During the year under review, Thailand economy experienced a marked
slowdown compared to previous year. Economic growth in 2011 slowed down
to 1.1% as against a strong 7.8% growth witnessed in 2010 , as the
production sector faced supply disruption problems following Japan’s
natural disaster, coupled with the widespread and severe flood in the
country. Many tyre companies closed down temporarily and this resulted
into loss of Sales Volumes. This has adversely affected the industry and
your Company’s performance too as compared to last year. However, even
during the severe flood situation your Company maintained uninterrupted
Production and supplied Carbon Black to its customers as and when they
required to keep its Customers Operations up and running. The Directors
of the Company would like to loud the commitment and efforts
demonstrated by the Management Team and Employees of the Company.

In this backdrop, of a year which was marred by many challenges and
natural disasters, the Performance of the Company is satisfactory.
During the year under review your Company recorded Sales of 238,755 MT
reflecting a decline of 4% over the previous year. The decline was seen
as 9.7% in the domestic market but there was increase of 5% in the
export market. Decline in domestic Sales Volumes can also be attributed
to dumping by Chinese Competitors. The depreciation of Thai Baht
vis-a-vis USD coupled with currency war among major countries in the
world poses a fresh challenge for companies in the emerging countries.
Your Company is no exception. Increased volatility in the oil prices
will fuel uncertainties in our business also. However, improving forex
reserve of the country due foreign direct investment at the start of the
year enabled a shallow Baht recovery. As macro prospects firm up with
normalization of manufacturing industry.

Your Company’s net profit from operations declined to 870 Mn Baht by
15.4% over 2010. Performance of associated companies was also gloomy.
Accordingly net profit on consolidated basis also declined to 806 Mn
Baht from 1,274 Mn Baht recording a decline of 36.7%

Several initiatives were taken during the year towards fostering a
better friendly environment reducing emissions and improving safety
records. Your company has significantly strengthened its engagement with
communities. During the year under review Thailand faced a worst ever
flood in the last many decades. Your Company actively got involved in
helping the communities through supply of

1. Fresh drinking water

2. Temporary Tent for effected families

3. Dry Food

4. Mobile Toilets etc.

Your company also made its contribution to the Prime minister’s flood
relief fund. Post flood also your Company helped to rehabilitate the
flood victims in cleaning and other activities. There was a rigorous
focus on retraining the employees on SOP’s in all areas of operations.
Your company has managed challenges well by continuing to follow prudent
financial policy, a razor sharp focus on improving productivity and
reigning in on cost in a disciplined manner. During the year, the
technical team of Columbian Chemicals team visited the plant on number
of occasions to study and suggested technological upgrading and shared
best practices for process improvements. These improvement in technology
and increased yields, are likely to give benefit in the years to come.

Going forward your Company sees bright future ahead as reconstruction
activity picks up in Thailand after floods, stronger momentum of car
sale will lead growth of the company as flood constraints ease, also
more synergy benefits are likely to come from acquisition of Columbian
Chemicals and outlook for the next year appear to be better since it is
expected that global trade is to grow around 3-4% and also with
integration of market with erstwhile Columbian Chemical. The Board of
Directors on its own and on behalf of all the stakeholder of the company
wish to place on record its sincere appreciation to the leadership team
and to all employees of the company for their focused performance by
Management of the company by upholding the value of the Aditya Birla
Group.

Your directors also express their gratitude to the Government of
Thailand, the Government of Angthong, financial institutions, all other
business associates and stakeholders for ongoing co operation and
support.

Overview of business operation of Subsidiary Company

The subsidiary company in China namely Liaoning Birla Carbon Co., Ltd
(LBCC) recorded net loss of RMB 30.14 million. Presently the company is
focusing on operational efficiency & cost optimization of product mix to
maximize the capacity utilization to improve the overall performance.

The Highlights & Achievements for the year 2011 are as follows:

• Highest ever production of 28,155 MT in the year 2011

• Highest ever sales of 27,200 MT during the year 2011

(Comparison of Production & Sales for last 5 years shown below)

[]

• Highest ever monthly production of 3,203 MT in Jun’11 (6% over
capacity of 3000

MT/ month).

