3. Nature of Business

Pato Chemical Industry Plc. was established on 6 October 1973 to import,
formulate, and distribute pesticide in Thailand. Its initial registered
capital was 1 million baht with 1,000 ordinary shares at par value of
1,000 baht per share. 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 and the company has been listed in the Stock Exchange
of Thailand in August 1995.

In 2009 Resolution of shareholders’ meeting approved share split from 10
baht per share to 1 baht per share. The ordinary shares of the company
are then 140,000,000 shares.

In 2010 Sojitz Corporation, major shareholders from Japan divested its
total stake in PATO

In 2011 The effective of Hazardous Substances Act (3^(rd) Issue) B.E
2551 of the Ministry of Agriculture and Cooperatives on the registration
of hazardous resulted in the expiration of all available registrations
of the company. The company has applied new registration accordingly.

Investment in a new company “Pato Crop Care Co., Ltd.” The registered
capital is 5 million baht for 10 million ordinary shares with the par
value of 5 baht per share.

Pato received SET Awards for Outstanding Company Performance 2011.

Pato went into and agreement to sell land and buildings at Minburi old
Factory on June 10, 2011.

(1) Major Changes and Development

+-----------+---+--------------------------------------------------------+
| January   | : | Pato transferred ownership of the land and buildings   |
| 2012      |   | at Minburi old factory to the buyer on January 12,     |
|           | : | 2012.                                                  |
| February  |   |                                                        |
| 2012      | : | DOA has approved some of product registrations.        |
|           |   |                                                        |
| April     | : | AGM of Shareholders 1/2012 where the meeting appointed |
| 2012      |   |                                                        |
|           | : | Mr. Pradit Rodloytook Registration No. 218 or Ms.      |
| May 2012  |   | Nongram Laoha-areedilok Registration No. 4334 or Ms.   |
|           | : | Chamaporn Rodloytook Registraion No. 9211 from AST     |
| November  |   | Master Co.,Ltd to be the Company’s auditor for 2012.   |
| 2012      | : |                                                        |
|           |   | Dividend payment for the 2011 performance at 1.08 baht |
| January   | : | per share.                                             |
| 2013      |   |                                                        |
|           |   | EGM of Shareholders 1/2012 where the meeting approve   |
| .         |   | the ESOP Scheme to issue and allocate 2,800,000 units  |
|           |   | of warrant to Employees and Managements who are not    |
|           |   | the director of the company.                           |
|           |   |                                                        |
|           |   | Increase Registered capital to 142.8 million baht with |
|           |   | 142.8 million shares to support the exercise of        |
|           |   | warrant in 2015                                        |
|           |   |                                                        |
|           |   | Pato has been awarded with its second consecutive year |
|           |   | of SET Awards for Outstanding Company Performance      |
|           |   | 2012.                                                  |
|           |   |                                                        |
|           |   | The Company has issued 2.8 million units of warrants   |
|           |   | which will last for three years granted to 63          |
|           |   | employees and executives who are not the directors of  |
|           |   | the Company.                                           |
+-----------+---+--------------------------------------------------------+

Development of major shareholders from 31 December 2010 – 30 December
2012

[TABLE]

(2) Pato Chemical Industry Public Company Limited

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

Major Type of Imports

1. Technical Grade (TG): is a concentrated chemicals which are used in
formulations to produce final products according to the specified
formulas

2. Finished Product (FP): is the product ready for use. Most of the
imported FD is in liquid and solid form in bulk sizes. 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 material
as compared with other competitors who import finished product for
repackaging. TG has longer shelf-life than FP and can be formulated
according 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 granule for safety in moving and storing. In the
production process, there 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 for uses such as
solvents, carriers, surfactants, emulsifiers, or any other substance
which are added for special purpose called “Special Additives”.

Pato Crop Care Co., Ltd.

The company is the importer, formulator, and distributor of pesticide
under Global logo Pato Crop Care.

Major Type of Imports are :

1. Technical Grade (TG) which is a concentrated chemicals which are used
in formulations to produce final products according to the specified
formulas.

