During the year, company was no exception to the global economic
recession set in last quarter of 2008 and felt its after effects. The
company’s performance till 3^(rd) quarter of 2008 was quite satisfactory
and it was better than 9 months of 2007 on consolidated basis. In 4^(th)
quarter with the rolling of economic recession the demand in the auto
industry slumped, closure of capacities announced and inventories in the
auto industry supply chain started soaring. High inventories coupled
with closure of capacities in auto industry brought about bearish
situation in the market affecting sales volume and prices. Inventories
piled up at very high prices led to high cost of production where as
selling prices felt down wards pressure resulting into negligible or
negative margins. The demand in the auto industry dropped by 40-50% and
major auto/tire companies have announced closure of their capacities.

Despite global and industry upheavals your company’s production and
sales volumes reduced by only 7% and 10% respectively. However due to
economic recession, drop in the demand in auto industry, continued very
high oil prices and raw material cost and very high inventory cost the
net profit from Carbon Black operations reduced substantially by 86% and
the net profit on consolidated basis reduced by 65%.

During the year the company has started focusing on the MRG sector and
sales of high end soft grade carbon black to expand the customer base in
non tire sector. Company has also strongly started various cost
reduction measures to control all elements of cost, improvement in
production processes for better productivity and revenue enhancement
measures. These initiatives will help improve competitiveness and market
share of the company. Your company will take strong steps to tide over
the current difficult situation and to emerge stronger.

Due to current difficult market situation, the progress on expansion
project is slowed down and expected to commence production by 2010.

The Company continued it journey of performance excellence in all
spheres of operations and achieved a unique distinction of getting
6^(th) time in a row “FORBES” Award of Asia Pacific’s Best 200 small
companies under a billion” TCB is the only company in the world who has
been conferred this distinction 6^(th) time.

Overview of business operation of Subsidiary and Associated Company

The subsidiary company in China namely Liaoning Birla Carbon Co., Ltd
(LBCC) recorded the marginal net profit in 2008 despite very difficult
market and economic situation. Presently the subsidiary company is
focusing on operational efficiency, approval of product grades from
MNC’s, cost reduction, optimization of product mix and to maximize the
capacity utilization.

The progress on Mexico project is slow due to current difficult market &
economic situation. Once the market situation improves, the subsidiary
company in Mexico will start working on detailed feasibilities stuty.

