Post global economic Tsunami in late 2008, the global economy went into
recession by early 2009 and the impacts were far reaching.

Your company was also affected from the global economic crisis as auto
industry was one of the hardest hit on which your company is largely
dependent. The demand in auto sector in Thailand and in the region
dropped by approx 25-30% and company’s performance followed suit with
export sales volume down by 31% as the major export to Japan dropped by
similar percentage and total sales volume down by 21%

Your company and its management responded quickly to the economic crisis
by rationalizing its production, Capex and working capital in line with
the prevailing business conditions, improving productivity and quality
standards, clear focus on customer needs and optimizing its operations
and logistic cost continuously. The strong measures taken not only
helped the company to minimize the impact of the crisis but also would
yield sustainable benefits. Your company has used crisis as opportunity
and institutionalized some of the new learnings

During the year 2009 which has witnessed the full blown impact of
economic crisis, production volume reduced by 21% and sales revenue by
39%. Despite this due to strong focus on all areas of operation the net
profit from company’s Carbon Black business improved substantially to
Baht 878 million compared to Baht 185 million in 2008 where as net
profit on consolidated basis also improved to Baht 1074 million compared
to Baht 450 million in 2008.

Due to the impact of the global economic crisis, uncertainty about
future and to conserve cash, the progress on expansion project was
slowed down during the year 2009. With the sign of economic recovery
starting Q3’2009, the progress on expansion project has picked up and it
is expected to commence production by end of Q2’2010. After expansion
our capacity will be approx 300,000 Mt/year which will be one of largest
in the world at single location.

Your company continues to focus on improving productivity, quality,
customer satisfaction, cost optimization and MRG sector to expand
customer base in non tire sector. During the journey of performance
excellence in all spheres of management was maintained and TCB received
the following awards.

+-------------------------------------------+--------------------------+
| -   National Quality and Productivity     | By Minister of Industry  |
|     Improvement Promotion Award           |                          |
+-------------------------------------------+--------------------------+
| -   River Conservation and Restoration    | By Minister of Industry  |
|     Outstanding Award                     |                          |
+-------------------------------------------+--------------------------+
| -   Good Governance Certificate on        | By Minster of Industry   |
|     Environmental Governance              |                          |
+-------------------------------------------+--------------------------+

Overview of business operation of Subsidiary Company

The subsidiary company in China namely Liaoning Birla Carbon Co., Ltd
(LBCC) was no exception to global economic recession and recorded net
loss of RMB 26.77 million due to the full year impact of economic
crisis. Presently the company is focusing on operational efficiency cost
reduction optimization of product mix to maximize the capacity
utilization to improve the overall performance.

The progress on Mexico project is quite slow to current difficult market
& economic situation post global economic recession.

INVESTMENT STRUCTURE OF THAI CARBON BLACK PUBLIC COMPANY LIMITED (as on 31 December 2009)

Detail of investment in, Subsidiary and Associated Companies

+--------------+-------------+---+-------+------+------+----------------+
| Company Name | Activity    |   | Pa    | %    | Cost | Other Major    |
|              |             |   | id-up | S    | of   | Shareholders   |
|              |             |   | Ca    | hare | In   |                |
|              |             |   | pital | Hold | vest | (>10%)         |
|              |             |   |       | ings | ment |                |
|              |             |   |       |      | (MB) |                |
+--------------+-------------+---+-------+------+------+----------------+
| Subsidiary   |             |   |       |      |      |                |
| Companies    |             |   |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| Liaoning     | Manufacture | 1 |       | 8    |   66 | 1. Dashiqiao   |
| Birla Carbon | of Carbon   | 5 |       | 8.54 | 2.47 | Ronghua        |
| Co.,Ltd      | Black       | 7 |       |      |      | Chemicals      |
|              |             | m |       |      |      | Co.,Ltd (11%)  |
| (Registered  |             | i |       |      |      |                |
| in China)    |             | l |       |      |      |                |
|              |             | l |       |      |      |                |
|              |             | i |       |      |      |                |
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|              |             | B |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| Birla Carbon | Manufacture | 3 |       | 9    |   1  |                |
| Mexico,      | of carbon   | . |       | 8.00 | 1.39 |                |
| S.A.DE       | black       | 2 |       |      |      |                |
|              |             | m |       |      |      |                |
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+--------------+-------------+---+-------+------+------+----------------+
| Associated   |             |   |       |      |      |                |
| Companies    |             |   |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| Aditya Birla | Manufacture | B |       | 2    | 50   | 1.Thai Rayon   |
| Chemicals    | of Caustic  | a |       | 9.99 | 9.82 | Pcl (29.98%)   |
| (Thailand)   | Soda &      | h |       |      |      |                |
| Co.,Ltd      | Epic        | t |       |      |      |                |
|              | hlorohydrin | 1 |       |      |      |                |
|              |             | , |       |      |      |                |
|              |             | 7 |       |      |      |                |
|              |             | 0 |       |      |      |                |
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|              |             | n |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| P.T. Indo    | Manufacture | 4 |       | 4    | 19   | 1.Thai Rayon   |
| Liberty      | of          | 2 |       | 0.00 | 6.95 | Plc. (40%)     |
| Textiles     | Synthetic   | , |       |      |      |                |
| (Registered  | Yarn        | 5 |       |      |      | 2.Cheddington  |
| in           |             | 4 |       |      |      | Trading        |
| Indonesia)   |             | 9 |       |      |      | Company Inc.   |
|              |             | , |       |      |      | (16%)          |
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+--------------+-------------+---+-------+------+------+----------------+
| Ameri Blend  | Procure and | U |       | 4    | 1    | 1. SKI         |
| Inc.         | store       | S |       | 9.00 | 3.62 | Investments    |
|              | material    | D |       |      |      | Pte. Ltd 48%   |
|              |             | 1 |       |      |      |                |
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+--------------+-------------+---+-------+------+------+----------------+

Revenue structure

Company produces carbon black as a main product which is more than 95%
of total revenue.