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 Dr.Viwat Trillit(Ating) 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, 2004 are as follows
:

+------------------------+---------------------------------------------+
| Name                   | Position                                    |
+------------------------+---------------------------------------------+
| 1. Mr.Metha Trillit    | Chairman/President                          |
+------------------------+---------------------------------------------+
| 2. Mr.Chaovuth         | Director                                    |
| Pojanalai              |                                             |
+------------------------+---------------------------------------------+
| 3. Dr.Viwat Trillit    | Director/Managing Director /Acting          |
|                        | Administration Manager                      |
+------------------------+---------------------------------------------+
| 4. Mr.Suvit            | Director                                    |
| Wesaratchawest         |                                             |
+------------------------+---------------------------------------------+
| 5.Mr.Surachai          | Director                                    |
| Choengvivatkit         |                                             |
+------------------------+---------------------------------------------+
| 6. Ms.Ratchanee        | Director                                    |
| Trillit                |                                             |
+------------------------+---------------------------------------------+
| 7. Mr.Nobuie Kimura    | Director                                    |
+------------------------+---------------------------------------------+
| 8. Mr.Masayuki         | Director                                    |
| Hashimoto              |                                             |
+------------------------+---------------------------------------------+
| 9. Mr.Lertchai         | Independent Director / Chairman of Audit    |
| Leelayonkul            | Committee                                   |
+------------------------+---------------------------------------------+
| 10. Mr.Chaiwat         | Independent Director / Audit Committee      |
| Chandarasrivongs       | Member                                      |
+------------------------+---------------------------------------------+
| 11. Dr.Chongrak        | Independent Director / Audit Committee      |
| Prichanont             | Member                                      |
+------------------------+---------------------------------------------+
| 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.Kawinharn        | Research and Development Manager            |
| Polaharn               |                                             |
+------------------------+---------------------------------------------+
| 17. Mr.Rapin           | Area Sales Manager                          |
| Theingthum             |                                             |
+------------------------+---------------------------------------------+
| 18. Mrs.Parichart      | Office Manager/Company Secretary            |
| Manuthasna             |                                             |
+------------------------+---------------------------------------------+
| M                      |                                             |
| r.Chaovuth Pojanalai i |                                             |
| s to co-sign with Mr.M |                                             |
| etha Trillit or Dr.Viw |                                             |
| at Trillit with compan |                                             |
| y seal affixed to affe |                                             |
| ct company documents.  |                                             |
+------------------------+---------------------------------------------+

Definition of Independent Directors

1.  Holding shares not more than 5% of total voting shares of the
    company, the affiliated companies, holding companies or the person
    who may have the conflict (counting of the person concerned
    according to Section 258 of Securities Law)

2.  No participation in management including employee, staff, business
    consultant who receives permanent salary or the person who has the
    power to control the company or affiliated companies, holding
    companies or the person who has the conflict of interests unless the
    said benefit or interest has passed over one year.

3.  No business relations, nor benefits nor interests direct or indirect
    both financial and management aspect of the company, affiliated
    companies, holding companies or the person who may have the conflict
    of interests up to the level of lacking independence.

4.  Not the close relatives of the executive, the major shareholders of
    the company, affiliated companies, holding companies or the person
    who may have the conflict of interests and is not appointed to be
    the representative to protect the benefit of the director or major
    shareholders.

  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 Stakeholders

  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 2004 in
full force. The Chairman of the meeting gave shareholders equal rights
and freedom to ask questions and express views.

The auditor and legal advisor also attended the meeting for observation.

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.

Power and Obligation of the Board of Directors

1.  To supervise and manage in order to make sure that the operations of
    the company are in accordance with the law, the objectives and
    Articles of Association of the company as well as the resolution of
    the Shareholders’ Meeting, and to protect the company’s interest
    based on good corporate governance.

2.  To establish the policy and operation direction of the company and
    to supervise the management to operate as approved plan.

