76     2.41

  Cash Flow Ratio (Time)                (0.02)    0.76      0.88     0.43

  Receivable Turnover (Time)            3.42      4.40      5.11     4.82

  Collection Period (Day)               105       81        71       75

  Inventory Turnover (Time)             4.16      4.69      5.07     4.13

  Inventory T/Period (Day)              87        77        71       87

  Account Payable Turnover (Time)       6.93      20.92     33.14    11.19

  Payment Period (Day)                  52        17        11       32

  Cash Cycle (Day)                      140       144       131      130

  Profitability Ratio                                                

  Gross Profit Margin (%)               14.71     16.00     18.95    23.92

  Profit from operation (%)             5.02      6.27      10.55    7.09

  Other profit (%)                      (3.15)    1.31      0.72     0.40

  Cash (%)                              (5.42)    118.12    86.89    88.42

  Net Profit Margin (%)                 1.76      6.05      8.01     3.18

  Return on Equity (%)                  2.55      9.66      13.10    5.52

  Efficiency Ratio                                                   

  Return on Total Assets (%)            2.05      8.38      11.22    4.33

  Return on Fixed Assets (%)            19.58     44.54     63.68    35.10

  Assets Turnover (Time)                1.16      1.39      1.40     136.10

  Financial Ratio                                                    

  Debt to Equity (Time)                 0.19      0.12      0.22     0.34

  Interest Coverage (Time)              (3.39)    25.19     61.18    35.45

  Cash Basis (Time)                     (0.05)    3.97      1.54     (0.72)

  Payout Ratio (%)                      98.14     93.93     91.46    117.37

  Per Share (Baht)                                                   

  Book Value (Baht)                     21.26     22.84     23.90    22.38

  Earning per Share (Baht)              0.56      2.13      3.06     1.28

  Dividend per Share (Baht)             0.55      2.00      2.80     1.50

  Growth Rate                                                        

  Total Sale (%)                        (13.16)   0.38      14.35    2.88

  Cost of Goods Sold (%)                (36.91)   (36.02)   98.58    45.17

  Sales Revenue (%)                     (14.34)   11.28     9.09     5.71

  Selling & Admin Expense (%)           (17.54)   7.20      4.48     9.40

  Net Profit (%)                        (54.75)   279.95    43.77    (58.25)
  ------------------------------------- --------- --------- -------- ---------

2) Management Discussion and Analysis

In the financial statement of Pato Chemical Industry Public Co. Ltd.
indicated net profit (loss) totaled 29.81, 42.86 and 17.89 million baht
in 2002 – 2004 respectively. These figures represent an increase and
reduction of 279.95, 43.77 and (58.26) respectively.

These changes are attributed to the continued economic slump, leading to
reduced liquidity in the business system and a reduction in consumers’
purchasing power. Although financial institutions reduced the interest
rate in a bid to stimulate investment, this was not successful.

As a result of a bid to control the effect of pesticides on the
environment, the Government enforced laws prohibiting the import and
sale of certain products, causing the company’s total sales to fall. It
was necessary for the company to urgently develop new products to
replace these prohibited products. The period was also marked by
competition from rivals with regard to quality and price. Price was used
as the basis for formulating competitive strategy. There were also
market expenses and increased costs for developing new products.

Agricultural produce prices fell from 2002 as a result of floods from
heavy rain in the South and the Northeast during third and forth quarter
which caused great damage to farm produce. As a result, farmers had
extremely less purchasing power. At the same time, there were
fluctuating effects from foreign exchange rates and a weakened baht,
causing prices for imported raw materials to rise. Oil prices tend to
increase and thus affected our cost.

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

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

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

Sales revenue during 2002 – 2004 was 484.69, 528.76 and 558.96 million
baht respectively, representing increases (reductions) of 11.28%, 9.09%
and 5.71% respectively.

Total revenue during 2002 – 2004 was 492.92, 535.39 and 562.93 million
baht, representing increases (reductions) of 10.83%, 8.61%, and 5.14%
respectively.

Sales costs in 2002 – 2004 were 407.12, 428.57, and 425.25 million baht,
representing increases (reductions) of (16.83%) , 9.59% , and 5.27%
respectively.