2. Finished Product (FP)

Production plant is located in Bangpoo Industrial Estate. Pato Crop Care
rents building and machinery of Building no. 5 and 6 of Pato Chemical
Industry Plc. to use as office, formulating plant and warehouse. Annual
capacity will be 16,500 Mts. for granule pesticide, 3,300 Mts. for
liquid pesticide, and 1,650 Mts. for powder pesticide. Pato Crop Care is
currently in the process of filing the documents for registration to the
Department of Agriculture, therefore there was no business operation as
of December 31, 2011.

Shareholders’ Structure

a) Trillit Asia Mineral Processing Co.,Ltd.

  b) Pojanalai

c) Wesaratchawest

d) Choengwiwatkit

a) 35.08% a) 39.30% a) -

b) 11.55% b) 12.70% b) 94 %

c) 6.11% c) 19.60% c) -

d) 6.38% d) 15.70% d) -

59.12% 87.30% 94%

Pato Chemical Industry Plc Kentex Properties Co.,Ltd

Registered Capital Baht 142.8 Million (Office Space Rental)

100%

Pato Crop Care Co.,Ltd.

Registered Capital Baht 5 Million Baht Connected transaction - office
space rental

(3) Revenue Structure

+------------------+------+-------+-----+----+-----+---+-----+----+
|                  | Oper | Perce | 2   |    | 2   |   | 2   |    |
|                  | ated | ntage | 010 |    | 011 |   | 012 |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
|                  |      | Of    | Mil | %  | Mil | % | Mil | %  |
|                  |      | S     | B   |    | B   |   | B   |    |
|                  |      | hares | aht |    | aht |   | aht |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Local Sales by   |      | 100%  |     |    |     |   |     |    |
| Products         |      | in    |     |    |     |   |     |    |
|                  |      |       |     |    |     |   |     |    |
|                  |      | Pa    |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Product Line 1   | PATO | Pato  |     |    |     |   |     |    |
|                  |      | Crop  |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Insecticide      |      | Care  | 458 | 5  | 349 | 3 | 23  | 7. |
|                  |      | but   | .85 | 0. | .93 | 6 | .93 | 41 |
|                  |      | no    |     | 64 |     | . |     |    |
|                  |      |       |     |    |     | 3 |     | 6  |
|                  |      |       |     |    |     | 7 |     | 5. |
|                  |      |       |     |    |     |   |     | 60 |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Herbicide        |      | produ | 306 | 3  | 455 | 4 | 211 | 6  |
|                  |      | ction | .94 | 3. | .20 | 7 | .98 | 5. |
|                  |      |       |     | 87 |     | . |     | 60 |
|                  |      |       |     |    |     | 3 |     |    |
|                  |      |       |     |    |     | 1 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Fungicide        |      | or    | 88  | 9. | 97  | 1 | 58  | 1  |
|                  |      |       | .11 | 72 | .11 | 0 | .87 | 8. |
|                  |      |       |     |    |     | . |     | 21 |
|                  |      |       |     |    |     | 0 |     |    |
|                  |      |       |     |    |     | 9 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Acaricide        |      | di    | 20  | 2. | 22  | 2 | 11  | 3. |
|                  |      | strib | .64 | 28 | .00 | . | .96 | 70 |
|                  |      | ution |     |    |     | 2 |     |    |
|                  |      |       |     |    |     | 8 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Other            |      |       | 31  | 3. | 37  | 3 | 16  | 5. |
|                  |      |       | .65 | 49 | .99 | . | .41 | 08 |
|                  |      |       |     |    |     | 9 |     |    |
|                  |      |       |     |    |     | 5 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Total Local Sale |      |       | 906 | 1  | 962 | 1 | 323 | 1  |
|                  |      |       | .19 | 00 | .23 | 0 | .15 | 00 |
|                  |      |       |     |    |     | 0 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Export Sales by  |      |       |     |    |     |   |     |    |
| Products         |      |       |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Product Line 1   | PATO |       |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Insecticide      |      |       | -   | -  | -   | - | -   | -  |
|                  |      |       |     |    |     |   |     |    |
|                  |      |       |     |    |     |   | -   |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Herbicide        |      |       | -   | -  | -   | - | -   | -  |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Fungicide        |      |       | -   | -  | -   | - | -   | -  |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Acaricide        |      |       | -   | -  | -   | - | -   | -  |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Other            |      |       | -   | -  | -   | - | -   | -  |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Total Export     |      |       | -   | -  | -   | - | -   | -  |
