2. Nature of Business

(1) Company profile

Pato Chemical Industry Plc was established on 6 October 1973 to import,
formulate, and distribute pesticide in Thailand. Its registered capital
was at first 1 million baht with total ordinary shares of 1,000 at par
value of 1,000 baht . PATO went public, and changed its name to PATO
CHEMICAL INDUSTRY PUBLIC COMPANY LIMITED in October 1993 then continued
to sell its ordinary stocks for 3,000,000 shares at Bt 55 per share,
valued at Baht 10 per share in July 1995. PATO increased its capital to
Baht 140 million. The company has been listed in the Stock Exchange of
Thailand in August 1995.

Important Changes and Developments.

  ------------ --- ------------- --------------------------------------------------------
  April 1997   :   ANCOM BERHAD  
                   Co Ltd a      
                   listed        
                   company in    
                   Malaysia, has 
                   become a      
                   major         
                   shareholder   
                   of 10.50% of  
                   the company’s 
                   total         
                   ordinary      
                   shares. One   
                   director from 
                   Ancom was     
                   appointed.    

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

  December     :                 Appointment of Audit Committee
  1999                           

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

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

  September    :                 Pato has disposed investment in affiliated company,
  2001                           Acron Plastic Industry Co.,Ltd. The common shares of
                                 4,588,077 were sold and transferred to new investor.
                                 Pato is consequently, left with only 531,923 shares
                                 which represents 4.93%.
  ------------ --- ------------- --------------------------------------------------------

Development of major shareholders from December 1998 – 31 December 2001

[TABLE]

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

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

Major Types of Imports

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

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

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

Shareholders' Structure

a) Trillit

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

c) Nissho Iwai Corp.

d) Pojanalai

e) Choengwiwatkit

f) Wesaratchawest

a) 0.92% a) 26.89% a) 39.30% a) 32%

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

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

d) 0.58% d) 10.69% d) 12.70% d) 46%

e) 0.29% e) 7.94% e) 15.70% e) -

f) - f) 6.33% f) 19.60% f) -

1.79% 82.35% 87.30% 78%

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

Registered Capital Baht 140 Million (Office Space Rental)

4.93%

Acron Plastic Industry Co.,Ltd.

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

(3) Revenue Structure Sales Revenue

+-----------------+-------+------+-----+----+-----+----+-----+----+
|                 | Ope   | Pe   | 1   |    | 2   |    | 2   |    |
|                 | rated | rcen | 999 |    | 000 |    | 001 |    |
|                 | By    | tage |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
|                 |       | Of   | Mil | %  | Mil | %  | Mil | %  |
|                 |       | Sh   | B   |    | B   |    | B   |    |
|                 |       | ares | aht |    | aht |    | aht |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Local Sales by  |       |      |     |    |     |    |     |    |
| Products        |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | 223 | 4  | 128 | 2  | 120 | 2  |
|                 |       |      | .14 | 1. | .90 | 4. | .76 | 6. |
|                 |       |      |     | 01 |     | 16 |     | 45 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | 235 | 4  | 310 | 5  | 267 | 5  |
|                 |       |      | .87 | 3. | .25 | 8. | .35 | 8. |
|                 |       |      |     | 34 |     | 15 |     | 55 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | 19  | 3. | 12  | 2. | 21  | 4. |
|                 |       |      | .10 | 51 | .88 | 48 | .26 | 66 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | 12  | 2. | 13  | 2. | 13  | 3. |
|                 |       |      | .89 | 37 | .29 | 49 | .87 | 04 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | 53  | 9. | 68  | 1  | 33  | 7. |
|                 |       |      | .18 | 77 | .20 | 2. | .31 | 30 |
|                 |       |      |     |    |     | 78 |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Local     |       |      | 544 | 10 | 533 | 10 | 456 | 10 |
| Sales           |       |      | .18 | 0. | .52 | 0. | .55 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Export Sales by |       |      |     |    |     |    |     |    |
| Products        |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | -   | -  | -   | -  | -   | -  |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Export    |       |      | -   | -  | -   | -  | -   | -  |
| sales           |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Local & Export  |       |      |     |    |     |    |     |    |
| Sales           |       |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Product Line 1  | PATO  |      |     |    |     |    |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Insecticide     |       |      | 223 | 4  | 128 | 2  | 120 | 2  |
|                 |       |      | .14 | 1. | .90 | 4. | .76 | 6. |
|                 |       |      |     | 01 |     | 16 |     | 45 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Herbicide       |       |      | 235 | 4  | 310 | 5  | 267 | 5  |
|                 |       |      | .87 | 3. | .25 | 8. | .35 | 8. |
|                 |       |      |     | 34 |     | 15 |     | 55 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Fungicide       |       |      | 19  | 3. | 12  | 2. | 21  | 4. |
|                 |       |      | .10 | 51 | .88 | 42 | .26 | 66 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Acaricide       |       |      | 12  | 2. | 13  | 2. | 13  | 3. |
|                 |       |      | .89 | 37 | .29 | 49 | .87 | 04 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Other           |       |      | 53  | 9. | 68  | 1  | 33  | 7. |
|                 |       |      | .18 | 77 | .20 | 2. | .31 | 30 |
|                 |       |      |     |    |     | 78 |     |    |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Local &   |       |      | 544 | 10 | 533 | 1  | 456 | 10 |
| Export sales    |       |      | .18 | 0. | .52 | 00 | .27 | 0. |
|                 |       |      |     | 00 |     |    |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Less returned & |       |      | 29  | 5. | 27  | 5. | 21  | 4. |
| Discount        |       |      | .21 | 37 | .40 | 14 | .30 | 67 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Net Sales       |       |      | 514 | 9  | 506 | 9  | 435 | 9  |
|                 |       |      | .97 | 7. | .12 | 6. | .25 | 7. |
| Contractor      |       |      |     | 46 |     | 84 |     | 87 |
|                 |       |      | 5   |    | 2   |    | 0   |    |
| Other Income    |       |      | .25 | 1. | .37 | 0. | .33 | 0. |
|                 |       |      |     | 00 |     | 45 |     | 07 |
|                 |       |      | 8   |    | 14  |    | 9   |    |
|                 |       |      | .15 | 1. | .16 | 2. | .16 | 2. |
|                 |       |      |     | 54 |     | 71 |     | 06 |
+-----------------+-------+------+-----+----+-----+----+-----+----+
| Total Revenue   |       |      | 528 | 10 | 522 | 10 | 444 | 10 |
|                 |       |      | .37 | 0. | .65 | 0. | .74 | 0. |
|                 |       |      |     | 00 |     | 00 |     | 00 |
+-----------------+-------+------+-----+----+-----+----+-----+----+