In 2002, the economic situation began to improve. Thanks to the
Government’s policy to solve economic problems at the grassroots, by
supporting SME operations and through the Government’s One Tambon, One
Product project. A segment of the products – agricultural products -
received good government support. However, agricultural prices were
still not so good and there were also flood problems during the 3^(rd)
and 4^(th) quarters. The Government fully dealt with the problems and
gave all forms of agricultural support, such as guaranteeing
agricultural prices, giving assistance in the form of seeds, fertilizer
and chemicals. With regard to the latter, government and private sector
units gave importance to the quality of products used by farmers. Thus,
there was a policy to check and curtail products not of standard
quality, so that these inferior products would no longer be on the
market.

The above factors led to a rise in the outbreak of harmful plant
insects, presenting a major problem for farmers engaging in cultivation
after the floods. It led to a 8.61% rise in the sales volume of
insecticides compared to 2001, of which granule insecticides sales
volume rose by 221 tons or 29.85%, compared to 2001.

Sales of herbicides also rose by 2.62%, compared to 2001. This comprised
an increase in liquid herbicide of 155,000 liters or 11.60%, and a rise
of 159 tons or 34.91% for powder herbicide, while sales of granule
herbicide reduced slightly. These figures are respectively in comparison
to the sale of liquid, powder and granule herbicide in 2001.

Due to the increase in total sales, income from sales rose by 11.28%
compared to 2001, with the company adjusting its marketing strategy in
line with the situation and also introducing many new products, leading
to a rise in total sales. Another outside factor helping to boost sales
was suppression and strict measures against substandard products on the
market.

At the same time, the company set an efficient administrative management
policy for production. This lead to a 2.32% decrease in labor costs and
other production costs. Raw materials were also procured from new
sources, leading to an average 7.19% decrease in raw material prices.
Production and selling costs rose by 3.44% and 9.59% compared to 2001.
However, production and selling costs rose at a lower ratio than the
increase in total sales income which rose by 11.28%. Therefore, these
factors led to a 16% initial profit rate for the company, representing a
rise of 8.77% from 2001.

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

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

  Total sales rose by 44.06 million baht or 9.9% compared to the year
2002. This is due to the spread of plant pests, a major problem for
farmers beginning their planting after the floods. This led to an
increase of 62.63% in the sales of pesticides compared to 2002, with a
97.06% rise seen in the sale of granule pesticide and 78.25% rise in the
sale of powder pesticide compared to 2002. This led to initial total
sales to rise by 36.68 million baht or an increase of 28.09%. At the
same time, total sales of herbicides rose by 0.92% compared to 2002.
Under this increase, liquid herbicide increased by 21.27%, while granule
and powder herbicide fell by 5.55% and 7.37% respectively compared to
2002. This caused initial total sales to rise by 7.95 million baht or
2.72%. Sales of liquid fungicide rose by 60.18%, ca using initial sales
to rise by 7.51 million baht, representing an increase of 62.46%.
However at the same time, there was a slight fall in total sales and
retailing of powder fungicide.

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

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

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

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

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

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

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

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

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

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

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

Table showing rate of increases (reduction) during 2002 - 2004

+------+--------------------+-------------------------+--------------+
| Year | PATO               |                         |              |
+------+--------------------+-------------------------+--------------+
|      | Sales Revenue      | Consolidated revenue    | Cost of Sale |
+------+--------------------+-------------------------+--------------+
|      |                    |                         |              |
+------+--------------------+-------------------------+--------------+
| 2002 | 11.28              | 10.83                   | 9.59         |
+------+--------------------+-------------------------+--------------+
| 2003 | 9.09               | 8.61                    | 5.27         |
+------+--------------------+-------------------------+--------------+
| 2004 | 5.71               | 5.14                    | (0.78)       |
+------+--------------------+-------------------------+--------------+

Sales and General Administrative expenses during 2002-2004 totaled
47.19, 46.10, and 94.06 million baht, representing increases
(reductions) of 7.20% , (2.39%) and 104.03% respectively, not including
interest payable.

Interest payable in 2002 – 2004 totaled 1.77, 1.08, and 1.71 million
baht, representing increases (reductions) of 557.04%, (38.90%), and
58.19% respectively.

In 2002, Sales and general administrative expenses rose by 3.16 million
baht or 7.20% due to a management cost control policy that led to
efficient cost reduction while total sales rose at a higher ratio, with
investment in sales and management costs proving to be worthwhile. This
led to a higher ratio of income generation, while sales and management
costs were also mostly down compared to 2001. However, at the same time
certain costs rose from last year, such as a rise of 1.27 million baht
for salary and benefits or 0.18%, a rise in irretrievable debts costs of
2.48 million baht or 14.33%. As the company had a policy to protect
against risk from flood-ravaged debtors, the company thus increased its
reserves from the previous year.