| sales            |      |       |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Local & Export   | PATO | 100%  |     |    |     |   |     |    |
| Sales            |      | in    |     |    |     |   |     |    |
|                  |      |       |     |    |     |   |     |    |
| Product Line 1   |      | Pato  |     |    |     |   |     |    |
|                  |      | Crop  |     |    |     |   |     |    |
| Insecticide      |      |       |     |    |     |   |     |    |
|                  |      | Pato  |     |    |     |   |     |    |
| Herbicide        |      | Crop  |     |    |     |   |     |    |
|                  |      |       |     |    |     |   |     |    |
| Fungicide        |      |       |     |    |     |   |     |    |
|                  |      |       |     |    |     |   |     |    |
| Acaricide        |      |       |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
|                  |      |       |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
|                  |      | Care  | 458 | 5  | 349 | 3 | 23  | 7. |
|                  |      | but   | .85 | 0. | .93 | 6 | .93 | 41 |
|                  |      | no    |     | 64 |     | . |     |    |
|                  |      |       |     |    |     | 3 |     | 6  |
|                  |      |       |     |    |     | 7 |     | 5. |
|                  |      |       |     |    |     |   |     | 60 |
+------------------+------+-------+-----+----+-----+---+-----+----+
|                  |      | produ | 306 | 3  | 455 | 4 | 211 | 6  |
|                  |      | ction | .94 | 3. | .20 | 7 | .98 | 5. |
|                  |      |       |     | 87 |     | . |     | 60 |
|                  |      |       |     |    |     | 3 |     |    |
|                  |      |       |     |    |     | 1 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
|                  |      | or    | 88  | 9. | 97  | 1 | 58  | 1  |
|                  |      |       | .11 | 72 | .11 | 0 | .87 | 8. |
|                  |      |       |     |    |     | . |     | 21 |
|                  |      |       |     |    |     | 0 |     |    |
|                  |      |       |     |    |     | 9 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
|                  |      | di    | 20  | 2. | 22  | 2 | 11  | 3. |
|                  |      | strib | .64 | 28 | .00 | . | .96 | 70 |
|                  |      | ution |     |    |     | 2 |     |    |
|                  |      |       |     |    |     | 8 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Other            |      |       | 31  | 3. | 37  | 3 | 16  | 5. |
|                  |      |       | .65 | 49 | .99 | . | .41 | 08 |
|                  |      |       |     |    |     | 9 |     |    |
|                  |      |       |     |    |     | 5 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Total Local &    |      |       | 906 | 1  | 962 | 1 | 323 | 1  |
| Export sales     |      |       | .19 | 00 | .23 | 0 | .15 | 00 |
|                  |      |       |     |    |     | 0 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Less returned &  |      |       | 9   | 1. | 7   | 0 | 1   | 0. |
| Discount         |      |       | .83 | 09 | .31 | . | .18 | 36 |
|                  |      |       |     |    |     | 7 |     |    |
|                  |      |       |     |    |     | 6 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Net Sales        |      |       | 896 | 9  | 954 | 9 | 324 | 7  |
|                  |      |       | .36 | 8. | .92 | 9 | .33 | 6. |
| มูลค่ากา           |      |       |     | 45 |     | . |     | 84 |
| รรับจ้างผลิตหรือบรรจุ |      |       |     |    |     | 3 |     |    |
|                  |      |       |     |    |     | 0 |     |    |
| รายได้อื่นๆ         |      |       |     |    |     |   |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Contractor       |      |       | -   | -  | -   | - | -   | -  |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Other Income     |      |       | 14  | 1. | 6   | 0 | 97  | 2  |
|                  |      |       | .12 | 55 | .72 | . | .76 | 3. |
|                  |      |       |     |    |     | 7 |     | 16 |
|                  |      |       |     |    |     | 0 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+
| Total Revenue    |      |       | 910 | 1  | 961 | 1 | 422 | 1  |
|                  |      |       | .48 | 00 | .64 | 0 | .09 | 00 |
|                  |      |       |     |    |     | 0 |     |    |
+------------------+------+-------+-----+----+-----+---+-----+----+