3.  To make the arrangement of the Shareholders’ Meeting as an Annual
    Ordinary Shareholders’ Meeting within 4 months as from the end of
    the fiscal year of the company and the arrangement of the
    Shareholders’ Meeting as an Extraordinary Shareholders’ Meeting when
    necessary.

4.  To hold the Board of Directors’ Meeting every three months and not
    less than half of the directors will attend the meeting. The
    resolutions of any meeting of directors are decided by the majority
    of votes, in case of an equality of votes, the chairman has a
    casting vote.

5.  To make an arrangement of the balance-sheet and the profit and loss
    statement as at the end of the fiscal year of the company in order
    to present to the General Ordinary Shareholder’s Meeting to
    scrutinize the balance-sheet and the profit and loss statement, and
    the Board of Directors shall have the auditor to finish the auditing
    prior to the presentation to the Shareholders’ Meeting.

6.  To assign the power of management to the Managing Director to carry
    out the business of the company including the power to appoint or
    remove the staff of the company as well as the fixing of the
    remuneration.

7.  To scrutinize and approve the annual budget for investment and for
    business operation of the company.

8.  To implement the internal control and internal audit including
    financial control system, operation and to supervise the performance
    as well as risk control and risk management.

9.  To make an arrangement of financial information report, information
    and general information important for the shareholders properly,
    completely and sufficiently together with the verification of the
    report.

10. A director must not, without the notification to the general meeting
    of shareholders prior to the appointment, undertake commercial
    transactions, nor he or she be a partner or a shareholder in another
    juristic person of the same nature as and compete with that of the
    company.

11. The director who has a special interest in the contract entered with
    the company or the increase or decrease of the shareholders or of
    the debentures of the company, must notify the company without
    delay.

The Power and Obligations of Executive Directors 

1.  To establish the strategic directions and business operation with
    highest effectiveness and efficiency.

2.  To evaluate and to scrutinize the investment project and annual
    budget in order to be approved by the Board of Directors.

3.  To sign in the documents binding on the company as appointed by the
    Board of Directors.

4.  To consider and approve the executing of forward contract as risk
    management of currency and foreign exchange.

5.  To allot the resources and recruit the personnel of potential for
    the highest benefit of the company.

The Power and Obligations of Audit Committee 

1. To review the sufficiency, credibility and objectivity of the
financial report

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

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

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

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

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.

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

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

3 Executive Directors namely ;

-   Mr.Metha Trillit

-   Dr.Viwat Trillit

-   Mr.Choavuth Pojanalai

 5 Non-Executive Directors namely ;

-   Mr.Suvit Vesaratcharwest

-   Mr.Surachai Cheonvivatkit

-   Ms.Ratchanee Trillit

-   Mr.Masayuki Hashimoto

-   Mr.Nobuie Kimura

  3 Member of Audit Committee namely ;

Mr.Lertchai Leelayonkul

-   Mr.Chaiwat Chandarasirvongs

-   Dr.Chongrak Prichanont

9.  Aggregation and Segregation of Positions

The Chairman of the Board of Directors comes from the major shareholder
group which holds 34.36% 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 11 persons received meeting allowances at
    3,000 Baht/meeting

  Chairman of audit committee’ remuneration 20,000 baht/month totaling
  240,000 baht

  Member of audit committee’s remuneration 10,000 baht/month totaling
  120,000 baht per person.

  Signatory Director, Mr.Chaovuth Pojanalai’s remuneration 15,000
  baht/month totaling 180,000 baht

  Total remuneration for 11 directors in 2004 was 769,200.00 Baht

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

- Managers received 6,232,462.00 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 2004, there
were 4 regular meetings and 2 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 2 special
sessions as follows :

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

  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.

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

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 and adhere to written regulation set. 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, 2004.

Mr.Metha Trillit

(President)

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 2004 is 169.

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 2004 is 45,799,910.42 baht.

Employees develop their efficiency with regular participation in
seminars.