Interest payments, meanwhile, rose by 1.50 million baht or 557.04% due
to payment policy to T/R creditors and foreign creditors, under which
payment terms were extended in the 2^(nd), 3^(rd) and 4^(th) quarters,
thus leading to the burden of increased interest payments.

With regard to foreign exchange losses, there were foreign exchange
profits of 1.80 million baht in 2001, while in 2002 there was a foreign
exchange loss of 2.52 million baht, representing a 4.32 million baht
difference or a change of 239.56%. This was due to fluctuation of the
baht which weakened continuously, leading to increased foreign exchange
losses.

Income tax in 2002 came to 7.03 million baht, whereas in 2001 the
company sold off its investments in subsidiary companies. This led to a
loss in taxes of 49.79 million and thus no income tax payments for 2001.
There was also a 15 million baht loss from taxes which could be entered
as Credit and this led to an increase in income tax in 2002, compared to
the previous year.

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

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

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

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

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

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

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

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

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

The above operational results led to gross profit during 2002- 2004 to
total 77.57, 100.18 and 133.72 million baht respectively, representing a
percentage of 16.00, 18.95, and 33.47 respectively.

Operational profits in 2002 – 2004 came to 30.38, 55.78, and 39.65
million baht respectively, representing percentage of 6.27, 10.55 and
7.09 respectively.

Net profits in 2002 – 2004 came to 29.81, 42.86, and 17.89 million baht,
or a percentage of 6.05, 8.01 and 3.18 respectively.

Return on equity during 2002 – 2004 were 9.66% , 13.10%, and 5.52%
respectively.

In 2002, total sales rose by 11.28% which resulted from government and
private sector assistance to farmers following flooding during the
3^(rd) and 4^(th) quarters, helping farmers to recover more quickly. At
the same time, there were stricter measures against sub-standard
products. This led to less market competition as these products could
not be sold. In addition to this, an adjustment in marketing and pricing
strategies to suit changes in costs, also led to higher market share.
This was also coupled with the fact that new products were able to make
higher profit rates. There was also efficient management of production
costs which led production costs and selling costs to increase at a
lower ratio than the rise in total sales. This made initial profit rate
rise to 16.00%

Under a set policy for efficient management and control, selling and
management costs increased at a lower ratio compared to the rise in
total sales. There was also a policy to prevent risk from irretrievable
debts and increased reserves were set aside for this, making operational
profit for 2002 rise to 6.79%.

At the same time, the baht’s fluctuation made it difficult to implement
a policy to prevent against foreign exchange risks, and as a result,
foreign exchange losses increased. And due to the fact that in 2002,
there were no effects from the operations of subsidiary companies,
income tax burden was higher and net profit rose 6.05%, leading
shareholder returns to increase to 9.66%.

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

  Overall sales and management costs fell, as already stated, with the
company’s policy to manage and control costs to rise at only the minimum
rate and make investment most worthwhile, so as to make the most
efficient income generation. There was also a policy for careful debtor
management so as to reduce risk of bad debts, with a great reduction bad
debts and doubtful debts seen in 2003. This resulted in the company
seeing operational profit in 2003 increase by 55.78%. 

At the same time, the increased stability of the baht and company policy
for efficient management of foreign exchange risks, led to higher
foreign exchange profits in 2003. The company’s net profits thus rose by
8.01% and return of equity in 2003 rose by 13.10%.

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

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

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

Total assets in 2002-2004 amounting to 356.57, 407.75, and 419.50
million baht respectively, marked an increase (decrease) at a percentage
of 0.38, 14.35, and 2.88 respectively.

Total liabilities in 2002-2004 amounting to 36.85, 73.17, and 106.23
million baht, marked an increase (decrease) of (36.02%), 98.58%, and
45.18% respectively.

Shareholder equity in 2002-2004 amounting to 319.72, 334.58, and 313.27
million baht, marked an increase (decrease) of 7.43%, 4.65%, and (6.37%)
respectively.

In 2002, total sales of the company rose by 11.28% while operational
cash flow rose 3,128.61%, with liquidity ratio up from 4.26 in 2001 to
6.08 in 2002. Quick ratio rose from 2.56 in 2001 to 3.67 in 2002. Cash
flow liquidity ratio rose from (0.02) in 2001 to 0.76 in 2002 due to
classification of related debtor companies to debtors and long-term
loans to related companies. The classification led to a reduction in
circulating debts totaling 28.81 million baht. The company also made
quicker payments to T/R creditors and commercial creditors, leading to a
reduction in circulating debts.

