13.1 Financial Statement

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Financial Ratio (Consolidated)

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Financial Ratio (Company only)

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13.2 Management Discussions & Analysis (Company only)

Production

During the year 2012, the production decreased by 19% in view of the
lower demand by Tire majors consequent to the economic crisis in Euro
zone and all time high dumping of Chinese Carbon Black into south east
asian market. Company’s production during 2012 was at a level of 196,424
Mt compared to 241,851 Mt last year.

Sales Revenue

The sales revenue is down by 9% from Baht 10,156 million to Baht 9,246
million. The sales volume recorded lower sales of 195,319 MT from
238,755 MT reflecting a decline of 18% compared to the previous year
2011.

The ratio of export to local sales for the year 2012 has changed from
49: 51 to 47: 53 It is Company’s strategy to strive the optimum product
and customer mix to enhance the contribution margin and sales volume.

Other Income

Other income in 2012 of Baht 288 million is higher against Baht 245
million last year.

The interest income of Baht 212 million is higher by 89 Mn against Baht
123 million last year mainly due to the interest income accrued on the
loan given to Indigold Carbon–Mauritius.

Dividend income of Baht 64 million is same as last year.

There is a gain on exchange of Baht 3 million is lower against Baht 48
million last year mainly due to MTM accounting loss due to Thai Baht
being stronger against US dollar.

Cost and Expenses

The cost of sales is lower by 9% from Baht 8,974 million to Baht 8,139
million due to lower sales by 9%.

Profits

During the year 2012, the company recorded the net profit of 716 Mn Baht
compared to Baht 870 million in 2011 due to the lower sales volume
compared to 2011.

Financial Position (Company only)

Assets

The total assets as at 31^(st) Dec 2012 amounted to Baht 14,591 million
compared to Baht 15,853 million for the previous year, a decline by 8%.
Details of major assets are as follow

-   Cash

  The cash and cash equivalents were lower at Baht 8 million compared to
  Baht 1,075 million for 2011 mainly due to receivable financing done in
  the last year.

-   Inventory

  At the year end the inventory was bit lower due to better working
  capital management at Baht 2,784 million compared to Baht 2,932
  million for the previous year.

-   Property, plant and equipment

  Net value of Property, Plant and Equipment (after depreciation)
  decreased by 9% to Baht 1,980 million against Baht 2,171 million last
  year.

-   Long term Investments

  Long term investments decreased by 182 million from 8,732 million to
  8,550 million last year mainly due to accounting of unrealized loss on
  exchange.

Liabilities and Shareholders Equity

The total liabilities decreased by 1,738 million baht from 7,312 million
Baht to 5,574 million Baht mainly due to reduction in payables due to
better working capital management and repayment of long-term loan taken
from various banks for Columbian Chemical acquisitions.

Earning per share

The earning per share was Baht 2.39 in 2012 compared to Baht 2.90 in
2011 due to lower profit for 2012 consequent to lower volume sales.

Book value per share

The book value per share increased to Baht 30.06 in 2012 against Baht
28.47 in 2011 due to profit for the year 2012.

Analysis of Financial Ratios (Company only)

Liquidity

The company’s current ratio for 2012 is at 1.76 against 1.63 in year
2011 mainly due to decrease in trade payables. This is possible due to
strong focus on working capital management.

Equity

The company has historically maintained very low debt to equity ratio.
In the year of 2011, company had repaid against the long term borrowings
from various banks so the debt to equity ratio is improved to 0.62:1 in
2012 against 0.86:1 for last year of 2011.

Profitability

The gross profit margin of the company is 11.97% in 2012 as compared to
11.65% in 2011 which is almost same as last year and the net profit
margin is 7.51% compared to 8.37% in 2011 due to higher tax provision in
2012.

The return on average shareholders equity based on total profit after
tax is 8.15% in 2012 compared to 10.54% in last year due to lower net
profit.

Efficiency

The return on fixed assets has decreased to 51.25% from 52.93% and
Return on total assets is 5.62%. The inventory turnover ratio is at 2.85
against 3.63 in 2011.

13.3 Details to Auditors

1.  Name of Auditors

  Details of Auditors of the Company, its subsidiary and associated
  companies for year 2012 are as per details given below

+---------------------------------+------------------------------------+
| Company name                    | Audit firm                         |
+---------------------------------+------------------------------------+
| Thai Carbon Black Pcl           | Ernst & Young Office Limited,      |
|                                 | Bangkok, Thailand                  |
+---------------------------------+------------------------------------+
| Liaoning Birla Carbon Co., Ltd  | Gaodeyuequin Certified Public      |
|                                 | Accountants, Beijing , China       |
+---------------------------------+------------------------------------+
| Birla Carbon Mexico, S.A.DE     | No auditor appointed (as company   |
|                                 | is in initial stage of activities) |
| C.V.                            |                                    |
+---------------------------------+------------------------------------+
| Aditya Birla Chemicals          | Ernst & Young Office Limited       |
| (Thailand) Co., Ltd             |                                    |
|                                 | Bangkok, Thailand                  |
+---------------------------------+------------------------------------+
| P.T. Indo Liberty Textiles      | Deloitte, Indonesia                |
+---------------------------------+------------------------------------+
| Ameriblend Inc, USA.            | No auditor appointed (as company   |
|                                 | is in initial stage of activities) |
+---------------------------------+------------------------------------+
| Indigold Carbon, Mauritius      | Price Waterhouse                   |
+---------------------------------+------------------------------------+

Audit fee

+-------------------------------+--------------------------------------+
| Thai Carbon Black Pcl         | -Audit fee of Baht 950,000-          |
|                               |                                      |
|                               | -BOI Audit fee of Baht 200,000-      |
+-------------------------------+--------------------------------------+