• Started earning from Power generation and export in 2011 compared to
previous

years

• Major issues related to winter affecting performance of the Plant
eliminated and Plant

performed consistently during peak winter

• ISO 9001 re-certification has been done successfully with all
departments

• MBF rebuilt for improved performance and reduced chances of emissions

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

INVESTMENT STRUCTURE OF THAI CARBON BLACK PUBLIC COMPANY LIMITED (as on 31 December 2010)

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 |       | 100% |   69 |                |
| Birla Carbon | of Carbon   | 5 |       |      | 9.73 |                |
| Co.,Ltd      | Black       | 7 |       |      |      |                |
|              |             | m |       |      |      |                |
| (Registered  |             | i |       |      |      |                |
| in China)    |             | l |       |      |      |                |
|              |             | l |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | o |       |      |      |                |
|              |             | n |       |      |      |                |
|              |             | R |       |      |      |                |
|              |             | M |       |      |      |                |
|              |             | B |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| Birla Carbon | Manufacture | 4 |       | 9    |   1  |                |
| Mexico,      | of carbon   | . |       | 8.00 | 2.85 |                |
| S.A.DE       | black       | 5 |       |      |      |                |
|              |             | m |       |      |      |                |
| C.V.         | (under      | i |       |      |      |                |
| (Registered  | planning    | l |       |      |      |                |
| in Mexico)   | stage)      | l |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | o |       |      |      |                |
|              |             | n |       |      |      |                |
|              |             | M |       |      |      |                |
|              |             | e |       |      |      |                |
|              |             | x |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | c |       |      |      |                |
|              |             | a |       |      |      |                |
|              |             | n |       |      |      |                |
|              |             | P |       |      |      |                |
|              |             | e |       |      |      |                |
|              |             | s |       |      |      |                |
|              |             | o |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| 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 |       |      |      |                |
|              |             | 0 |       |      |      |                |
|              |             | M |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | l |       |      |      |                |
|              |             | l |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | o |       |      |      |                |
|              |             | 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%)          |
|              |             | 0 |       |      |      |                |
|              |             | 0 |       |      |      |                |
|              |             | 0 |       |      |      |                |
|              |             | , |       |      |      |                |
|              |             | 0 |       |      |      |                |
|              |             | 0 |       |      |      |                |
|              |             | 0 |       |      |      |                |
|              |             | I |       |      |      |                |
|              |             | n |       |      |      |                |
|              |             | d |       |      |      |                |
|              |             | o |       |      |      |                |
|              |             | n |       |      |      |                |
|              |             | e |       |      |      |                |
|              |             | s |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | a |       |      |      |                |
|              |             | n |       |      |      |                |
|              |             | R |       |      |      |                |
|              |             | p |       |      |      |                |
|              |             | . |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| Ameri Blend  | Procure and | U |       | 4    | 1    | 1. SKI         |
| Inc.         | store       | S |       | 9.00 | 3.62 | Investments    |
|              | material    | D |       |      |      | Pte. Ltd 48%   |
|              |             | 1 |       |      |      |                |
|              |             | m |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | l |       |      |      |                |
|              |             | l |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | o |       |      |      |                |
|              |             | n |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+
| Indigold     | Manufacture | U |       | 2    | 6    | 1. SKI         |
| carbon       | of Carbon   | S |       | 0.59 | 3.60 | Investments    |
| (Mauritius)  | Black       | D |       |      |      | Pte Ltd –      |
|              |             | 1 |       |      |      | 58.82%         |
|              |             | 0 |       |      |      |                |
|              |             | m |       |      |      | 2. Alexandria  |
|              |             | i |       |      |      | Carbon Black – |
|              |             | l |       |      |      | 20.59%         |
|              |             | l |       |      |      |                |
|              |             | i |       |      |      |                |
|              |             | o |       |      |      |                |
|              |             | n |       |      |      |                |
+--------------+-------------+---+-------+------+------+----------------+

Revenue structure

Company produces carbon black as a main product which is approx 94% of
total revenue.