Meanwhile, debt collection period was shortened from 107 days in 2001 to
83 days in 2002. Product selling period were also shorter from 88 days
in 2001 to 78 days in 2002, and debt payments were also quicker from 53
days in 2001 to 17 days in 2002, making Cash Cycle rise to 144 days.

An analysis of the above ratio showed a trend for improvement from the
previous year, as a result of a policy for stock management in which a
reduction of 8.15% is seen. This is for sufficiency in meeting market
demand at appropriate periods and to prevent excess stocking which would
lead to higher storage costs, with consideration given to Lead Time for
efficient product ordering management, and strict policy and management
of debtors, not including related debtor companies. This led to quicker
payment collection and as a result quicker payments to T/R creditors and
commercial creditors. Company liquidity also became better, creating
greater operational cash flow.

Cash flow for investment activities increased 126.71% as a result of the
company freeing itself from the burden of deposit guarantor and
repayment of loans from related companies, including the sale of company
cars totaling 11.31 million baht. At the same time, the company gave
loans to related companies and bought assets totaling 8.50 million baht,
leading to a rise in cash flow from investment activities compared to
the previous year.

Cash flow from procurement activities improved company liquidity and
thus the company was able to repay T/R creditors before schedule and
give out dividends in 2002 totaling 20.40 million baht. This led to a
reduction of 335.23% in cash flow from procurement activities.

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

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

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

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

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

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

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

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

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

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

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

When taking into consideration of the investment structure and that the
ratio of debts to shareholders was 0.34 times in 2004, this represented
an increase from the previous year. There was an increase of loans from
financial institutions due to increased purchases of raw materials from
abroad. However, this ratio was still a very low ratio and reflected the
company’s careful and efficient management of funds. The company had a
policy of using current liabilities to invest in current assets in order
to obtain maximum return, taking into consideration that outlay capital
should not be excessive and should provide the maximum return to the
shareholders. The company also kept the ratio from becoming too high for
fear of financial risk to the company.

For the main factors that are important and bear effect on operations in
2005 , it is expected that the overall economy will continue to expand
from 2004, with positive factors on many sides. These include various
supporting policies in the government sector, as well as in major and
small business operations, and people in rural areas, all of which will
help in enabling the GDP to be able to increase.

In agricultural sector production, the Government will continue to
provide its full support in all areas such as:

  1.       Technology development - Developing production technology by
educating farmers and providing good plant breeds in order to further
develop quality of output.

  2.       Marketing - Helping to sustain agricultural prices by
  providing farmers with loans using their agricultural goods as
  collateral. This will keep agricultural prices from falling too low
  and let market forces operate on their own.

  3.       Finances – Providing loan support which might in the form of
  a village fund, low-interest loans and loans derived from transforming
  assets into capital, so as to create opportunity for farmers.

4.       Promote agricultural processing – This is done by creating
added value to products which would develop product quality and enable
to export, such as through the One Tambon One Product Project (OTOP) .
Products under this project have now become products going onto world
markets.

  These are the main factors improving the financial conditions of
farmers. At the same time, the government and private sectors, through
the Thai Crop Protection Association joined forces to control and check
sub-standard products which when used by farmers, lead to higher costs
for farmers and yields which do not meet expectations. This, in turn,
reduces farmers’ purchasing power. The company is aware of the
importance of this problem and at present is able to control this
problem to a certain level, making sub-standard products more difficult
to market.

Raw material prices are likely to increase in accordance with world
situation and become another factor affecting product prices. Most raw
materials are imported and thus is affected by fluctuating foreign
exchange rates all the time. The rise and fall of raw material prices
depends on the stability of the baht and oil prices.

The rules and regulations of the government to control the importation
of pesticides are another factors affect our production. These are
outside factors which cannot be controlled, but risks from foreign
exchange damage can be reduced by following measures :

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

2.  Practicing more caution when ordering raw materials, seeing that it
    concords with needs. This will reduce damage from excessive
    inventory. However, Lead Time is considered to avoid short of
    inventory.

3.  Making careful consideration before opening new trade accounts and
    expanding credit lines to prevent damage from bad debts and strictly
    performing in accordance with collection policy.

4.  Disseminate knowledge on technology and correct usage of product to
    increase yields, promote safety, with no environmental effects.

These above factors affect the company’s operations and financial
position. Therefore, it is the policy of the company to try and reduce
the adverse effects from these various factors through the above
mentioned measures. Although, these are outside factors that cannot be
controlled, it is expected that this policy will reflect in better
operations for the company.