Business Operation of the Company, Subsidiary and Associated Companies

+------------+------------+---+-------+-----+-----+---------------+-----+
| Company    | Activity   |   | Pa    | %   | C   | Other Major   |     |
| Name       |            |   | id-up | Sh  | ost | Shareholders  |     |
|            |            |   | Ca    | are | of  |               |     |
|            |            |   | pital | Ho  | I   | (>10%)        |     |
|            |            |   |       | ldi | nve |               |     |
|            |            |   |       | ngs | stm |               |     |
|            |            |   |       |     | ent |               |     |
|            |            |   |       |     | (   |               |     |
|            |            |   |       |     | MB) |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+
| Subsidiary |            |   |       |     |     |               |     |
| Companies  |            |   |       |     |     |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+
| Liaoning   | M          | 1 |       | 88  |     | 1. Dashiqiao  |     |
| Birla      | anufacture | 5 |       | .54 | 662 | Ronghua       |     |
| Carbon     | of Carbon  | 7 |       |     | .47 | Chemicals     |     |
| Co.,Ltd    | Black      | m |       |     |     | Co.,Ltd (11%) |     |
|            |            | i |       |     |     |               |     |
| (          |            | l |       |     |     |               |     |
| Registered |            | l |       |     |     |               |     |
| in China)  |            | i |       |     |     |               |     |
|            |            | o |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
|            |            | R |       |     |     |               |     |
|            |            | M |       |     |     |               |     |
|            |            | B |       |     |     |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+
| Birla      | M          | 3 |       | 98  |   9 |               |     |
| Carbon     | anufacture | . |       | .00 | .39 |               |     |
| Mexico,    | of carbon  | 2 |       |     |     |               |     |
| S.A.DE     | black      | m |       |     |     |               |     |
|            |            | i |       |     |     |               |     |
| C.V.       | (under     | l |       |     |     |               |     |
| (          | planning   | l |       |     |     |               |     |
| Registered | stage)     | i |       |     |     |               |     |
| in Mexico) |            | o |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
|            |            | M |       |     |     |               |     |
|            |            | e |       |     |     |               |     |
|            |            | x |       |     |     |               |     |
|            |            | i |       |     |     |               |     |
|            |            | c |       |     |     |               |     |
|            |            | a |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
|            |            | P |       |     |     |               |     |
|            |            | e |       |     |     |               |     |
|            |            | s |       |     |     |               |     |
|            |            | o |       |     |     |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+
| Associated |            |   |       |     |     |               |     |
| Companies  |            |   |       |     |     |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+
| Aditya     | M          | B |       | 29  | 509 | 1.Thai Rayon  |     |
| Birla      | anufacture | a |       | .99 | .82 | Pcl (29.98%)  |     |
| Chemicals  | of Caustic | h |       |     |     |               |     |
| (Thailand) | Soda &     | t |       |     |     |               |     |
| Co.,Ltd    | Epich      | 1 |       |     |     |               |     |
|            | lorohydrin | , |       |     |     |               |     |
|            |            | 7 |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | M |       |     |     |               |     |
|            |            | i |       |     |     |               |     |
|            |            | l |       |     |     |               |     |
|            |            | l |       |     |     |               |     |
|            |            | i |       |     |     |               |     |
|            |            | o |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+
| P.T. Indo  | M          | 4 |       | 40  | 196 | 1.Thai Rayon  |     |
| Liberty    | anufacture | 2 |       | .00 | .95 | Plc. (40%)    |     |
| Textiles   | of         | , |       |     |     |               |     |
| (          | Synthetic  | 5 |       |     |     | 2.Cheddington |     |
| Registered | Yarn       | 4 |       |     |     | Trading       |     |
| in         |            | 9 |       |     |     | Company Inc.  |     |
| Indonesia) |            | , |       |     |     | (16%)         |     |
|            |            | 0 |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | , |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | 0 |       |     |     |               |     |
|            |            | I |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
|            |            | d |       |     |     |               |     |
|            |            | o |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
|            |            | e |       |     |     |               |     |
|            |            | s |       |     |     |               |     |
|            |            | i |       |     |     |               |     |
|            |            | a |       |     |     |               |     |
|            |            | n |       |     |     |               |     |
|            |            | R |       |     |     |               |     |
|            |            | p |       |     |     |               |     |
|            |            | . |       |     |     |               |     |
+------------+------------+---+-------+-----+-----+---------------+-----+

INVESTMENT STRUCTURE OF THAI CARBON BLACK PUBLIC COMPANY LIMITED (as on 31 December 2008)

The sales revenue structure of the company, subsidiary and associated
companies for the past three years is as follow :

Million Baht

+----------------------------+------------+------------+-------------+
| Company                    | 2008       | 2007       | 2006        |
|                            |            |            |             |
|                            | Amount     | Amount     | Amount      |
+----------------------------+------------+------------+-------------+
| Thai Carbon Black Plc.     | 9,032      | 6,802      | 6,594       |
+----------------------------+------------+------------+-------------+
| Liaoning Birla Carbon      | *142.7     | *97.88     | *94.79      |
| Co.,Ltd.                   |            |            |             |
+----------------------------+------------+------------+-------------+
| Birla Carbon Mexico, S.A.  | **0.001    | Nil        | Nil         |
| DE C.V                     |            |            |             |
+----------------------------+------------+------------+-------------+
| P.T. Indo Liberty Textiles | ***495,650 | ***479,824 | ***364,375  |
+----------------------------+------------+------------+-------------+
| Aditya Birla Chemicals     | 11,420     | 8,529.0    | 7,461.34    |
| (Thailand) Co.,Ltd         |            |            |             |
+----------------------------+------------+------------+-------------+

* Million Chinese RMB

** Million Mexican Pesos

*** Million Indonesia Rupiah